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Execution Version

  FINANCING AGREEMENT between USG NEVADA LLC, a Delaware limited liability
company, (Borrower) and ARES CAPITAL CORPORATION, a Maryland corporation,
(Lender) Approximately Eight Megawatt Geothermal Power Facility Washoe County,
Nevada   November 9, 2011  

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TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS 1                          1.1 Definitions 1              
     1.2 Rules of Interpretation. 1       ARTICLE 2 THE CREDIT FACILITIES 1    
                     2.1 Cash Grant Bridge Loan Facility. 1                  
 2.2 Interest Provisions; Loan Funding; Prepayments. 2                    2.3
Fees. 5                    2.4 Other Payment Terms. 5                    2.5
Change of Circumstances. 9                    2.6 Funding Losses 11            
       2.7 Alternate Office; Minimization of Costs. 11                    2.8
Collateral and other Related Documents. 12                    2.9 Further
Assurances 12       ARTICLE 3 CONDITIONS PRECEDENT 13                        
 3.1 Conditions Precedent to the Financial Closing Date. 13                  
 3.2 Conditions Precedent to the Borrowing of the Additional Loan. 19          
         3.3 No Approval of Work. 22       ARTICLE 4 REPRESENTATIONS AND
WARRANTIES 22                          4.1 Organization 22                  
 4.2 Authorization; No Conflict. 23                    4.3 Enforceability 23    
               4.4 Compliance with Law 23                    4.5 ERISA 24      
             4.6 Taxes 24                    4.7 Business, Debt, Contracts, Etc
24                    4.8 Certain Fees. 24                    4.9 Investment
Company. 25                    4.10 Governmental Regulation. 25                
   4.11 Regulation U, Etc 26                    4.12 Financial Statements. 26  
                 4.13 Partnerships and Joint Ventures 26                    4.14
Existing Defaults 26                    4.15 No Default 26                  
 4.16 Permits. 26                    4.17 Offices 27                    4.18
Adverse Change 27                    4.19 Hazardous Substances 27              
     4.20 Litigation 28                    4.21 Title and Liens. 28

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                   4.22 Utilities 28                    4.23 Roads; Access. 28  
                 4.24 Project Documents 29                    4.25
Representations and Warranties 29                    4.26 Labor Disputes and
Acts of God 29                    4.27 Disclosure. 29                    4.28
Budgets; Project Schedule; Projections. 30                    4.29 Collateral 30
                   4.31 Insurance 30                    4.32 Scheduled
Commercial Operations 31                    4.33 Separateness 31                
   4.34 Patriot Act Compliance 31                    4.35 Solvency 32          
         4.36 Cash Grant Compliance. 32                    4.37 Absence of any
Undisclosed Liabilities 32       ARTICLE 5 AFFIRMATIVE COVENANTS OF BORROWER 33
                         5.1 Use of Proceeds 33                    5.2 Payment
33                    5.3 Notices. 33                    5.4 Financial
Statements. 36                    5.5 Reports. 37                    5.6 Term
Loan 37                    5.7 Cooperation 37                    5.8 Existence,
Conduct of Business, Properties, Etc. 37                    5.9 Obligations 38  
                 5.10 Separateness 38                    5.11 Books, Records,
Access 38                    5.12 Energy Regulation. 39                    5.13
Operation of Project and Annual Budget 39                    5.14 Preservation
of Rights; Further Assurances 39                    5.15 Construction 39        
           5.16 Taxes, Other Government Charges and Utility Charges. 40        
           5.17 Compliance With Laws, Instruments, Etc. 40                  
 5.18 Maintenance of Insurance 40                    5.19 Warranty of Title 41  
                 5.20 Event of Eminent Domain. 41                    5.21
Indemnification 41                    5.22 Certification of Interests. 42      
             5.23 Security 42                    5.24 Cash Grant Application 42
                   5.25 Cash Grant Notice of Assignment. 43                  
 5.26 Cash Grant Guidance; Cash Grant Proceeds 43                    5.27 Use of
Insurance Proceeds and Awards 43                    5.28 Pari Passu 43          
         5.29 Insolvent 43

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                   5.30 Construction Loan Agreement and Construction Contract 43
                   5.31 Consents and Estoppels 44                    5.32
Deposit Account Control Agreement 44       ARTICLE 6 NEGATIVE COVENANTS OF
BORROWER 44                          6.1 Contingent Liabilities 44              
     6.2 Limitations on Liens. 44                    6.3 Indebtedness 44        
           6.4 Sale or Lease of Assets. 44                    6.5 Changes 45    
               6.6 Distributions 45                    6.7 Investments. 45      
             6.8 Transactions With Affiliates 45                    6.9
Regulations. 45                    6.10 Loan Proceeds; Project Revenues 45      
             6.11 Partnerships 45                    6.12 Dissolution. 45      
             6.13 Additional Project Documents 46                    6.14
Amendments; Change Orders; Completion 46                    6.15 Compliance With
Operative Documents. 47                    6.16 Name and Location; Fiscal Year
47                    6.17 Use of Project Site. 47                    6.18
Assignment. 47                    6.19 Transfer of Interests. 47                
   6.20 Abandonment of Project. 47                    6.21 Hazardous Substances
48                    6.22 ERISA 48                    6.23 If Section 4.5(a) is
true, then 48                    6.24 Regulation of Parties 48                  
 6.25 Cash Grant Guidance 48                    6.26 Tax Credits 48            
       6.27 Fiscal Year 48       ARTICLE 7 EVENTS OF DEFAULT; REMEDIES 49      
                   7.1 Failure to Make Payments. 49                    7.2
Judgments. 49                    7.3 Misstatements. 49                    7.4
Bankruptcy; Insolvency. 49                    7.5 Cross Default. 51            
       7.6 ERISA 51                    7.7 Breach of Project Documents. 51      
             7.8 Breach of Terms of Agreement 53                    7.9 Placed
in Service Date. 53                    7.10 Material Adverse Effect 54          
         7.11 Schedule 54

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                   7.12 Security. 54                    7.13 Permits; Expiration
of Appeals Period. 54                    7.14 Loss of Project. 55              
     7.15 Destruction of the Project. 55                    7.16 Transfer of
Interests. Except for Permitted Transfers, a 55                    7.17 Cash
Grant Recapture Liabilities. Any 55                    7.18 Cure by Lender. 56  
                 7.19 Acceleration. 56                    7.20 Possession of
Project 56                    7.21 Remedies Under Financing Documents 56      
ARTICLE 8 SCOPE OF LIABILITY 57       ARTICLE 9 INDEPENDENT CONSULTANTS 58      
                   9.1 Removal and Fees 58                    9.2 Duties. 58    
               9.3 Independent Consultants’ Certificates. 58                  
 9.4 Certification of Dates 59       ARTICLE 10 MISCELLANEOUS 59                
         10.1 Notices. 59                    10.2 Additional Security; Right to
Set-Off 61                    10.3 Delay and Waiver. 61                    10.4
Costs, Expenses and Attorneys’ Fees 61                    10.5 Attorney-In-Fact.
62                    10.6 Entire Agreement 63                    10.7
Severability. 63                    10.8 Headings. 63                    10.9
Accounting Terms 63                    10.10 No Partnership, Etc. 63            
       10.11 Limitation on Liability 64                    10.12 APPLICABLE LAW.
64                    10.13 CONSENT TO JURISDICTION 64                    10.14
WAIVER OF JURY TRIAL 65                    10.15 Usury 65                  
 10.16 Successors and Assigns 65                    10.17 Counterparts 66      
             10.18 Patriot Act Compliance 66                    10.19 Electronic
Execution 66                    10.20 Appointment of Agent. 66                  
 10.21 Confidentiality 66

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INDEX OF EXHIBITS

Exhibit A Definitions and Rules of Interpretation       Note Exhibit B Form of
Note       Legal Opinions Exhibit C Schedule of Legal Opinions       Security
Related Documents Exhibit D-1 Form of Cash Grant Security Agreement Exhibit D-2
Form of Idaho Sponsor Pledge Agreement Exhibit D-3 Form of Member Pledge
Agreement Exhibit D-4 Form of Sponsor Cash Grant Shortfall Guaranty Exhibit D-5
Form of Intercreditor Agreement Exhibit D-6 Form of Cash Grant Application Power
of Attorney Exhibit D-7 Form of Cash Grant Notice of Assignment Exhibit D-8
Schedule of Security Filings Exhibit D-9 Form of Notice of Borrowing     Exhibit
E Intentionally Omitted       Closing Certificates Exhibit F-1 Form of
Borrower’s Closing Certificate Exhibit F-2 Form of Independent Accountant’s
Certificate Exhibit F-3 Form of Independent Engineer’s Certificate Exhibit F-4
Form of Solvency Certificate Exhibit F-5 Form of Borrower’s Additional Loan
Borrowing Certificate       Project Description Exhibits Exhibit G-1 Description
of Project Exhibit G-2 Schedule of Applicable Permits Exhibit G-3 Project Budget
Exhibit G-4 Project Schedule Exhibit G-5 Pending Litigation Exhibit G-6
Hazardous Substances Disclosure Exhibit G-7 Schedule of Project Documents      
Other Exhibit H Insurance Requirements Exhibit I Lender/Lending Office

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FINANCING AGREEMENT

This FINANCING AGREEMENT (this “Agreement”) dated as of November 9, 2011, is
entered into by and between USG NEVADA LLC, a Delaware limited liability
company, as Borrower, and ARES CAPITAL CORPORATION, a Maryland corporation, as
Lender.

In consideration of the agreements herein and in the other Financing Documents
and in reliance upon the representations and warranties set forth herein and
therein, the parties agree as follows:

ARTICLE 1
DEFINITIONS

1.1 Definitions. Except as otherwise expressly provided, capitalized terms used
in this Agreement and its exhibits shall have the meanings given in Exhibit A.

1.2 Rules of Interpretation. Except as otherwise expressly provided, the rules
of interpretation set forth in Exhibit A shall apply to this Agreement and the
other Financing Documents.

ARTICLE 2
THE CREDIT FACILITIES

2.1 Cash Grant Bridge Loan Facility.

(a) Availability. Subject to the terms and conditions set forth in this
Agreement, Lender agrees to advance to Borrower cash grant bridge loans in an
aggregate principal amount not to exceed NINE MILLION DOLLARS ($9,000,000) (the
“Loan Commitment”), to be comprised as follows: (a) subject to the satisfaction
by Borrower of each of the requirements set forth in Section 3.1 hereof, a loan
in the aggregate principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000), to be made pursuant to an initial Borrowing to occur, if at all,
on the Financial Closing Date (the “Initial Loan”), and (b) subject to the
satisfaction by Borrower of each of the requirements set forth in Section 3.2
hereof, a loan in the aggregate principal amount of One Million Five Hundred
Thousand Dollars ($1,500,000), to be made pursuant to a second Borrowing to
occur, if at all, on the Second Borrowing Date and no later than the Second
Borrowing Deadline (such second Borrowing, the “Additional Loan” and, together
with the Initial Loan, collectively, the “Loans”).

(b) Interest. Borrower shall pay interest on the unpaid principal amount of the
Loans calculated from the date thereof until repayment of such Loans at a rate
per annum, at all times during each Interest Period for such Loans, equal to the
LIBO Rate for three (3) month Interest Periods plus the Applicable Margin.

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(c) Principal Payment. Borrower shall repay to Lender, in full on the Maturity
Date, the unpaid principal amount of the Loans together with any and all unpaid
interest, fees and costs hereunder.

(d) Use of Loan Proceeds.

(i) Borrower shall use the proceeds of the Loans solely toward development costs
in connection with the Expanded Project and for other general corporate
purposes; provided, however, that in no event shall the proceeds of the Loans be
used to pay any interest, principal or other financing-related fees under the
Construction Loan Documents other than as permitted by clause (ii) below.

(ii) Upon the satisfaction of each of the following conditions (as determined by
Lender in its sole discretion), Borrower may apply up to Two Million Dollars
($2,000,000) of the proceeds of the Loans towards the payment of interest,
principal and other financing-related fees under the Construction Loan
Documents: (A) the Cash Grant Application for the Project shall have been filed
with the United States Treasury Department in accordance with Section 5.24 of
this Agreement, (B) the Project shall not have been materially damaged by flood,
fire or other casualty, (C) there shall not have occurred at any time following
the Financial Closing Date any event, occurrence, effect or circumstance of
whatever nature that has, or could reasonably be expected to have, a Material
Adverse Effect, (D) no Event of Default or Inchoate Default shall have occurred
and be continuing, and (E) Borrower shall have delivered to Lender a certificate
from the Independent Engineer certifying: (1) that the Project has commenced
operations and producing electrical energy for commercial sale in accordance
with Prudent Utility Practices and applicable laws, (2) that the completion of
all work done to date has been in accordance with the Construction Contract, and
(3) otherwise in form and substance satisfactory to Lender, together with the
Independent Engineer’s report or reports attached thereto.

(iii) No portion of the proceeds of any Loan shall be used in any manner that
causes or might cause the funding of the Loans or the application of such
proceeds or deposits to violate Regulations T, U or X of the Federal Reserve
Board or to violate the Exchange Act.

2.2 Interest Provisions; Loan Funding; Prepayments.

(a) Interest Payment Dates. Borrower shall pay accrued interest on the unpaid
principal amount of each Loan (i) on each Interest Payment Date, (ii) on the
Maturity Date, (iii) upon any prepayment of any such Loan as and to the extent
provided below and (iv) at maturity (whether by acceleration or otherwise).

(b) Interest Periods. The initial and each subsequent Interest Period of each
Loan shall be three (3) months or such other longer periods as Lender may
approve in its sole and absolute discretion, except if the Maturity Date occurs
prior to the end of the three (3) month period, in which case the Interest
Period will end in accordance with Section 2.2(b)(C) as noted below; provided,
however, that (A) any Interest Period which would otherwise end on a day which
is not a Banking Day shall be extended to the next succeeding Banking Day unless
such next Banking Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding Banking Day; (B) any
Interest Period which begins on the last Banking Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Banking Day of the
calendar month at the end of such Interest Period; and (C) any Interest Period
which would otherwise end after the Maturity Date or otherwise end after a date
upon which any Loan is or may be required to be repaid shall end on the Maturity
Date or such other date upon which such Loan is or may be required to be repaid
in full.

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(c) Interest Account and Interest Computations. Borrower authorizes Lender to
record in an account or accounts maintained by Lender on its books (i) the
interest rates applicable to all Loans and the effective dates of all changes
thereto, (ii) the Interest Period for each Loan, (iii) the date and amount of
each principal and interest payment on each Loan, and (iv) such other
information as Lender may determine is necessary for the computation of interest
payable by Borrower hereunder. Borrower agrees that all computations by Lender
of interest shall be conclusive in the absence of demonstrable error. All
computations of interest on the Loans hereunder shall be based upon a year of
three hundred and sixty (360) days for the actual number of days elapsed in the
period during which such interest accrues. The LIBO Rate will be adjusted for
Regulation D reserve requirements on a statutory basis to reflect Lender’s
actual cost of maintaining such reserve.

(d) Promissory Note. The obligation of Borrower to repay the Loans and to pay
interest thereon at the rates provided herein, if requested by Lender, shall be
evidenced by a promissory note in the form of Exhibit B (the “Note”). The Note
shall be payable to Lender in the principal amount of the Loan Commitment.
Borrower authorizes Lender to record on the schedule annexed to the Note the
date and amount of each Loan and each payment or prepayment of principal
thereunder, and Borrower agrees that all such notations shall constitute prima
facie evidence of the accuracy of the matters noted; provided, that neither the
failure to make any such notation nor any error in such notation shall affect
the validity of Borrower’s obligations to repay the full unpaid principal amount
of the Loans or the other obligations of Borrower hereunder or under the Note.
Borrower further authorizes Lender to attach to and make a part of the Note
continuations of the schedule attached thereto as necessary.

(e) Loan Funding.

(i) Initial Loan. No later than 4:00 p.m., New York time, on the Financial
Closing Date, if the conditions precedent listed in Section 3.1 have been
satisfied or waived, Lender shall cause an amount equal to the Initial Loan in
Dollars and in immediately available funds to be credited in accordance with the
Flow of Funds Memorandum.

(ii) Additional Loan.

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(A) Borrower shall request the Additional Loan by delivering to Lender an
irrevocable Notice of Borrowing substantially in the form of Exhibit D-9, which
specifies or certifies (as applicable), among other things: (1) Borrower has
satisfied all conditions precedent to the making of such Borrowing under Section
3.2 of this Agreement, and (2) the date of the requested Borrowing, which date
shall be: (x) a Banking Day, (y) on or before the Second Borrowing Deadline, and
(z) at least three (3) Banking Days after Lender’s receipt of such Notice of
Borrowing (the “Second Borrowing Date”).

(B) No later than 4:00 p.m., New York time, on the Second Borrowing Date, if the
conditions precedent listed in Section 3.2 have been satisfied or waived, Lender
shall make available the Additional Loan in Dollars in immediately available
funds, and shall apply such funds pursuant to the terms of this Agreement.

(iii) Two Borrowings. For the avoidance of doubt, there shall only be two (2)
Borrowings of the Loans hereunder, which Borrowings shall occur, if at all, (a)
on the Financial Closing Date, and (b) on the Second Borrowing Date.

(f) Prepayments.

(i) Terms of all Prepayments. Upon the prepayment or repayment of any Loan,
Borrower shall pay to Lender (A) all accrued interest to the date of such
prepayment or repayment on the amount prepaid or repaid, (B) all accrued fees to
the date of such prepayment or repayment corresponding to the amount being
prepaid or repaid, and (C) if such prepayment or repayment is the prepayment or
repayment of a Loan on a day other than the otherwise scheduled last day of an
Interest Period for such Loan, all Liquidation Costs incurred by Lender as a
result of such prepayment or repayment. All such prepayments or repayments
(excluding repayments under Section 2.2(f)(iv)(A) which shall be applied
according to the order of priority set forth therein) shall be applied (x)
first, until all outstanding Loans have been repaid in full, to the payment of
the Loans and (y) second, to the prepayment of any other Obligations under the
Financing Documents. All prepayments of Loans shall be applied first to accrued
but unpaid interest remaining on such Loans on a pro rata basis and then to
reduce the outstanding principal amount of such Loan on a pro rata basis.

(ii) Re-Borrowings. Borrower may not reborrow the principal amount of any Loan
which is prepaid or repaid.

(iii) Optional Prepayments. Borrower may, at its option, upon three (3) Banking
Days’ notice to Lender, prepay Loans in whole or in part. Any optional
prepayment hereunder shall be in the minimum amount of One Million Dollars
($1,000,000) or any increment of Five Hundred Thousand Dollars ($500,000) in
excess thereof.

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(iv) Mandatory Prepayments.

(A) Borrower shall prepay the Loans upon receipt with one hundred percent (100%)
of the net cash proceeds of (i) any debt issuances by Borrower except for the
Construction Loan and any Approved Other Project Financing, and (ii) equity
issuances by Borrower other than equity issuances the proceeds of which are
applied to pay Project Costs and those associated with the Sponsor Equity.

(B) Borrower shall: (i) upon receipt of the Cash Grant for the Project, or (ii)
any payments under the Sponsor Cash Grant Shortfall Guaranty in respect of any
Cash Grant Shortfall, cause one hundred percent (100%) of the proceeds of the
Cash Grant or such payments by Sponsor and Idaho Sponsor to be paid to Lender
toward the repayment of the Loans.

Notwithstanding the foregoing, and except for any repayment or prepayment in
full of the Construction Loan pursuant to an Approved Term Loan, Borrower shall
not prepay any obligations under the Construction Loan Agreement unless Borrower
shall simultaneously prepay the Loans hereunder, on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof).

Upon the unconditional and irrevocable payment in full, in cash, of all of the
Obligations of Borrower hereunder and under each of the Financing Documents
(including without limitation payment in full of the Loans), any excess Cash
Grant Proceeds shall be released as soon as practicable by Lender to Borrower or
the Person legally entitled thereto.

2.3 Fees.

(a) Other Fees. Borrower shall pay to Lender any fees (“Other Fees”) on the
terms and in the respective amounts thereof set forth in the Mandate Letter and
the Fee Letters.

(b) Commitment Fees. On the last Banking Day in each calendar quarter commencing
on the Financial Closing Date until the Second Borrowing Date, Borrower shall
pay to Lender accruing from the Financial Closing Date or the first day of such
quarter, as the case may be, Loan commitment fees (the “Commitment Fees”) for
such quarter (or portion thereof) then ending in an aggregate amount equal to
the product of (A) 0.50% times (B) One Million Five Hundred Thousand Dollars
($1,500,000), times (C) a fraction, the numerator of which is the number of days
in such quarter (or portion thereof) and the denominator of which is 360.

2.4 Other Payment Terms.

(a) Place and Manner. Borrower shall make all payments due to Lender to the
following account:

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U.S. Bank, N.A.
Minneapolis, MN
ABA#091-000-022
Swift #USBKUS44
DDA #1731-0332-1738
Account Name: Ares Capital Corp.
Ref: FFC: ARCC 786127-700 / US Geothermal

(the “Lender Account”) in lawful money of the United States and in immediately
available funds not later than 2:00 p.m., New York time, on the date on which
such payment is due. Any payment made after such time on any day shall be deemed
received on the next Banking Day after such payment is received. All Cash Grant
Proceeds shall be deposited directly into the Lender Account.

(b) Date. Subject to Section 2.2, whenever any payment due hereunder shall fall
due on a day other than a Banking Day, such payment shall be made on the next
succeeding Banking Day (or, if resulting in an extension into the next calendar
month, the next preceding Banking Day), and such extension of time shall be
included in the computation of interest or fees, as the case may be.

(c) Default Interest. Upon the occurrence and during the continuance of any
Event of Default, the principal amount of all Loans outstanding shall thereafter
bear interest until those amounts are paid in full at a per annum rate equal to
the Default Rate. Borrower will also pay the Default Rate on any amount not paid
when due under this Agreement or any other Financing Document.

(d) Net of Taxes, Etc.

(i) Taxes. Any and all payments to or for the benefit of Lender by or on behalf
of Borrower, or on behalf of any Borrower Affiliate Entity, hereunder or under
any other Financing Document shall be made free and clear of and without
withholding, deduction, setoff or counterclaim for any present or future taxes,
levies, imposts, deductions, withholdings (including backup withholding),
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto
(collectively, “Taxes”), unless required by law. If any such withholding,
deduction or setoff is required by law, (x) Borrower or such Borrower Affiliate
Entity shall pay such additional amounts as may be necessary to yield to Lender,
after deduction for or on account of any Taxes (including deductions applicable
to additional sums payable under this Section 2.4(d)), and all liabilities with
respect thereto (excluding (A) taxes imposed on or measured by the net income or
capital of Lender or franchise taxes imposed in lieu of net income or capital
taxes, in each case imposed by any jurisdiction or any political subdivision or
taxing authority thereof or therein as a result of a connection between Lender
and such jurisdiction or political subdivision, other than a connection
resulting solely from executing, delivering or performing its obligations or
receiving a payment under, or enforcing, this Agreement, the Note or any other
Financing Document and (B) any United States federal withholding taxes that are
in effect and that would apply to a payment hereunder or under any other
Financing Document made to Lender as of the date Lender becomes a party to this
Agreement or designates a new Lending Office except to the extent Lender, or its
assignor (if any) was entitled, at the time of designation of a new Lending
Office (or assignment) to receive additional amounts from Borrower with respect
to such Taxes pursuant to this Section 2.4(d) (the “Excluded Taxes”)) (all such
Taxes other than Excluded Taxes being hereinafter referred to as “Indemnified
Taxes”), an amount equal to the sum it would have received hereunder or under
such other Financing Documents had such withholding, deduction or setoff not
been required; (y) such deductions or withholdings shall be made; and (z)
Borrower or such Borrower Affiliate Entity shall pay the full amount deducted or
withheld to the relevant taxation authority or other authority in accordance
with applicable law. In addition, Borrower agrees to timely pay or cause the
Borrower Affiliate Entities to pay any present or future stamp, recording or
documentary taxes and any other excise or property taxes, charges or similar
levies (and interest, fines, penalties and additions related thereto) that arise
under applicable law from any payment made hereunder or under any other
Financing Document or from the execution, delivery, filing or performance or
enforcement of, or otherwise with respect to, this Agreement or any other
Financing Document (hereinafter referred to as “Other Taxes”) to the relevant
taxation authority in accordance with applicable law.

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(ii) Indemnity. Borrower shall indemnify Lender for the full amount of Taxes and
Other Taxes (including any Indemnified Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.4(d)) paid by Lender, or
any of its Affiliates, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally asserted; provided
that Borrower shall not be obligated to indemnify Lender for any penalties,
interest or expenses relating to Indemnified Taxes or Other Taxes arising from
the indemnitee’s gross negligence or willful misconduct, as determined by a
final non-appealable judgment of a court of competent jurisdiction. Lender
agrees to use its commercially reasonable efforts to give notice to Borrower of
the assertion of any claim against Lender relating to any Indemnified Taxes or
Other Taxes reasonably promptly, and in no event later than sixty (60) days
after Lender has actual knowledge of such claim; provided that Lender’s failure
to notify Borrower within such sixty (60) day period of such assertion shall not
relieve Borrower of its obligation under this Section 2.4(d) with respect to
Indemnified Taxes, Other Taxes or liabilities, except to the extent of any
increased liability for such Indemnified Taxes, Other Taxes or liabilities
attributable to such failure. Payments by Borrower pursuant to this Section
2.4(d)(ii) shall be made within ten (10) days from the date Lender makes written
demand therefor which demand shall be accompanied by a certificate describing in
reasonable detail the basis and calculation thereof and which shall be
conclusive absent manifest error.

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(iii) Refunds. If Lender determines, in its sole discretion, that it has
received a refund of Indemnified Taxes or Other Taxes as to which Borrower has
paid additional amounts pursuant to this Section 2.4(d), it shall pay over such
refund to Borrower (but only to the extent of additional amounts paid by
Borrower under this Section 2.4(d) with respect to the Indemnified Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
Lender (including any Taxes imposed with respect to such refund) as is
determined by Lender in good faith and in its sole discretion, and as will leave
Lender in no worse position than it would be in if the additional amounts giving
rise to such refund has never been paid, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that Borrower, upon the request of Lender, agrees to repay
within ten (10) days of demand therefor the amount paid over to Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to Lender in the event Lender is required to repay such refund to
such Governmental Authority. This Section 2.4(d) shall not be construed to
require Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to Borrower or any other
Person.

(iv) Notice. Within thirty (30) days after the date of any payment of any
Indemnified Taxes or Other Taxes by Borrower, Borrower shall furnish to Lender
at its address referred to in Section 10.1, the original or a certified copy of
a receipt evidencing payment thereof, or if such receipt is not obtainable,
other evidence of such payment by Borrower reasonably satisfactory to Lender.
Borrower shall indemnify Lender for all losses and expenses sustained by Lender
as a result of any failure by Borrower to so furnish the original or certified
copy of such receipt or such other evidence of payment.

(v) Survival of Obligations. The obligations of Borrower under this Section
2.4(d) shall survive any assignment of rights by Lender as permitted hereunder,
and the termination of this Agreement and the repayment of the Obligations.

(e) Withholding Exemption Certificates. Lender agrees that on the date Lender
becomes a party to this Agreement it will deliver to Borrower either (A) if
Lender is a “United States person” as defined in Section 7701(a)(30) of the Code
(other than a corporation established under the laws of the United States or any
state thereof or the District of Columbia or other exempt holders that in each
case so certify), two duly and appropriately completed copies of a United States
Internal Revenue Service Form W-9 or any applicable successor form establishing
that Lender is not subject to United States backup withholding tax or (B) if
Lender is not a “United States person,” as defined in 7701(a)(30) of the Code,
(x) two duly and appropriately completed copies of United States Internal
Revenue Service Form W-8IMY (together with any required attachments), W-8ECI or
W-8BEN (claiming benefit under an applicable treaty) or applicable successor
form, as the case may be and any required supporting documentation (claiming
therein a reduction in or an exemption from United States withholding taxes), or
(y) in the case of a Person claiming the “portfolio interest exemption,” two
copies of a statement certifying that it is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within
the meaning of Section 881(c)(3)(B) of the Code or a “controlled foreign
corporation” receiving interest from a related person within the meaning of
Section 881(c)(3)(C) of the Code, together with two duly and appropriately
completed copies of United States Internal Revenue Service Form W-8BEN
certifying that such Person is not a United States person, and, in each case,
promptly following any reasonable request by Borrower, or upon expiration or
obsolescence of any previously submitted form, any additional or successor form
required by the United States Internal Revenue Service in order to qualify for
reduction of or exemption from United States withholding taxes, or notify
Borrower of its inability to deliver such forms. Borrower shall not be obligated
to pay any additional amounts in respect of United States federal income tax
pursuant to Section 2.4(d) (or make an indemnification payment pursuant to
Section 2.4(d)) to Lender or any Person (including any Person to which Lender
sells, assigns, grants a participation in, or otherwise transfers, its rights
under this Agreement) to the extent the obligation to pay such additional
amounts (or such indemnification) would not have arisen but for a failure of
Lender or such Person to comply with its obligations under this Section 2.4(f).
Notwithstanding the foregoing or anything else to the contrary in this
Agreement, Lender shall not be obligated to deliver any form, certificate or
document which it cannot deliver as a matter of law.

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2.5 Change of Circumstances.

(a) Inability to Determine Rates. If, on or before the first day of any Interest
Period for any Loan Lender determines, and promptly provides notice in writing
to Borrower, that (i) the LIBO Rate for such Interest Period cannot be
adequately and reasonably determined due to the unavailability of funds in or
other circumstances affecting the London interbank market, (ii) the rates of
interest for such Loans do not adequately and fairly reflect the cost to Lender
of making or maintaining the Loans as LIBO Rate Loans or (iii) deposits in
Dollars in the London interbank market are not available to Lender (as
conclusively certified by Lender in writing to Borrower) in the ordinary course
of business in sufficient amounts to make and/or maintain the Loans, then, after
the giving of any such notice and until Lender shall otherwise notify Borrower
that the circumstances giving rise to such condition no longer exist (which
notice shall be given promptly after such circumstances cease to exist),
Lender’s obligations to continue LIBO Rate Loans shall be suspended and all
Loans made or continued after the giving of such notice shall be made or
continued as ABR Loans. If any Loan is outstanding at the commencement of any
such suspension, it shall be converted at the end of the then current Interest
Period for such Loan into an ABR Loan unless Lender has notified Borrower in
writing that such suspension has then ended.

(b) Illegality. If, after the date of this Agreement, the adoption of any
Governmental Rule, any change in any Governmental Rule or the application or
requirements thereof (whether such change occurs in accordance with the terms of
such Governmental Rule as enacted, as a result of amendment, or otherwise), any
change in the interpretation or administration of any Governmental Rule by any
Governmental Authority, or compliance by Lender or Borrower with any request or
directive (whether or not having the force of law) of any Governmental Authority
(a “Change of Law”) shall make it unlawful or impossible for Lender to make or
maintain any Loan, Lender shall immediately notify Borrower of such Change of
Law. Upon receipt of such notice (i) Lender’s obligations to continue LIBO Rate
Loans shall be suspended for so long as such condition shall exist, and (ii) all
of the LIBO Rate Loans shall immediately convert to ABR Loans. Any conversion of
LIBO Rate Loans into ABR Loans prior to the last day of an Interest Period in
accordance with the preceding sentence shall be deemed a prepayment thereof for
purposes of Section 2.6 only.

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(c) Increased Costs. If, after the date of this Agreement, any Change of Law:
(i) shall subject Lender to any tax, duty or other charge with respect to any
Obligation or the Loan Commitment, or shall change the basis of taxation of
payments by Borrower to Lender on such Obligation or with respect to the Loan
Commitment (except for Indemnified Taxes or Other Taxes (to the extent covered
by Section 2.4), Excluded Taxes or changes in the rate of taxation on the
overall net income of Lender); or (ii) shall impose, modify or hold applicable
any reserve, special deposit or similar requirement (without duplication of any
reserve requirement included within the interest rate through the definition of
“Reserve Requirement”) against assets held by, deposits or other liabilities in
or for the account of, advances or loans by, or any other acquisition of funds
by Lender for any Loan; or (iii) shall impose on Lender any other condition
directly related to any Obligation or the Loan Commitment; and the effect of any
of the foregoing is to increase the cost to Lender of making, issuing, creating,
renewing, participating in or maintaining any such Obligation or the Loan
Commitment or to reduce any amount receivable by Lender hereunder or under the
Note, then, subject to Section 2.7(c), Borrower shall from time to time, upon
demand by Lender, pay to Lender additional amounts sufficient to reimburse
Lender for such increased costs or to compensate Lender for such reduced
amounts.

(d) Capital Requirements. If Lender reasonably determines that (i) any Change of
Law affects the amount of capital required or expected to be maintained by
Lender or the Lending Office (a “Capital Adequacy Requirement”) and (ii) the
amount of capital maintained by Lender or such Lending Office which is
attributable to or based upon the Loans, the Loan Commitment or this Agreement
must be increased as a result of such Capital Adequacy Requirement (taking into
account Lender’s policies with respect to capital adequacy), Borrower shall,
subject to Section 2.7(c), pay to Lender such amounts as Lender shall reasonably
determine are necessary to compensate Lender for the increased costs to Lender
of such increased capital.

(e) Notice. Lender will notify Borrower of any event occurring after the date of
this Agreement that will entitle Lender to compensation pursuant to this

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Section 2.5, as promptly as is reasonable. In the event Lender seeks
compensation under this Section 2.5, it shall promptly deliver to Borrower a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to Lender under this Section 2.5, which statement
shall be conclusive and binding upon all parties hereto absent demonstrable
error.

2.6 Funding Losses. If Borrower shall (a) repay or prepay any Loans on any day
other than the otherwise scheduled last day of an Interest Period for such Loans
(whether an optional prepayment or a Mandatory Prepayment), (b) fail to borrow
the Additional Loan in accordance with the Notice of Borrowing delivered to
Lender (whether as a result of the failure to satisfy any applicable conditions
or otherwise), or (c) fail to make any prepayment of any Loan in accordance with
any notice of prepayment delivered to Lender; then Borrower shall, upon demand
by Lender, reimburse Lender for all costs and losses incurred by Lender as a
result of such repayment, prepayment or failure which shall include the amount
equal to the excess, if any, of (x) the portion of the applicable interest
attributable to the LIBO Rate which would have applied to the principal amount
so repaid, prepaid or not borrowed for the period from the date of such
repayment or prepayment or failure to borrow to the last day of the then current
Interest Period for the such Loan over (y) the amount of interest that Lender
would be able to obtain by placing an amount equal to the principal amount so
repaid, prepaid or not borrowed, as the case may be, with a leading bank in the
London interbank market for a period commencing from the date of such repayment,
prepayment or failure to borrow, as applicable, through the end of such Interest
Period (“Liquidation Costs”) but shall not otherwise include any compensation
for lost profits. Borrower understands that such costs and losses may include
losses incurred by a Lender as a result of funding and other contracts entered
into by Lender to fund Loans. If Lender demands payment under this Section 2.6,
it shall deliver to Borrower a certificate setting forth, and reasonably
accounting for, the amount of costs and losses for which demand is made.
Notwithstanding the foregoing, unless an Event of Default shall have occurred
and be continuing, and except with regard to any optional prepayments hereunder
or the events described in clause (b) above, Lender shall use reasonable efforts
to minimize any Liquidation Costs, at Borrower’s request, by applying Mandatory
Prepayments until the last day of an Interest Period (provided that, for
purposes of clarification, Loans shall be deemed to remain outstanding for
purposes of the Financing Documents until such Mandatory Prepayments are applied
to Loans).

2.7 Alternate Office; Minimization of Costs.

(a) To the extent reasonably possible, Lender shall designate an alternative
Lending Office with respect to its Loans and otherwise take any reasonable
actions to reduce any liability of Borrower to Lender under Sections 2.4(d),
2.5(c) or 2.5(d), or to avoid the unavailability of any Loans so long as Lender,
in its reasonable discretion, does not determine that such designation is
disadvantageous to Lender.

(b) Lender may designate a Lending Office other than that set forth on Exhibit I
and may assign all of its interests under the Financing Documents, and the Note,
to such Lending Office, provided that such designation and assignment do not at
the time of such designation and assignment increase the reasonably foreseeable
liability of Borrower under Sections 2.4(d), 2.5(c) or 2.5(d).

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(c) Lender shall use reasonable efforts to avoid or minimize any additional
costs, taxes, expense or obligation which might otherwise be imposed on Borrower
pursuant to Sections 2.4(d), 2.5(c) or 2.5(d) or as a result of Lender being
subject to a Reserve Requirement; provided, however, that such efforts shall not
cause the imposition on Lender of any additional costs or legal or regulatory
burdens unless Borrower shall provide Lender with an indemnification for such
additional costs in form and substance reasonably satisfactory to Lender.

2.8 Collateral and other Related Documents. The Obligations shall be secured by,
and Borrower shall deliver or cause to be delivered to Lender on the Financial
Closing Date, the following:

(a) a Security Agreement substantially in the form of Exhibit D-1, duly executed
by Borrower (the “Cash Grant Security Agreement”), pursuant to which Lender is
granted a first priority security interest in all of Borrower’s right, title and
interest in the Cash Grant Proceeds (as defined therein);

(b) a Pledge Agreement substantially in the form of Exhibit D-2, duly executed
by Idaho Sponsor (the “Idaho Sponsor Pledge Agreement”), pursuant to which
Lender is granted a first priority security interest in all of Idaho Sponsor’s
ownership interests in Holdings;

(c) a Pledge Agreement substantially in the form of Exhibit D-3, duly executed
by Holdings (the “Member Pledge Agreement”), pursuant to which Lender is granted
a first priority security interest in all of Holdings’ ownership interests in
Borrower;

(d) a Cash Grant Shortfall Guaranty in substantially the form of Exhibit D-4,
duly executed by each of Sponsor and Idaho Sponsor (the “Sponsor Cash Grant
Shortfall Guaranty”), pursuant to which Sponsor and Idaho Sponsor jointly and
severally indemnify Lender from and against any Cash Grant Shortfall;

(e) an Intercreditor Agreement in substantially the form of Exhibit D-5, by and
between Lender and Construction Lender (the “Intercreditor Agreement”), pursuant
to which Lender and Construction Lender have set forth the relative priorities,
rights and security interests of the parties;

(f) appropriately completed copies, which have been duly authorized for filing
by the appropriate Person, of each UCC-1 financing statement necessary or
desirable to perfect the Liens of Lender in the Collateral; and

(g) such other documents, instruments and agreements as Lender may reasonably
request to grant to Lender Liens in the Collateral.

2.9 Further Assurances. Borrower shall deliver to Lender each of the foregoing
and such other instruments, agreements, certificates, opinions and documents
(including UCC financing statements) as Lender may request to perfect and
maintain the Liens granted to Lender by the foregoing prior to the Liens or
other interests of any Person other than Lender, including liens of the
Construction Lender under the Construction Loan Agreement. Borrower shall fully
cooperate with Lender and perform all additional acts reasonably requested by
Lender to effect the purposes of the foregoing.

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ARTICLE 3
CONDITIONS PRECEDENT

3.1 Conditions Precedent to the Financial Closing Date. The obligation of Lender
to make the Initial Loan on the Financial Closing Date and to otherwise enter
into the transactions contemplated by this Agreement is subject to the prior
satisfaction of each of the following conditions (unless waived in writing by
Lender):

(a) Resolutions. Delivery to Lender of a copy of one or more resolutions or
other authorizations of each Borrower Affiliate Entity, in each case, in form
and substance reasonably satisfactory to Lender, certified by the appropriate
officer or representative of each such entity as being in full force and effect
on the Financial Closing Date, authorizing the execution, delivery and
performance of this Agreement and the other Operative Documents and any
instruments or agreements required hereunder or thereunder to which each such
entity is a party, and in the case of Borrower, the Borrowings provided for
herein.

(b) Incumbency. Delivery to Lender of a certificate reasonably satisfactory in
form and substance to Lender from each Borrower Affiliate Entity, signed by the
appropriate authorized officer(s) or representative(s) of each such entity and
dated the Financial Closing Date, as to the incumbency of the natural persons
authorized to execute and deliver this Agreement and the other Operative
Documents and any instruments or agreements required hereunder or thereunder to
which each such entity is a party.

(c) Formation Documents. Not less than three (3) Banking Days before the
Financial Closing Date, delivery to Lender of (i) an equity ownership table of
Borrower Affiliate Entities, (ii) a corporate organization chart of Borrower
Affiliate Entities, (iii) the Borrower LLC Agreement, (iv) the Holdings LLC
Agreement, (v) a copy of the articles of incorporation or certificate of
incorporation or formation of each of Sponsor and Idaho Sponsor, each certified
by the Secretary of State of the applicable State of incorporation or formation
and (vi) a copy of the operating agreement, partnership agreement or by-laws of
each of Sponsor and Idaho Sponsor, in each case certified by its secretary.
Without limiting the generality of the foregoing, each of the Borrower LLC
Agreement and the Holdings LLC Agreement shall contain (x) restrictions and
protections satisfactory to Lender against direct or indirect transfers of
ownership that would cause the Project not to qualify for the Cash Grant or
result in a Recapture Event, (y) a requirement that, as a condition to any
direct or indirect transfers of ownership within five (5) years following the
Placed in Service Date, an opinion shall have been delivered to Lender from a
nationally recognized tax counsel expert reasonably satisfactory to Lender to
the effect that such transfer will not result in a Recapture Event, and (z) a
provision prohibiting any amendment to such operating agreement without the
approval of Lender and naming Lender as a third-party beneficiary with respect
such provision.

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(d) Good Standing. Delivery to Lender of (i) certificates issued by the
Secretary of State of the jurisdiction of incorporation or formation of each
Borrower Affiliate Entity, certifying that each such entity, as applicable, is
in good standing and is qualified to do business in, and has paid all franchise
taxes or similar taxes due to, such State, and (ii) a certificate issued by the
Secretary of State of the State of Nevada for Borrower certifying that Borrower
is in good standing and is qualified to do business in the State of Nevada.

(e) Satisfactory Proceedings.

(i) All corporate, partnership, limited liability company, partnership and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement shall be reasonably satisfactory in form and substance to
Lender.

(ii) All consents, exemptions, approvals, authorizations, or other actions by,
or notices to, or filings with, Governmental Authorities and other Persons in
respect of all applicable Legal Requirements, reasonably required in connection
with the execution, delivery or performance by each Borrower Affiliate Entity of
the Financing Documents to which it is a party (including all federal, state and
local regulatory filings, consents and approvals necessary in connection
therewith) shall have been obtained and be in full force and effect, and Lender
shall have been furnished with copies thereof, certified by a Responsible
Officer of Borrower as being true, complete and correct copies thereof, and all
waiting periods related thereto shall have lapsed or expired without extension
or the imposition of any adverse conditions or restrictions.

(f) Operative Documents.

(i) Delivery to Lender of fully executed Financing Documents and a certified
list, and true and correct copies, of each Project Document and any supplements
or amendments thereto, all of which Financing Documents, Project Documents and
supplements and amendments shall be reasonably satisfactory in form and
substance Lender and shall have been duly authorized, executed and delivered by
the parties thereto.

(ii) Delivery to Lender of all certificates representing securities pledged
under the Idaho Sponsor Pledge Agreement and the Member Pledge Agreement,
accompanied by instruments of transfer and undated ownership interest powers
endorsed in blank.

(iii) Delivery to Lender of a certificate of an authorized officer or
representative of Borrower, which certificate shall include certification (A) as
to the matters contained in Section 4.14, and (B) that, except as disclosed in
such certificate, all conditions precedent to the performance of Borrower and,
to Borrower’s knowledge, all conditions precedent to the performance of the
other parties under the Project Documents to have been performed have been
satisfied, except for conditions precedent to the performance of the parties
under the O&M Agreement that are not required to have been satisfied as of the
Financial Closing Date.

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(g) Certificate of Borrower. Lender shall have received a certificate, dated as
of the Financial Closing Date, signed by a Responsible Officer of Borrower, in
substantially the form of Exhibit F-1 (the “Borrower’s Closing Certificate”).

(h) Legal Opinions. Delivery to Lender of opinion(s) of counsel specified on
Exhibit C and, to the extent not covered by such opinions, opinions of counsel
for Borrower addressing (A) permitting and environmental matters, and (B) energy
regulatory matters, all such opinions in form and substance, and by such counsel
(if not otherwise specified), as Lender shall reasonably approve.

(i) Intentionally Omitted.

(j) Insurance. Insurance complying with Section 5.18 shall be in full force and
effect with respect to the Project and Lender shall have received (i) Exhibit H
describing the type of insurance and insurance limits for the Project, and (ii)
certified copies of all policies evidencing such insurance (or a binder,
commitment or certificates signed by the insurer or a broker authorized to bind
the insurer), in each case in form and substance reasonably satisfactory to
Lender.

(k) Independent Engineer’s Certificate. Delivery to Lender of the Independent
Engineer’s certificates with respect to the Project, in substantially the form
of Exhibit F-3 (detailing, among other things, (i) that the Placed in Service
Date is expected to occur prior to December 31, 2011, (ii) the on-schedule and
on-budget status of the Project construction, (iii) that there are sufficient
funds available to complete the Project in accordance with the Project Budget,
and (iv) that the completion of all work done to date has been in accordance
with the Construction Contract, and otherwise in form and substance satisfactory
to Lender), together with the Independent Engineer’s report or reports attached
thereto.

(l) Geothermal Consultant’s Certificate. Delivery to Lender of (i) the
Geothermal Report and (ii) a reliance letter from the Geothermal Consultant
permitting Lender to rely on such Geothermal Report, in each case in form and
substance satisfactory to Lender.

(m) Applicable Permits. Delivery to Lender of Exhibit G-2, the schedule of
Applicable Permits required to construct and operate the Project, in form and
substance reasonably satisfactory to Lender, together with copies of each
Applicable Permit listed on Part I of Exhibit G-2, each in form and substance
reasonably satisfactory to Lender. Borrower shall have duly obtained or been
assigned and there shall be in full force and effect in Borrower’s name and not
subject to any appeal or further proceeding or to any unsatisfied condition that
may allow a material modification or revocation of, the Applicable Permits for
the Project set forth on Part I of Exhibit G-2, constituting all of the
Applicable Permits which are, in Lender’s reasonable opinion in light of the
status of the acquisition, development, construction and operation of the
Project as of the Financial Closing Date, required to have been obtained by the
Financial Closing Date. Part II of Exhibit G-2 shall list all other Applicable
Permits required to construct and operate the Project. The Applicable Permits
listed in Part II of Exhibit G-2 shall, in Lender’s reasonable opinion in light
of the status of the development, construction and operation of the Project as
of the Financial Closing Date, be obtainable not later than required without
substantial difficulty, expense or delay. The Applicable Permits shall not be
subject to any restriction, condition, limitation or other provision that could
reasonably be expected to have a Material Adverse Effect on the construction or
operation of the Project.

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(n) No Change in Tax Laws. No change shall have occurred, since the date upon
which this Agreement was executed and delivered, in any law or regulation or
interpretation thereof that would subject Lender to any material unreimbursed
Indemnified Taxes or Other Taxes.

(o) Closing Costs and Fees. Lender shall have received evidence that Borrower
shall have paid all taxes, fees and other costs payable in connection with the
execution, delivery, recordation and filing of the Financing Documents
(including (x) all outstanding amounts due and owing to Lender under the Mandate
Letter, the Fee Letters or any other fee letter or agreement, and (y) the
reasonable and documented, out-of-pocket fees and expenses of (A) the
Independent Consultants and (B) Lender’s attorneys) shall have paid in full (or
shall contemporaneously be paid with the proceeds of the Initial Loan) or, as
approved by Lender, otherwise provided for.

(p) Absence of Litigation. No action, suit, proceeding or investigation shall
have been instituted or threatened, nor shall any order, judgment or decree have
been issued or proposed to be issued by any Governmental Authority that (i)
could reasonably be expected to have a Material Adverse Effect, (ii) seeks to
enjoin or otherwise prevent the consummation of the transactions hereby, or
(iii) solely as a result of the construction, ownership, leasing or operation of
the Project, the sale of electricity therefrom or the entering into of any
Operative Document or any transaction contemplated hereby or thereby, would
cause or deem (A) Lender or any Affiliate (as that term is defined in Section
1262(1) of PUHCA), of any of them to be subject to regulation under the FPA or
PUHCA or under any state laws and regulations respecting the rates or the
financial or organizational regulation of electric utilities, or (B) any
Borrower Affiliate Entity to be subject to, or not exempt from, regulation under
any state laws and regulations respecting the rates or the financial or
organizational regulation of electric utilities and regulation under PUHCA
except as set forth in Section 4.10 of this Agreement.

(q) Financial Statements. Not less than three (3) Banking Days before the
Financial Closing Date, delivery to Lender of the most recent annual financial
statements (audited if available) and most recent quarterly financial statements
from each Borrower Affiliate Entity (in the case of Borrower, on a consolidated
basis and including a balance sheet), in the case of each Borrower Affiliate
Entity together with a certificate from the appropriate Responsible Officer
thereof, stating that no material adverse change in the assets, liabilities,
operations or financial condition of such entity has occurred from those set
forth in the most recent financial statements or the balance sheet, as the case
may be, provided to Lender.

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(r) UCC Reports. Delivery to Lender of a UCC-11 (or similar) report of a recent
date before the Financial Closing Date for each of the jurisdictions in which
the UCC-1 financing statements will be filed or recorded, showing that upon due
filing or recordation (assuming such filing or recordation occurred on the date
of such respective reports), the security interests created under such
Collateral Documents will be prior to all other financing statements or other
security documents in respect of the Collateral, to the extent such security
interest can be perfected by filing or recording.

(s) Project Budget. Delivery to Lender of the budget (“Project Budget”) for all
anticipated costs to be incurred in connection with the construction and
start-up of the Project, including in such budget all construction and
non-construction costs, and including all interest, taxes and other carrying
costs, and such other information as Lender may reasonably require, together
with a balanced statement of uses and anticipated sources of funds necessary to
complete the Project, broken down as to separate construction phases and
components, which Project Budget shall be reasonably satisfactory to Lender. The
Project Budget is attached hereto as Exhibit G-3.

(t) Project Schedule. Delivery to Lender of a detailed project schedule of the
Project (“Project Schedule”) demonstrating that the Project will commence
operations and producing electrical energy for commercial sale in accordance
with Prudent Utility Practices and applicable laws no later than December 31,
2011, which Project Schedule shall be reasonably satisfactory to Lender. The
Project Schedule is attached hereto as Exhibit G-4.

(u) Material Adverse Change. In the reasonable judgment of Lender, acting in
good faith, there shall not have occurred at any time following October 1, 2011
any event, occurrence, effect or circumstance of whatever nature that has, or
could reasonably be expected to have, a Material Adverse Effect.

(v) QF Status. Borrower shall have delivered to Lender a copy of a notice of
self-certification filed at FERC demonstrating that Project will be a qualifying
small power production facility within the meaning of PURPA and 18 C.F.R.
Sections 292.203 and 292.204 (“QF”) at the time the Project begins producing
electric energy (the “QF Self-Certification”).

(w) Borrower Certification of Qualifying Costs. Delivery to Lender of a
certificate executed by the appropriate authorized officer of Borrower, in form
and substance satisfactory to Lender, certifying as to the aggregate amount of
Qualifying Costs paid through the Financial Closing Date with respect to the
Project and confirming that (i) such Qualifying Costs have been determined
pursuant to a methodology consistent with the Cash Grant Guidance and applicable
law, and (ii) the amount of the Initial Loan does not exceed ninety percent
(90%) of thirty percent (30%) of such Qualifying Costs incurred and paid with
regard to the Project.

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(x) Intentionally Omitted.

(y) Qualifying Costs. The aggregate principal amount of the Initial Loan shall
not exceed ninety percent (90%) of thirty percent (30%) of the Qualifying Costs
incurred (within the meaning of the Cash Grant Guidance) through the Financial
Closing Date, as certified by Borrower in its certificate delivered pursuant to
clause (w) above and as demonstrated by the Preliminary Cost Segregation Report
(as defined in clause (z) below).

(z) Preliminary Cost Segregation Report. Delivery to Lender of a preliminary
study of the Cost Segregation Consultant identifying the cost categories and
amount of Qualifying Costs, providing an itemization of Qualifying Costs paid
through a date reasonably close to the Financial Closing Date, and describing
the methodology used in determining categories and amounts of Qualifying Costs
(the “Preliminary Cost Segregation Report”), prepared in a manner consistent
with the Cash Grant Guidance and applicable law and in form and substance
satisfactory to Lender. The Preliminary Cost Segregation Report shall estimate
the Cash Grant for the Project to be at least Ten Million Dollars ($10,000,000).

(aa) Sponsor Indemnities. Borrower shall have delivered to Lender the Sponsor
Cash Grant Shortfall Guaranty.

(bb) Power of Attorney. Delivery to Lender of a power of attorney, in
substantially the form of Exhibit D-6 (the “Cash Grant Application Power of
Attorney”), executed by Borrower which grants Lender the power to act in the
place of Borrower with respect to the Cash Grant Application and any filings or
notices related thereto on and after the occurrence and during the continuance
of an Event of Default .

(cc) Ownership; No Disqualified Persons. Delivery to Lender of a certificate
executed and delivered by an authorized officer of Sponsor, Idaho Sponsor and
Holdings certifying that no direct or indirect equity interest in Borrower is
beneficially owned by a Disqualified Person, together with an ownership diagram
of Borrower, showing the complete direct and indirect ownership of Borrower, and
any partnership of other pass-through entity that directly or indirectly owns
any interest in Borrower, up to direct or indirect owners that are individuals,
non-grantor trusts, or taxable “C” corporations, but not including the owners of
a taxable “C” corporation, and any other backup diligence materials (including,
in the case of any beneficial owner that is an individual, certifications or
such other evidence establishing whether such individual is an “United States
Person” as defined in Section 7701(a)(30) of the Code) requested by Lender, in
each case in form and substance satisfactory to Lender.

(dd) Representations and Warranties. Each representation and warranty of each
Borrower Affiliate Entity under the Financing Documents and the Project
Documents to which it is a party shall be true and correct as of the Financial
Closing Date (or if such representation and warranty relates solely as of an
earlier date, as of such earlier date).

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(ee) Patriot Act Compliance. Delivery to Lender of all such documentation and
information requested by Lender that is necessary (including the name and
address of each Borrower Affiliate Entity) for Lender to identify each Borrower
Affiliate Entity and any of their controlling owners in accordance with the
requirements of the Patriot Act (including the “know your customer” and similar
regulations thereunder).

(ff) Intentionally Omitted.

(gg) Indebtedness. On the Financial Closing Date, Borrower shall have no
outstanding indebtedness or preferred stock other than (i) the Initial Loan and
other extensions of credit hereunder; (ii) the Construction Loan as permitted
under the Intercreditor Agreement; and (iii) indebtedness not in excess of
Twenty-Five Thousand Dollars ($25,000) in the aggregate. Lender shall have
received fully-executed copies of the Construction Loan Documents in effect as
of the Financial Closing Date.

(hh) Equity Commitment. The Sponsor shall have funded the Sponsor Equity prior
to the Financial Closing Date.

(ii) Flow of Funds. Not less than three (3) Banking Days before the Financial
Closing Date, delivery to Lender of a memorandum setting forth the sources and
uses of all proceeds of the Loans and including Sponsor Equity, including any
necessary instructions from Borrower with respect to the disbursement to and
receipt by any Borrower Affiliate Entity, and Borrower’s proposed use of such
proceeds pursuant to and in accordance with this Agreement and the other
Financing Documents, all as certified by an authorized officer of Borrower.

(jj) Event of Default. No Event of Default or Inchoate Default has occurred and
is continuing or will result from the Borrowing on the Financial Closing Date.

(kk) Interconnection Arrangements. Lender shall have been satisfied with the
Project’s interconnection arrangements with Interconnector or any other
transmission service provider in order for the Project to achieve the Placed in
Service Date no later than December 31, 2011.

(ll) Solvency Certificate. Delivery to Lender of a Solvency Certificate, in
substantially the form of Exhibit F-4, of a Responsible Officer of the Sponsor
confirming the Solvency of each Borrower Affiliate Entity after giving effect to
the transactions contemplated hereunder (the “Solvency Certificate”).

3.2 Conditions Precedent to the Borrowing of the Additional Loan. The obligation
of the Lender to effect or permit the Borrowing of the Additional Loan is
subject to the prior satisfaction of each of the following conditions (unless
waived in writing by Lender):

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(a) Notice of Borrowing. Borrower shall have delivered the Notice of Borrowing
to Lender in accordance with the procedures specified in Sections 2.2(e)(ii)(A).

(b) Certificate of Borrower. Lender shall have received a certificate, dated as
of the Second Borrowing Date, signed by a Responsible Officer of Borrower, in
substantially the form of Exhibit F-5.

(c) Independent Engineer’s Certificate. Delivery to Lender of the Independent
Engineer’s certificates with respect to the Project, in substantially the form
of Exhibit F-3 (detailing, among other things, (i) that the Placed in Service
Date is expected to occur prior to December 31, 2011, (ii) the on-schedule and
on-budget status of the Project construction, (iii) that there are sufficient
funds available to complete the Project in accordance with the Project Budget,
and (iv) that the completion of all work done to date has been in accordance
with the Construction Contract, and otherwise in form and substance satisfactory
to Lender), together with the Independent Engineer’s report or reports attached
thereto.

(d) Applicable Permits. All Applicable Permits required for the construction of
the Project and operation of the Project required to have been obtained by the
Second Borrowing Date from any Governmental Authority have been issued and are
in full force and effect and not subject to appeal or to any unsatisfied
conditions that may allow material modification or revocation. With respect to
any of the Permits not yet required and listed in Part II of Exhibit G-2, Lender
shall have reasonably concluded that there is no reason to believe that any such
Applicable Permits will not be obtained by the time required.

(e) Operative Documents. All of the Operative Documents to be executed and
delivered with respect to the Project on or prior to the Second Borrowing Date
shall be in full force and effect without change or amendment since the
respective dates of their execution and delivery hereunder except as permitted
hereunder.

(f) Acceptable Work; No Liens. All work that has been done on the Project has
been done in a good and workmanlike manner and in accordance with the Plans and
Specifications, the Construction Contract, the Power Purchase Agreement, the
Interconnection Agreement, the Lease and Prudent Utility Practices and there has
not been filed with or served upon Borrower or the Project (or any part thereof)
notice of any Lien, claim of Lien or attachment upon or claim affecting the
right to receive payment of any of the moneys payable to any of the Persons
named on such request which has not been released or which will not be released
with the payment of such obligation out of such Loan, other than Permitted
Liens.

(g) Casualty. If at the time of making any Borrowing, the Project shall have
been materially damaged by flood, fire or other casualty, Borrower shall have
complied with the requirements of Section 5.27 and Lender shall have received
assurances sufficient in the reasonable judgment of Lender and the Independent
Consultants to assure restoration and Substantial Completion of the Project
prior to December 31, 2011.

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(h) No Material Adverse Change. There shall not have occurred at any time
following the Financial Closing Date any event, occurrence, effect or
circumstance of whatever nature that has, or could reasonably be expected to
have, a Material Adverse Effect.

(i) Absence of Litigation. No action, suit, proceeding or investigation shall
have been instituted or threatened against any Borrower Affiliate Entity or the
Project that could reasonably be expected to have a Material Adverse Effect.

(j) Cash Grant Bridge Loan.

(i) The previously incurred and projected Qualifying Costs shall remain
consistent with the Preliminary Cost Segregation Report, and Borrower shall have
delivered to Lender a certificate by the appropriate authorized officer of
Borrower, in form and substance reasonably satisfactory to Lender: (A)
certifying as to the cost categories and aggregate amount of Qualifying Costs
paid through a date reasonably close to the Second Borrowing Date with respect
to the Project, and (B) confirming that (x) such Qualifying Costs have been
determined pursuant to a methodology consistent with the Cash Grant Guidance and
applicable law, and (y) the amount of the Loans (including the Additional Loan)
do not exceed ninety percent (90%) of thirty percent (30%) of such Qualifying
Costs incurred and paid with regard to the Project.

(ii) Delivery to Lender of an Independent Accountant’s certificate with respect
to the Project, substantially in the form of Exhibit F-2, certifying (i) the
amount of Qualifying Costs incurred (within the meaning of the Cash Grant
Guidance) through a date reasonably close to the Second Borrowing Date, (ii) the
Project is on schedule to be placed in service (within the meaning of the Cash
Grant Guidance) prior to the qualification deadline of the Cash Grant (with
reasonable margin for delays, to be determined in consultation with the
Independent Engineer and Lender), and (iii) otherwise in form and substance
reasonably satisfactory to Lender and consistent with the Cash Grant Guidance
and applicable law and, to the extent that the Independent Accountant has relied
upon a certificate from the Independent Engineer and/or a “Report of Management
on Eligible Cost Basis” statement from Borrower, a copy of such certificate
and/or report.

(iii) The aggregate principal amount of all Loans (including the Additional
Loan) shall not exceed ninety percent (90%) of thirty percent (30%) of the
Qualifying Costs previously incurred (within the meaning of the Cash Grant
Guidance) through the Second Borrowing Date, as described in the certificates
delivered pursuant to clauses (i) and (ii) above.

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(iv) Delivery to Lender of the final Cost Segregation Report, prepared in a
manner reasonably acceptable to Lender, dated as of a date reasonably close to
the Second Borrowing Date, prepared in a manner consistent with the Cash Grant
Guidance and applicable law and in form and substance satisfactory to Lender.
The final Cost Segregation Report shall estimate the Cash Grant for the Project
to be at least Ten Million Dollars ($10,000,000).

(k) Representations and Warranties. Each representation and warranty set forth
in Article 4 is true and correct in all material respects as if made on such
date (or if such representation and warranty relates solely as of an earlier
date, as of such earlier date).

(l) Event of Default. No Event of Default or Inchoate Default has occurred and
is continuing or will result from the Borrowing of the Additional Loan.

3.3 No Approval of Work. The making of the Borrowings hereunder shall not be
deemed an approval or acceptance by Lender of any work, labor, supplies,
materials or equipment furnished or supplied with respect to the Project.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Borrower makes the following representations and warranties to and in favor of
Lender as of the Financial Closing Date, as of the date of the Second Borrowing
Date and as of the date of each certificate required under this Agreement
(except that any representation or warranty in this Article 4 which relates
expressly to an earlier date, by direct reference or by reference to a document
dated a certain date, shall be deemed made only as of such date). All such
representations and warranties shall survive the Financial Closing Date and the
making of the Borrowings:

4.1 Organization.

(a) Borrower (i) is a limited liability company duly formed, validly existing
and in good standing under the laws of the State of Delaware, and (ii) is duly
qualified, authorized to do business and in good standing in each other
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary (including the State of Nevada).
Borrower has all requisite power and authority to own or hold under lease and
operate the property it purports to own or hold under lease and to carry on its
business as now being conducted and as proposed to be conducted under the
Operative Documents, and has the requisite power and authority to execute,
deliver and perform each Operative Document to which it is a party. The only
member of Borrower is Holdings. The only member of Holdings is the Idaho
Sponsor.

(b) Each Borrower Affiliate Entity (other than Borrower) (i) is duly organized
and validly existing and in good standing under the laws of the State of its
formation with all requisite organizational or other power and authority under
the laws of such State to enter into the Operative Documents to which it is a
party and to perform its obligations thereunder and to consummate the
transactions contemplated thereby; (ii) is duly qualified, authorized to do
business and in good standing in such State, and each other jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary, unless the failure to obtain such qualification could
not cause a Material Adverse Effect; and (iii) has the power (A) to carry on its
business as now being conducted and as proposed to be conducted by it hereunder,
(B) to execute, deliver and perform its obligations under each Operative
Document to which it is a party, in its individual capacity, (C) to take all
action as may be necessary to consummate the transactions contemplated
thereunder, (D) to grant the liens and security interest provided for in the
Financing Documents to which it is a party, and (E) has the authority to
execute, deliver and perform its obligations under each Operative Document to
which it is a party.

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4.2 Authorization; No Conflict. Each Borrower Affiliate Entity has duly
authorized, executed and delivered each Operative Document to which such
Borrower Affiliate Entity is a party (or such Operative Documents have been duly
and validly assigned to such Borrower Affiliate Entity and such Borrower
Affiliate Entity has duly and validly assumed the obligations thereunder), and
neither such Borrower Affiliate Entity’s execution and delivery thereof nor its
consummation of the transactions contemplated thereby nor its compliance with
the terms thereof (a) conflicts with or constitutes a default under or results
in the violation of the provisions of the Organizational Documents or any Legal
Requirement applicable to or binding on such Borrower Affiliate Entity or any of
its properties or on the Project, except any of the foregoing that in the case
of any Borrower Affiliate Entity other than Borrower could not reasonably be
expected to result in a Material Adverse Effect; (b) constitutes a default under
or results in the violation of the provisions of any Project Document, any
Construction Loan Document or any indenture, mortgage, deed of trust, or
agreement or other instrument to which such Borrower Affiliate Entity is a party
or by which it or any of its properties or assets is or may be bound or
affected, except such conflict, default or violation which could not in the case
of any Borrower Affiliate Entity other than Borrower reasonably be expected to
result in a Material Adverse Effect; or (c) results in or requires the creation
or imposition of (or the obligation to create or impose) any Lien (other than
Permitted Liens) upon any of its property or assets under, or result in the
acceleration of, any obligation. The execution, delivery and performance by each
Borrower Affiliate Entity of each Operative Document to which it is a party does
not require the approval or consent of any holder or trustee of any Debt or
other obligations of such Borrower Affiliate Entity which has not been obtained.

4.3 Enforceability. Each Operative Document to which each Borrower Affiliate
Entity is a party is a legal, valid and binding obligation of such Borrower
Affiliate Entity, enforceable against such Borrower Affiliate Entity in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors’ rights and subject to general equitable principles.
None of the Operative Documents to which a Borrower Affiliate Entity is a party
has been amended or modified since the Financial Closing Date except in
accordance with this Agreement.

4.4 Compliance with Law. (a) Borrower is in compliance with and not in default
under Borrower’s Organizational Documents; and (b) Borrower is in compliance
with all Legal Requirements applicable to Borrower, the Project and the Site,
except any such noncompliance or such default which could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise have been
delivered to Lender, no notices of violation of any Legal Requirement relating
to the Project or the Site have been issued or received by any Borrower
Affiliate Entity or any Affiliate of them.

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4.5 ERISA. Either (a) there are no ERISA Plans for Borrower or any member of the
Controlled Group or (b)(i) no Reportable Event exists with respect to any ERISA
Plan, (ii) during the five-year period prior to the date hereof, Borrower and
each member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code for each ERISA Plan, (iii) no
material liability to the PBGC (other than required premium payments), the
Internal Revenue Service (other than user fees) or an ERISA Plan exists, or is
reasonably expected by Borrower or any member of the Controlled Group to be,
incurred by Borrower, (iv) Borrower does not have any contingent liability with
respect to any post-retirement benefit under any “welfare plan” (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage under
Part 6 of Title I of ERISA, (v) no Multiemployer Plan is, or is reasonably
expected by Borrower or any member of the Controlled Group to be, in
“reorganization” (as defined in Section 4241 of ERISA or Section 418 of the
Code) or is “insolvent” (as defined in Section 4245 of ERISA), or has received
notice pursuant to Section 305(b)(3) of ERISA that its funding status is or will
be in “endangered” or “critical” status, and (vi) no Lien under Section 430(k)
of the Code or Section 303(k) of ERISA or requirement to provide security under
Section 401(a)(29) of the Code or Section 307 of ERISA exists or is reasonably
expected by Borrower to be imposed on the assets of Borrower. Neither the
execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby will involve a “prohibited transaction” within
the meaning of Section 406 of ERISA or Section 4975 of the Code which is not
exempt under Section 408 of ERISA or under Section 4975(d) of the Code.

4.6 Taxes. Each Borrower Affiliate Entity has timely filed, or has caused to be
timely filed, all federal, state and local tax returns that it is required to
file, has timely paid or has caused to be timely paid all material taxes it is
required to pay to the extent due (other than those taxes that it is contesting
in good faith and by appropriate proceedings, for which adequate, segregated
reserves are established in accordance with GAAP). There are no ongoing or
pending audits, examinations or other administrative or judicial proceedings
against any Borrower Affiliate Entity relating to Taxes. For U.S. federal income
tax purposes: (i) Borrower is treated as a disregarded entity and (ii) Holdings
is treated as a disregarded entity.

4.7 Business, Debt, Contracts, Etc. (a) With regard to the Project, Borrower has
not conducted any business other than the business contemplated by the Operative
Documents, has no outstanding Debt or other material liabilities other than
pursuant to or allowed by the Operative Documents , and is not a party to or
bound by any material contract other than the Operative Documents to which it is
a party; and (b) Borrower has no subsidiaries.

4.8 Certain Fees. No broker’s or finder’s fee or commission will be payable with
respect to the transactions contemplated by the Financing Documents.

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4.9 Investment Company. No Borrower Affiliate Entity is an investment company or
a company controlled by an investment company, within the meaning of the
Investment Company Act of 1940, as amended.

4.10 Governmental Regulation.

(a) As of the Financial Closing Date, Borrower is not (i) subject to and, is
exempt from, regulation as an “electric utility company,” a “public utility
company,” a “holding company,” a “subsidiary company” of a holding company or an
“associate company” of a holding company under PUHCA; and (ii) subject to rate,
financial, organizational or other regulation as a “public service company,” an
“electric company,” or similar entity under Nevada law, in connection with (A)
Borrower’s ownership, operation or maintenance of, the Project or (B) Borrower’s
execution, delivery or performance of any of the Operative Documents or its
exercise of any of their rights thereunder.

(b) No Borrower Affiliate Entity will, solely as a result of the construction,
ownership, leasing or operation of the Project, the sale or transmission of
electricity therefrom or the entering into any Operative Document or any
transaction contemplated hereby or thereby, be deemed by any Governmental
Authority having jurisdiction to be or otherwise become (i) an “electric utility
company,” a “public utility company,” a “holding company,” a “subsidiary
company” of a holding company or an “associate company” of a holding company
under PUHCA, or (ii) subject to rate, financial or organizational regulation as
a “public service company,” an “electric company,” or similar entity under
Nevada law.

(c) Borrower is not subject to regulation under any Governmental Rule as to
securities, rates or financial or organizational matters that would preclude the
incurrence or repayment of the principal of and interest on any Loans, or the
incurrence by Borrower of any of the Obligations or the execution, delivery and
performance by Borrower of the Operative Documents to which it is a party.
Borrower will not be deemed by any state Governmental Authority to be subject to
financial, organizational or rate regulation as a “public utility” an “electric
utility” a “public service corporation” or similar entity under any existing
state law, rule or regulation.

(d) There is no complaint or administrative proceeding pending as to the
aforementioned orders, and Borrower is not aware of any facts or circumstances
which could reasonably be expected to give rise to a complaint or administrative
proceeding in the future which could reasonably be expected to have a Material
Adverse Effect.

(e) As of the Financial Closing Date and other than as set forth in Section
4.10(a) and Section 4.16, no other filing with, or approval from, any state or
federal Governmental Authority with jurisdiction over the energy sales, the
transmission of electric energy, or the Financing Documents or in connection
with any of the transactions contemplated hereby or by any other Operative
Document is required.

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(f) Neither Lender, nor any Affiliate (as that term is defined in Section
1262(1) of PUHCA) of any of them will, solely as a result of Borrower’s
construction, ownership, leasing or operating of the Project, the sale or
transmission of electricity therefrom or the entering into any Operative
Document or any transaction contemplated hereby or thereby, be subject to, or
not exempt from, regulation under the FPA or PUHCA or under state laws and
regulations respecting the rates or the financial or organizational regulation
of electric utilities.

4.11 Regulation U, Etc. Borrower is not engaged principally, or as one of its
principal activities in the business of extending credit for the purpose of
purchasing or carrying margin stock (as defined or used in Regulations T, U or X
of the Federal Reserve Board), and no part of the proceeds of the Borrowings or
the Project Revenues will be used by Borrower to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or otherwise in violation of Regulations T, U or
X of the Federal Reserve Board.

4.12 Financial Statements. The financial statements delivered in respect of each
Borrower Affiliate Entity pursuant to Section 3.1(q) and Section 5.4 are true,
complete and correct and fairly present the financial condition of the Person to
whom they relate as of the date thereof. The financial statements of each
Borrower Affiliate Entity have been prepared in accordance with GAAP as properly
applied, subject to normal year-end adjustments and lack of footnotes. No
Borrower Affiliate Entity will have any material liabilities, direct or
contingent, except as has been disclosed in such financial statements or
pursuant to the Operative Documents or otherwise disclosed in writing to Lender
prior to the date hereof.

4.13 Partnerships and Joint Ventures. Borrower is not a general partner or a
limited partner in any general or limited partnership or a joint venturer in any
joint venture or a member in any limited liability company.

4.14 Existing Defaults. Borrower is not in default under any Project Document,
any of the Construction Loan Documents or any other material agreement relating
to any obligation of Borrower for or with respect to borrowed money, and to
Borrower’s knowledge, no other party to any Project Document is in default under
any material term thereunder.

4.15 No Default. No Event of Default or Inchoate Default has occurred which has
not been disclosed to Lender by Borrower in writing, or has occurred and is
continuing.

4.16 Permits.

(a) There are no Permits under existing law as the Project is currently designed
that are or will become Applicable Permits other than the Permits described in
Exhibit G-2. Each Applicable Permit is either (i) in full force and effect and
is not subject to any appeals or further proceedings or to any unsatisfied
condition that may allow material modification or revocation, in the case of
those Permits listed in Part I of Exhibit G-2; or (ii) of a type that is
routinely granted on application and that would not normally be obtained before
the applicable stage of construction, reconstruction or commencement of
operation, in each case as contemplated by the Operative Documents, in the case
of those Applicable Permits listed in Part II of Exhibit G-2. Borrower has no
reason to believe that any Permit so indicated on Part II of Exhibit G-2 will
not be obtained before it becomes an Applicable Permit. Borrower is not in
material violation of any Applicable Permit.

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(b) To Borrower’s knowledge, each of the other Major Project Participants
possesses all licenses, Permits, franchise, patents, copyrights, trademarks and
trade names, or rights thereto necessary to perform its duties under the
Operative Documents to which it is a party, and such party is not in violation
of any valid rights of others with respect to any of the foregoing which could
reasonably be expected to have a Material Adverse Effect.

4.17 Offices. The chief executive office or chief place of business (as such
term is used in Article 9 of the Uniform Commercial Code) of Borrower is located
at 1505 Tyrell Lane, Boise ID 83705. Borrower’s organizational identification
number is 770717022.

4.18 Adverse Change. As of the Financial Closing Date, there has not occurred at
any time since October 1, 2011, and as of each date this representation is made
or deemed made after the Financial Closing Date, there has not occurred at any
time since the Financial Closing Date, any event, occurrence, effect or
circumstance of whatever nature that has, or could reasonably be expected to
have, a Material Adverse Effect 4.19 Hazardous Substances.

(a) Except as set forth in Exhibit G-6, (i) Borrower is not and has not in the
past been in violation of (or received any notice that it is in violation of)
any Environmental Law which violation could result in a material liability to
Borrower or could otherwise result in a Material Adverse Effect; (ii) neither
Borrower nor, to the knowledge of Borrower, any third party has used, released,
discharged, generated, manufactured, produced, stored, or disposed of in, on,
under, or about the Site or any Improvements, or transported thereto or
therefrom, any Hazardous Substances in a manner that could reasonably be
expected to subject Lender or Borrower to liability under any Environmental Law;
(iii) to the knowledge of Borrower, there are no underground tanks containing
regulated quantities of Hazardous Substances, whether operative or temporarily
or permanently closed, located on the Site or any Improvement, (iv) there are no
Hazardous Substances used, stored or present at, on or, to the knowledge of
Borrower, near the Site or any Improvement, and (v) to the knowledge of
Borrower, there is or has been no condition, circumstance, action, activity or
event that could form the basis of any violation of, or liability to Lender or
Borrower under, any Environmental Law.

(b) Except as set forth on Exhibit G-5 or Exhibit G-6, to the knowledge of
Borrower, there is no proceeding, investigation or inquiry by any Governmental
Authority (including the U.S. Environmental Protection Agency) or any
non-governmental third party with respect to the presence or Release of
Hazardous Substances in, on, from or to the Site or any Improvement.

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(c) Borrower has no knowledge of any past or existing violations of any
Environmental Laws by any Person relating in any way to the Site or any
Improvement, which violations could reasonably be expected to have a Material
Adverse Effect.

(d) Except as set forth on Exhibit G-5 or Exhibit G-6, there are no
Environmental Laws, including but not limited to the Surface Mining Control and
Reclamation Act, that could be reasonably expected to have a Material Adverse
Effect on the development of the Project or operation of the Project.

(e) Except as set forth on Exhibit G-5 or Exhibit G-6, there are no land use
restrictions, institutional controls, engineering controls or other restrictions
on the Project imposed pursuant to any Environmental Laws, that could reasonably
be expected to have a Material Adverse Effect.

4.20 Litigation. There are no pending or, to Borrower’s knowledge, threatened
actions or proceedings of any kind, including actions or proceedings of or
before any Governmental Authority, to which any Borrower Affiliate Entity, or
the Project is a party or is subject, or by which any of them or any of their
properties or the Project are bound, in each case (a) except as set forth on
Exhibit G-5, or (b) only to the extent the representation and warranty under
this Section 4.20 is made or deemed made after the Financial Closing Date, that
if adversely determined to or against any Borrower Affiliate Entity or the
Project, could reasonably be expected to have a Material Adverse Effect.

4.21 Title and Liens. Borrower has good, marketable and insurable fee title and
leasehold interests, as the case may be, to the assets then owned by Borrower
that comprise the Project as of such date, and all of the assets then existing
relating to the Project, in each case free and clear of all Liens, or other
exceptions to title other the liens created under the Construction Loan
Documents and Permitted Liens. Borrower does not own assets other than the
Expanded Project.

4.22 Utilities. All utility services (a) as of the Financial Closing Date and
during the Construction Period, necessary for the construction of the Project,
and (b) on and after Substantial Completion, necessary for the operation of the
Project, in each case, for its intended purposes, are available at the Site or
will be so available as and when required upon commercially reasonable terms.

4.23 Roads; Access.

All roads, permits, rights of way, easements and other entitlements and
agreements necessary for the construction of the Project and full utilization of
the Project for its intended purposes under the Project Documents have, as
applicable, either been completed or acquired or will be upon completion of
construction.

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4.24 Project Documents.

(a) The services to be performed, the materials to be supplied and the real
property interests, the Real Property Documents and other rights granted
pursuant to the Project Documents: (i) are sufficient to enable (x) the Project
to be located and constructed on the Site and (y) the Project to be operated and
maintained on the Site, in each case in accordance with all Legal Requirements,
the Annual Operating Budget, and the Project Schedule; and (ii) provide adequate
ingress and egress for any reasonable purpose in connection with the
construction of the Project and the operation and maintenance of the Project
under the Project Documents.

(b) There are no material services, materials or rights required for the
construction of the Project or the operation or maintenance of the Project in
accordance with the Project Documents and the Plans and Specifications other
than those available under the Project Documents.

(c) All agreements relating to the Project to which Borrower or any of its
Affiliates are a party that are in effect on the Financial Closing Date are
listed on Exhibit G-7. Copies of all Project Documents to which Borrower or any
of its Affiliates is a party as currently in effect have been delivered to
Lender by Borrower. Except as has been previously disclosed in writing to
Lender, as of the Financial Closing Date none of the Project Documents to which
Borrower or any of its Affiliates is a party has been amended, modified or
terminated and each such Project Document is in full force and effect.

4.25 Representations and Warranties. To the best of Borrower’s knowledge, the
representations and warranties of the Major Project Participants contained in
the Operative Documents other than this Agreement are true and correct in all
material respects, as of the time made or deemed made by such Major Project
Participant.

4.26 Labor Disputes and Acts of God. There has not been any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty or
force majeure event (whether or not covered by insurance), which could
reasonably be expected to have a Material Adverse Effect.

4.27 Disclosure. Neither the information provided by or on behalf of Borrower
and its Affiliates to Lender regarding the Borrower Affiliate Entities nor the
information provided by Borrower and its Affiliates to Lender regarding the
Project that was prepared by or on behalf of the Borrower Affiliate Entities,
taken as a whole, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading under the circumstances in which they were made at the
time such statements are made. Notwithstanding the foregoing, no representation
or warranty is made as to any forecasts, projections or other forward-looking
statements except that those of such forecasts, projections or other
forward-looking statements that were prepared by any Borrower Affiliate Entity
(or, at any Borrower Affiliate Entity’s request, by their respective advisors)
were prepared in good faith and were based on assumptions believed by Borrower
to be reasonable at the time made.

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4.28 Budgets; Project Schedule; Projections. Borrower has prepared, or caused to
be prepared, the Project Budget and the Project Schedule and is responsible for
developing the assumptions on which the Project Budget and the Project Schedule
are based. The Project Budget and the Project Schedule (a) are, to Borrower’s
knowledge as of the Financial Closing Date, based on reasonable assumptions as
to all legal and factual matters material to the estimates set forth therein,
and set forth an accurate representation of the expected financial performance
of the Project; (b) as of the Financial Closing Date are consistent with the
provisions of the Operative Documents; and (c) indicate that the estimated
Project Costs will not exceed funds available to pay Project Costs. As of the
date hereof, there are no material Project Costs (including anticipated sales
and use taxes) that are not included in the Project Budget.

4.29 Collateral. The security interests granted to Lender pursuant to each
Collateral Document in the Collateral are, and, with respect to such
subsequently acquired collateral, will be, superior and prior to the rights of
all third Persons now existing or hereafter arising whether by way of lien,
security interests, encumbrance, assignment or otherwise, including without
limitation Construction Lender. The Deposit Account Control Agreement is
effective to create and perfect in favor of Lender a legal, valid, binding and
enforceable security interest in the Blocked Account and proceeds and products
thereof. Except to the extent control of portions of the Collateral is required
for perfection and, in the case of the Cash Grant, the filing of any required
notice of assignment in accordance with FACA, all such action as is necessary
has been taken to establish and perfect Lender’s rights in and to, and first
priority Lien on, the Collateral, including any recording, filing, registration,
giving of notice or other similar action. The Collateral Documents relating to
the Collateral and the financing statements relating thereto have been duly
filed or recorded in each office and in each jurisdiction where required in
order to create, perfect and maintain perfected the first Lien and security
interest described above. Lender has been properly provided control of all
Collateral that requires or allows for perfection of the Lien and security
interest described above by control.

4.30 Intellectual Property. Borrower owns or has the right to use all material
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, which are necessary for the operation of its business. Borrower has not
received notice that (a) any material product, process, method, substance, part
or other material presently contemplated to be sold by or employed by Borrower
in connection with its business, will infringe in any material manner any
patent, trademark, service mark, trade name, copyright, license or other right
owned by any other Person; (b) there is pending or threatened any claim or
litigation against or affecting Borrower contesting its right to sell or use any
such product, process, method, substance, part or other material; or (c) there
is, or there is pending or proposed, any patent, invention, device, application
or principle or any statute, law, rule, regulation, standard or code which could
reasonably be expected to have a Material Adverse Effect.

4.31 Insurance. Insurance complying with Section 5.18 hereof is in full force
and effect and all premiums then due thereon have been paid in full (or to the
extent this representation is made at the Financial Closing Date, will be paid
concurrently with the Financial Closing Date).

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4.32 Scheduled Commercial Operations. The Project is scheduled to commence
operations and produce electrical energy for commercial sale in accordance with
Prudent Utility Practices and applicable laws no later than December 31, 2011.

4.33 Separateness.

(a) The property and assets of Borrower, on the one hand, and each other
Borrower Affiliate Entity and their upstream Affiliates, on the other, are
separately identifiable and are not commingled with the property or assets of
any other Person.

(b) Borrower maintains with commercial banking institutions deposit accounts or
other accounts separate from those of each other Borrower Affiliate Entity and
any their upstream Affiliates and does not commingle its funds with any other
Borrower Affiliate Entity or any of their upstream Affiliates.

(c) Each of the Borrower Affiliate Entities acts solely in its name and through
its duly authorized officers, managers, general partners, representatives or
agents in the conduct of its businesses, and none of the Borrower Affiliate
Entities act through the name or through the officers, managers, general
partners, representatives or agents of such Borrower Affiliate Entity in the
conduct of its business.

(d) Each of the Borrower Affiliate Entities conducts in all material respects
its business solely in its own name or through its duly authorized managers,
general partners, representatives or agents, in a manner not misleading to other
Persons as to its identity, and neither the Idaho Sponsor nor the Sponsor
conducts its business in the name or through its managers, general partners,
representatives or agents of any other Borrower Affiliate Entity.

(e) Each of the Borrower Affiliate Entities have obtained proper authorization
for all of its actions in accordance with the requirements of its Organizational
Documents.

4.34 Patriot Act Compliance.

(a) Neither Borrower’s borrowing of the Loans nor its use of the proceeds
thereof will violate in any material respect (i) the United States Trading with
the Enemy Act, as amended, (ii) any of the foreign assets control regulations of
the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto, (iii)
Executive Order No. 13224, 66 Fed Reg. 49,079 (2001), issued by the President of
the United States (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism)
(the “Terrorism Order”) or (iv) the anti-money laundering provisions of the
Patriot Act. No part of the proceeds from the Loans hereunder will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in material
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.

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(b) No Borrower Affiliate Entity (i) is or will become a “blocked person” as
described in Section 1 of the Terrorism Order or (ii) to the best of its
knowledge, engages or will engage in any dealings or transactions, or is
otherwise associated, with any such blocked person.

(c) Each Borrower Affiliate Entity is in compliance with the anti-money
laundering provisions of the Patriot Act.

4.35 Solvency. Each Borrower Affiliate Entity is Solvent. 4.36 Cash Grant
Compliance.

(a) Eligibility. Borrower and the Project meet the standards for applicant and
property eligibility set forth in the Cash Grant Guidance. Borrower estimates
that the Cash Grant will be paid to Borrower on or prior to the Maturity Date.
Borrower’s best estimate is that the Cash Grant will be at least Ten Million
Dollars ($10,000,000). Such estimate (i) is based on reasonable assumptions as
to all legal and factual matters material to such estimates, (ii) is consistent
with the provisions of the Operative Documents in all material respects, (iii)
has been calculated in good faith and with due care and (iv) fairly represents
Borrower’s reasonable expectations as to the amount of the Cash Grant. The
factual information provided and representations made by Borrower to the
Independent Accountant, the Independent Engineer and the Cost Segregation
Consultant are true, correct and complete in all material respects and are based
on reasonable assumptions as to al legal and factual matters material to such
information or representations.

(b) Cash Grant Application. From and after the filing of the Cash Grant
Application for the Project, the factual information and the representations of
Borrower set forth in the Cash Grant Application are (i) true, correct and
complete in all material respects, (ii) based on reasonable assumptions as to
all legal and factual matters material to the figures set forth therein, (iii)
consistent with the provisions of the Operative Documents in all material
respects, (iv) prepared in good faith and with due care and (v) fairly represent
Borrower’s reasonable expectations as to the matters covered thereby. No federal
tax credit pursuant to Code Sections 45 and 48 has been or will be claimed with
respect to any asset comprising the Project. Borrower has and will continue to
make every election that is necessary to claim and apply for the Cash Grant in
accordance with the Cash Grant Guidance and applicable law.

(c) No Ownership by Disqualified Persons. Neither Borrower nor any direct or
indirect owner of Borrower is a Disqualified Person.

4.37 Absence of any Undisclosed Liabilities. There are no material liabilities
of any Borrower Affiliate Entity of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in any such liabilities, other than those liabilities
provided for or disclosed in the most recently delivered financial statements
pursuant to Section 5.4.

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ARTICLE 5
AFFIRMATIVE COVENANTS OF BORROWER

Borrower covenants and agrees that until the Obligations have been repaid in
full in cash (other than unasserted contingent indemnity obligations) and the
Loan Commitment has been terminated, it will, unless Lender waives compliance in
writing:

5.1 Use of Proceeds. Borrower shall apply the proceeds of the Loans as permitted
under Section 2.1(d)(i) hereof.

5.2 Payment. Pay all sums due under this Agreement and the other Financing
Documents according to the terms hereof and thereof.

5.3 Notices. Promptly, upon acquiring notice or giving notice, as the case may
be, or obtaining knowledge thereof, give written notice to Lender of the
following (it being understood that delivery of such notice shall not be deemed
to result in a waiver of any Inchoate Default or Event of Default arising from
any of the matters notified):

(a) Any litigation pending or, to the best knowledge of Borrower, threatened
against Borrower involving claims against Borrower or the Project in excess of
Two Hundred and Fifty Thousand Dollars ($250,000) in the aggregate or involving
any material injunctive, declaratory or other equitable relief, such notice to
include copies of all papers filed in such litigation and to be given monthly if
any such papers have been filed since the last notice given;

(b) Any dispute or disputes which may exist between Borrower and any
Governmental Authority and which involve (i) claims against Borrower which
individually exceed Two Hundred and Fifty Thousand Dollars ($250,000) or in the
aggregate in any fiscal year of Borrower exceed Two Hundred and Fifty Thousand
Dollars ($250,000); (ii) injunctive or declaratory relief; (iii) revocation,
material modification or suspension of, or failure to obtain or renew, or any
similar occurrence or circumstance with respect to, any Applicable Permit, or
imposition of additional material conditions with respect thereto; or (iv) any
Liens for taxes due but not paid;

(c) Any Event of Default or Inchoate Default;

(d) Any casualty, damage or loss, whether or not insured, through fire, theft,
other hazard or casualty, or any act or omission of any Borrower Affiliate
Entity, or any of their partners, officers, directors, employees, contractors,
consultants or representatives, or of any other Person if such casualty, damage
or loss affects Borrower or the Project, in excess of Fifty Thousand Dollars
($50,000) for any one casualty or loss, or an aggregate of One Hundred Thousand
Dollars ($100,000);

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(e) Any cancellation or material change in the terms, coverages or amounts of
any insurance required under Section 5.18;

(f) Any matter which has or could reasonably be expected to have a Material
Adverse Effect;

(g) Initiation of any condemnation proceedings involving the Project or any
portion thereof;

(h) Any intentional withholding of compensation to any Major Project Participant
under the applicable Project Documents, other than retention provided by the
express terms of such Project Documents;

(i) Any termination, notice of default or other material notice given or
received under any Project Document, including without limitation notice of any
major unscheduled repair or replacement of parts and any notice related to the
failure or insufficiency of performance security required thereunder;

(j) Any event of force majeure or excusable delay asserted under any Project
Document and, to the extent reasonably requested by Lender and reasonably
available to Borrower, copies of related invoices, statements, supporting
documentation, schedules, data or affidavits delivered under the relevant
Project Document;

(k) Any written notice from FERC or other Governmental Authority initiating or
threatening the commencement of proceedings against the Project that could
materially affect the Project or impose material incremental expenses on the
Project;

(l) Any (i) fact, circumstance, condition or occurrence at, on, or arising from,
the Site or any Improvement that results in material noncompliance with any
Environmental Law or any Release of Hazardous Substances on or from the Site or
any Improvement that has resulted or could reasonably be expected to result in
personal injury or material property damage or have a Material Adverse Effect,
and (ii) pending or, to Borrower’s knowledge, threatened, Environmental Claim
against Borrower or to Borrower’s knowledge any of its Affiliates, contractors,
lessees or any other Persons, arising in connection with their occupying or
conducting operations on or at the Project, the Site or any Improvement which
could reasonably be expected to have a Material Adverse Effect;

(m) Any Additional Project Document or any actual or proposed amendment, waiver
or modification to any existing Project Document (together with copies of such
Additional Project Document or amendment);

(n) Any event that could reasonably be expected to cause the Project not to
commence operations and production of electrical energy for commercial sale or
otherwise not to be developed, in each case, in accordance with the Plans and
Specifications, Prudent Utility Practices and applicable Legal Requirements on
or before December 31, 2011, which notice shall include a written explanation
for the delay, what measures are being taken with respect thereto and the
anticipated date by which the Project will commence operations and production of
electrical energy for commercial sale or otherwise not to be developed, in each
case, in accordance with the Plans and Specifications, Prudent Utility Practices
and applicable Legal Requirements and otherwise satisfy the requirements of the
applicable Project Documents and Substantial Completion;

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(o) (i) Any Termination Event with respect to an ERISA Plan has occurred or will
occur which could reasonably be expected to result in Borrower incurring a
liability in excess of Fifty Thousand Dollars ($50,000), (ii) any condition
exists with respect to an ERISA Plan which presents a material risk of
termination of an ERISA Plan (other than a standard termination under Section
4041(b) of ERISA) or imposition of an excise tax or other liability with respect
to an ERISA Plan which could reasonably be expected to result in Borrower
incurring a liability in excess of Fifty Thousand Dollars ($50,000), (iii)
Borrower has engaged in a “prohibited transaction,” as defined in Section 4975
of the Code or as described in Section 406 of ERISA, that is not exempt under
Section 4975 of the Code and Section 408 of ERISA and which could reasonably be
expected to result in Borrower incurring a liability in excess of Fifty Thousand
Dollars ($50,000), (iv) any condition exists with respect to a Multiemployer
Plan which presents a risk of partial or complete withdrawal (as described in
Section 4203 or 4205 of ERISA) by Borrower or any member of the Controlled Group
from a Multiemployer Plan and which could reasonably be expected to result in
Borrower incurring a liability in excess of Fifty Thousand Dollars ($50,000),
(v) a Multiemployer Plan is in “reorganization” (as defined in Section 418 of
the Code or Section 4241 of ERISA) or is “insolvent” (as defined in Section 4245
of ERISA) or receives notice pursuant to Section 305(b)(3) of ERISA that its
funding status is or will be in “endangered” or “critical” status, or (vi) there
is an action brought against Borrower or any member of the Controlled Group
under Section 502 of ERISA with respect to its failure to comply with Section
515 of ERISA (it being understood that in each case any such notice shall be
provided no later than ten (10) days after Borrower knows, or has reason to
know, of the occurrence of any such event, and which notice shall be accompanied
by a copy of any notice or filing from the PBGC, the Internal Revenue Service,
the Department of Labor or which may be required by any such agency with respect
to any of the foregoing events);

(p) Any notices, reports, certificates or other documents filed with, or
received from, the United States Treasury Department with respect to the Cash
Grant for the Project (including the filing of the Cash Grant Application),
which notice shall include a copy of such notice, report, certificate or other
document to or from the United States Treasury Department (it being understood
that in any case any such notice shall be provided no later than ten (10) days
after such notice, report, certificate or other document to or from the United
States Treasury Department is given or filed); and

(q) Such other information respecting the business, condition (financial or
otherwise), operations, performance or properties (including, without
limitation, reports, statements, lists of property, accounts, budgets,
forecasts, and other similar information) of Borrower or any other Borrower
Affiliate Entity (solely as it relates to such Borrower Affiliate Entity’s
obligations under any of the Operative Documents) as Lender may from time to
time reasonably request.

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5.4 Financial Statements.

(a) Deliver to Lender (or cause to be delivered to Lender) with sufficient
copies for Lender, in form and detail reasonably satisfactory to Lender:

(i) As soon as available but no later than sixty (60) days after the close of
the first, second and third quarterly periods of its fiscal year, quarterly (and
year-to-date) (consolidated, if applicable) financial statements of and prepared
by Borrower, Holdings, Idaho Sponsor, Sponsor (until the obligations of Sponsor
under the Financing Documents shall have been performed in full or otherwise
discharged in accordance with the terms thereof), including a balance sheet,
statements of income and statement of cash flows; and

(ii) As soon as available but no later than one hundred and twenty (120) days
after the close of each applicable fiscal year, audited (consolidated, if
applicable) financial statements of Borrower, Holdings, Idaho Sponsor, Sponsor
(until the obligations of Sponsor under the Financing Documents shall have been
performed in full or otherwise discharged in accordance with the terms thereof),
including statements of equity, balance sheets as of the close of such year, and
statements of income and cash flows, all prepared in accordance with GAAP; and
certified by an independent certified public accountant selected by the Person
whose financial statements are being prepared and satisfactory to Lender. Such
certificate shall not contain any material qualification or limitation or
otherwise be qualified as to scope of audit or contain a going-concern
qualification.

(b) Each time the financial statements of any Borrower Affiliate Entity are
delivered under Section 5.4(a)(i) or (ii), a certificate signed by the natural
person who is a financial officer, managing director, or managing member of the
applicable Person shall be delivered along with such financial statements,
certifying that (i) each of the representations and warranties contained in
Sections 4.1, 4.2, 4.3 and 4.4 are true and correct, (ii) such financial
statements present fairly in all material respects the financial condition of
the applicable Borrower Affiliate Entity, as of the date thereof and its results
of operations and cash flows for the period then ended, and such financial
statements have been prepared in conformity with GAAP applied on a consistent
basis subject (in the case of unaudited financial statements) to normal year-end
adjustments and (iii) such financial officer, managing director, or managing
member has made or caused to be made a review of the transactions and financial
condition of the applicable Person during the relevant fiscal period and that
such review has not, to the best knowledge of such financial officer, managing
director, or managing member, disclosed the existence of any event or condition
which constitutes an Event of Default or an Inchoate Default hereunder or under
any Financing Document applicable to such Person, or if any such event or
condition existed or exists, the nature thereof and the corrective actions that
such Person has taken or proposes to take with respect thereto.

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5.5 Reports.

(a) Until Final Completion, deliver to Lender monthly progress reports received
from Contractor under the Construction Contract.

(b) Deliver to Lender, on a monthly basis, a summary operating report for the
Project, which shall include (i) a one-month numerical and narrative assessment
of (A) electrical production and delivery, (B) cash receipts and disbursements
and cash balances, including distributions to Holdings, Idaho Sponsor or
Sponsor, and (C) casualty losses of value in excess of Fifty Thousand Dollars
($50,000).

(c) Provide to Lender promptly upon reasonable request such reports, statements,
lists of property, accounts, budgets, forecasts and other similar information
concerning the Project and, to the extent reasonably available and reasonable in
light of their role in the Project, such reports and information as are
reasonably required by the Independent Consultants.

(d) Deliver to Lender promptly after its receipt thereof each Annual Operating
Budget under the O&M Agreement (the “Annual Operating Budget”).

(e) Deliver to Lender all such information (including the name and address of
each Borrower Affiliate Entity) requested by Lender that is necessary for Lender
to identify any Borrower Affiliate Entity in accordance with the requirements of
the Patriot Act (including the “know your customer” and similar regulations
thereunder).

5.6 Term Loan. Keep Lender apprised on a timely basis regarding any term loan
arrangements for the Project or financing arrangements for Phase II, including
any refinancing or take-out financing of the Construction Loan, and enter into
an Approved Term Loan no later than January 26, 2012; and cause any holder of
any security interest in Borrower’s assets (including the Expanded Project) or
any other secured creditor of Borrower, including any successor to Construction
Lender’s security interest in Project assets and any Approved Lender, to enter
into an intercreditor agreement in form and substance substantially similar to
the Intercreditor Agreement and otherwise satisfactory to Lender. Upon the
execution of an Approved Term Loan in accordance with the provisions hereof,
Lender shall release its interests under the Member Pledge Agreement in favor of
the Approved Lender of such Approved Term Loan.

5.7 Cooperation. Perform, upon the reasonable request of Lender, such reasonable
acts as may be necessary or advisable to comply with the terms of this Agreement
and the other Financing Documents

5.8 Existence, Conduct of Business, Properties, Etc. Except as otherwise
expressly permitted under this Agreement (a) maintain and preserve its existence
as a Delaware limited liability company and all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business; (b)
perform (to the extent not excused by force majeure events or the
non-performance of the other party) all of its contractual obligations under the
Operative Documents and all other agreements and contracts by which it is bound,
maintain all necessary Permits and licenses, including all Applicable Permits,
with respect to its business and the Project; (c) at or before the time that any
Permit becomes an Applicable Permit, obtain such Permit; and (d) engage only in
the business contemplated by the Operative Documents, including the development
of Phase II.

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5.9 Obligations. Pay all obligations, howsoever arising, as and when due and
payable, including Taxes and Tax claims, subject to the provisions of Section
5.16, except (a) such as may be contested in good faith or as to which a bona
fide dispute may exist, provided that Lender is satisfied in its reasonable
discretion that non-payment of such obligation pending the resolution of such
contest or dispute would not reasonably be expected to result in a Material
Adverse Effect, and (b) Borrower’s trade payables which shall be paid in the
ordinary course of business.

5.10 Separateness.

(a) Act, and cause Holdings, Idaho Sponsor and Sponsor to act, solely in its
name and through its duly Responsible Officers, managers or agents in the
conduct of its businesses.

(b) Conduct, and cause Holdings, Idaho Sponsor and Sponsor to conduct, its
business solely in its own name, in a manner not misleading to other Persons as
to its identity.

(c) Provide, and cause Holdings, Idaho Sponsor and Sponsor to provide, for the
payment of its own operating expenses and liabilities from its own funds (and
not from the funds of any Affiliate, except in the case where such funds were
contributed as equity or as debt by such Affiliate in a manner permitted under
the Financing Documents).

(d) Obtain, and cause Holdings, Idaho Sponsor and Sponsor to obtain, proper
authorization from member(s), director(s) and manager(s), as required by its
Organizational Documents for all of its limited liability company actions.

(e) Comply, and cause Holdings, Idaho Sponsor and Sponsor to comply, with the
terms of its Organizational Documents.

5.11 Books, Records, Access. Maintain adequate books, accounts and records with
respect to itself and the Project and prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction thereof, and permit employees or
agents of Lender at any reasonable times and upon reasonable prior notice to
inspect all of its properties, including the Site (subject to compliance with
the Lease) to examine or audit all of its books, accounts and records and make
copies and memoranda thereof. In addition to the visitation rights granted
pursuant to this Section 5.11, permit the Independent Engineer and Geothermal
Consultant such access to the Project as may be reasonably requested by the
Independent Engineer or the Geothermal Consultant in their efforts to fulfill
their obligations under this Agreement.

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5.12 Energy Regulation. Take or cause to be taken all necessary or appropriate
actions so that Borrower will be in compliance with the requirements of the FPA
as amended by PURPA and PUHCA and FERC’s regulations thereunder.

5.13 Operation of Project and Annual Budget.

(a) Keep and operate the Project, or cause the same to be kept and operated, in
good operating condition consistent with Prudent Utility Practices, all
Applicable Permits and all Legal Requirements and all applicable requirements of
the Operative Documents, and make or cause to be made all repairs (structural
and non-structural, extraordinary or ordinary) necessary to keep and operate the
Project in such condition. Borrower shall from time to time consider such
reasonable recommendations of the Independent Engineer in connection with the
operation of the Project.

(b) Replace or consent to the replacement of Operator, to the extent provided
under the O&M Agreement, if Operator is not operating the Project in accordance
in all material respects with the provisions hereof or O&M Agreement.

5.14 Preservation of Rights; Further Assurances.

(a) Perform and observe all of its covenants and obligations contained in each
Project Document and preserve, protect and defend the material rights of
Borrower under each and every Project Document, including, if appropriate,
prosecution of suits to enforce any material right of Borrower thereunder and
enforcement of any material claims with respect thereto.

(b) From time to time as reasonably requested by Lender, execute, acknowledge,
record, register, deliver and/or file all such notices, statements, instruments,
agreements, certificates, opinions, and other documents relating to the Loans
and other Obligations stating the interest and charges then due and any known
defaults, and take such other steps as may be necessary or advisable to render
fully valid and enforceable under all applicable laws the rights, Liens
(including the creation, perfection, and maintenance of perfection thereof) and
priorities of Lender with respect to all Collateral and other security from time
to time furnished under this Agreement and the other Financing Documents or
intended to be so furnished, in each case in such form and at such times as
shall be reasonably satisfactory to Lender, and pay all reasonable fees and
expenses (including attorneys’ fees) incident to compliance with this Section.
Borrower shall fully cooperate with Lender and perform all additional acts
reasonably requested by Lender to effect the purposes of the foregoing.

5.15 Construction. Make or cause to be made all contracts and do or cause to be
done all things necessary for the construction, improvement and equipping of the
Project and the Placed in Service Date to occur on or before the Placed in
Service Deadline, and cause the Project to be constructed, improved, equipped
and to achieve Substantial Completion and Final Completion substantially in
accordance in all material respects with the Plans and Specifications, the
Construction Contract, the Power Purchase Agreement, the Interconnection
Agreement, the Lease and the Project Budget and the Project Schedule and not
exceeding the disbursements as contemplated thereby.

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5.16 Taxes, Other Government Charges and Utility Charges. Pay, or cause to be
paid, as and when due and prior to delinquency, all Taxes, assessments and
governmental charges of any kind that may at any time be lawfully assessed or
levied against or with respect to Borrower or the Project, all utility and other
charges incurred in the construction, operation, maintenance, use, occupancy and
upkeep of the Project, and all assessments and charges lawfully made by any
Governmental Authority for public improvements that may be secured by a Lien on
the properties of Borrower or the Project. However, Borrower may contest in good
faith any such Taxes, assessments and other charges and, in such event, may
permit the Taxes, assessments or other charges so contested to remain unpaid
during any period, including appeals, when Borrower is in good faith contesting
the same, so long as (a) reserves reasonably satisfactory to Lender have been
established in an amount sufficient to pay any such Taxes, assessments or other
charges, accrued interest thereon and potential penalties or other costs
relating thereto, or other adequate provision for the payment thereof shall have
been made; (b) enforcement of the contested Tax, assessment or other charge is
effectively stayed for the entire duration of such contest; and (c) any Tax,
assessment or other charge determined to be due, together with any interest or
penalties thereon, is paid when due after resolution of such contest.

5.17 Compliance With Laws, Instruments, Etc. At its expense, within such time as
may be required by Legal Requirements (a) comply, or cause compliance, in all
material respects, with all Legal Requirements, whether or not compliance
therewith shall require structural changes in the Project or any part thereof or
require major changes in operational practices or interfere with the use and
enjoyment of the Project or any part thereof except for such noncompliance which
would not reasonably be expected to have a Material Adverse Effect; and (b)
procure, maintain and comply, or cause to be procured, maintained and complied
with, in all material respects, all Permits required for any use of the Project
or any part thereof, then being made or contemplated by the Operative Documents
except for such noncompliance which would not reasonably be expected to have a
Material Adverse Effect, except that Borrower may, at its expense, contest by
appropriate proceedings conducted in good faith the validity or application of
any such Legal Requirements provided that (i) neither Lender, nor Borrower would
be subject to any criminal liability for failure to comply therewith; and (ii)
all proceedings to enforce such Legal Requirements against Lender, Borrower or
the Project or any part of any of them, shall have been duly and effectively
stayed during the entire pendency of such contest.

5.18 Maintenance of Insurance. Without cost to Lender, (i) as soon as
practicable, and in any case on or before the Placed in Service Date, maintain
or caused to be maintained on its behalf in effect at all times, insurance for
the Project, in an amount not less than its full replacement value of the
Project, in form and substance satisfactory to the Lender, and (ii) at all
times, maintain or cause to be maintained on its behalf in effect the types of
insurance required pursuant to the Insurance Requirements, in the amount and on
the terms and conditions specified therein, in each case with insurance
companies rated “A” or better, with a minimum size rating of “VIII” by Best’s
Insurance Guide and Key Ratings (or an equivalent rating by another nationally
recognized insurance rating agency of similar standing if Best’s Insurance Guide
and Key Ratings shall no longer be published).

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5.19 Warranty of Title. Maintain (a) a legal and valid interest in and to the
leasehold or easement estate (as the case may be) to the Site pursuant to the
Real Property Documents, subject only to Permitted Liens, and (b) good and valid
title to all of its other respective properties and assets, other than
properties and assets disposed of in the ordinary course of developing and
operating the Project or in accordance with Section 6.4.

5.20 Event of Eminent Domain. If an Event of Eminent Domain shall be threatened
or occur with respect to any Collateral, (a) promptly upon discovery or receipt
of notice of any such threat or occurrence provide written notice of either to
Lender; (b) diligently pursue all its rights to compensation against the
relevant Governmental Authority in respect of such Event of Eminent Domain; and
(c) not, without the written consent of Lender, which consent shall not be
unreasonably withheld, compromise or settle any claim against such Governmental
Authority. Borrower consents to the participation of Lender in any proceedings
resulting from an Event of Eminent Domain, and Borrower shall from time to time
deliver to Lender all documents and instruments reasonably requested by it to
permit such participation.

5.21 Indemnification.

(a) Without duplication of Borrower’s obligations under Sections 2.4(d), 2.5(c)
or 2.5(d) (and excluding any items or events specifically excluded from
Borrower’s obligations thereunder), indemnify, defend and hold harmless Lender
and in its capacities as such, its respective officers, directors, shareholders,
controlling persons, employees, agents and servants (collectively, the
“Indemnitees”) from and against and reimburse the Indemnitees for:

(i) any and all claims, obligations, liabilities, losses, damages, injuries (to
person, property, or natural resources), penalties, stamp or other similar
taxes, actions, suits, judgments, costs and expenses (including reasonable
attorney’s fees of a single counsel, plus a single local counsel if required,
and additional counsel solely to the extent the Indemnitees have inconsistent or
conflicting defenses or the circumstances giving rise to such indemnification
would create an ethical conflict for such single counsel) of whatever kind or
nature, whether or not well founded, meritorious or unmeritorious, demanded,
asserted or claimed against any such Indemnitee (collectively, “Claims”) in any
way relating to, or arising out of or in connection with this Agreement, the
other Operative Documents, or the Project;

(ii) any and all Claims arising in connection with the release or presence of
any Hazardous Substances at the Project, whether foreseeable or unforeseeable,
including all costs of removal and disposal of such Hazardous Substances, all
reasonable costs required by Governmental Authorities or under any Governmental
Rule to be incurred in (x) determining whether the Project is in compliance and
(y) causing the Project to be in compliance, with all applicable Legal
Requirements, all reasonable costs associated with claims for damages to persons
or property, and reasonable attorneys’ and consultants’ fees and court costs;
and

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(iii) any and all Claims in any way relating to, or arising out of or in
connection with any claims, suits, liabilities against any Borrower Affiliate
Entity or any of their Affiliates.

(b) The foregoing indemnities shall not apply with respect to an Indemnitee, to
the extent arising solely as a result of the gross negligence or willful
misconduct of such Indemnitee as determined by a final non-appealable judgment
of a court of competent jurisdiction, but shall continue to apply to other
Indemnitees.

(c) The provisions of this Section 5.21 shall survive foreclosure of the
Collateral Documents and satisfaction or discharge of the Obligations, and shall
be in addition to any other rights and remedies of Lender.

(d) Any amounts payable by Borrower pursuant to this Section 5.21 shall be
payable on demand and shall bear interest at the Default Rate.

(e) Any and all Claims relating to or arising from any Recapture Event.

5.22 Certification of Interests. Deliver or cause to be delivered to Lender any
and all certificates representing ownership interest in Borrower within five (5)
days after certification of such ownership interest.

5.23 Security. Cause security or any other amounts required under any Material
Project Document, including, without limitation, under the Interconnection
Agreement and the Power Purchase Agreement, to be and remain posted and paid at
such times, in such amounts and for the benefit of such Persons as is required
by the Material Project Documents.

5.24 Cash Grant Application. As soon as practicable following the Placed in
Service Date, and in any case by the earlier of: (a) thirty (30) days after the
Placed in Service Date, and (b) the Placed in Service Deadline, (i) prepare and
file, or cause to be filed, a Cash Grant Application for the Cash Grant for the
Project with the United States Treasury Department in a manner consistent with
the Cash Grant Guidance and applicable law and otherwise true, correct and
complete in all material respects; (ii) provide all supporting documentation
required to be filed with such Cash Grant Application or subsequently thereto in
accordance with the Cash Grant Guidance; (iii) promptly respond to all requests
for further information with respect to such Cash Grant Application; (iv)
promptly deliver to Lender an executed copy of the Cash Grant Application
prepared in accordance with this Section 5.24 , including all attachments and
documentation required to be filed with such application, which application and
accompanying documentation shall satisfy all relevant requirements of the Cash
Grant Guidance and shall have been provided and approved by Lender (such
approval not to be unreasonably withheld or delayed) prior to its filing; and
(v) make other related filings deemed necessary or advisable with regard to the
Cash Grant, in each case, in consultation with, and in a manner reasonably
acceptable to, Lender. Notwithstanding anything to the contrary set forth
herein, prior to such filing of a Cash Grant Application, Borrower shall have
(x) delivered promptly upon the completion or receipt thereof, as applicable,
but in no event later than the Placed in Service Deadline, a draft of such Cash
Grant Application together with all supporting documents, including the
commissioning report, design plans and final engineering design documents
stamped by a licensed professional engineer, and the related Cost Segregation
Report for the Project, and (y) obtained the prior written consent of Lender for
the filing of such Cash Grant Application, such consent not to be unreasonably
withheld, delayed or conditioned.

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5.25 Cash Grant Notice of Assignment. Together with the filing of the Cash Grant
Application pursuant to Section 5.24 above, (a) prepare and file, or cause to be
filed, the Cash Grant Notice of Assignment with the United States Treasury
Department in a manner consistent with the Cash Grant Guidance, FACA, and any
other applicable law and otherwise true, correct and complete in all material
respects; (b) provide all supporting documentation required to be filed with
such Cash Grant Notice of Assignment or subsequently thereto in accordance with
the Cash Grant Guidance; (c) promptly respond to all requests for further
information with respect to such Cash Grant Notice of Assignment; (d) promptly
deliver to Lender an executed copy of the Cash Grant Notice of Assignment
prepared in accordance with this Section 5.25, including all attachments and
documentation required to be filed with such notice, which notice and
accompanying documentation shall satisfy all relevant requirements of the Cash
Grant Guidance and shall have been provided and approved by Lender (such
approval not to be unreasonably withheld) prior to its filing, and (e) make
other related filings deemed necessary or advisable with regard to the Cash
Grant, in each case, in consultation with, and in a manner reasonably acceptable
to, Lender.

5.26 Cash Grant Guidance; Cash Grant Proceeds. (a) Comply with the Cash Grant
Guidance, including all annual filing requirements and the delivery of all
reports, certificates and other such documents as required thereunder. (b) Cause
to be deposited all Cash Grant Proceeds directly into the Lender Account for
immediate application toward repayment of the Loans pursuant to Section
2.2(f)(iv) hereof.

5.27 Use of Insurance Proceeds and Awards. In the event there occurs any damage
to or destruction of all or any portion of the Project, promptly commence and
proceed diligently with the work of repair, reconstruction and restoration of
the Project, and apply insurance proceeds and awards paid in connection with
such casualty solely and exclusively to costs incurred in connection with such
repair, reconstruction and restoration.

5.28 Pari Passu. Ensure that, at all times, all liabilities of Borrower under
this Agreement shall be pari passu with all liabilities of Borrower under the
Construction Loan Agreement.

5.29 Insolvent. If any third party under any material Project Documents becomes
insolvent, enter into a replacement contract for such Project Document in form
and substance reasonably satisfactory to Lender and with a replacement
contractor reasonably satisfactory with Lender within forty-five (45) days after
the occurrence of such insolvency.

5.30 Construction Loan Agreement and Construction Contract. Repay the
Construction Lender: (a) all amounts owed under the Construction Loan Agreement
on or before the maturity date of the Construction Loan, as may be amended from
time to time in accordance with the Intercreditor Agreement, and (b) all amounts
owed under the Construction Contract as and when required thereunder.

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5.31 Consents and Estoppels. Borrower shall use commercially reasonable efforts
to obtain: (i) a consent regarding the Pledge Agreements from the Power
Purchaser, and (ii) an estoppel from the Interconnector, each in form and
substance reasonably satisfactory to Lender, by no later than December 31, 2011.

5.32 Deposit Account Control Agreement. Promptly upon receipt, and in any event
within twenty (20) days after the Financial Closing Date, Borrower shall deliver
to Lender the executed Deposit Account Control Agreement, in form and substance
satisfactory to Lender.

ARTICLE 6
NEGATIVE COVENANTS OF BORROWER

Borrower covenants and agrees that until the Obligations have been repaid in
full in cash (other than unasserted contingent indemnity obligations) and the
Loan Commitment has been terminated, it will not, without the prior written
consent of Lender:

6.1 Contingent Liabilities. Except as provided in this Agreement, become liable
as a surety, guarantor, accommodation endorser or otherwise, for or upon the
obligation of any other Person or otherwise create, incur, assume or suffer to
exist any contingent obligation exceeding in the aggregate One Hundred Thousand
Dollars ($100,000); provided, however, that this Section 6.1 shall not be deemed
to prohibit (a) the acquisition of goods, supplies or merchandise in the normal
course of developing the Expanded Project and operating the Expanded Project on
normal trade credit; (b) the endorsement of negotiable instruments received in
the normal course of developing the Project and operating the Project; (c)
contingent liabilities required under any Applicable Permit or Operative
Document; or (d) contingent obligations under or in respect of performance
bonds, bid bonds, appeal bonds, surety bonds, financial assurances, including
security required under the Power Purchase Agreement, and completion guaranties,
indemnification obligations, obligations to pay insurance premiums, take or pay
obligations and similar obligations in each case incurred in the ordinary course
of business and not in connection with Debt for borrowed money.

6.2 Limitations on Liens. Create, assume or suffer to exist any Lien on any of
the Collateral other than the Liens under this Agreement and the other Financing
Documents.

6.3 Indebtedness. Incur, create, assume or permit to exist any Debt except (a)
the Loans and the other Obligations; (b) the Construction Loan as permitted
under the Intercreditor Agreement, (c) the Approved Other Project Financings,
(d) up to Two Hundred Thousand Dollars ($200,000) of trade or other similar
indebtedness incurred in the ordinary course of developing the Expanded Project
and operating the Expanded Project and not more than ninety (90) days past due;
(e) up to an aggregate of One Hundred Thousand Dollars ($100,000) of Debt
incurred in the ordinary course of developing and operating the Project
associated with purchase money Permitted Liens; and (f) contingent liabilities,
to the extent otherwise constituting Debt, permitted pursuant to Section 6.1 of
this Agreement.

6.4 Sale or Lease of Assets. Sell, lease, assign, transfer or otherwise dispose
of assets, whether now owned or hereafter acquired except (a) in the ordinary
course of developing the Expanded Project and operating the Project as
contemplated by the Operative Documents, (b) obsolete, worn out or replaced
personal property not used or useful in the development of the Expanded Project,
and in each case at fair market value, (c) as permitted under the Construction
Loan Agreement as in effect as of the date hereof, and (c) the liquidation or
use of Permitted Investments.

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6.5 Changes. Change the nature of its business or expand its business beyond the
ownership of the Expanded Project and activities reasonably related thereto.

6.6 Distributions. Cause all distributions of Borrower, after the payment of
prudent operating costs, debt under the Construction Loan Agreement or any
Approved Other Project Financing, and the funding of prudent reserves required
under the Construction Loan Agreement or any Approved Other Project Financing,
to be deposited into the Blocked Account, to be held for the benefit of Lender
in accordance with the terms and provisions of the Deposit Account Control
Agreement.

6.7 Investments. Make or permit to remain outstanding any advances or loans or
extensions of credit to, or purchase or own any stock, bonds, notes, debentures
or other securities of any Person, except Permitted Investments.

6.8 Transactions With Affiliates. Except for the Sponsor Cash Grant Shortfall
Guaranty and for transactions related to Phase II, directly or indirectly enter
into any transaction or series of transactions with or for the benefit of an
Affiliate without the prior written approval of Lender, which consent (prior to
the occurrence and continuation of an Event of Default) may not be unreasonably
withheld.

6.9 Regulations. Directly or indirectly apply any part of the proceeds of any
Loan or Project Revenues to the purchasing or carrying of any margin stock
within the meaning of Regulations T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder.

6.10 Loan Proceeds; Project Revenues. Use, pay, transfer, distribute or dispose
of any Loan proceeds in any manner or for any purposes in any manner or for any
purposes, in each case, except as provided for herein, or apply any Project
Revenues in any manner except as permitted under the Construction Loan Agreement
or any Approved Other Project Financing.

6.11 Partnerships. Execute a binding agreement to become a general or limited
partner in any partnership, or a member in any limited liability company, or a
joint venturer in any joint venture or acquire property, create and hold stock
or other equity interests in any Person or form or acquire any subsidiaries.

6.12 Dissolution. Liquidate, wind-up or dissolve, or sell or lease or otherwise
transfer or dispose of all or any substantial part of its property, assets or
business or combine, merge or consolidate with or into any other entity, or
change its legal form, or implement any material acquisition or purchase of
assets in connection with the development of the Expanded Project from any
Person other than pursuant to the Project Documents.

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6.13 Additional Project Documents. Enter into or become a party to any
Additional Project Document, except (a) with the prior written consent of Lender
(not to be unreasonably withheld or delayed), and (b) in the name of Borrower.

6.14 Amendments; Change Orders; Completion.

(a) Cause, consent to, or permit, any termination, material amendment, material
modification, variance or waiver of timely compliance with any terms or
conditions of (i) the Borrower LLC Agreement, (ii) the Holdings LLC Agreement,
(iii) the Sponsor Cash Grant Shortfall Guaranty, or (iv) any Material Project
Document. This clause (a) shall not be deemed to govern change orders to the
Construction Contract or the O&M Agreement. Such change orders shall be governed
by subsections (b) and (d) below.

(b) Unless compliance hereof is waived in writing by Lender, direct or consent
to any material change order under the Construction Contract. For purposes of
this Section 6.14(b), change orders in an aggregate amount less than $250,000
per annum (and that would not cause the Place in Service Date to occur after the
Placed in Service Deadline) shall not be deemed material.

(c) Declare “Substantial Completion” (as defined in the Construction Contract)
without the prior written approval of Lender (acting in consultation with the
Independent Engineer), such approval not to be unreasonably withheld or delayed.

(d) Unless compliance hereof is waived in writing by Lender, direct or consent
to any change order under the O&M Agreement if such change order:

(i) will increase the Annual Operating Budget for the Project by more than 5%
per change order or by more than 20% per annum in the aggregate;

(ii) would reasonably be anticipated to require an amendment or change order
under any Construction Contract which could delay Substantial Completion beyond
the Maturity Date;

(iii) may permit or result in any material adverse modification or materially
impair the enforceability of any warranty under any Construction Contract, the
Water Contract, any subcontract or the O&M Agreement;

(iv) is not permitted by or is otherwise inconsistent with any Material Project
Document or would materially diminish any obligation of any Major Project
Participant or materially increase any obligation of Borrower thereunder;

(v) may permit the revocation or material modification of any material
Applicable Permit; or

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(vi) would reasonably be expected to cause the Project not to comply or lessen
the Project’s ability to comply with Legal Requirements in any manner that would
reasonably be expected to result in a Material Adverse Effect.

(e) Lender shall use its best efforts to respond to each change order request or
request for waiver of compliance with clause (d) above within ten (10) days
after it and the Independent Engineer receives such request. However, the
failure by Lender to respond to any such change order or request within thirty
(30) days after receipt of written notice thereof shall not be deemed an
approval of such change order or request.

6.15 Compliance With Operative Documents. Do or permit (to the extent within its
control and permitted by the Operative Documents) to be done any act under the
Operative Documents, or omit or refrain (to the extent within its control and
permitted by the Operative Documents) from any act under the Operative
Documents, where such act done or permitted to be done, or such omission of or
refraining from action, would reasonably be expected to have a Material Adverse
Effect.

6.16 Name and Location; Fiscal Year.

(a) Change its name or its jurisdiction of organization without written notice
to Lender at least thirty (30) days prior to such change, or change its fiscal
year without the prior written consent of Lender such consent not to be
unreasonably withheld.

(b) Change the location of its chief executive office, principal place of
business or federal identification number without written notice to Lender
within thirty (30) days after such change.

6.17 Use of Project Site. Subject to the rights retained by the Lessor pursuant
to the Lease, (a) use or permit to be used the Site for any purpose other than
for the construction of the Project and operation and maintenance of the Project
as contemplated by the Operative Documents, and development, drilling and
construction of Phase II, without the prior written consent of Lender, or (b)
locate any portion of the Project on a site other than the Site, without the
prior written consent of Lender, not to be unreasonably withheld.

6.18 Assignment. Assign its rights hereunder or under any of the Operative
Documents to any Person except as permitted by Section 6.19, or consent to the
assignment by any Major Project Participant of its obligations under any
Material Project Document to which it is a party.

6.19 Transfer of Interests. Cause, make, suffer, permit or consent to any
creation, sale, assignment or transfer of any ownership interest or other
interest (direct or indirect) in Borrower except for Permitted Transfers or as
otherwise permitted by Lender.

6.20 Abandonment of Project. At any time willfully and voluntarily abandon and
suspend construction or operation of the Project for a period of more than
thirty (30) consecutive days for any reason (other than force majeure), provided
that none of (i) scheduled maintenance of the Project, (ii) repairs to the
Project, whether or not scheduled, or (iii) a forced or scheduled outage of the
Project shall constitute abandonment so long as Borrower is diligently
attempting to end such suspension.

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6.21 Hazardous Substances. Release, emit or discharge into the environment any
Hazardous Substances in violation of any Environmental Laws, Legal Requirements
or Applicable Permits or allow any Hazardous Substance to impact or be present
on, in, under or above the Site or Improvements in a manner that would
reasonably be expected to have a Material Adverse Effect.

6.22 ERISA. If Section 4.5(a) is true, then establish, maintain, contribute to
or become obligated to contribute to any ERISA Plan or suffer or permit any
member of the Controlled Group to do so; and if Section 4.5(a) is not true,
then, (a) permit any Termination Event to occur, which could reasonably be
expected to result in Borrower incurring a liability in excess of Fifty Thousand
Dollars ($50,000), (b) engage in a “prohibited transaction,” as defined in
Section 4975 of the Code or as described in Section 406 of ERISA, that is not
exempt under Section 4975 of the Code and Section 408 of ERISA and which could
reasonably be expected to result in Borrower incurring a liability in excess of
Fifty Thousand Dollars ($50,000), (c) fail to meet the minimum funding
requirements of Sections 412 and 430 of the Code with respect to any ERISA Plan,
(d) fail to pay any required contribution to a Multiemployer Plan, or (e) incur
a partial or complete withdrawal (as described in Section 4203 or 4205 of ERISA)
from a Multiemployer Plan and which could reasonably be expected to result in
Borrower incurring a liability in excess of Fifty Thousand Dollars ($50,000).

6.24 Regulation of Parties. Take or cause to be taken any actions that would
reasonably be expected to result in (a) the representations in Sections 4.9 or
4.10 becoming untrue as a result of such action or omission, or (b) Lender or
any Affiliate (as that term is defined in Section 1262(1) of PUHCA) of any of
them, solely as a result of Borrower’s actions relating to the ownership,
leasing or operation of the Project, the sale of electricity therefrom or the
entering into any Operative Document or any transaction contemplated hereby or
thereby becoming subject to regulation under PUHCA, the FPA or state laws and
regulations respecting the rates or the financial or organizational regulation
of electric utilities.

6.25 Cash Grant Guidance. Take any action that would cause, or permit any
transfer of any direct or indirect ownership interests in Borrower that would
cause, the Cash Grant applicable to the Project to be subject to a Recapture
Event (or other disallowance claim), including issuance, sale, assignment or
transfer of any direct or indirect ownership interest in Borrower to any
Disqualified Person.

6.26 Tax Credits. Claim, or permit or cause to be claimed, any federal tax
credit under Section 45 or Section 48 of the Code with respect to any portion of
the Project constituting specified energy property for purposes of the Cash
Grant or any property described in the Cash Grant Application for the Project.

6.27 Fiscal Year. Change its fiscal year to end on a day other than December 31.

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ARTICLE 7
EVENTS OF DEFAULT; REMEDIES

Events of Default

The occurrence of any of the following events shall constitute an event of
default (individually, an “Event of Default”, and collectively, “Events of
Default”) hereunder:

7.1 Failure to Make Payments.

(a) Borrower shall fail to pay, in accordance with the terms of this Agreement,
(i) any principal on any Loan on the date that such sum is due; or (ii) any
amount in respect of interest on any Loan within three (3) days after the date
that such sum is due; or (iii) any other cost, charge or other sum due under
this Agreement or any other Financing Document within ten (10) days after the
date that such sum is due.

(b) Either Idaho Sponsor or Sponsor shall default in the payment of its
obligations under the Sponsor Cash Grant Shortfall Guaranty.

(c) Any of the other Borrower Affiliate Entities shall default in the
performance of its obligations under any Financing Document to which it is a
party (subject to such cure periods, if any, as shall be set forth therein).

7.2 Judgments. A final judgment or judgments shall be entered against Borrower
in the aggregate amount of One Hundred Thousand Dollars ($100,000) or more
(other than (a) a judgment which is fully covered by insurance or satisfied in
full or discharged within thirty (30) days after its entry, or (b) a judgment,
the execution of which is effectively stayed within thirty (30) days after its
entry but only for thirty (30) days after the date on which such stay is
terminated or expires) or which would reasonably be expected to materially
impair or inhibit the construction of the Project or Borrower’s use of the
Project for the purpose for which the Project was intended.

7.3 Misstatements. Any financial statement, representation, warranty or
certificate made or prepared by, under the control of or on behalf of any
Borrower Affiliate Entity and furnished to Lender pursuant to this Agreement or
any other Financing Document shall contain any statement of fact that is untrue
or misleading in any material respect or shall fail to state a material fact
necessary to make the statements therein not misleading in any material respect
as of the date made; provided that no Event of Default shall occur pursuant
hereto, if within fifteen (15) days of the date on which Borrower receives
notice (from any source) that such untrue or misleading statement has occurred,
Borrower shall eliminate or otherwise cure to the reasonable satisfaction of
Lender any such material and adverse effects relating to such untrue or
misleading statement.

7.4 Bankruptcy; Insolvency. Any of the following events shall have occurred
(each, a “Bankruptcy Event”):

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(a) Any of the Major Project Participants shall institute a voluntary case
seeking liquidation or reorganization under the Bankruptcy Law (or any successor
statute), or shall consent to the institution of an involuntary case thereunder
against it;

(b) Any of the Major Project Participants shall file a petition, answer or
consent or shall otherwise institute any similar proceeding under any other
applicable federal, state or other applicable law, or shall consent thereto;

(c) Any of the Major Project Participants shall apply for, or by consent or
acquiescence there shall be an appointment of, a receiver, liquidator,
sequestrator, trustee or other officer with similar powers;

(d) Any of the Major Project Participants shall make an assignment for the
benefit of creditors; or any of the Major Project Participants shall admit in
writing its inability to pay its debts generally as they become due; or

(e) If an involuntary case shall be commenced seeking the liquidation or
reorganization of any of the Major Project Participants under the Bankruptcy Law
(or any successor statute) or any similar proceeding shall be commenced against
any of the Major Project Participants under any other applicable federal, state
or other applicable law, and:

(i) the petition commencing the involuntary case is not timely controverted;

(ii) the petition commencing the involuntary case is not dismissed within sixty
(60) days of its filing;

(iii) an interim trustee is appointed to take possession of all or a portion of
the property, and/or to operate all or any part of the business of any of the
Major Project Participants and such appointment is not vacated within sixty (60)
days;

(iv) an order for relief shall have been issued or entered therein;

(v) a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other officer
having similar powers of any of the Major Project Participants or of all or a
part of their property, shall have been entered; or

(vi) any other similar relief shall be granted against any of the Major Project
Participants under any applicable federal, state or other law;

provided, however, that except with regard to a Bankruptcy Event of a Borrower
Affiliate Entity or the Interconnector, a Bankruptcy Event shall not result in a
Event of Default under this Section 7.4 if Borrower obtains a Replacement
Obligor for the affected party within forty-five (45) days of such Bankruptcy
Event and, in the reasonable judgment of Lender, such event has not had, does
not have prior to and would not reasonably be expected to have after so
obtaining such Replacement Obligor, a Material Adverse Effect.

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7.5 Cross Default. There shall occur and be continuing an event of default under
the Construction Loan Agreement or any Construction Loan Document or under any
Approved Other Project Financing, or Borrower or Holdings shall default for a
period beyond any applicable grace period (i) in the payment of any principal,
interest or other amount due under any other agreement (other than the Financing
Documents) involving the borrowing of money or the advance of credit and the
outstanding amount or amounts payable under all such agreements equals or
exceeds One Hundred Thousand Dollars ($100,000) in the aggregate, or (ii) in the
payment of any amount or performance of any obligation due under any other
guaranty or other agreement (other than the Financing Documents) if in either
case, the indebtedness evidenced thereby equals or exceeds One Hundred Thousand
Dollars ($100,000).

7.6 ERISA. With respect to any ERISA Plan, (a) any Termination Event shall have
occurred and, within forty-five (45) days after the reporting of such
Termination Event to Lender by Borrower (or Lender otherwise obtaining knowledge
of such event) and the furnishing of such information as Lender may reasonably
request with respect thereto, Lender shall have notified Borrower in writing
that, on the basis of such Termination Event, an Event of Default exists
hereunder; (b) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that an ERISA Plan must be terminated
or have a trustee appointed to administer it; (c) the PBGC shall institute
proceedings to terminate any ERISA Plan or against Borrower to enforce Section
515 of ERISA; (d) Borrower shall have engaged in a transaction which is
prohibited under Section 4975 of the Code or Section 406 of ERISA; (e) Borrower
shall fail to pay when due an amount which it shall have become liable to pay to
the PBGC, any ERISA Plan or a trust established under Title IV of ERISA; or (f)
a complete or partial withdrawal by Borrower or any member of the Controlled
Group from any Multiemployer Plan shall have occurred, or any Multiemployer Plan
shall enter reorganization status, become insolvent, or terminate (or notify
Borrower or any member of the Controlled Group of its intent to terminate) under
Section 4041A of ERISA and, within forty-five (45) days after the reporting of
any such occurrence to Lender by Borrower (or Lender otherwise obtaining
knowledge of such event) and the furnishing of such information as Lender may
reasonably request with respect thereto, Lender shall have notified Borrower in
writing that Lender has made a determination that, on the basis of such
occurrence, an Event of Default exists hereunder; provided that the occurrence
of an event listed in clauses (a) through (d) hereof could reasonably be
expected to result in the imposition on Borrower of liability in excess of Fifty
Thousand Dollar ($50,000) or, with respect to clause (e), the imposition on
Borrower of an annual liability in excess of Fifty Thousand Dollar ($50,000).

7.7 Breach of Project Documents.

(a) Borrower. Borrower shall be in breach of any material obligation, or a
material default by Borrower shall have occurred and be continuing, under a
Project Document and such breach or default shall not be remediable or, if
remediable, shall continue unremedied for a period equal to the lesser of the
cure period provided under such Project Document or thirty (30) days, if (i)
such breach cannot be cured within such period, (ii) such breach is susceptible
of cure within forty-five (45) days, (iii) Borrower is proceeding with diligence
and in good faith to cure such breach, (iv) the existence of such breach has not
resulted in, and would not after considering the nature of the cure be
reasonably expected to give rise to, a termination by the counterparty to the
Project Document which is subject to breach or to otherwise have a Material
Adverse Effect, and (v) Lender shall have received an officer’s certificate
signed by a Responsible Officer of Borrower to the effect of clauses (i), (ii),
(iii) and (iv) above and stating what action Borrower is taking to cure such
breach, then, so long as no Material Adverse Effect occurs, such initial cure
period specified above shall be extended to such date not to exceed forty-five
(45) days in the aggregate to the extent necessary for Borrower (acting
diligently) to cure such breach.

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(b) Third Party. Construction Lender or any Approved Lender, as the case may be,
shall be in breach of any material obligation under the Intercreditor Agreement
(or subsequent intercreditor agreement, in the case of an Approved Lender other
than Construction Lender), or a party (other than Borrower) shall be in breach
of any material obligation under, or a material default shall have occurred and
be continuing under, a Project Document (other than the Power Purchase Agreement
and the Lease), and such breach or default shall not be remediable or, if
remediable, shall continue unremedied for a period equal to the lesser of the
cure period provided under such agreement or thirty (30) days after Borrower
receives notice of such breach (unless waived by the appropriate party;
provided, that Borrower, prior to waiving any such material breach or material
default, shall have obtained the written consent of Lender) and such breach or
default has had or would reasonably be expected to have a Material Adverse
Effect; provided that, if (i) such breach cannot be cured within such period,
(ii) such breach is susceptible of cure within forty-five (45) days, (iii) the
breaching party is proceeding with diligence and in good faith to cure such
breach, and (iv) an extension of the time to cure would not reasonably be
expected to exacerbate an existing Material Adverse Effect or cause any new
Material Adverse Effect, then, so long as no Material Adverse Effect occurs,
such thirty (30) day cure period shall be extended to such date not to exceed
forty-five (45) days as shall be necessary for such third party diligently to
cure such breach. Notwithstanding the foregoing, no Event of Default shall occur
as a result of such breach under this clause (b) if (i) Borrower obtains a
Replacement Obligor for the affected third party within sixty (60) days
thereafter and (ii) such breach has not resulted in, and cannot reasonably be
expected to result in, prior to obtaining such Replacement Obligor, a Material
Adverse Effect. For purposes of the foregoing, any cure by Lender on Borrower’s
behalf with respect to a breach or default by Borrower under a Project Document
shall not be considered a remedy under this Agreement for any such breach or
default of such Project Document.

(c) Termination. (i) The Interconnection Agreement, the Construction Contract,
the Lease or the Water Contract shall for any reason cease to be valid and
binding on the Persons parties thereto, as the case may be, except upon
fulfillment of such party’s obligations thereunder, or any such Person pursues a
right of termination under the Interconnection Agreement, the Construction
Contract, the Lease or the Water Contract, as the case may be; or (ii) any
provision in any other Project Document shall for any reason cease to be valid
and binding on any party thereto except upon fulfillment of such party’s
obligations thereunder (or any party to a such Project Document pursues a right
of termination) and, in the case of clause (ii), the foregoing would be
reasonably be expected to result in a Material Adverse Effect.

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7.8 Breach of Terms of Agreement.

(a) Borrower shall fail to perform or observe any of the covenants set forth in
Sections 5.1, 5.3(c), 5.8, 5.18, 5.19, 5.21, 5.24, 5.25, 5.26, or Article 6
(other than Section 6.16(b) hereof);

(b) Borrower shall have failed to pursue its rights and remedies under any
Project Document with an Affiliate of Borrower upon a breach by the applicable
Affiliate of the terms thereof, and such failure shall continue unremedied for a
period of ten (10) Banking Days after Borrower receives written notice thereof
from Lender (provided that Borrower shall, in the case of any failure by any
Affiliate to pay liquidated damages or warranty payments, seek from such
Affiliate recovery of such liquidated damages or warranty payments from, at a
minimum, the date Lender provides notice hereunder); or

(c) Borrower or any other Borrower Affiliate Entity shall fail to perform or
observe any other covenant to be performed or observed by it hereunder or under
any Financing Document and not otherwise specifically provided for elsewhere in
this Article 7, and such failure shall continue unremedied for a period of
thirty (30) days after Borrower becomes aware thereof or receives written notice
thereof from Lender; provided, however, that if such default is of a nature such
that it cannot reasonably be cured within such thirty (30) day period but is
susceptible to cure within a longer period not to exceed forty-five (45) days in
the aggregate, a Event of Default shall not result therefrom so long as (i)
Borrower has, promptly upon discovery thereof, given written notice to Lender of
such default (provided, that if any Event of Default is cured within any
applicable time period specified herein, or waived or temporarily waived by
Lender, the failure alone to give notice of such Event of Default as provided in
this sentence shall cease to be an Event of Default from and after such cure or
waiver), (ii) such Borrower Affiliate Entity as promptly as practicable
commences action reasonably designed to cure such default within such forty-five
(45) day extended cure period and continues diligently to pursue such action and
cures the applicable default within such forty-five (45) day period, and (iii)
Lender in its reasonable discretion shall have determined that such default
would not reasonably be expected to have a Material Adverse Effect.

7.9 Placed in Service Date. The Placed in Service Date and Substantial
Completion shall not have occurred on or before January 31, 2011 (the “Placed in
Service Deadline”); provided, however, that upon the satisfaction of each of the
following conditions (as determined by Lender in its sole discretion), the
“Placed in Service Deadline” shall be extended to February 28, 2012: (a) the
Placed in Service Date shall not have occurred on or before January 31, 2011,
(b) the Project shall not have been materially damaged by flood, fire or other
casualty, (c) there shall not have occurred at any time following the Financial
Closing Date any event, occurrence, effect or circumstance of whatever nature
that has, or could reasonably be expected to have, a Material Adverse Effect,
and (d) Borrower shall have delivered to Lender a certificate from the
Independent Engineer certifying: (i) that the Placed in Service Date is expected
to occur prior to February 28, 2012, (ii) that the Project will commence
operations and producing electrical energy for commercial sale in accordance
with Prudent Utility Practices and applicable laws no later than February 28,
2012, (iii) that there exists funds sufficient for the Borrower to achieve the
Placed in Service Date no later than February 28, 2012 and that the Construction
Contract supports such deadline, (v) that the completion of all work done to
date has been in accordance with the Construction Contract, and (vi) otherwise
in form and substance satisfactory to Lender, together with the Independent
Engineer’s report or reports attached thereto.

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7.10 Material Adverse Effect. Any Borrower Affiliate Entity shall become subject
to any law or regulation that would materially adversely affect the Project with
respect to the generation or sale of electricity under any applicable state or
federal law or regulation and the same shall continue for a period of thirty
(30) days or, if (i) such breach cannot be cured within such period, (ii) such
breach is susceptible of cure within forty-five (45) days, and (iii) the
applicable Borrower Affiliate Entity is proceeding with diligence and in good
faith to cure such breach, then, such thirty (30) day cure period shall be
extended to such date, not to exceed a total of forty-five (45) days, as shall
be necessary to diligently cure such breach so long as such extension of time to
cure has not, and would not reasonably be expected to, exacerbate an existing
Material Adverse Effect or cause any new Material Adverse Effect.

7.11 Schedule. At any time prior to Final Completion, construction work on the
Project by Contractor shall cease for a period of more than thirty (30) days for
any reason (which period (i) shall be measured from the first occurrence of a
work stoppage and continuing until work of a substantial nature is resumed and
thereafter diligently continued, and (ii) shall not include delays caused by any
event of force majeure under the Construction Contract).

7.12 Security.

(a) Any of the Collateral Documents, including the Sponsor Cash Grant Shortfall
Guaranty, once executed and delivered, shall, except as the result solely of the
acts or omissions of Lender (except any such omission in respect of which
Borrower is expressly obligated under the Financing Documents), in any material
respect fail to provide Lender the Liens, remedies, powers or privileges
intended to be created thereby or cease to be in full force and effect, or the
validity thereof or the applicability thereof to the Loans, the Note or any
other Obligations purported to be secured or guaranteed thereby or any part
thereof shall be disaffirmed by or on behalf of Borrower or any other party
thereto; or

(b) There shall occur a default or event of default (however defined) by the
Borrower Affiliate Entities under any of the Collateral Documents, and such
default or event of default shall not have been cured within thirty (30) days
(or such other cure periods as provided therein) after its occurrence.

7.13 Permits; Expiration of Appeals Period.

(a) Borrower shall fail to obtain any Permit on or before the date that such
Permit becomes an Applicable Permit and such failure would reasonably be
expected to have a Material Adverse Effect; or

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(b) Any Applicable Permit necessary for operation of the Project shall be
materially modified, revoked or canceled by the issuing agency or other
Governmental Authority having jurisdiction and within thirty (30) days
thereafter Borrower is not able to demonstrate to Lender that such modification
or loss of such Permit would not reasonably be expected to have a Material
Adverse Effect.

7.14 Loss of Project.

(a) Any substantial portion of Borrower’s property is seized or appropriated
without fair value being paid therefor such as to allow replacement of such
property and/or prepayment in full of all Obligations then outstanding and to
allow Borrower in Lender’s reasonable judgment to continue satisfying its
obligations hereunder and under the other Operative Documents (it being
expressly understood and agreed that any determination of fair, market or other
value for any of Borrower’s property determined in accordance with any Project
Document shall not be conclusive of fair value or binding upon Lender for the
purposes of making any such determination in connection with this Financing
Agreement or any other Financing Document); or

(b) Any Material Project Document shall cease for any reason to be in full force
and effect.

7.15 Destruction of the Project. All or a material portion of the assets or
operations of the Project is destroyed, or suffers an actual or constructive
loss or material damage.

7.16 Transfer of Interests. Except for Permitted Transfers, any direct or
indirect transfer of, including the sale, hypothecation, pledge or grant of a
security interest in, any membership interests, partnership interest, stock or
other ownership interest in any Borrower Affiliate Entity or any other Person
who has a direct ownership interest in Borrower.

7.17 Cash Grant Recapture Liabilities. Any Cash Grant Recapture Liability shall
have been assessed against Borrower or otherwise in respect of the Project,
pursuant to a written demand issued by the United States Treasury Department,
and Borrower fails to pay such Cash Grant Recapture Liability in full on or
prior to the deadline for payment thereof (as set forth in such notice or demand
of the United States Treasury Department, if applicable), or Borrower has
knowledge of any circumstance or event which would reasonably be expected to
result in any Cash Grant Recapture Liability, unless Borrower has established,
to Lender’s reasonable satisfaction, reserves to cover the reasonably
anticipated amount of the Cash Grant Recapture Liability, which such reserves
shall have been funded with equity contributions from Sponsor and Idaho Sponsor
deposited in a segregated account, and which such account shall be pledged to
Lender, and shall be subject to a control agreement in form and substance
reasonably satisfactory to Lender. For the avoidance of doubt, Borrower shall
not be entitled to make distributions for the purpose of funding the foregoing
reserves unless such distributions are otherwise permitted hereunder.

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Remedies

Upon the occurrence and during the continuation of an Event of Default, Lender
may without further notice of default, presentment or demand for payment,
protest or notice of non-payment or dishonor, or other notices or demands of any
kind, all such notices and demands being waived, exercise any or all of the
following rights and remedies, in any combination or order that Lender may
elect, in addition to such other rights or remedies as Lender may have
hereunder, under the Collateral Documents, or at law or in equity:

7.18 Cure by Lender. Without any obligation to do so, make disbursements or
loans to or on behalf of Borrower to cure any Event of Default hereunder and to
cure any default and render any performance under any Project Documents as
Lender may consider necessary or appropriate, whether to preserve and protect
the Collateral or Lender’s interests therein or for any other reason, and all
sums so expended, together with interest on such total amount at the Default
Rate (but in no event shall the rate exceed the maximum lawful rate), shall be
repaid by Borrower to Lender on demand and shall be secured by the Financing
Documents.

7.19 Acceleration. Declare and make all sums of accrued and outstanding
principal and accrued but unpaid interest remaining under this Agreement
together with all unpaid fees, costs (including Liquidation Costs), charges and
other amounts due hereunder or under any other Financing Document, immediately
due and payable, provided that in the event of a Event of Default with respect
to Borrower occurring under Section 7.4, all such amounts shall become
immediately due and payable without further act of Lender or any other Person.

7.20 Possession of Project. Subject to the Intercreditor Agreement, enter into
possession of the Project and perform or cause to be performed any and all work
and labor necessary to complete the Project substantially according to the
Construction Contract and the Plans and Specifications or to operate and
maintain the Project, and all sums expended by Lender in so doing, together with
interest on such total amount at the Default Rate, shall be repaid by Borrower
to Lender upon demand and shall be secured by the Financing Documents.

7.21 Remedies Under Financing Documents. Exercise any and all rights and
remedies available to it under any of the Financing Documents, including
judicial or non-judicial foreclosure or public or private sale of any of the
Collateral pursuant to the Collateral Documents.

Liquidation Preference

From and after any Event of Default and the exercise of remedies by Lender, all
payments made under this Agreement or the other Financing Documents and all
other amounts received by Lender under this Agreement or the other Financing
Documents (including proceeds from any disposition of Collateral) shall be
applied as follows:

first, to any fees, costs, charges or expenses payable to Lender hereunder or
under the other Financing Documents;

second, to any accrued but unpaid interest then due and owing in respect of the
Obligations;

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third, to outstanding principal then due and owing in respect of the
Obligations; and f

ourth, to such other Obligations as remain outstanding.

ARTICLE 8
SCOPE OF LIABILITY

Notwithstanding any other provision of the Financing Documents (but subject to
the last sentence of, and other limitations and qualifications contained in,
this Article 8), there shall be no recourse against Holdings, Idaho Sponsor,
Sponsor or any of its Affiliates (except Borrower), or the stockholders or other
owners, officers, directors or employees of any of them (each, a “Non-Recourse
Party”), for any liability to Lender arising in connection with this Agreement
(whether in contract, tort, strict liability or otherwise) except to the extent
the same is enforced against Borrower and the Collateral and the proceeds and
products of the Collateral, and Lender shall look solely to Borrower (but not to
any Non-Recourse Party except as provided herein) and the Collateral and the
rents, issues, profits, proceeds and products of the Collateral in enforcing
rights and obligations under and in connection with the Financing Documents,
provided that (a) the foregoing provisions of this Article 8 shall not
constitute a waiver, release or discharge of any of the indebtedness, or of any
of the terms, covenants, conditions, or provisions of this Agreement, the Note,
any Collateral Document or other Financing Document (but without personal
liability to the Non-Recourse Parties except as in such Collateral Document or
other Financing Document to which it is a party), and the same shall continue
until the Loan Commitment has been terminated and all Obligations have been
fully paid, discharged, observed, or performed; (b) the foregoing provisions of
this Article 8 shall not limit or restrict the right of Lender to name Borrower
or any other Person as a defendant in any action or suit for a judicial
foreclosure or for the exercise of any other remedy under or with respect to
this Agreement, the Project, any Collateral Document or any other Financing
Document, or otherwise, or for injunction or specific performance, so long as no
judgment in the nature of a deficiency judgment shall be enforced against any
Non-Recourse Party out of any property, assets or funds other than the
Collateral and the proceeds or products of the Collateral, and any other
property of Borrower; and (c) the foregoing provisions of this Article 8 shall
not affect or diminish or constitute a waiver, release or discharge of any
specific written obligation, covenant, or agreement made by any of the
Non-Recourse Parties in any Collateral Document or other Financing Document to
which it is a party or any security granted by the Non-Recourse Parties in
support of the obligations of such Persons under any guaranty or as security for
the obligations of Borrower, including Idaho Sponsor’s and Sponsor’s obligations
under the Sponsor Cash Grant Shortfall Guaranty, with respect to which Idaho
Sponsor, Sponsor or such other Non-Recourse Party, as applicable, shall be
personally liable to the extent provided therein. Notwithstanding the foregoing,
it is expressly understood and agreed that nothing contained in this Article 8
shall be deemed to (a) limit or restrict any right or remedy of Lender (or any
assignee or beneficiary thereof or successor thereto) with respect to, and
Borrower and all of the other Persons described above shall remain fully liable
to the extent that such Person would otherwise be liable for its own actions
with respect to, any fraud, willful misconduct or gross negligence; (b) limit in
any respect the enforceability against the parties thereto of the Collateral
Documents, the Sponsor Cash Grant Shortfall Guaranty, the Fee Letters or any
Operative Document in accordance with their respective terms; or (c) release any
legal consultant in its capacity as such from liability on account of any legal
opinion rendered in connection with the transactions contemplated hereby.

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ARTICLE 9
INDEPENDENT CONSULTANTS

9.1 Removal and Fees. Lender, in its reasonable discretion, may remove from time
to time, any one or more of the Independent Consultants and appoint replacements
reasonably acceptable to Borrower. Notice of any replacement Independent
Consultant shall be given by Lender to Borrower and to the Independent
Consultant being replaced. All reasonable fees and expenses of the Independent
Consultants (whether the original Independent Consultants or replacements) shall
be paid by Borrower; provided, however, that unless an Inchoate Default or Event
of Default shall have occurred and be continuing, Lender shall request that each
such Independent Consultant provide Borrower with its proposed scope of work and
proposed budget therefor, and shall consult with and seek the consent of
Borrower (such consent not to be unreasonably withheld or delayed) with regard
to the matters contained therein.

9.2 Duties. Each Independent Consultant shall be contractually obligated to
Lender to carry out the activities required of it in this Agreement and as
otherwise requested by Lender and shall be responsible solely to Lender.
Borrower acknowledges that it will not have any cause of action or claim against
any Independent Consultant resulting from any decision made or not made, any
action taken or not taken or any advice given by such Independent Consultant in
the due performance in good faith of its duties to Lender hereunder.

9.3 Independent Consultants’ Certificates.

(a) Until the receipt by Lender of certificates reasonably satisfactory to
Lender from each Independent Consultant whom Lender consider necessary or
appropriate certifying Substantial Completion and Final Completion, Borrower,
upon request, shall provide such documents and information to the Independent
Consultants as any of the Independent Consultants may consider necessary or
advisable in order for the Independent Consultants to deliver to Lender the
following certificates:

(i) certificates of the Independent Engineer and Geothermal Consultant delivered
on and dated as of the Financial Closing Date as described in Article 3 and
containing the matters set out therein;

(ii) certificate of the Independent Accountant delivered on and dated as of the
Second Borrowing Date as described in Section 3.2(c) and containing the matters
set out therein; and

(iii) such other information and certification as Lender may reasonably require
from time to time.

(b) Following Substantial Completion, Borrower shall provide such documents and
information to the Independent Consultants as they may reasonably consider
necessary in order for the Independent Consultants to deliver annually to Lender
a certificate setting forth a full report on the status of the Project and such
other information and certification as Lender may reasonably require from time
to time.

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9.4 Certification of Dates. Borrower shall provide the Independent Consultants
with reasonable notice of the expected occurrence of any such dates or events
that would require certificates of Independent Consultants hereunder.

ARTICLE 10
MISCELLANEOUS

10.1 Notices.

(a) Subject to the remaining clauses of this Section 10.1, any communications
between the parties hereto or notices provided herein to be given may be given
to the following addresses:

  If to Lender: Ares Capital Corporation     Address: 245 Park Avenue, 44th
Floor       New York, NY 10167     Telephone: (212) 750-4915     Fax: (212)
750-1777     Attention: Raymond Wright           with copies to: Latham &
Watkins LLP     Address: 600 West Broadway, Suite 1800       San Diego, CA 92101
    Telephone: (619) 236-1234     Fax: (619) 696-7419     Attention: Kelley M.
Gale           If to Borrower: USG Nevada LLC     Address: 1505 Tyrell Lane    
  Boise, ID 83706     Telephone: (208) 424-1027     Fax: (208) 424-1030    
Attention: Jonathan Zurkoff           with copies to: Hawley Troxell    
Address: 877 Main Street, Suite 1000       Boise, ID 83702     Telephone: (208)
344-6000     Fax: (208) 954-5270     Attention: Michael M. Stoddard

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The above is Borrower’s address. All notices or other communications required or
permitted to be given hereunder shall, subject to the remaining clauses of this
Section 10.1, be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by overnight delivery service (including
Federal Express, ETA, Air Borne and other similar overnight delivery services),
(c) in the event overnight delivery services are not readily available, if
mailed by first class mail, postage prepaid, registered or certified with return
receipt requested or (d) if sent by prepaid telegram, or by telecopy confirmed
by telephone. Notice so given shall be effective upon receipt by the addressee,
except that communication or notice so transmitted by telecopy or other direct
written electronic means shall be deemed to have been validly and effectively
given on the day (if a Banking Day and, if not, on the next following Banking
Day) on which it is transmitted if transmitted before 4 p.m., recipient’s time,
and if transmitted after that time, on the next following Banking Day; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
Any party shall have the right to change its address for notice hereunder to any
other location within the United States by giving of thirty (30) days’ written
notice to the other parties in the manner set forth herein above. In addition,
any such notice or other communication to Lender shall at the request of Lender
be provided to any subagent appointed hereunder as designated by Lender from
time to time.

(b) Notices and other communications to Lender hereunder may be delivered or
furnished by electronic communication (including e-mail or Intralinks
(www.intralinks.com) or another relevant website (such Intralinks site or such
other website being referred to herein as the “Platform”)) pursuant to
procedures approved by Lender. Lender or Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. Unless
Lender otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement); provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Banking Day for the recipient, and (ii) notices or communications
posted on the Platform shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.

(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. LENDER DOES NOT WARRANT
THE ACCURACY OR COMPLETENESS OF ANY NOTICES OR COMMUNICATIONS OR THE ADEQUACY OF
THE PLATFORM, AND LENDER EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS
IN ANY NOTICES OR COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY LENDER IN CONNECTION WITH ANY NOTICES OR COMMUNICATIONS
OR THE PLATFORM. IN NO EVENT SHALL LENDER OR ANY OF ITS AFFILIATES OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES HAVE ANY LIABILITY TO HOLDINGS, IDAHO SPONSOR, SPONSOR,
BORROWER, LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND,
INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF SUCH
AGENT OR OTHER PERSON’S TRANSMISSION OF ANY NOTICES OR COMMUNICATIONS THROUGH
THE PLATFORM, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

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10.2 Additional Security; Right to Set-Off. Any deposits or other sums at any
time credited or due from Lender and any Project Revenues, securities or other
property of Borrower in the possession of Lender may at all times be treated as
collateral security for the payment of the Loans and the Note and all other
obligations of Borrower to Lender under this Agreement and the other Financing
Documents, and Borrower hereby pledges to Lender for the benefit of Lender and
grants Lender a security interest and Lien in and to all such deposits, sums,
securities or other property.

10.3 Delay and Waiver. No delay or omission to exercise any right, power or
remedy accruing to Lender upon the occurrence of any Event of Default or
Inchoate Default or any breach or default of Borrower under this Agreement or
any other Financing Document shall impair any such right, power or remedy of
Lender, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring, nor shall any waiver of any single Event of Default, Inchoate Default
or other breach or default be deemed a waiver of any other Event of Default,
Inchoate Default or other breach or default theretofore or thereafter occurring.
Any waiver, indulgence, permit, consent or approval of any kind or character on
the part of Lender of any Event of Default, Inchoate Default or other breach or
default under this Agreement or any other Financing Document, or any waiver on
the part of Lender of any provision or condition of this Agreement or any other
Financing Document, must be in a writing expressly referencing this Agreement
and shall be effective only to the extent in such writing specifically set
forth. All remedies, either under this Agreement or any other Financing Document
or by law or otherwise afforded to Lender, shall be cumulative and not
alternative.

10.4 Costs, Expenses and Attorneys’ Fees. Borrower will pay to Lender all
reasonable third-party and out-of-pocket costs and expenses in connection with
the preparation, negotiation, closing and costs of administering this Agreement
and the documents contemplated hereby, including the reasonable fees, expenses
and disbursements of Latham & Watkins LLP and other attorneys retained by Lender
in connection with the preparation of such documents and any amendments hereof
or thereof, or the negotiation, closing or administration of this Agreement, and
the reasonable fees, expenses and disbursements of the Independent Consultants
and any other engineering, insurance, environmental and construction consultants
to Lender incurred in connection with this Agreement or the Loans or the Loan
Commitment, and the reasonable and documented travel, out-of-pocket and the
tombstone and lucite costs incurred by Lender and all reasonable third-party and
out-of-pocket costs and expenses in connection with the preparation and
negotiation of any amendments to this Agreement or other Financing Documents,
including the reasonable fees, expenses and disbursements of counsel to Lender.
Borrower will reimburse Lender for all costs and expenses, including reasonable
attorneys’ fees, expended or incurred by Lender in enforcing this Agreement or
the other Financing Documents in connection with an Event of Default or Inchoate
Default, in actions for declaratory relief in any way related to this Agreement,
in collecting any sum which becomes due Lender on the Note or under the
Financing Documents, or in connection with the participation by Lender or the
Independent Engineer in any arbitration proceedings under the Construction
Contract.

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10.5 Attorney-In-Fact.

(a) For the purpose of allowing Lender to exercise its rights and remedies
provided in Article 7 following the occurrence and during the continuation of an
Event of Default, and subject to the Intercreditor Agreement, Borrower hereby
constitutes and appoints Lender its true and lawful attorney-in-fact, with full
power of substitution, to complete the Project in the name of Borrower, and
hereby empowers such attorney or attorneys as follows:

(i) To make such changes and corrections in the Plans and Specifications as
reasonably shall be necessary or desirable to complete the work on any or all of
the Project in substantially the manner contemplated by the Construction
Contract;

(ii) To employ such contractors, subcontractors, agents, architects and
inspectors as reasonably shall be required for such purposes;

(iii) To pay, settle or compromise all bills and claims which may be or become
Liens or security interests against the Project or the Collateral, or any part
thereof, unless a bond or other security satisfactory to Lender has been
provided;

(iv) To execute applications and certificates in the name of Borrower which
reasonably may be required by the Financing Documents or any other agreement or
instrument executed by or on behalf of Borrower in connection with the Project;

(v) To prosecute and defend all actions or proceedings in connection with the
Project or the Collateral or any part thereof and to take such action and
require such performance as such attorney reasonably deems necessary under any
performance and payment bond and the Financing Documents; and

(vi) To do any and every act which Borrower might do on its behalf with respect
to the Collateral or any part thereof or the Project and to exercise any or all
of Borrower’s rights and remedies under any or all of the Project Documents.

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(b) This power of attorney shall be deemed to be a power coupled with an
interest and shall be irrevocable.

10.6 Entire Agreement. This Agreement, the Confidentiality Agreement and any
agreement, document or instrument attached hereto or referred to herein
(including the Financing Documents and the Fee Letters) integrate all the terms
and conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms, conditions
and provisions of this Agreement shall prevail. This Agreement and the other
Financing Documents may only be amended or modified by an instrument in writing
signed by Borrower (to the extent party thereto), Lender and any other parties
to be charged and in accordance with the terms of this Agreement.

10.7 Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision.

10.8 Headings. Paragraph headings and a table of contents have been inserted in
this Agreement as a matter of convenience for reference only and it is agreed
that such paragraph headings are not a part of this Agreement and shall not be
used in the interpretation of any provision of this Agreement.

10.9 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and practices consistent with those
applied in the preparation of the financial statements submitted by Borrower to
Lender, and (unless otherwise indicated) all financial data submitted pursuant
to this Agreement shall be prepared in accordance with such principles and
practices.

10.10 No Partnership, Etc. Lender and Borrower intend that the relationship
between them shall be solely that of creditor and debtor. Nothing contained in
this Agreement, the Note or in any of the other Financing Documents shall be
deemed or construed to create a partnership, tenancy-in-common, joint tenancy,
joint venture or co-ownership by, between or among Lender and Borrower or any
other Person. Lender shall not be in any way responsible or liable for the
debts, losses, obligations or duties of the Borrower Affiliate Entities or any
other Person with respect to the Project Documents, the Project or otherwise.
All obligations to pay real property or other taxes, assessments, insurance
premiums, and all other fees and charges arising from any Project Document or
the ownership, operation or occupancy of the Project and to perform all
obligations under the Project Documents, the Real Property Documents and any
other agreements and contracts relating to the Project shall be the sole
responsibility of Borrower, as applicable.

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10.11 Limitation on Liability. NO CLAIM SHALL BE MADE BY ANY PARTY HERETO OR ANY
OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS AGAINST ANY OTHER
PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS
FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (WHETHER OR NOT THE
CLAIM THEREFOR IS BASED ON CONTRACT, TORT, DUTY IMPOSED BY LAW OR OTHERWISE), IN
CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS OR ANY ACT OR
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND EACH PARTY HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER
OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

10.12 APPLICABLE LAW. THIS AGREEMENT, AND ANY INSTRUMENT OR AGREEMENT REQUIRED
HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
LIEN AND SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

10.13 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE,
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER FINANCING DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
BORROWER AFFILIATE ENTITY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY LENDER IN
RESPECT OF RIGHTS UNDER ANY FINANCING DOCUMENT GOVERNED BY LAWS OTHER THAN THE
LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT
THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY BORROWER
AFFILIATE ENTITY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER ANY BORROWER AFFILIATE ENTITY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (E) AGREES THAT LENDER RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY BORROWER
AFFILIATE ENTITY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
EXERCISE OF ANY RIGHTS UNDER ANY FINANCING DOCUMENT OR THE ENFORCEMENT OF ANY
JUDGMENT.

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10.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER FINANCING DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.14 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER FINANCING
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

10.15 Usury. Nothing contained in this Agreement or the Note shall be deemed to
require the payment of interest or other charges by Borrower or any other Person
in excess of the amount which the holders of the Note may lawfully charge under
any applicable usury laws. In the event that the holders of the Note shall
collect moneys which are deemed to constitute interest which would increase the
effective interest rate to a rate in excess of that permitted to be charged by
applicable law, all such sums deemed to constitute interest in excess of the
legal rate shall, upon such determination, at the option of the holder of the
Note, be returned to Borrower or credited against the principal balance of the
Note then outstanding. Nothing contained in this Section 10.15 shall be
construed as waiving any usury exemption Lender has under law, and, to the
extent any such exemption applies, this Section 10.15 shall be inapplicable.

10.16 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Borrower may not assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of Lender. Lender
may assign or otherwise transfer all or any of its rights under this Agreement
to an Affiliate without the consent of Borrower, or to any other financial
institution with Borrower’s consent, not to be unreasonably withheld,
conditioned or delayed.

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10.17 Counterparts. This Agreement may be executed in one or more duplicate
counterparts and by facsimile and when signed by all of the parties listed below
shall constitute a single binding agreement.

10.18 Patriot Act Compliance. Lender hereby notifies Borrower that, pursuant to
the requirements of the Patriot Act, it and Lender shall be required to obtain,
verify and record information that identifies the Borrower Affiliate Entities,
which information includes, without limitation, the name and addresses and other
information that will allow it or Lender to identify the Borrower Affiliate
Entities in accordance with the requirements of the Patriot Act. Borrower shall
promptly deliver information described in the immediately preceding sentence
when requested by Lender in writing pursuant to the requirements of the Patriot
Act.

10.19 Electronic Execution. This Agreement and the other Financing Documents may
be executed by electronic signature, and the words “execution,” “signed,”
“signature,” and words of like import in any Financing Document shall be deemed
to include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.

10.20 Appointment of Agent. Borrower hereby irrevocably designates, appoints and
empowers CT Corporation System (the “Process Agent”), with offices on the date
hereof at 111 Eighth Avenue, New York, New York 10011, as its permitted
designee, appointee and agent to receive and forward, for and on its behalf,
service of any and all legal process, writs, summons, notices and documents
which may be served in any action or proceeding arising out of this Agreement or
any other Financing Document. Borrower hereby agrees to cause the Process Agent
to execute and deliver to Lender a letter from the Process Agent to the effect
of the foregoing. If for any reason such Process Agent shall cease to act as
such, Borrower agrees hereby to designate a new permitted designee, appointee
and agent in New York City on terms satisfactory to Lender. Borrower shall
promptly inform the Process Agent of any change to Borrower’s address for
forwarding such items.

10.21 Confidentiality. Lender agrees to use best efforts to maintain the
confidential nature of, and shall not use or disclose the financial information
or other confidential information related to Borrower, without first obtaining
Borrower’s prior written consent; provided that nothing in this Section 10.21
shall require Lender to obtain any consent of Borrower in connection with (and
Borrower hereby authorizes Lender to freely disclose any financial information
or confidential information with respect to Borrower, the Project, any Project
Document or any Financing Document without any consent of Borrower, to the
extent otherwise required, in connection with) (a) exercising any of their
respective rights under the Financing Documents, including those exercisable
upon the occurrence of a Event of Default; (b) providing information about
Borrower, the Project, any Project Document or any Financing Document or the
parties thereto to any other Lender or prospective Lender or any Person
acquiring, or potentially acquiring, any interest of Lender under the Financing
Agreement and any such Person’s directors, officers, employees, agents and
consultants in connection with their credit evaluation of Borrower or otherwise
(if, in the case of any such Person potentially acquiring such an interest from
Lender, such Person agrees to be bound by the terms of a confidentiality
agreement substantially similar to this Section 10.21); (c) any situation in
which Lender (i) is required by law or required by any Governmental Authority or
the National Association of Insurance Commissioners or provincial regulatory
body to disclose information or (ii) is requested by bank examiners or bank
regulatory bodies, to disclose information (provided that in each instance under
clauses (i) and (ii) above such Person uses reasonable efforts to maintain
confidentiality of the information disclosed); (d) providing information to
legal counsel to Lender in connection with the transactions contemplated by any
of the Financing Documents (if Lender informs such counsel of the confidential
nature of such information and requires that it be kept confidential except as
permitted herein); (e) providing information to independent accountants,
auditors or other expert consultants retained by Lender (if Lender informs such
auditors or consultants of the confidential nature of such information and
requires that it be kept confidential except as permitted herein); (f) any
information that is in or becomes part of the public domain otherwise than
through a wrongful act of Lender or any employees or agents thereof or other
Persons to whom confidential information is disclosed under subsections (b),
(c), (d) or (e) above; (g) any information that is in the possession of Lender
prior to receipt thereof from Borrower or any other Person known to Lender to be
acting on behalf of Borrower; (h) any information that is independently
developed by Lender; and (i) any information that is disclosed to Lender by a
third party that is not known or reasonably suspected by Lender to be bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, Borrower with respect to such information.

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Notwithstanding anything to the contrary set forth in this Section 10.21, after
notice to Borrower or Lender shall be free to disclose any information regarding
the tax structure of the transactions contemplated in this Agreement to any
relevant Governmental Authority requiring such information.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties have caused this Financing Agreement to be duly
executed by their officers thereunto duly authorized as of the day and year
first above written.

USG NEVADA LLC, a Delaware limited liability company, as Borrower   By:
______________________________   Name: ____________________________   Title:
_____________________________

[SIGNATURE PAGE TO FINANCING AGREEMENT]

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ARES CAPITAL CORPORATION, a Maryland corporation, as Lender   By:
___________________________   Name: _________________________   Title:
__________________________

[SIGNATURE PAGE TO FINANCING AGREEMENT]

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Execution Version

EXHIBIT A
to Financing Agreement

DEFINITIONS

“ABR” refers, when used in reference to any Loan, to when such Loan is bearing
interest at the Alternate Base Rate plus the Applicable Margin.

“Additional Loan” shall have the meaning given in Section 2.1(a) of the
Financing Agreement.

“Additional Project Documents” means any contracts or agreements related to the
construction, testing, maintenance, repair, operation or use, as applicable, of
the Project entered into by Borrower and any other Person or assigned to
Borrower subsequent to the Financial Closing Date and that either (a) replaces
or substitutes for an existing Project Document, (b) has a term greater than
three months or (c) has an aggregate value over its term in excess of
Seventy-Five Thousand Dollars ($75,000); provided, however, that notwithstanding
the foregoing, any contract or agreement related to the Project between Borrower
and any Affiliate of Borrower (including, without limitation, any management
services agreement) shall be deemed an Additional Project Document hereunder.

“Affiliate” of a specified Person means any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with the Person specified, or who holds or beneficially
owns ten percent (10%) or more of the equity interest in the Person specified or
ten percent (10%) or more of any class of voting securities of the Person
specified. When used with respect to Borrower, “Affiliate” shall include each
Borrower Affiliate Entity and any of their Affiliates.

“Agreement” means the Financing Agreement.

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such
day plus 0.5%, and (c) the LIBO Rate for one (1) month Interest Period plus
1.00% . Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective as of the opening of business on
the effective date of such change.

“Annual Operating Budget” shall have the meaning given in Section 5.5(d) of the
Financing Agreement.

“Applicable Margin” means (a) from the Financial Closing Date to and including
March 31, 2012, 3.50%; and (b) from and after March 31, 2012, 9.0% .

“Applicable Permit” means, at any time, any Permit, including any zoning,
environmental protection, pollution (including air, water or noise), sanitation,
FERC, import, export, safety, siting or building Permit, or accreditation in any
system for purposes of a renewable portfolio standard or qualification, in each
case that is (a) necessary at any given time in light of the stage of
development, construction or operation of the Project (to the extent required by
Legal Requirements, the Financing Documents or Material Project Documents) to
site, construct, test, operate, maintain, repair, own or use the Project as
contemplated by the Financing Documents and Material Project Documents, to sell
electricity therefrom, and for Borrower to enter into any Operative Document or
to consummate any transaction contemplated thereby, in each case in accordance
with all applicable Legal Requirements, (b) necessary so that (i) neither
Lender, nor any Affiliate of any of them may be deemed by any Governmental
Authority to be subject to regulation under the FPA or PUHCA or under any state
laws or regulations respecting the rates or the financial or organizational
regulation of electric utilities solely as a result of the construction,
ownership or operation of the Project or the sale of electricity therefrom, or
(ii) neither Borrower nor any Borrower Affiliate Entity may be deemed by any
Governmental Authority to be subject to regulation under PUHCA except as set
forth in Section 4.10 of the Financing Agreement, and/or (c) listed on the
Schedule of Applicable Permits attached to the Financing Agreement as Exhibit
G-2.

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“Approved Lender” means any provider of an Approved Other Project Financing.

“Approved Other Project Financing” means, collectively, the Approved Term Loan
and any project financing by Borrower of Phase II, including any construction
loan, bridge loan or letter of credit facility entered into by Borrower in
connection with the development, construction or operation of Phase II,
provided, that such financing satisfies each of the requirements set forth in
clauses (a), (b) and (c) of the proviso contained in the definition of “Approved
Term Loan” hereunder

“Approved Term Loan” means mini-perm, term, refinancing or other take-out
financing of Borrower that is entered into on or after the Placed in Service
Date and whose purpose is to refinance and repay (together with any equity
contribution of Borrower) one hundred percent of the Construction Loan; provided
that (a) the provider of such financing, if such financing is secured by any
assets of Borrower or the Expanded Project or any assets otherwise previously
pledged as collateral to Construction Lender under the Construction Loan, shall
have entered into an Intercreditor Agreement with Lender substantially similar
to the Intercreditor Agreement and otherwise reasonably satisfactory to Lender;
(b) the Collateral hereunder (except for the Member Pledge Agreement, to the
extent released pursuant to Section 5.6 of the Financing Agreement) shall
continue to constitute the separate collateral solely of Lender and shall be
free an clear of any Liens of any such provider of such financing; and (c)
Lender shall have approved any application of Project Revenues pursuant to such
financing and the provisions thereof regarding distributions to Borrower, such
that Lender shall be assured that, after payment of reasonable operating costs,
debt service and reasonable reserves, and customary debt service coverage
restrictions on distributions, all distributions of Borrower shall be deposited
into the Blocked Account and shall comprise Collateral solely in favor of Lender
and not subject to the Lien of any other Person

“Banking Day” means any day (a) other than a Saturday, Sunday or other day on
which banks are authorized to be closed in New York, New York, or Washoe County,
Nevada; and (b) which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.

Exhibit A-2

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“Bankruptcy Event” shall have the meaning given in Section 7.4 of the Financing
Agreement.

“Bankruptcy Law” means Title 11, United States Code, and any other state or
federal insolvency, reorganization, moratorium or similar law for the relief of
debtors.

“Blocked Account” means the “Account” as defined in the Deposit Account Control
Agreement.

“Borrower” means USG Nevada LLC, a Delaware limited liability company.

“Borrower Affiliate Entity” means each of Borrower, Holdings, Idaho Sponsor and
Sponsor.

“Borrower LLC Agreement” means that certain Limited Liability Company Agreement
of Borrower, dated as of March 5, 2008, executed by Idaho Sponsor, as amended by
that certain First Amendment to Limited Liability Company Agreement, dated as of
September 19, 2011, executed by Holdings, and as further amended by that certain
Second Amendment to Limited Liability Company Agreement, dated as of November 9,
2011, executed by Holdings.

“Borrower’s Closing Certificate” shall have the meaning given in Section 3.1(g)
of the Financing Agreement.

“Borrower’s Organizational Documents” means the Borrower LLC Agreement and
certificate of formation.

“Borrowing” means a borrowing by Borrower of any Loan pursuant to Section 2.1 of
the Financing Agreement upon the satisfaction (or waiver in accordance with the
terms of the Financing Agreement) of each of the applicable conditions precedent
listed in Article 3 of the Financing Agreement. There shall be no more than two
(2) Borrowings.

“Capital Adequacy Requirement” shall have the meaning given in Section 2.5(d) of
the Financing Agreement.

“Cash Grant” means a United States Treasury Department cash grant in lieu of the
available renewable energy tax credits pursuant to Sections 45 and 48 of the
Internal Revenue Code under the terms of Section 1603 of the American Recovery
and Reinvestment Act of 2009 and the Cash Grant Guidance with respect to the
Project.

“Cash Grant Application” means the complete application (including any
preliminary or supplemental application) for a Cash Grant described in the Cash
Grant Guidance, together with any exhibits, schedules, attachments, reports or
other documents filed with such application, and any supplemental information
and filings and associated required registrations, all in accordance with
Section 5.24 of the Financing Agreement.

“Cash Grant Application Power of Attorney” shall have the meaning given in
Section 3.1(bb) of the Financing Agreement.

Exhibit A-3

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“Cash Grant Guidance” means the United States Treasury Department’s program
guidance publication entitled “Payments for Specified Energy Property in Lieu of
Tax Credits under the American Recovery and Reinvestment Act of 2009,” dated
July 2009, and revised in March 2010 and April 2011, as the same may be amended,
and any other guidance, instructions or terms and conditions published or issued
by the United States Treasury Department in respect of the Cash Grant or any
Cash Grant Application.

“Cash Grant Notice of Assignment” means the Notice of Assignment substantially
in the form of Exhibit D-7 to the Financing Agreement, duly executed by Borrower
and Lender, as described in the Cash Grant Guidance, for the assignment by
Borrower to Lender of all rights to the proceeds of the Cash Grant, together
with any exhibits, schedules, attachments, reports or other documents filed with
such notice, and any supplemental information and filings and associated
required registrations, all in accordance with Section 5.24 of the Financing
Agreement.

“Cash Grant Proceeds” shall have the meaning given in the Cash Grant Security
Agreement.

“Cash Grant Recapture Liabilities” means an amount equal to (i) the amount of
the Cash Grant that is recaptured, disallowed, or invalidated as a result of a
Recapture Event plus (ii) any associated interest and penalties or other amounts
imposed in connection with the recapture or disallowance of the Cash Grant.

“Cash Grant Security Agreement” shall have the meaning given in Section 2.8(a)
of the Financing Agreement, as amended, restated, supplemented, modified,
replaced or refinanced from time to time.

“Cash Grant Shortfall” means, collectively (but without duplication): (a) (X)
the positive difference between (i) the aggregate outstanding amount of the
Loans, minus (ii) the aggregate amount of the Cash Grant applied for by Borrower
under the Cash Grant Application, plus (Y) the positive difference between (i)
the aggregate amount of the Cash Grant applied for by Borrower under the Cash
Grant Application, minus (ii) the Cash Grant received by Borrower and applied to
repay the Loans; and (b) in the event that, as of the Maturity Date, no Cash
Grant has been received, the aggregate outstanding amount of the Loans.

“Change of Law” shall have the meaning given in Section 2.5(b) of the Financing
Agreement.

“Claims” shall have the meaning given in Section 5.21(a)(i) of the Financing
Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means: (a) the Cash Grant and all Cash Grant Proceeds, (b) the
pledge by Holdings of all equity interests in the Borrower, (c) the pledge by
Idaho Sponsor of all equity interests in Holdings, (d) all amounts credited to
or deposited in the Blocked Account, and (e) all other property which is
subject, from time to time, to the security interests or liens granted in or
purported or intended to have been granted by any of the Collateral Documents.

Exhibit A-4

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“Collateral Documents” means, collectively, the Cash Grant Security Agreement,
the Pledge Agreements, the Sponsor Cash Grant Shortfall Guaranty, the Control
Agreements, the Consents and any other security document, financing statement
and the like filed or recorded in connection with the foregoing.

“Commitment Fees” shall have the meaning given in Section 2.3(b) of the
Financing Agreement.

“Confidentiality Agreement” means the agreements related to confidentiality of
relationships and information contained in the Mandate Letter.

“Consents” means the consents to collateral assignment or estoppels, as the case
may be, entered into in accordance with the Financing Agreement.

“Construction Contract” means that certain Engineering, Procurement and
Construction Contract, dated August 27, 2010, between Borrower and Construction
Lender, as amended by (i) Change Order No. 1, dated November 12, 2010, (ii)
Change Order No. 2, dated November 12, 2010, (iii) Change Order No. 3, dated
November 18, 2010, (iv) Change Order No. 4, dated December 1, 2010, (v) Change
Order No. 5, dated December 29, 2010, (vi) Change Order No. 6, dated January 14,
2011, (vii) Change Order No. 7, dated March 11, 2011, (viii) Change Order No. 8,
dated May 23, 2011, (ix) Change Order No. 9, dated June 2, 2011, (x) Change
Order No. 10, dated July 11, 2011, (xi) Change Order No. 11, dated August 30,
2011, (xii) Change Order No. 12, dated September 16, 2011, (xiii) Change Order
No. 13, dated September 23, 2011, and (xiv) Change Order No. 14, dated October
27, 2011.

“Construction Lender” means SAIC Constructors, LLC, an Oklahoma limited
liability company, formerly known as Benham Constructors, LLC, having an office
at 9400 N. Broadway, Suite 300, Oklahoma City, Oklahoma 73114, together with its
successors and assigns.

“Construction Loan” means the loan in the original principal amount of
$24,553,000 made by the Construction Lender pursuant to the Construction Loan
Agreement.

“Construction Loan Agreement” means that certain Credit Addendum to Engineering,
Procurement and Construction Contract, dated August 27, 2010, as amended by that
certain First Amendment to Credit Addendum dated May 20, 2011, between Borrower
and Construction Lender, in each case as in effect as of the date hereof.

“Construction Loan Documents” means, collectively, the Construction Loan
Agreement and the “Loan Documents,” as defined in the Construction Loan
Agreement as in effect as of the date hereof.

“Construction Period” means the period from the Financial Closing Date until but
not including Substantial Completion.

“Contractor” means SAIC Constructors, LLC, an Oklahoma limited liability
company, formerly known as Benham Constructors, LLC, having an office at 9400 N.
Broadway, Suite 300, Oklahoma City, Oklahoma 73114.

Exhibit A-5

--------------------------------------------------------------------------------

“Control Agreements” means, collectively, the Deposit Account Control Agreement
and any other control agreement executed from time to time by any Borrower
Affiliate Entity in favor of Lender pursuant to any Financing Document.

“Controlled Group” means (a) a corporation which is a member of a controlled
group of corporations with Borrower within the meaning of Section 414(b) of the
Code, (b) a trade or business (including a sole proprietorship, partnership,
trust, estate or corporation) which is under common control with Borrower within
the meaning of Section 414(c) of the Code or Section 4001(b)(1) of ERISA, (c) a
member of an affiliated service group with Borrower within the meaning of
Section 414(m) of the Code, or (d) an entity deemed affiliated with Borrower
under Section 414(o) of the Code.

“Cost Segregation Consultant” means Deloitte LLP, a Delaware limited liability
partnership.

“Cost Segregation Report” means the final study of the Cost Segregation
Consultant identifying the cost categories and expended amounts of Qualifying
Costs for the Project, providing an itemization of Qualifying Costs and
describing the methodology used in determining categories and amounts of
Qualifying Costs, and prepared in a manner reasonably acceptable to Lender and
consistent with the Cash Grant Guidance and applicable law.

“Debt” of any Person at any date means, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (d) all
obligations of such Person under leases which are or should be, in accordance
with GAAP, recorded as capital leases in respect of which such Person is liable,
(e) all obligations of such Person to purchase securities (or other property)
which arise out of or in connection with the sale of the same or substantially
similar securities (or property), (f) all deferred obligations of such Person to
reimburse any bank or other Person in respect of amounts paid or advanced under
a letter of credit or other instrument, (g) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by such Person,
(h) all Debt of others guaranteed directly or indirectly by such person or as to
which such Person has an obligation substantially the economic equivalent of a
guaranty and (i) obligations of such Person in respect of the interest rate
hedge agreements, commodity hedges or currency agreements.

“Default Rate” means the interest rate per annum equal to the lesser of (a) 2.0%
per annum in excess of the interest rate otherwise payable hereunder with
respect to the applicable Loans (or, in the case of any fees and other amounts
at a rate which is 2.0% per annum in excess of the interest rate otherwise
payable hereunder for then-outstanding ABR Loans) and (b) the maximum rate of
interest permitted under applicable law; provided, in the event any Loan is a
LIBO Rate Loan, upon the expiration of the Interest Period in effect at the time
any such increase in interest rate is effective such LIBO Rate Loan shall
thereupon become an ABR Loan and shall thereafter bear interest payable upon
demand at a rate which is equal to the lesser of (i) 2.0% per annum in excess of
the interest rate otherwise payable hereunder for ABR Loans and (ii) the maximum
rate of interest permitted under applicable law.

Exhibit A-6

--------------------------------------------------------------------------------

“Deposit Account Control Agreement” means that certain control agreement entered
into in connection with the Blocked Account, by and among Borrower, Lender, and
Bank of America, N.A, in form and substance satisfactory to Lender.

“Disqualified Person” means (a) any Federal, State, or local government (or any
political subdivision, agency, or instrumentality thereof); (b) any organization
described in Section 501(c) of the Code and exempt from tax under Section 501(a)
of the Code; (c) any entity referred to in paragraph (4) of Section 54(j) of the
Code; (d) any Person described in Section 50(d)(1) of the Code; (e) any Person
who is not a “United States person” as defined in Section 7701(a)(30) of the
Code, unless such Person is a foreign person or entity (other than a foreign
partnership or foreign pass-through entity and the exception under Section
168(h)(2)(B)(i) of the Code applies with respect to such Person’s distributive
share of income from Borrower; and (f) any partnership or other pass-through
entity (including a single-member disregarded entity) other than a real estate
investment trust as defined in Section 856(a) of the Code or a cooperative
organization described in Section 1381(a) of the Code, any direct or indirect
partner (or other direct or indirect holder of an equity or profits interest) of
which is described in clauses (a) through (f), unless such Person holds its
interests in the partnership or other pass-through entity indirectly through a
taxable “C” corporation; provided, if and to the extent the definition of
“Disqualified Person” under Section 1603(g) of the American Recovery and
Reinvestment Act of 2009 or the Cash Grant Guidance is amended after the
Financial Closing Date, the definitions of “Disqualified Person” shall be
interpreted to conform to such amendment.

“Dollars” and “$” means United States dollars or such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts in the United States of America.

“Endangered Species Laws” means the federal Endangered Species Act of 1973 (16
U.S.C. Section 1531 et seq.) and any similar state law.

“Environmental Claim” means any and all obligations, liabilities, losses,
administrative, regulatory or judicial actions, suits, demands, decrees, claims,
liens, judgments, warning notices, notices of noncompliance or violation,
investigations, proceedings, removal or remedial actions or orders, or damages
(foreseeable and unforeseeable, including consequential and punitive damages),
penalties, fees, out of pocket costs, expenses, disbursements, attorneys’ or
consultants’ fees, relating in any way to any Environmental Law or any Permit
issued under any such Environmental Law (hereafter “Claims”), including (a) any
and all Claims by Governmental Authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Releases of Hazardous Substances or arising
from alleged injury or threat of injury to healthy, safety or environment.

“Environmental Law” means any of:

(a) the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601 et seq.) (“CERCLA”);

Exhibit A-7

--------------------------------------------------------------------------------

(b) the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.)
(“Clean Water Act” or “CWA”);

(c) the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.)
(“RCRA”);

(d) the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) (“AEA”);

(e) the Clean Air Act (42 U.S.C. Section 7401 et seq.) (“CAA”);

(f) the Emergency Planning and Community Right to Know Act (42 U.S.C. Section
11001 et seq.) (“EPCRA”);

(g) the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section
136 et seq.) (“FIFRA”);

(g) the Oil Pollution Act of 1990 (P.L. 101-380, 104 Stat. 486);

(h) the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.) (“SDWA”);

(i) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.) (“TSCA”);

(j) the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.)
(“HMTA”);

(k) the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.)
(“OSHA”);

(p) the Endangered Species Laws;

(q) all other Federal, state or local Legal Requirements now or hereafter in
effect that relate to protection of pollution, protection or cleanup of the
environment, including without limitation any Legal Requirement that relates to
(i) any Release or (ii) the use, treatment, storage, disposal, handling,
manufacturing, transportation or shipment of Hazardous Substances or otherwise
govern Hazardous Substances; and

(r) the regulations adopted pursuant to all such foregoing laws.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Plan” means any employee benefit plan (a) maintained by Borrower or any
member of the Controlled Group or to which any of them is making, or has an
obligation to make, contributions, or has made, or has been obligated to make,
contributions as of the date hereof or at any time within the six (6) year
period preceding the date hereof or (b) covered by Title IV of ERISA or to which
Section 412 of the Code applies.

Exhibit A-8

--------------------------------------------------------------------------------

“Event of Default” and “Events of Default” have the meanings given in Article 7
of the Financing Agreement.

“Event of Eminent Domain” means any compulsory transfer or taking by
condemnation, eminent domain or exercise of a similar power, or transfer under
threat of such compulsory transfer or taking, of any part of the Project, by any
agency, department, authority, commission, board, instrumentality or political
subdivision of the State in which the Project is located, the United States or
another Governmental Authority having jurisdiction.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” shall have the meaning set forth in Section 2.4(d)(i) of the
Financing Agreement.

“Expanded Project” means collectively the Project and Phase II.

“FACA” means the Federal Assignment of Claims Act of 1940 (31 U.S.C. Section
3727 et seq.; 41 U.S.C. Section 15 et seq.).

“FDIC” means the Federal Deposit Insurance Corporation and its successors.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the per
annum rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers as published by the
Federal Reserve Bank of New York for such day (or, if such rate is not so
published for any day, the average of the rates quoted by three federal funds
brokers to Lender on such day on such transactions).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.

“Fee Letters” means, collectively, the Underwriting Fee Letter Agreement and the
Upfront Fee Letter Agreement.

“FERC” means the Federal Energy Regulatory Commission and its successors.

“Final Completion” means, with respect to the Project, that “Final Completion”
under the Construction Contract and final acceptance of such work (including
acceptance by Borrower in consultation with the Independent Engineer and
completion of all Punch List Items) shall have occurred and that completion of
all such work shall have been in accordance with the Plans and Specifications
and the requirements of all Applicable Permits, all as certified by the
Independent Engineer to Lender (which certification shall be satisfactory to
Lender in its reasonable discretion).

“Financial Closing” means the satisfaction (or waiver in accordance with the
terms of the Financing Agreement) of each of the conditions precedent listed in
Section 3.1 of the Financing Agreement.

Exhibit A-9

--------------------------------------------------------------------------------

“Financial Closing Date” means the date upon which Financial Closing occurs.

“Financing Agreement” means that certain Financing Agreement dated as of
November 9, 2011, between Borrower and Lender.

“Financing Documents” means, collectively, the Financing Agreement, the Note,
the Collateral Documents, the Intercreditor Agreement (and any subsequent
intercreditor agreement entered into in conjunction with an Approved Other
Project Financing), the Mandate Letter, the Cash Grant Notice of Assignment, the
Fee Letters, and any other loan or security agreements or letter agreements or
similar documents, agreements or instruments (including the Cash Grant
Application Power of Attorney ) entered into in connection with any of the
foregoing or with the transactions contemplated by the Financing Documents.

“Flow of Funds Memorandum” means the memorandum delivered to Lender pursuant to
Section 3.1(ii).

“FPA” means the Federal Power Act, as amended, and all rules and regulations
adopted thereunder.

“GAAP” means generally accepted accounting principles in the United States of
America consistently applied.

“Geothermal Consultant” means GeothermEx.

“Governmental Authority” means any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including any zoning authority, FERC,
the Securities and Exchange Commission, the FDIC, the Comptroller of the
Currency or the Federal Reserve Board, any central bank or any comparable
authority), or any arbitrator with authority to bind a party at law.

“Governmental Rule” means, with respect to any Person, any statute, law, rule,
regulation, ordinance, rule of common law, order or binding interpretation,
code, treaty, judgment, decree, directive, guidelines, policy or similar form of
decision of any Governmental Authority in each case applicable to or binding
upon such Person or any of its properties or to which such Person or any of its
property is subject.

“Hazardous Substances” means any substance or material that is prohibited,
regulated or defined as “hazardous” or any other term of similar import under
any Environmental Law, including without limitation, chemicals, pollutants,
contaminants, wastes, acid mine runoff, toxic substances, oil, petroleum,
petroleum derivatives or other hydrocarbons, petroleum products, asbestos, or
PCBs.

“Holdings” means Nevada USG Holdings, LLC, a Delaware limited liability company.

Exhibit A-10

--------------------------------------------------------------------------------

“Holdings LLC Agreement” means that certain Limited Liability Company Agreement
of Holdings, dated as of September 19, 2011, and amended by that certain First
Amendment, dated as of November 9, 2011, executed by Idaho Sponsor.

“Idaho Sponsor” means U.S. Geothermal Inc., an Idaho corporation.

“Idaho Sponsor Pledge Agreement” shall have the meaning given in Section 2.8(b)
of the Financing Agreement, as amended, restated, supplemented, modified,
replaced or refinanced from time to time.

“Improvements” means all the buildings, structures, facilities and improvements
of every nature whatsoever now or hereafter situated on the Site.

“Inchoate Default” means any occurrence, circumstance or event, or any
combination thereof, which, with the lapse of time, the giving of notice or
both, would constitute an Event of Default.

“Indemnified Taxes” shall have the meaning given in Section 2.4(d)(i) of the
Financing Agreement.

“Indemnitees” shall have the meaning given in Section 5.21(a) of the Financing
Agreement.

“Independent Accountant” means Martinelli Mick or its successor appointed
pursuant to Section 9.1 of the Financing Agreement.

“Independent Consultants” means, collectively, the Independent Engineer, the
Independent Accountant and the Geothermal Consultant, or their successors
appointed pursuant to Section 9.1 of the Financing Agreement.

“Independent Engineer” means Luminate, or its successors appointed pursuant to
Section 9.1 of the Financing Agreement.

“Initial Loan” shall have the meaning given in Section 2.1(a) of the Financing
Agreement.

“Insurance Requirements” means the provisions set forth on Exhibit H of the
Financing Agreement.

“Interconnection Agreement” means that certain Small Generator Interconnection
Agreement (Service Agreement No. #10-01277), dated as of December 28, 2010, by
and between Interconnector and Borrower.

“Interconnector” means Sierra Pacific Power Company d/b/a NV Energy.

“Intercreditor Agreement” shall have the meaning given in Section 2.8(f) of the
Financing Agreement.

Exhibit A-11

--------------------------------------------------------------------------------

“Interest Payment Date” shall mean, for any Loan, the last day of the Interest
Period applicable to such Loan.

“Interest Period” means with respect to any Loan, the time period set forth in
Section 2.2(b) of the Financing Agreement, which commences on the first day of
such Loan and ends on the last day of such time period.

“Lease” means that certain Geothermal Lease dated October 14, 1987, by and
between Borrower and Lessor, as amended by that certain First Amendment to
Geothermal Lease dated March 15, 2008 and that certain Second Amendment to
Geothermal Lease.

“Legal Requirements” means, as to any Person, the articles of incorporation,
bylaws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation, any requirement under a Permit, and any
determination of any Governmental Authority in each case applicable to or
binding upon such Person or any of its properties or to which such Person or any
of its property is subject.

“Lender” means Ares Capital Corporation, a Maryland corporation, and its
successors and assigns.

“Lender Account” shall have the meaning given in Section 2.4(a) of the Financing
Agreement.

“Lending Office” means the office designated as such beneath the name of Lender
on Exhibit I of the Financing Agreement or such other office of Lender as Lender
may specify in writing from time to time to Borrower.

“Lessor” means the The Kosmos Company.

“LIBO Rate” means, for any Loan, a rate per annum (rounded upwards if necessary,
to the nearest 1/100 of 1%) determined by Lender equal to the rate appearing on
Page 3750 of the Telerate Service (or any successor or substitute page of the
Telerate Service providing rate quotations comparable to those currently
provided on such Page 3750, as determined by Lender) at which deposits in
Dollars (in the approximate amount and having approximately the same maturity as
the Loan to be made) are offered to Lender in the London Interbank Market at
approximately 11:00 a.m. (London time), two Banking Days prior to the first day
of the Interest Period for such Loan.

“Lien” on any asset means any mortgage, deed of trust, lien, pledge, charge,
security interest, restrictive covenant or easement or encumbrance of any kind
in respect of such asset, whether or not filed, recorded or otherwise perfected
or effective under applicable law, or any preference, priority or preferential
arrangement of any kind or nature whatsoever including the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

“Liquidation Costs” shall have the meaning given in Section 2.6 of the Financing
Agreement.

Exhibit A-12

--------------------------------------------------------------------------------

“Loan” and “Loans” shall have the meaning given in Section 2.1(a) of the
Financing Agreement.

“Loan Commitment” shall have the meaning given in Section 2.1(a) of the
Financing Agreement.

“Major Project Participants” means (a) Borrower, (b) each other Borrower
Affiliate Entity, (c) Operator, (d) Power Purchaser, (e) Contractor, (f)
Construction Lender, (g) Approved Lender, (h) Interconnector, (i) each other
Person party to the Water Contract, and (j) Lessor.

“Mandate Letter” means that certain Mandate Agreement, by and between Sponsor
and Lender.

“Mandatory Prepayment” means a prepayment of Obligations required pursuant to
the Financing Agreement.

“Material Adverse Effect” means (a) a material and adverse change in the
business, property, results of operation or condition (financial or otherwise)
of any Borrower Affiliate Entity, (b) a material and adverse effect on the
Project, or any Borrower Affiliate Entity’s ability to perform its respective
obligations under the Financing Documents or any Material Project Document to
which it is a party, (c) a material and adverse change in the ability of Lender
to enforce any of the obligations under the Financing Documents, (d) a material
and adverse effect on the value, validity or priority of Lender’s security
interests in and Liens on the Collateral, or (e) a material and adverse effect
upon Borrower’s ability to apply for or receive the Cash Grant or the Cash Grant
Proceeds, as the case may be.

“Material Project Documents” means the Borrower LLC Agreement, the Holdings LLC
Agreement, the Construction Contract, the Power Purchase Agreement, the
Interconnection Agreement, the O&M Agreement, the Lease, the Water Contract and
to the extent material to the Project, any other individual Real Property
Document, and each Additional Project Document that is reasonably deemed
material to the Project by Lender (in consultation with the Independent
Engineer).

“Maturity” or “maturity” means with respect to any Loan, Borrowing, interest,
fee or other amount payable by Borrower under the Financing Agreement or the
other Financing Documents, the date such Loan, Borrowing, interest, fee or other
amount becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.

“Maturity Date” means the earliest to occur of (a) three (3) Banking Days after
the receipt by Borrower of any Cash Grant Proceeds, (b) one-hundred and twenty
(120) days after the Placed in Service Date, and (c) June 30, 2012.

“Member Pledge Agreement” shall have the meaning given in Section 2.8(c) of the
Financing Agreement, as amended, restated, supplemented, modified, replaced or
refinanced from time to time.

“Moody’s” means Moody’s Investors Service, Inc.

Exhibit A-13

--------------------------------------------------------------------------------

“Multiemployer Plan” means any ERISA Plan that is a “multiemployer plan” (as
defined in Section 3(37) of ERISA).

“Non-Recourse Party” shall have the meaning given in Article 8 of the Financing
Agreement.

“Note” shall have the meanings given in Section 2.2(d) of the Financing
Agreement.

“O&M Agreement” means that certain Management Services Agreement, dated as of
September 30, 2010, between Borrower and U.S. Geothermal Services, LLC.

“Obligations” means, collectively, (a) all Debt, loans, advances, debts,
liabilities (including any indemnification or other obligations that survive the
termination of the Financing Agreement and other Financing Documents) and all
other obligations, howsoever arising (including guaranty obligations), owed by
Borrower to Lender of every kind and description (whether or not evidenced by
any note or instrument and whether or not for the payment of money), direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, pursuant to the terms of the Financing Agreement, the
Collateral Documents or any of the other Financing Documents or any other
agreement, document or instrument evidencing, securing or relating to such
indebtedness, liabilities and obligations, including all interest, fees
(including Other Fees and the Commitment Fees), charges, expenses, attorneys’
fees and accountants fees chargeable to Borrower or payable by Borrower
thereunder, (b) any and all sums advanced by Lender in order to preserve the
Collateral or preserve its security interest in the Collateral and (c) in the
event of any proceeding for the collection or enforcement of the obligations
described in clause (a) and (b) above, after an Event of Default shall have
occurred and be continuing, the expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the Collateral,
or of any exercise by Lender of their rights under the Collateral Documents,
together with any necessary attorneys’ fees and court costs.

“Operative Documents” means, collectively, the Financing Documents and Project
Documents.

“Operator” means USG Services, LLC, or such other Persons as shall be approved
by Lender to operate the Project in accordance with Section 5.13 of the
Financing Agreement.

“Organizational Documents” means, as to any Person, the articles of
incorporation, bylaws, operating agreement, partnership agreement, or other
organizational or governing documents of such Person, including, in the case of
Borrower, the Borrower LLC Agreement, and in the case of Holdings, the Holdings
LLC Agreement.

“Other Fees” shall have the meaning given in Section 2.3 of the Financing
Agreement.

“Other Taxes” shall have the meaning given in Section 2.4(d)(i) of the Financing
Agreement.

Exhibit A-14

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“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001, Public Law 107-56 (October 26, 2001) amending the Bank Secrecy Act,
31 U.S.C. Section 5311 et seq., and all rules and regulations adopted
thereunder.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under Title IV of ERISA.

“Permit” means any action, approval, consent, waiver, exemption, variance,
franchise, order, permit, authorization, right or license of or from a
Governmental Authority.

“Permitted Investments” means an investment in any of the following:

(a) direct obligations of the United States of America or any of its agencies;

(b) obligations guaranteed by the United States of America or any of its
agencies;

(c) interest-bearing demand or time deposit accounts (which may be represented
by money market, time or certificates of deposit) of any lender or any domestic
or foreign bank whose outstanding long-term debt is rated at least AA- by S&P or
the equivalent thereof by Moody’s or other nationally recognized rating agencies
of similar standing having capital and surplus in excess of Five Hundred Million
Dollars ($500,000,000) having a maturity not exceeding 90 days from the date of
acquisition;

(d) money market mutual funds which are register under the Investment Company
Act of 1940 and rated AAAm by S&P and Aaa by Moody’s. Such fund must have
capital in excess of Five Hundred Million Dollars ($500,000,000) and at no point
in time will this investment constitute more than five percent (5%) of fund
capital;

(e) bankers’ acceptances drawn on and accepted by any domestic or foreign
commercial banks whose outstanding long-term debt is rated “AA-” or higher by
S&P or “Aa3” or higher by Moody’s (or the equivalent thereof by other nationally
recognized rating agencies of similar standing);

(f) direct obligations of, obligations guaranteed by, and any other obligations
issued by, any state of the United States, or any political subdivision, agency,
authority or instrumentality thereof, which are rated at “AA-” or higher by S&P
or “Aa3” or higher by Moody’s (or the equivalent thereof by other nationally
recognized rating agencies of similar standing);

(g) commercial paper, not including liquidity notes or other extendable
securities, issued by any corporation which is rated “A 1” or higher by S&P or
“P 1” or higher by Moody’s (or the equivalent thereof by other nationally
recognized rating agencies of similar standing) having a maturity not exceeding
90 days from the date of acquisition; and

Exhibit A-15

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(h) repurchase agreements with any domestic or foreign bank whose outstanding
long-term debt is rated at least AA- by S&P or the equivalent thereof by Moody’s
or other nationally recognized rating agencies of similar standing having
capital and surplus in excess of Five Hundred Million Dollars ($500,000,000)
having a maturity not exceeding 90 days from the date of acquisition relating to
securities referred to in clauses (a), (b) and (g) above.

“Permitted Liens” means (a) the rights and interests of Lender as provided in
the Collateral Documents; (b) Liens imposed by any Governmental Authority for
taxes to the extent such taxes are permitted to remain unpaid under Section 5.16
of the Financing Agreement; (c) materialmen’s, mechanics’, workers’,
repairmen’s, employees’ or other like Liens arising in the ordinary course of
business or, prior to Final Completion, in connection with the construction of
the Project, for amounts being contested in good faith and by appropriate
proceedings so long as (i) such proceedings shall not involve any danger of the
sale, forfeiture or loss of any part of the Project or the Site, title thereto
or any interest therein and shall not interfere with the use or disposition of
the Project or the Site, or (ii) a bond or other security acceptable to Lender
in its reasonable discretion has been posted or provided in such manner and
amount as to assure Lender that any amounts determined to be due will be
promptly paid in full when such contest is determined (it being understood that
it shall be reasonable for Lender to require that such bond or security be in
such form and amount as may be necessary to cause any such lien to be removed of
record); (d) Liens incurred in the ordinary course of business in connection
with worker’s compensation, unemployment insurance, social security and other
Governmental Rules and that do not in the aggregate materially impair the use of
the property or assets of Borrower or the value of such property or assets for
the purposes of such business; (e) Liens arising out of judgments or awards that
do not otherwise constitute an Event of Default so long as an appeal or
proceeding for review is being prosecuted in good faith and for the payment of
which adequate reserves in accordance with GAAP, bonds or other security
acceptable to Lender in its reasonable discretion have been provided or are
fully covered by insurance; (f) minor defects, easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions, licenses,
restrictions on the use of property or minor imperfections in title which do not
materially impair the property affected thereby for the purpose for which title
was acquired or interfere with the operation of the Project as contemplated by
the Operative Documents; (g) Liens, deposits or pledges to secure statutory
obligations or performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, or for purposes of like general nature
in the ordinary course of its business; (h) Liens on assets (real or personal)
of Borrower which assets collectively have a fair market value of less than
Twenty-Five Thousand Dollars ($25,000) in the aggregate; (i) involuntary Liens
(including a lien of an attachment, judgment or execution) securing a charge or
obligation, on Borrower’s property, either real or personal, whether now or
hereafter owned, in the aggregate sum of less than Twenty-Five Thousand Dollars
($25,000); (j) Liens of trade vendors created in connection with Debt allowed
under Section 6.3(b) of the Financing Agreement; (k) the terms and conditions of
the Lease, (l) the rights and interests of Construction Lender under the
Construction Loan Agreement as in effect as of the date hereof, (m) the Liens in
favor of an Approved Lender, and (n) any other Liens permitted in writing by
Lender.

“Permitted Transfer” means any sale, transfer or assignment of ownership
interests (direct or indirect) in Holdings on or after (x) the Placed in Service
Date and (y) the submission by Borrower of the Cash Grant Application in
accordance with the terms of the Financing Agreement, so long as, after giving
effect to such transaction, (a) Sponsor and Idaho Sponsor will continue to own,
beneficially and of record, directly or indirectly, greater than fifty percent
(50%) of the economic ownership of and membership interest of Holdings and (b)
Sponsor and Idaho Sponsor continue to have, directly or indirectly, the ability
to control the fundamental management decisions of Holdings (including the right
to elect a majority of the members of the board of directors (or similar
governing body, if any) of Holdings, the manager of Holdings or such other
direct or indirect controlling body of Holdings); provided, however, that no
such sale, assignment or transfer described above shall be permitted unless (i)
no Event of Default shall have occurred and be continuing or shall occur as a
result of any such sale, assignment or transfer; (ii) all permits and other
certificates, licenses, appraisals or requirements of any Governmental Authority
with respect to such sale, assignment or transfer have been obtained and are in
full force and effect, and such sale, assignment or transfer complies with all
the terms, conditions and requirements thereof; (iii) such sale, assignment or
transfer complies with the terms and conditions of the Project Documents; (iv)
such sale, assignment or transfer complies with all applicable laws, rules,
regulations, ordinances, codes, orders, decrees or judgments of any Governmental
Authority having jurisdiction with respect thereto, including all federal and
state securities laws; (v) the addition of such Person as a direct or indirect
owner of Holdings shall not cause (x) the Project to lose its authorization to
sell energy, capacity and ancillary services, or (y) Holdings, Borrower or any
direct or indirect owner of Borrower to be a Disqualified Person or otherwise
cause a Material Adverse Effect; (vi) such Person acquiring such interest shall
have delivered to Lender such documents, agreements, instruments and other items
with respect to itself as a pledgor of the ownership interests in Holdings as
are substantially similar to those set forth in Sections 2.8(b) and (h)-(i), and
Sections 3.1(a)-(d), (h), (r), (cc) and (ee) of the Financing Agreement and
otherwise reasonably acceptable to Lender; and (vii) Sponsor reaffirms, pursuant
to such documentation as shall be in form and substance reasonably satisfactory
to Lender, Sponsor’s continuing obligations under the Sponsor Cash Grant
Shortfall Guaranty.

Exhibit A-16

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“Person” means any natural person, corporation, limited liability company,
partnership, firm, association, Governmental Authority or any other entity
whether acting in an individual, fiduciary or other capacity.

“Phase II” means that certain expansion of the Project from approximately eight
(8) megawatts to approximately sixteen (16) megawatts and commonly known as
“Phase II.”

“Placed in Service Date” means the date on which the Project shall be “placed in
service” under and in accordance with the Cash Grant Guidance, which Placed in
Service Date shall occur no later than the Placed in Service Deadline.

“Placed in Service Deadline” shall have the meaning given in Section 7.9 of the
Financing Agreement.

“Plans and Specifications” means the plans and specifications for the
construction and design of the Project, including any document describing the
scope of work performed by Contractor under the Construction Contract or any
other contract or subcontract for the construction of the Project and any feeder
lines and interconnections, all work drawings, engineering and construction
schedules, project schedules, project monitoring systems, specifications status
lists, material and procurement ledgers, drawings and drawing lists, manpower
allocation documents, management and project procedures documents, project
design criteria, and any other document referred to in the Construction Contract
or any of the documents referred to in this definition, as the same may be
amended to the extent permitted by the Financing Agreement.

Exhibit A-17

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“Platform” shall have the meaning given in Section 10.1(b) of the Financing
Agreement.

“Pledge Agreements” means, collectively, the Idaho Sponsor Pledge Agreement and
the Member Pledge Agreement.

“Power Purchase Agreement” means that certain Amended and Restated Long-Term
Portfolio Energy Credit and Renewable Power Purchase Agreement, dated May 31,
2011, by and between Power Purchaser and Borrower.

“Power Purchaser” means Sierra Pacific Power Company.

“Preliminary Cost Segregation Report” shall have the meaning given in Section
3.1(z) of the Financing Agreement.

“Prime Rate” shall mean the rate which Lender announces, from time to time, as
its prime lending rate, the Prime Rate to change when and as such prime lending
rate changes. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged by Lender to any customer of
Lender. Borrower acknowledges that Lender may, from time to time, make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.

“Process Agent” means CT Corporation System.

“Project” means the repowering of an existing three (3) megawatt geothermal
power facility located on the Site, increasing the output thereof to
approximately eight (8) megawatts, as more particularly described on Exhibit
G-1, including the development, construction, maintenance and operation of the
expanded geothermal facility, all improvements or structures erected on the
Site, all alterations thereto or replacements thereof, all fixtures,
attachments, appliances, equipment, machinery and other articles attached
thereto or used in connection therewith and all parts which may from time to
time be incorporated or installed in or attached thereto, all contracts and
agreements for the purchase or sale of commodities or other personal property
related thereto, all real or personal property owned or leased related thereto,
and all other real and tangible and intangible personal property leased or owned
by Borrower and placed upon or used in connection with the generation of
electricity upon the Site. The “Project” shall not be deemed to include Phase
II.

“Project Budget” shall have the meaning given in Section 3.1(s) of the Financing
Agreement.

Exhibit A-18

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“Project Costs” means (a) the cost of designing, engineering, equipping,
procuring, constructing, starting up and testing the Project; (b) the cost to
Borrower of constructing or procuring the construction of the collection system
and interconnection of the Project to the relevant electrical substation
therefor; (c) the cost of acquiring any lease and any other necessary interest
in the Site; (d) real and personal property taxes, ad valorem taxes, sales, use
and excise taxes and insurance (including title insurance) premiums payable with
respect to the Project during the Construction Period; (e) interest payable
under this Agreement and financing-related fees (including Other Fees and the
Commitment Fees) and costs during the Construction Period; (f) initial working
capital requirements of the Project; (g) the costs of acquiring Permits for the
Project during the Construction Period; (h) all general and administrative costs
of Borrower attributable to the Project during the Construction Period; (i) the
cost of establishing a spare parts inventory for the Project; (j) the cost of
establishing the letters of credit or payment and performance bonds required
under any Project Documents; and (k) other fees, costs and expenses relating to
the development, construction and closing of the financing for the Project,
including financial, legal and consulting fees, costs and expenses, all as
described in the Project Budget.

“Project Documents” means the Construction Contract, the Construction Loan
Agreement, the O&M Agreement, the Power Purchase Agreement, the Water Contract,
the Interconnection Agreement, the Real Property Documents, the Borrower LLC
Agreement, the Holdings LLC Agreement, the Additional Project Documents and any
other agreement relating to the development, construction or operation of the
Project.

“Project Revenues” means all income and receipts derived from the ownership or
operation of the Expanded Project including payments and liquidated damages paid
to Borrower under the Power Purchase Agreement, the Construction Contract, the
O&M Agreement, and any other contract or agreement of Borrower, proceeds of any
business interruption or other insurance, other income derived from the sale or
use of electric energy transmitted or distributed by the Expanded Project
(including, if applicable, any transmission credits under the Interconnection
Agreement, renewable energy credits, capacity attributes, etc.), and any
receipts derived from the sale of any property pertaining to the Expanded
Project or incidental to the operation of the Expanded Project, all as
determined in conformity with cash accounting principles, the investment income
on amounts in the Accounts, the proceeds of any condemnation awards relating to
the Project and proceeds from the sale of any Collateral. Project Revenues shall
not include any amounts that are subject to rebate, return, recapture or refund.

“Project Schedule” shall have the meaning given in Section 3.1(t) of the
Financing Agreement.

“Prudent Utility Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, of which there may be
more than one, and as the same may change from time to time, as are commonly
used by solar photovoltaic electric generation facilities of a type and size
similar to the Project as good, safe and prudent engineering practices in
connection with the design, construction, operation, maintenance, repair and use
of electrical and other equipment, facilities and improvements of such solar
photovoltaic electrical generation facility, with commensurate standards of
safety, performance, dependability, efficiency and economy.

Exhibit A-19

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“PUHCA” means the Public Utility Holding Company Act of 2005, and all rules and
regulations adopted by FERC thereunder.

“Punch List Items” means the “Punchlist Items” under and as defined in the
Construction Contract

“PURPA” means the Public Utility Regulatory Policies Act, and all rules and
regulations adopted by FERC thereunder.

“QF” shall have the meaning set forth in Section 3.1(v) of the Financing
Agreement.

“QF Self-Certification” shall have the meaning set forth in Section 3.1(v) of
the Financing Agreement.

“Qualifying Costs” means actual, documented Project Costs expended by Borrower
in respect of “specified energy property” within the meaning of Section 1603(d)
of the American Recovery and Reinvestment Act of 2009 and the Cash Grant
Guidance and that are properly includable in the tax basis of such property in
accordance with the Cash Grant Guidance and applicable law.

“Real Property” means all real property held by Borrower, which Borrower owns in
fee or in which it holds a leasehold interest as a tenant, an easement right as
an easement holder or a license right as a licensee or otherwise occupies.

“Real Property Documents” means any documents, agreements or instruments
pursuant to which Borrower has rights in Real Property.

“Recapture Event” mean a determination by United States Treasury Department that
all or any portion of the Cash Grant shall be recaptured, disallowed or
invalidated as a result of (i) any disposal of specified energy property for
which Borrower received a Cash Grant, (ii) any transfer of any direct or
indirect equity interest in Borrower to any Disqualified Person, (iii) any
misstatements, misrepresentations or inaccuracies in any Cash Grant Application,
(iv) a determination, following the receipt of the Cash Grant, that Borrower or
the Project does not qualify for Cash Grants, or (v) for any other reason,
including impermissible cessation of energy production from the Project.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System (or any successor).

“Regulatory Change” means any change after the date of the Financing Agreement
in federal, state, local or foreign laws, regulations, Legal Requirements or
requirements under Applicable Permits, or the adoption or making after such date
of any interpretations, directives or requests of or under any federal, state,
local or foreign laws, regulations, Legal Requirements or requirements under
Applicable Permits (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.

Exhibit A-20

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“Release” means disposing, discharging, injecting, spilling, leaking, leaching,
dumping, pumping, pouring, emitting, escaping, emptying, seeping, placing and
the like, into or upon any land or water or air, or otherwise entering into the
environment.

“Replacement Obligor” means, with respect to any Person party to a Project
Document, any Person satisfactory to Lender who, pursuant to any definitive
agreement or definitive guaranty satisfactory to Lender, assumes the obligation
of providing the services and/or products on terms and conditions no less
favorable to Borrower than those which such Person being replaced is obligated
to provide pursuant to the applicable Project Document.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived by the PBGC.

“Reserve Requirement” means the maximum rate (expressed as a percentage) at
which reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during the Interest Period therefor under Regulation D
by Lender. Without limiting the effect of the foregoing, the Reserve Requirement
shall reflect any other reserves required to be maintained by Lender, by reason
of any Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the LIBO Rate or Loans is to be determined, (ii)
any category of liabilities or extensions of credit or other assets which
include Loans or (iii) any category of liabilities or extensions of credit which
are considered irrevocable commitments to lend, unless such Loans are exempt
from this foregoing list.

“Responsible Officer” means, as to any Person, its president, chief executive
officer, any vice president, treasurer, or secretary, any managing general
partner (or any of the preceding with regard to such managing general partner)
or, authorized representative.

“S&P” means Standard & Poor’s Corporation.

“Second Borrowing Date” shall have the meaning given in Section 2.2(e)(ii)(A) of
the Financing Agreement.

“Second Borrowing Deadline” shall mean January 15, 2012.

“Site” shall mean the real property situated in the County of Washoe, State of
Nevada, more particularly described in Exhibit G-1 (the “Land”), together with
all and singular tenements, hereditaments, rights, reversions, remainders,
development rights, privileges, benefits, easements (in gross or appurtenant),
rights-of-way, licenses, gores or strips of land, streets, ways, alleys,
passages, sewer rights, water courses, water rights and powers, riparian rights
and powers, and all appurtenances whatsoever and claims or demands of Borrower
at law or in equity in any way belonging, benefiting, relating or appertaining
to the Land, the Project, Borrower, the airspace over the Land or the
Improvements, or which hereinafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by Borrower.

Exhibit A-21

--------------------------------------------------------------------------------

“Solvency Certificate” shall have the meaning given in Section 3.1(ll) of the
Financing Agreement.

“Solvent” means, with respect to each Borrower Affiliate Entity, that as of the
date of determination, both (a) (i) the sum of such Person’s Debt (including
contingent liabilities) does not exceed the present fair saleable value of such
Person’s present assets; and (ii) such Person has not incurred and does not
intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due (whether at
maturity or otherwise); and (b) such Person is “solvent” within the meaning
given that term and similar terms under the Bankruptcy Law and applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).

“Specified Cash Grant Recapture Exposure” shall have the meaning given in
Section 4.7 of the Sponsor Cash Grant Shortfall Guaranty.

“Sponsor” means U.S. Geothermal Inc., a Delaware corporation.

“Sponsor Cash Grant Shortfall Guaranty” shall have the meaning given in Section
2.8(e) of the Financing Agreement.

“Sponsor Equity” means an amount equal to Fourteen Million Dollars
($14,000,000).

“State” shall mean (a) any state of the United States of America or (b) the
District of Columbia.

“Substantial Completion” means that “Substantial Completion” under the
Construction Contract has been achieved, and copies of all certificates required
to be issued in respect thereof have been provided to Lender and are, in each
case, in form and substance reasonably satisfactory to Lender and the
Independent Engineer.

“Taxes” shall have the meaning given in Section 2.4(d)(i) of the Financing
Agreement.

“Term” means the entire period during which there is any outstanding Obligation.

“Termination Event” means (i) a Reportable Event with respect to any ERISA Plan,
(ii) the initiation of any action by Borrower, any member of the Controlled
Group or any ERISA Plan fiduciary to terminate an ERISA Plan (other than a
standard termination under Section 4041(b) of ERISA) or the treatment of an
amendment to an ERISA Plan as a termination under Section 4041(e) of ERISA,
(iii) the institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan,
(iv) Borrower or any member of the Controlled Group incurs liability under
Section 4062(e) of ERISA with respect to an ERISA Plan or (v) Borrower or any
member of the Controlled Group is in default (as defined in Section 4219(c)(5)
of ERISA) with respect to payments to a Multiemployer Plan.

Exhibit A-22

--------------------------------------------------------------------------------

“Terrorism Order” shall have the meaning given in Section 4.33(a) of the
Financing Agreement.

“UCC” means the Uniform Commercial Code of the jurisdiction the law of which
governs the document in which such term is used or which governs the creation or
perfection of the Liens granted thereunder.

“Underwriting Fee Letter Agreement” means that certain Underwriting Fee Letter
Agreement dated on or about the date hereof, by and between Sponsor and Lender.

“Upfront Fee Letter Agreement” means that certain Upfront Fee Letter Agreement
dated on or about the date hereof, by and between Sponsor and Lender.

“Water Contract” means that certain Water Lease Agreement, dated as of August 1,
2010, executed by and between Idaho Sponsor and Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Exhibit A-23

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RULES OF INTERPRETATION

1.

The singular includes the plural and the plural includes the singular.

    2.

The word “or” is not exclusive.

    3.

A reference to a Governmental Rule includes any amendment or modification to
such Governmental Rule, and all regulations, rulings and other Governmental
Rules promulgated under such Governmental Rule.

    4.

A reference to a Person includes its successors and permitted assigns.

    5.

Accounting terms have the meanings assigned to them by GAAP, as applied by the
accounting entity to which they refer.

    6.

The words “include,” “includes” and “including” are not limiting.

    7.

A reference in a document to an Article, Section, Exhibit, Schedule, Annex or
Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of
such document unless otherwise indicated. Exhibits, Schedules, Annexes or
Appendices to any document shall be deemed incorporated by reference in such
document.

    8.

References to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
and (c) shall mean such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified and supplemented from time to time (to
the extent permitted under the Financing Documents) and in effect at any given
time.

    9.

The words “hereof,” “herein” and “hereunder” and words of similar import when
used in any document shall refer to such document as a whole and not to any
particular provision of such document.

    10.

References to “days” shall mean calendar days, unless the term “Banking Days”
shall be used. References to a time of day shall mean such time in New York, New
York, unless otherwise specified.

    11.

The Financing Documents are the result of negotiations between, and have been
reviewed by Borrower, Lender and their respective counsel. Accordingly, the
Financing Documents shall be deemed to be the product of all parties thereto,
and no ambiguity shall be construed in favor of or against Borrower or Lender.

    12.

The words “will” and “shall” shall be construed to have the same meaning and
effect.

Exhibit A-24

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EXHIBIT B
to Financing Agreement

FORM OF NOTE

$[_________] New York, New York   ______________
, 2011

For value received, the undersigned USG NEVADA LLC, a Delaware limited liability
company (“Borrower”), unconditionally promises to pay to ARES CAPITAL
CORPORATION, a Maryland corporation (the “Lender”), or order, at its office
located at 245 Park Avenue, 44th Floor, New York, NY 10167, in lawful money of
the United States of America and in immediately available funds, the principal
amount of [___________________] DOLLARS ($[________]), or if less, the aggregate
unpaid and outstanding principal amount of this Note advanced by the Lender to
Borrower and all other amounts owed by Borrower to the Lender hereunder pursuant
to that certain Financing Agreement, dated as of November 9, 2011 (as amended,
amended and restated, modified or supplemented from time to time, the “Financing
Agreement”), by and between Borrower and the Lender.

This is the Note referred to in the Financing Agreement and is entitled to the
benefits thereof and is subject to all terms, provisions and conditions thereof.
Capitalized terms used and not defined herein shall have the meanings set forth
in the Financing Agreement.

This Note is made in connection with and is secured by, among other instruments,
the provisions of the Collateral Documents. Reference is hereby made to the
Financing Agreement and the Collateral Documents for the provisions, among
others, with respect to the custody and application of the Collateral, the
nature and extent of the security provided thereunder, the rights, duties and
obligations of Borrower and the rights of the holder of this Note.

The principal amount hereof is payable in accordance with the Financing
Agreement, and such principal amount may be prepaid solely in accordance with
the Financing Agreement.

Borrower authorizes the Lender to record on the schedule annexed to this Note,
the date and amount of the Loans made by the Lender and each payment or
prepayment of principal thereunder and agrees that all such notations shall
constitute prima facie evidence of the accuracy of the matters noted. Borrower
further authorizes the Lender to attach to and make a part of this Note
continuations of the schedule attached thereto as necessary. No failure to make
any such notations, nor any errors in making any such notations, shall affect
the validity of Borrower’s obligations to repay the full unpaid principal amount
of the Loans or the other obligations of Borrower hereunder or under the
Financing Agreement.

Borrower further agrees to pay, in lawful money of the United States of America
and in immediately available funds, interest from the date hereof on the unpaid
and outstanding principal amount hereof until such unpaid and outstanding
principal amount shall become due and payable (whether at stated maturity, by
acceleration or otherwise) at the rates of interest and at the times set forth
in the Financing Agreement, and Borrower agrees to pay other fees and costs as
stated in the Financing Agreement at the times specified in, and otherwise in
accordance with, the Financing Agreement.

--------------------------------------------------------------------------------

If any payment on this Note becomes due and payable on a date which is not a
Banking Day, such payment shall be made on the first succeeding, or the
immediately preceding, Banking Day, in either case in accordance with the terms
of the Financing Agreement.

Upon the occurrence of any one or more Events of Default, all amounts then
remaining unpaid on this Note may become or be declared to be immediately due
and payable as provided in the Financing Agreement and other Financing
Documents, without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor, or notices or demands of any kind, all of
which are expressly waived by Borrower.

Recourse under this Note shall be limited as set forth in Article 8 of the
Financing Agreement.

Borrower agrees to pay all costs and expenses, including without limitation
reasonable attorneys’ fees, incurred in connection with the interpretation or
enforcement of this Note, at the times specified in, and otherwise in accordance
with, the Financing Agreement.

Except as permitted by the Financing Agreement, this Note may not be assigned by
the Lender to any other person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN AND SHALL BE GOVERNED BY, AND
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN SUCH STATE AND WITHOUT REFERENCE TO CONFLICTS OF LAWS.

  USG NEVADA LLC,   a Delaware limited liability company,   as Borrower        
               By: _____________________________________                      
 Name: ___________________________________                        Title:
____________________________________

[SIGNATURE PAGE TO NOTE]

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Date Advance Prepayment or
Repayment Outstanding Balance                                                  
                                                                               
                                                                     

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EXHIBIT C
to Financing Agreement

SCHEDULE OF OPINIONS

1.

New York Legal Opinion (covering enforceability of the Financing Documents and
creation/perfection of security interests), Nevada Legal Opinion (covering
regulatory/environmental/permitting opinions) and Corporate Legal Opinion
(covering due formation, good standing, authorization, execution, delivery and
no conflicts) of U.S. Geothermal Inc. (an Idaho corporation), U.S. Geothermal
Inc. (a Delaware corporation), Nevada USG Holdings, LLC (a Delaware limited
liability company) and USG Nevada LLC (a Delaware limited liability company) of
Hawley Troxell Ennis & Hawley LLP, dated as of November 9, 2011, as counsel to
the Borrower Affiliate Entities.

    2.

New York Legal Opinion (covering enforceability of the Intercreditor Agreement),
and Corporate Legal Opinion (covering due formation, good standing,
authorization, execution, delivery and no conflicts) of McAfee & Taft, A
Professional Corporation, dated as of November 9, 2011, as counsel to SAIC
Constructors, LLC.

Exhibit C

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EXHIBIT D-1 to Financing Agreement

FORM OF
CASH GRANT SECURITY AGREEMENT

between

USG NEVADA LLC,
a Delaware limited liability company
(Grantor)

and

ARES CAPITAL CORPORATION,
a Maryland corporation
(Lender)

 

Dated as of November 9, 2011  

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TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS 2                    1.1 Defined Terms 2                
   1.2 Financing Agreement and UCC Definitions 2                    1.3 Rules of
Interpretation 2 ARTICLE II. PLEDGE AND GRANT OF SECURITY INTEREST 2            
       2.1 Granting Clause 2                    2.2 Actions under Cash Grant
Application and Consents 3                    2.3 Destruction of Collateral 3  
                 2.4 Retention of Certain Rights 4                    2.5
Certain Exclusions 4 ARTICLE III. OBLIGATIONS SECURED 4 ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS 4                    4.1 Construction
Loan Documents. 4 ARTICLE V. EVENTS OF DEFAULT 5 ARTICLE VI. REMEDIES UPON AN
EVENT OF DEFAULT 5                    6.1 Remedies Upon Event of Default 5      
             6.2 Minimum Notice Period 7                    6.3 Costs and
Expenses 7                    6.4 Actions Taken by Lender 7                  
 6.5 Waiver of Rights and Remedies Under Applicable Legal Requirements 7        
           6.6 No Impairment of Remedies 7 ARTICLE VII. MISCELLANEOUS 8        
           7.1 Remedies Cumulative; Delay Not Waiver. 8                    7.2
Attorney-In-Fact 8                    7.3 Perfection; Further Assurances;
Certain Waivers. 9                    7.4 Continuing Assignment and Security
Interest; Transfer of Notes 10                    7.5 Termination of Security
Interest 11

Exhibit D-1-ii

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                   7.6 Limitation on Duty of Lender with Respect to the
Collateral 11                    7.7 Liability 11                    7.8
Amendments; Waivers; Consents 11                    7.9 Notices 11
                   7.10 Reinstatement 11                    7.11 Application of
Proceeds 12                    7.12 Lender May Perform 12
                   7.13 Expenses; Interest. 12                    7.14
Severability 12                    7.15 Survival of Provisions 12
                   7.16 Successions or Assignments. 12                    7.17
Headings Descriptive 13                    7.18 Entire Agreement 13
                   7.19 Time 13                    7.20 Counterparts 13
                   7.21 APPLICABLE LAW. 13                    7.22 CONSENT TO
JURISDICTION 13                    7.23 WAIVER OF JURY TRIAL 14
                   7.24 Third Party Rights 14

Exhibit D-1-iii

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CASH GRANT SECURITY AGREEMENT

THIS CASH GRANT SECURITY AGREEMENT, dated as of November 9, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, this
“Agreement”), is entered into by and between USG NEVADA LLC, a limited liability
company formed and existing under the laws of the State of Delaware (“Grantor”),
and ARES CAPITAL CORPORATION, a corporation formed and existing under the laws
of the State of Maryland (together with its successors, designees and assigns in
such capacity, “Lender”).

RECITALS

A. Grantor owns and intends to develop, construct, install, test, own, operate
and use an approximately 8 MW geothermal power facility located in Washoe
County, Nevada (the “Project”).

B. Grantor has entered into that certain Financing Agreement, dated as of the
date hereof (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Financing Agreement”), by and between Grantor,
as Borrower and Lender, pursuant to which, among other things, Lender has
extended commitments to make loans and other financial accommodations to, and
for the benefit of, Grantor.

C. Grantor will apply certain proceeds and other financial accommodations
obtained under the Financing Agreement in the manner set forth in the Financing
Agreement.

D. Grantor will file a Cash Grant Application with respect to the Project as and
when required pursuant to the Financing Agreement.

E. The primary source of repayment to Lender with respect to the Loans will be
the proceeds from Cash Grant paid by the United States Treasury Department in
connection with the filing of the Cash Grant Application (such proceeds, the
“Cash Grant Proceeds”).

C. Grantor will derive substantial benefit from the making of the extensions of
credit under the Financing Agreement.

D. It is a condition precedent to the effectiveness of the Financing Agreement
and the other Financing Documents, and the making of the advances of credit
contemplated thereby, that Grantor shall have executed this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and to induce
Lender to enter into the Financing Documents and to make the advances of credit
to Borrower contemplated thereby, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Grantor hereby agrees
with Lender as follows:

Exhibit D-1-1

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ARTICLE I.
DEFINITIONS

1.1 Defined Terms. The following terms (whether or not underscored) when used in
this Agreement, including its preamble and recitals, shall have the following
meanings: “Cash Grant Proceeds” has the meaning given in the recitals to this
Agreement.

“Collateral” has the meaning given in Section 2.1.

“Financing Agreement” has the meaning given in the recitals to this Agreement.
“Grantor” has the meaning given in the preamble to this Agreement.

“Lender” has the meaning given in the preamble to this Agreement. “Project” has
the meaning given in the recitals to this Agreement.

 “UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the perfection or priority
of the security interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York the term
“UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.

1.2 Financing Agreement and UCC Definitions. Unless otherwise defined herein,
all capitalized terms used in this Agreement shall have the meanings provided in
Exhibit A to the Financing Agreement or if not defined therein, the UCC.

1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Financing Agreement shall apply to
this Agreement, including its preamble and recitals.

ARTICLE II.
PLEDGE AND GRANT OF SECURITY INTEREST

2.1 Granting Clause. To secure the timely payment in full in cash and
performance of the Obligations, Grantor does hereby assign, grant and pledge to,
and subject to a continuing security interest in favor of, Lender, all the
estate, right, title and interest of Grantor in, to and under the following
(collectively, the “Collateral”):

(a) the Cash Grant, the Cash Grant Application, and all contracts, agreements
and documents relating to the Cash Grant or the Cash Grant Application, as
amended, supplemented, substituted, renewed or otherwise modified from time to
time;

(b) all income and revenues derived from the Cash Grant, including the Cash
Grant Proceeds, and all money, instruments, securities, investment property,
financial assets, contract rights, documents, deposit accounts, chattel paper,
general intangibles, commercial tort claims and supporting obligations
pertaining to the Cash Grant or the Cash Grant Proceeds, including the right in
the name and on behalf of Grantor to appear in an defend any action or
proceeding brought with respect to the Cash Grant, and to commence any action or
proceeding to protect the interest of Grantor in such Collateral;

Exhibit D-1-2

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(c) all books, records, writings, design documents, computer programs, printouts
and other computer materials and records, data bases, software, information and
other property relating to, used or useful in connection with, the Cash Grant
Application; and

(d) the proceeds of all of the foregoing collateral, whether cash or noncash,
including without limitation all rights of Grantor to receive moneys due and to
become due under or pursuant to such Collateral, all claims for damages arising
out of or under the Collateral, all rights of Grantor to amend, supplement,
modify or waive performance with regard to the Cash Grant or the Cash Grant
Application, or to make determinations, to exercise any election or option or to
give or receive any notice, consent, waiver or approval, together with full
power and authority with respect to the same, to demand, receive, enforce
collect or provide receipt for any of the foregoing rights, to enforce or
execute any checks or other instruments or orders, to file any claims and to
take any action which may be necessary or advisable in connection with any of
the foregoing, all proceeds receivable or received when any or all of the
Collateral is sold, collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily, and any and all additions and accessions to the
Collateral, and all proceeds thereof, including proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, or of any judgments or settlements made in lieu thereof for damage to or
diminution of the Collateral.

2.2 Actions under Cash Grant Application and Consents. Notwithstanding anything
to the contrary contained herein, (i) Grantor shall remain liable under the Cash
Grant Application to perform all obligations thereunder in accordance with the
Cash Grant Guidance and the Financing Agreement, provided that Lender may, at
its option (but shall not be obligated to) remedy any failure of Grantor to so
perform such obligations with regard to the Cash Grant (and no such cure by
Lender shall be construed as an assumption by Lender of any obligation of
Grantor with regard to the Cash Grant, and no such action by Lender shall result
in liability of Lender, except to the extent caused by Lender’s gross negligence
or willful misconduct), and (ii) Lender may exercise any rights or remedies
under any Consent delivered pursuant to the Financing Agreement at any time
permitted under such Consent. Grantor hereby constitutes and appoints Lender and
each successor or assign or designee of Lender, the true and lawful
attorney-in-fact of Grantor, with full power and authority in the place and
stead of Grantor and in the name of Grantor, Lender or otherwise, to enforce all
rights, interests and remedies of Grantor with respect to the Consents. This
power of attorney is a power coupled with an interest and shall be irrevocable.

2.3 Destruction of Collateral. No injury to, or loss or destruction of, the
Collateral or any part thereof shall relieve Grantor of any of its obligations
hereunder or any of the Obligations under the Financing Agreement or any other
Financing Document to which it is a party.

Exhibit D-1-3

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2.4 Retention of Certain Rights. So long as Lender has not exercised remedies
with respect to the Collateral under this Agreement or any other Financing
Document upon the occurrence and during the continuation of an Event of Default,
Grantor reserves all rights with respect to the Collateral owned by it (except
as limited by the Financing Documents), including all rights to use, apply,
modify, dispose of or otherwise deal with such Collateral (except as limited by
the Financing Documents).

2.5 Certain Exclusions. Notwithstanding anything in this Agreement to the
contrary, in no event shall the security interest granted under Section 2.1
attach to any contract, property rights or agreement to which Grantor is a party
or any of its rights or interests thereunder if and for so long as the grant of
such security interest shall constitute or result in (a) the abandonment,
invalidation or unenforceability of any right, title or interest of Grantor
therein or (b) a breach of termination pursuant to the terms of, or a default
under, any such lease, license, contract property rights or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law or
principles of equity), provided, however, that such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable,
shall attach immediately to any portion of such contract, property rights or
agreement that does not result in any of the consequences specified in clauses
(a) or (b) above, including, without limitation, any proceeds of such contract,
property rights or agreement.

ARTICLE III.
OBLIGATIONS SECURED

Without limiting the generality of the foregoing, this Agreement and all of the
Collateral secure the payment and performance when due of all Obligations (as
such term is defined in the Financing Agreement) of Grantor to Lender pursuant
to the Financing Documents.

ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS

To induce Lender to enter into the Financing Agreement and the other Financing
Documents and to induce Lender to make its extension of credit to the Borrower
under the Financing Agreement, Grantor hereby represents, warrants and covenants
to Lender, as of the date hereof and the other applicable dates (if any)
specified in the applicable Financing Documents, that: 4.1 Construction Loan
Documents. The grant of the security interest contemplated hereby is permitted
under the Construction Loan Documents and the Construction Loan Documents shall
not apply to prevent the attachment of the security interest granted hereunder.

4.2 Extensions. Grantor shall not grant any extension of time of payment of any
receivable under the Cash Grant; compromise or settle any receivable for less
than the full amount thereof; release, wholly or partially, any Person liable
for the payment thereof; or amend, supplement or modify the same in any manner
that could adversely affect the value thereof.

Exhibit D-1-4

--------------------------------------------------------------------------------

4.3. Eligibility. Borrower and the Project meet the standards for applicant and
property eligibility set forth in the Cash Grant Guidance. Borrower estimates
that the Cash Grant will be paid to Borrower on or prior to the Maturity Date.
Borrower’s best estimate is that the Cash Grant will be at least ten million
Dollars ($10,000,000). Such estimate (i) is based on reasonable assumptions as
to all legal and factual matters material to such estimates, (ii) is consistent
with the provisions of the Operative Documents in all material respects, (iii)
has been calculated in good faith and with due care and (iv) fairly represents
Borrower’s reasonable expectations as to the amount of the Cash Grant.

4.4. Cash Grant Application. From and after the filing of the Cash Grant
Application for the Project, the factual information and the representations of
Borrower set forth in the Cash Grant Application are (i) true, correct and
complete in all material respects, (ii) based on reasonable assumptions as to
all legal and factual matters material to the figures set forth therein, (iii)
consistent with the provisions of the Operative Documents in all material
respects, (iv) prepared in good faith and with due care and (v) fairly represent
Borrower’s reasonable expectations as to the matters covered thereby. Other than
with respect to the Cash Grant Application and the matters covered thereunder,
no federal tax credit pursuant to Code Sections 45 and 48 has been or will be
claimed with respect to any asset comprising the Project. Borrower has and will
continue to make every election that is necessary to claim and apply for the
Cash Grant in accordance with the Cash Grant Guidance and applicable law.

4.5 No Ownership by Disqualified Persons. Neither Borrower nor any direct or
indirect owner of Borrower is a Disqualified Person.

ARTICLE V.
EVENTS OF DEFAULT

     The occurrence of an Event of Default under, and as defined in, the
Financing Agreement shall constitute an Event of Default hereunder.

ARTICLE VI.
REMEDIES UPON AN EVENT OF DEFAULT

     6.1 Remedies Upon Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Lender shall have the right, but not the
obligation, to do any of the following:

(a) declare any amounts payable by Grantor under the Financing Agreement to be
due and payable immediately and thereupon the same shall become immediately due
and payable without presentment, demand, notice of dishonor, protest or further
notice of any kind, all of which are expressly waived by Grantor, anything
contained herein to the contrary notwithstanding (provided that, if such Event
of Default occurs under Section 7.4 of the Financing Agreement with respect to
Grantor, all such amounts shall become automatically due and payable);

(b) proceed to protect and enforce the rights vested in it by this Agreement and
under the UCC;

Exhibit D-1-5

--------------------------------------------------------------------------------

(c) cause all revenues hereby pledged as security and all other moneys and other
property pledged hereunder to be paid and/or delivered directly to it, and
demand, sue for, collect and receive any such moneys and property;

(d) cause any action at law or suit in equity or other proceeding to be
instituted and prosecuted to collect or enforce any obligation or right
hereunder or included in the Collateral, including specific enforcement of any
covenant or agreement contained herein, or to foreclose or enforce the security
interest in all or any part of the Collateral granted herein, or to enforce any
other legal or equitable right vested in it by this Agreement or by applicable
Legal Requirements;

(e) foreclose or enforce any other agreement or other instrument by or under or
pursuant to which the Obligations are issued or secured;

(f) incur reasonable expenses, including reasonable attorneys’ fees, reasonable
consultants’ fees, and other costs appropriate to the exercise of any right or
power under this Agreement;

(g) perform any obligation of Grantor hereunder or under any other Financing
Document, make payments, submit certificates, purchase, contest or compromise
any encumbrance, charge, or lien, pay taxes and expenses and insure, process and
preserve the Collateral without, however, any obligation to do so;

(h) make any reasonable compromise or settlement deemed desirable with respect
to any of the Collateral and may extend the time of payment, arrange for payment
installments, or otherwise modify the terms of, any Collateral;

(i) enter into any extension, reorganization, deposit, merger, consolidation or
other agreement pertaining to, or deposit, surrender, accept, hold or apply
other property in exchange for, the Collateral or any part thereof;

(j) transfer the Collateral or any part thereof to the name of Lender or to the
name of Lender’s nominee;

(k) take possession of and endorse in the name of Grantor or in the name of
Lender, for the account of Grantor, any bills of exchange, checks, drafts, money
orders, notes or any other chattel paper, documents or instruments constituting
all or any part of the Collateral or received as interest or other payment on or
on account of the Collateral or any part thereof;

(l) take possession of the Collateral and of any and all books of account and
records of Grantor relating to any part of the Collateral, and, if applicable,
secure the appointment of a receiver, and arrange for and conduct a sale of the
Collateral at public or private sale as Lender may elect, and Lender shall incur
no liability as a result of such sale conducted in a commercially reasonable
manner and in accordance with applicable Legal Requirements;

Exhibit D-1-6

--------------------------------------------------------------------------------

(m) appoint another Person (who may be an employee, officer or other
representative of Lender) to do any of the foregoing, or take any other action
permitted hereunder, as agent for or representative of, and on behalf of,
Lender;

(n) execute (in the name, place and stead of Grantor) endorsements, assignments
and other instruments of conveyance or transfer with respect to all or any of
the Collateral;

(o) take any other action which Lender deems necessary or desirable to protect
or realize upon its security interest in the Collateral or any part thereof, and
Grantor hereby irrevocably appoints Lender as Grantor’s attorney-in-fact (as set
forth in Section 7.2) to take any such action, including the execution and
delivery of any and all documents or instruments related to the Collateral or
any part thereof in Grantor’s name, and said appointment shall create in Lender
a power coupled with an interest which shall be irrevocable; (p) exercise any
other or additional rights or remedies granted to Lender under any other
provision of this Agreement or any Financing Document, or exercisable by a
secured party under the UCC or under any other applicable Legal Requirement; or

(q) exercise any rights or remedies granted to Lender under any power of
attorney or Consent delivered under the Financing Agreement.

6.2 Minimum Notice Period. If, pursuant to applicable Legal Requirements, prior
notice of any action described in Section 6.1 is required to be given to
Grantor, Grantor hereby acknowledges that the minimum time required by such
applicable Legal Requirements, or, if no minimum time is specified, ten (10)
Banking Days, shall be deemed a reasonable notice period.

6.3 Costs and Expenses. All reasonable costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by Lender in connection with any actions
taken under Article V, together with interest thereon (to the extent permitted
by law) computed at a rate per annum equal to the Default Rate from the date on
which such costs or expenses are payable to the date of payment thereof, shall
be added to the indebtedness secured by this Agreement and shall be paid by
Grantor to Lender within five (5) Banking Days after demand.

6.4 Actions Taken by Lender. Any action or proceeding to enforce this Agreement
may be taken by Lender either in Grantor’s name or in Lender’s name, as Lender
may deem necessary.

6.5 Waiver of Rights and Remedies Under Applicable Legal Requirements. In
exercising its right to take possession of the Collateral upon the occurrence
and during the continuation of an Event of Default hereunder, Lender, personally
or by its agents or attorneys, and subject to the rights of any tenant under any
lease or sublease of the Collateral, to the fullest extent permitted by Legal
Requirements, may enter upon any land owned or leased by Grantor without being
guilty of trespass or any wrongdoing, and without liability to Grantor for
damages thereby occasioned.

6.6 No Impairment of Remedies. If, in the exercise of any of its rights and
remedies under this Agreement, Lender shall forfeit any of its rights or
remedies, whether because of any applicable Legal Requirements pertaining to
“election of remedies” or otherwise, Grantor hereby consents to such action by
Lender and, to the extent permitted by applicable Legal Requirements, waives any
claim based upon such action, even if such action by Lender shall result in a
full or partial loss of any rights of subrogation, indemnification or
reimbursement which Grantor might otherwise have had but for such action by
Lender or the terms herein. Any election of remedies which results in the denial
or impairment of the right of Lender to seek a deficiency judgment against
Grantor shall not, to the extent permitted by applicable Legal Requirements,
impair Grantor’s obligation hereunder.

Exhibit D-1-7

--------------------------------------------------------------------------------

ARTICLE VII.
MISCELLANEOUS

7.1 Remedies Cumulative; Delay Not Waiver.

7.1.1 Remedies Cumulative. No right, power or remedy herein conferred upon or
reserved to Lender hereunder is intended to be exclusive of any other right,
power or remedy, and every such right, power and remedy shall, to the extent
permitted by applicable Legal Requirements, be cumulative and in addition to
every other right, power and remedy given hereunder or under any other Financing
Document now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy. Resort to any or all security now or hereafter held by Lender,
may be taken concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken nonjudicial proceedings, or both.

7.1.2 Delay Not Waiver; Separate Causes of Action. No delay or omission to
exercise any right, power or remedy accruing to Lender upon the occurrence of
any Event of Default shall impair any such right, power or remedy of Lender, nor
shall it be construed to be a waiver of any such Event of Default, or an
acquiescence therein, or of or in any other breach or default thereafter
occurring, nor shall any waiver of any other breach or default under this
Agreement or any other Financing Document be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of Lender of any breach or default
under this Agreement, or any waiver on the part of Lender of any provision or
condition of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. Each and every default by
Grantor in payment hereunder shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.

7.2 Attorney-In-Fact. Grantor hereby constitutes and appoints Lender and each
successor or assign of Lender, the true and lawful attorney-in-fact of Grantor,
with full power and authority in the place and stead of Grantor and in the name
of Grantor, Lender or otherwise, subject to the terms of the Financing Agreement
and the other Financing Documents, to enforce all rights, interests and remedies
of Grantor with respect to the Collateral, including the right: (a) to ask,
require, demand, receive and give acquittance for any and all moneys and claims
for moneys due and to become due under or arising out of any of the Collateral,
including any insurance policies;

Exhibit D-1-8

--------------------------------------------------------------------------------

(b) to elect remedies thereunder and to endorse any checks or other instruments
or orders in connection therewith;

(c) to file any claims or take any action or institute any proceedings in
connection therewith which Lender may reasonably deem to be necessary or
advisable;

(d) to pay, settle or compromise all bills and claims which may be or become
liens or security interests against any or all of the Collateral, or any part
thereof, unless a bond or other security satisfactory to Lender has been
provided;

(e) to vote, demand, receive and enforce Grantor’s rights with respect to the
Collateral;

(f) to give appropriate receipts, releases and satisfactions for and on behalf
of and in the name of Grantor or, at the option of Lender, in the name of
Lender, with the same force and effect as Grantor could do if this Agreement had
not been made; and

(g) upon foreclosure and to the extent provided herein or in any other Financing
Document, to do any and every act which Grantor may do on its behalf with
respect to the Collateral or any part thereof;

provided, however, that Lender shall not exercise any of the aforementioned
rights unless an Event of Default has occurred and is continuing and has not
been waived in accordance with the Financing Documents. This power of attorney
is a power coupled with an interest and shall be irrevocable; provided further,
however, that nothing in this Agreement shall prevent Grantor from, prior to the
exercise by Lender of any of the aforementioned rights, undertaking Grantor’s
operations in the ordinary course of business in accordance with the Collateral
and the Financing Documents.

7.3 Perfection; Further Assurances; Certain Waivers.

7.3.1 Perfection. Grantor agrees that from time to time, at the expense of
Grantor, Grantor shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary, or
that Lender may reasonably request, in order to perfect, to ensure the continued
perfection of, and to protect the assignment and security interest granted or
intended to be granted hereby or to enable Lender to exercise and enforce its
rights and remedies hereunder with respect to any Collateral, including any
notices or other filings that may be necessary or reasonably desirable to be
made under the Federal Assignment of Claims Act. Without limiting the generality
of the foregoing, Grantor shall: (a) subject to any applicable thresholds set
forth in Section 4.1 through 4.5, if any Collateral shall be evidenced by a
promissory note or other instrument, deliver and pledge to Lender such note or
instrument duly endorsed (without recourse) and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Lender; and (b) authorize, execute and file such financing statements or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be reasonably necessary or desirable, or as
Lender may reasonably request or as required by applicable Legal Requirements,
in order to perfect and preserve the assignments and security interests granted
or purported to be granted hereby.

Exhibit D-1-9

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7.3.2 Filing of Financing and Continuation Statements. Grantor hereby authorizes
the filing of any financial statements or continuation statements, and
amendments to financing statements, or any similar document in any jurisdictions
and with any filing offices as Lender may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to Lender
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of the
Collateral that describes such property in any other manner as Lender may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted to Lender
herein.

7.3.3 Information Concerning Collateral. Grantor shall promptly upon request,
and at the expense of Grantor, provide to Lender all information and evidence it
may reasonably request concerning the Collateral to enable Lender to enforce the
provisions of this Agreement.

7.3.4 Waiver. Grantor hereby waives, to the maximum extent permitted by
applicable Legal Requirements, (a) all rights under any law to require Lender to
pursue any Person other than Grantor, any security which Lender may hold, or any
other remedy before proceeding against Grantor; (b) all rights of reimbursement
or subrogation and all rights to participate in any security held by Lender
until the Obligations have been paid and the covenants of the Financing
Documents have been performed in full; (c) all rights to require Lender to give
any notices of any kind, including without limitation notices of nonpayment,
nonperformance, protest, dishonor, default, delinquency or acceleration, or to
make any presentments, demands or protests, except as set forth herein or as
expressly provided in the Financing Agreement or other Financing Documents; (d)
all rights to assert the bankruptcy or insolvency of Grantor as a defense
hereunder or as the basis for rescission hereof; (e) subject to Section 7.6, all
rights under any law purporting to reduce Grantor’s obligations hereunder if the
Obligations are reduced (other than as a result of payment of such Obligations);
(f) all defenses based on the disability or lack of authority of Grantor or any
Person, the repudiation of the Financing Documents by Grantor or any Person, the
failure by Lender to enforce any claim against Grantor, or the unenforceability
in whole or in part of any Financing Documents; and (g) all suretyship and
guarantor’s defenses generally.

7.4 Continuing Assignment and Security Interest; Transfer of Notes. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash and performance in full of the Obligations and the
termination of the Loan Commitment and other obligations of Lender under the
Financing Documents (other than any unasserted contingent reimbursement or
indemnify obligations); (b) be binding upon Grantor and its successors and
assigns; and (c) inure, together with the rights and remedies of Lender, to the
benefit of Lender and its successors and assigns. Without limiting the
generality of the foregoing clause (c), Lender may assign or otherwise transfer
the Note or other evidence of indebtedness held by them to any other Person to
the extent permitted by and in accordance with the Financing Agreement, and such
other Person shall thereupon become vested with all or an appropriate part of
the benefits in respect thereof granted to Lender herein or otherwise. The
release of the security interest in any or all of the Collateral, the taking or
acceptance of additional security, or the resort by Lender to any security it
may have in any order it may deem appropriate, shall not affect the liability of
any Person on the indebtedness secured hereby.

Exhibit D-1-10

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7.5 Termination of Security Interest. Upon the payment in full in cash of all
Obligations and the termination of the Loan Commitment and other obligations of
Lender under the Financing Documents (other than any unasserted contingent
reimbursement or indemnity obligations), this Agreement and the security
interest and all other rights granted hereby shall terminate and all rights to
the Collateral shall revert to Grantor. Upon any such termination, Lender shall,
at Grantor’s expense and upon its written direction, execute and, subject to
Section 7.10 herein, deliver to Grantor such documents (including UCC-3
termination statements) as Grantor shall reasonably request to evidence such
termination, to release all security interest on the Collateral and to return
such Collateral to Grantor.

7.6 Limitation on Duty of Lender with Respect to the Collateral. The powers
conferred on Lender hereunder are solely to protect its interest in the
Collateral and shall not impose any duty on it to exercise any such powers.
Except for the safe custody of any Collateral in its possession, the accounting
for monies actually received by it hereunder and any duty expressly imposed on
Lender by applicable Legal Requirements with respect to any Collateral that has
not been waived hereunder, Lender shall have no duty with respect to any
Collateral and no implied duties or obligations shall be read into this
Agreement against Lender. Lender shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment that is substantially equivalent to that which
Lender accords its own property, it being expressly agreed, to the maximum
extent permitted by applicable Legal Requirements, that Lender shall have no
responsibility for (a) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (b) taking any action to protect
against any diminution in value of the Collateral, but, in each case, Lender may
do so and all expenses reasonably incurred in connection therewith shall be part
of the Obligations.

7.7 Liability. Recourse against the Non-Recourse Parties under this Agreement
shall be limited to the extent provided in Article 8 of the Financing Agreement.

7.8 Amendments; Waivers; Consents. This Agreement may not be amended, modified
or supplemented, except in a writing signed by each of the parties hereto and
otherwise in accordance with the provisions of the Financing Agreement.

7.9 Notices. All notices required or permitted under the terms and provisions
hereof shall be in writing, and any such notice shall be effective if given in
accordance with Section 10.1 of the Financing Agreement. Notices to Grantor or
Lender may be given at the addresses set forth in Section 10.1 of the Financing
Agreement.

7.10 Reinstatement. This Agreement and the obligations of Grantor hereunder
shall automatically be reinstated if and to the extent that for any reason any
payment made pursuant to this Agreement is rescinded or must otherwise be
restored or returned, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise with respect to Grantor or any other Person or as a
result of any settlement or compromise with any Person (including Grantor) in
respect of such payment, and Grantor shall pay Lender on demand all of its
reasonable costs and expenses (including reasonable fees of counsel) incurred by
Lender in connection with such rescission or restoration.

Exhibit D-1-11

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7.11 Application of Proceeds. Upon the occurrence and during the continuation of
an Event of Default, the proceeds of any sale of, or other realization upon, all
or any part of the Collateral shall be applied as described in the Liquidation
Preference provision of Article 7 of the Financing Agreement. Grantor shall
remain liable for any deficiency.

7.12 Lender May Perform. Upon the occurrence and during the continuance of an
Event of Default, if Grantor fails to perform any agreement contained herein,
Lender may itself perform, or cause performance of, such agreement, and the
reasonable expenses of Lender incurred in connection therewith shall be part of
the Obligations.

7.13 Expenses; Interest.

7.13.1 Expenses. Grantor agrees to pay on demand to Lender all costs and
expenses incurred by Lender (including the reasonable fees and disbursements of
counsel) incident to its enforcement, exercise, protection or preservation of
any of its rights, remedies or claims under this Agreement.

7.13.2 Interest. Any amount required to be paid by Grantor pursuant to the terms
hereof that is not paid when due shall bear interest at the Default Rate or the
maximum rate permitted by applicable Legal Requirements, whichever is less, from
the date due until paid in full.

7.14 Severability. The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

7.15 Survival of Provisions. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the
Financing Agreement and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Grantor set forth
herein shall terminate only upon the payment in full in cash of all Obligations
and the termination of the Loan Commitment and other obligations of Lender under
the Financing Documents (other than any unasserted contingent reimbursement or
indemnify obligations).

7.16 Successions or Assignments.

7.16.1 Successors. This Agreement shall inure to the benefit of the successors
or assigns of Lender who shall have, to the extent of their interest, the rights
of Lender hereunder.

7.16.2 Assignment. This Agreement is binding upon Grantor and its successors and
assigns. Grantor is not entitled to assign its obligations hereunder to any
other Person without the written consent of Lender, and any purported assignment
in violation of this provision shall be void. Lender shall not assign this
Agreement except in conjunction with an assignment of the Financing Agreement as
provided therein.

Exhibit D-1-12

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7.17 Headings Descriptive. Article and section headings have been inserted in
this Agreement as a matter of convenience for reference only and it is agreed
that such article and section headings are not a part of this Agreement and
shall not be used in the interpretation of any provision of this Agreement.

7.18 Entire Agreement. This Agreement, together with the Financing Documents, is
intended by the parties as a final expression of their agreement and is intended
as a complete and exclusive statement of the terms and conditions thereof.

7.19 Time. Time is of the essence of this Agreement.

7.20 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

7.21 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE LIEN AND SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

7.22 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE,
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER FINANCING DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
BORROWER AFFILIATE ENTITY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY LENDER IN
RESPECT OF RIGHTS UNDER ANY FINANCING DOCUMENT GOVERNED BY LAWS OTHER THAN THE
LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT
THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY BORROWER
AFFILIATE ENTITY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 7.9; (D) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER ANY BORROWER AFFILIATE ENTITY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (E) AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY BORROWER
AFFILIATE ENTITY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
EXERCISE OF ANY RIGHTS UNDER ANY FINANCING DOCUMENT OR THE ENFORCEMENT OF ANY
JUDGMENT.

Exhibit D-1-13

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7.23 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING HEREUNDER OR UNDER ANY OF THE OTHER FINANCING DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTIONS OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 7.23 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER FINANCING
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

7.24 Third Party Rights. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon, or give to any Person, other than
Grantor and Lender, any security, rights, remedies or claims, legal or
equitable, under or by reason hereof, or any covenant or condition hereof; and
this Agreement and the covenants and agreements herein contained are and shall
be held to be for the sole and exclusive benefit of Grantor and Lender.

Exhibit D-1-14

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[SIGNATURE PAGES FOLLOW]

Exhibit D-1-15

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to legally bound, have caused this Agreement to be duly executed as of
the date first above written.

GRANTOR:

USG NEVADA LLC,
a Delaware limited liability company

      By: _______________________________________

      Name: _______________________________________

      Title: _______________________________________

--------------------------------------------------------------------------------

LENDER:

ARES CAPITAL CORPORATION,
a Maryland corporation

      By: _______________________________________

      Name: _______________________________________

      Title: _______________________________________

--------------------------------------------------------------------------------

EXHIBIT D-2 to Financing Agreement

FORM OF
IDAHO SPONSOR PLEDGE AGREEMENT

among

U.S. GEOTHERMAL INC.,
an Idaho corporation
(Pledgor)

and

NEVADA USG HOLDINGS, LLC,
a Delaware limited liability company
(Pledged Company)

and

ARES CAPITAL CORPORATION,
a Maryland corporation
(Lender)

 

Dated as of November 9, 2011  

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS 1                          1.1 Defined Terms 1          
         1.2 Financing Agreement and UCC Definitions 2                    1.3
Rules of Interpretation 2 ARTICLE II. PLEDGE AND GRANT OF SECURITY INTEREST 2  
                       2.1 Granting Clause 2                    2.2 Delivery of
Certificates 3                    2.3 Retention of Certain Rights 3 ARTICLE III.
OBLIGATIONS SECURED 4       ARTICLE IV. EVENTS OF DEFAULT 4       ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PLEDGOR 4                          5.1
Organization 4                    5.2 Power and Authorization; Enforceable
Obligations 4                    5.3 No Legal Bar 5                    5.4
Beneficial Ownership; Pledged Ownership Interests 5                    5.5 No
Prior Assignment 5                    5.6 No Other Financing Documents 5        
           5.7 Compliance with Law 5                    5.8 No Litigation 5    
               5.9 Financial Statements 6                    5.10 Permitted
Activities of the Equity Pledgor. 6                    5.11 Taxes 6            
       5.12 Investment Company Act; Federal Energy Laws. 6                  
 5.13 Name; Organizational Number 6                    5.14 Pledged Company
Information 6                    5.15 Capital Adequacy; Etc. 6                  
 5.16 Perfection of Security Interest 7                    5.17 After Acquired
Collateral 7                    5.18 No Ownership by Disqualified Persons 7
ARTICLE VI. COVENANTS OF PLEDGOR 8                          6.1 Compliance with
Obligations 8                    6.2 Defense of Collateral 8                  
 6.3 Preservation of Value; Limitation of Liens 8                    6.4 No
Other Filings 8                    6.5 No Sale of Collateral 8                  
 6.6 Notice 8                    6.7 Filing of Bankruptcy Proceedings 8        
           6.8 Distributions 9                    6.9 Maintenance of Records 9

Exhibit D-2-i

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                   6.10 Name; Jurisdiction of Organization 9                  
 6.11 Certificated Securities 9                    6.12 Amendments to
Organizational Documents 9                    6.13 Proceeds of Collateral 9
ARTICLE VII. REMEDIES UPON EVENT OF DEFAULT 10                          7.1
Remedies Upon an Event of Default 10                    7.2 Minimum Notice
Period 11                    7.3 Right to Cure 11                    7.4
Expenses; Interest 11                    7.5 3 Sale of Collateral 11            
       7.6 Compliance With Limitations and Restrictions 12                  
 7.7 No Impairment of Remedies 12 ARTICLE VIII. MISCELLANEOUS. 13              
           8.1 Remedies Cumulative; Delay Not Waiver 13                    8.2
Pledged Company’s Consent and Covenant 15                    8.3
Attorney-in-Fact 15                    8.4 Perfection; Further Assurances 16    
               8.5 Payment of Taxes 17                    8.6 Place of Business;
Location of Records 17                    8.7 Continuing Assignment and Security
Interest; Transfer of Note 17                    8.8 Termination of Security
Interest 17                    8.9 Security Interest Absolute 18                
   8.10 Limitation on Duty of Lender with Respect to the Collateral 18          
         8.11 Liability 19                    8.12 Amendments; Waivers; Consents
19                    8.13 Notices 19                    8.14 Modification of
Obligations 19                    8.15 Delivery of Collateral; Proxy 20        
           8.16 Reinstatement 21                    8.17 Severability 21        
           8.18 Survival of Provisions 21                    8.19 Headings
Descriptive 21                    8.20 Entire Agreement 21                  
 8.21 Time 21                    8.22 Counterparts 21                    8.23
Limitation of Liability 21                    8.24 Submission to Jurisdiction 22
                   8.25 APPLICABLE LAW. 22                    8.26 CONSENT TO
JURISDICTION 22                    8.27 WAIVER OF JURY TRIAL 23                
   8.28 Knowledge and Attribution 23                    8.29 Rights of Lender 23
                   8.30 Consent and Acknowledgement 24                    8.31
Third Party Beneficiaries 24                    8.32 Waiver of Transfer
Restrictions 24

Exhibit D-2-ii

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                   8.33 Article 8 Securities 24                    8.34
Appointment of Agent. 24

EXHIBITS AND SCHEDULE

Exhibit A Irrevocable Proxy Exhibit B Transfer Document Schedule I Description
of Ownership Interests

Exhibit D-2-iii

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IDAHO SPONSOR PLEDGE AGREEMENT

This IDAHO SPONSOR PLEDGE AGREEMENT, dated as of November 9, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, this
“Agreement”), is entered into by and among U.S. GEOTHERMAL INC., a corporation
formed under the laws of the State of Idaho (“Pledgor”), NEVADA USG HOLDINGS,
LLC, a limited liability company formed under the laws of the State of Delaware
(“Pledged Company”), and ARES CAPITAL CORPORATION, a corporation formed under
the laws of the State of Marlyand (together with its successors, designees and
assigns in such capacity, “Lender”).

RECITALS

A. USG Nevada LLC, a limited liability company formed under the laws of the
State of Delaware (“Borrower”) owns and intends to develop, construct, install,
test, own, operate and use an approximately 8 MW geothermal power facility
located in Washoe County, Nevada (the “Project”).

B. Borrower has entered into, among other things, (i) that certain Financing
Agreement, dated as of the date hereof (as amended, amended and restated,
modified or supplemented from time to time, the “Financing Agreement”), by and
among Borrower and Lender, pursuant to which, among other things, Lender has
extended commitments to make loans and other financial accommodations to, and
for the benefit of Borrower, and (ii) certain other documents related to the
Financing Agreement (collectively, the “Financing Documents”).

C. Pledged Company directly owns 100% of the ownership interests of Borrower.

D. Pledgor directly owns 100% of the ownership interests of Pledged Company.

D. It is a condition precedent to the effectiveness of the Financing Agreement
and the other Financing Documents, and the making of the advances of credit
contemplated thereby, that Pledgor and Pledged Company shall have executed and
delivered this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and to induce
the Lender to enter into the Financing Documents and to make the advances of
credit to Borrower contemplated thereby, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledged Company and Pledgor hereby agree with Lender, as follows:

ARTICLE I.
DEFINITIONS

1.1 Defined Terms. The following terms (whether or not underscored) when used in
this Agreement, including its preamble and recitals, shall have the following
meanings:

Exhibit D-2-1

--------------------------------------------------------------------------------

“Collateral” has the meaning given in Section 2.1.

“Financing Agreement” has the meaning given in the recitals to this Agreement.

“Financing Documents” has the meaning given in the recitals to this Agreement.

“Lender” has the meaning given in the preamble to this Agreement.

“Pledged Company” has the meaning given in the preamble to this Agreement.

“Pledged Ownership Interests” has the meaning given in Section 2.1. “Pledgor”
has the meaning given in the preamble to this Agreement. “Project” has the
meaning given in the recitals to this Agreement.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, however, that in the event that,
by reason of mandatory provisions of law, any or all of the perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.

1.2 Financing Agreement and UCC Definitions. Unless otherwise defined herein,
all capitalized terms used in this Agreement shall have the meanings provided in
Exhibit A to the Financing Agreement or, if not defined therein, the UCC.

1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Financing Agreement shall apply to
this Agreement, including its preamble and recitals.

ARTICLE II.
PLEDGE AND GRANT OF SECURITY INTEREST

2.1 Granting Clause. To secure the timely payment in full in cash and
performance in full of the Obligations, Pledgor hereby assigns, grants and
pledges to Lender, a continuing security interest in all the estate(s),
right(s), title(s) and interest(s) of Pledgor, now owned or hereafter existing
or acquired, in, to and under any and all of the following (the “Collateral”):
Any and all of Pledgor’s right(s), title(s) and interest(s), whether now owned
or hereafter existing or acquired, in Pledged Company, and all of Pledgor’s
ownership interests in Pledged Company related thereto (the “Pledged Ownership
Interests”), including the ownership interests of Pledgor described on Schedule
I hereto and Pledgor’s share of:

Exhibit D-2-2

--------------------------------------------------------------------------------

(a) all rights to receive income, gain, profit, dividends and other
distributions allocated or distributed to Pledgor in respect of or in exchange
for all or any portion of the Pledged Ownership Interests;

(b) all capital or ownership interest, including capital accounts, in Pledged
Company, and all accounts, deposits or credits of any kind with Pledged Company;

(c) all voting rights in or rights to control or direct the affairs of Pledged
Company;

(d) all rights, title and interest, as a member of Pledged Company, in, to or
under any and all of Pledged Company’s assets or properties;

(e) all other rights, title and interest in or to Pledged Company derived from
the Pledged Ownership Interests;

(f) all indebtedness or other obligations of Pledged Company owed to Pledgor;

(g) all claims of Pledgor for damages arising out of, or for any breach or
default relating to, the Collateral, other than any claims against Lender;

(h) all rights of Pledgor to terminate, amend, supplement, modify, or cancel,
the governing documents of Pledged Company, to take all actions thereunder and
to compel performance and otherwise exercise all remedies thereunder;

(i) all securities, notes, certificates and other instruments representing or
evidencing any of the foregoing rights and interests or the ownership thereof
and any interest of Pledgor reflected in the books of any financial intermediary
pertaining to such rights and interests and all non-cash dividends, cash,
options, warrants, stock splits, reclassifications, rights, instruments or other
investment property and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such rights and interests; and

(j) all proceeds of the foregoing Collateral, whether cash or non-cash;
provided, however, that “Collateral” shall not include any distribution to
Pledgor expressly permitted pursuant to the terms of the Financing Agreement or
any other Financing Document.

2.2 Delivery of Certificates. All certificates, notes and other instruments
representing or evidencing any Collateral (including the certificates described
on Schedule I hereto) shall be delivered to and held by or on behalf of, and, in
the case of notes, endorsed to the order of, Lender, or its designee pursuant
hereto, in the manner set forth in Section 8.15.

2.3 Retention of Certain Rights. So long as Lender has not exercised remedies
with respect to the Collateral under this Agreement or any other Financing
Document upon the occurrence and during the continuation of an Event of Default,
Pledgor reserves the right to exercise all voting and other rights with respect
to the Collateral (except as limited by the Financing Documents) and to receive
all income, dividends and other distributions from the Collateral (except as
limited by the Financing Documents).

Exhibit D-2-3

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ARTICLE III.
OBLIGATIONS SECURED

Without limiting the generality of the foregoing, this Agreement and all of the
Collateral secure the payment and performance when due of all Obligations of
Borrower to Lender pursuant to the Financing Documents. If, notwithstanding the
representation and warranty set forth in Section 5.15 or anything to the
contrary herein, enforcement of the liability of Pledgor under this Agreement
for the full amount of the Obligations would be an unlawful or voidable transfer
under any applicable fraudulent conveyance or fraudulent transfer law or any
comparable law, then the liability of Pledgor hereunder shall be reduced to the
highest amount for which such liability may then be enforced without giving rise
to an unlawful or voidable transfer under any such law.

ARTICLE IV.
EVENTS OF DEFAULT

The occurrence of an Event of Default under, and as defined in, the Financing
Agreement shall constitute an Event of Default hereunder.

ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PLEDGOR

Pledgor represents and warrants, to and in favor of Lender, as of the date
hereof, as follows:

5.1 Organization. Pledgor is (a) a corporation duly formed, validly existing and
in good standing solely under the laws of the State of Idaho, and (b) duly
qualified, authorized to do business and in good standing in each jurisdiction
in which such qualification is necessary to execute, deliver and perform this
Agreement and each of the other Operative Documents to which it is a party,
except where failure to do so would not cause a Material Adverse Effect.

5.2 Power and Authorization; Enforceable Obligations. Pledgor has the full power
and authority to execute, deliver and perform this Agreement and each other
Operative Document to which it is a party and to take all action as may be
necessary to complete the transactions contemplated hereunder and thereunder.
Pledgor has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and each other Operative Document to
which it is a party and to complete the transactions contemplated hereby and
thereby. No consent or authorization of, filing with, or other act by or in
respect of any other Person or Governmental Authority is required in connection
with the execution, delivery or performance by Pledgor, or the validity or
enforceability as to Pledgor, of this Agreement and each other Operative
Document to which it is a party, except such consents or authorizations or
filings or other acts as have already been obtained or made or where the failure
to obtain such consent or authorization could not reasonably be expected to have
a Material Adverse Effect. This Agreement and each other Operative Document to
which Pledgor is a party have been duly executed and delivered by Pledgor and
constitute, and each other Operative Document to which it is a party will upon
execution and delivery thereof by Pledgor and the other parties thereto (if any)
constitute, a legal, valid and binding obligation of Pledgor enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the right of creditors generally and by general principles of equity.

Exhibit D-2-4

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5.3 No Legal Bar. The execution, delivery and performance by Pledgor of this
Agreement and each other Operative Document to which it is a party and the
consummation of the transactions contemplated hereby (including the granting of
security interests hereunder) or under any other Operative Document to which it
is a party do not or will not violate any applicable Legal Requirement or any
material contractual obligation of Pledgor and do not and will not result in, or
require, the creation or imposition of any Lien (other than Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and, to the
extent required by Governmental Rule, clause (b) of the definition thereof) on
any of the properties or revenues of Pledgor pursuant to any applicable Legal
Requirement or any such contractual obligation.

5.4 Beneficial Ownership; Pledged Ownership Interests. Pledgor is the lawful and
beneficial owner of and has full right, title and interest in, to and under
rights and interests comprising the Collateral, subject to no Liens (except
Permitted Liens described in clause (a) of the definition of “Permitted Liens”
and, to the extent required by Governmental Rule, clause (b) of the definition
thereof). The Pledged Ownership Interests listed next to Pledgor’s name on
Schedule 1 (a) have been duly authorized and validly issued, (b) are fully paid
and non-assessable and (c) constitute all of Pledgor’s outstanding ownership
interests of Pledged Company.

5.5 No Prior Assignment. Pledgor has not previously assigned any of its rights
in, to or under all or any portion of the Collateral, except as specifically
permitted by the Financing Agreement or the other Financing Documents.

5.6 No Other Financing Documents. Pledgor has not executed and is not aware of
any effective financing statement, security agreement or other instrument
similar in effect covering all or any part of the Collateral on file in any
recording office, except such as may have been filed pursuant to this Agreement
and the other Financing Documents.

5.7 Compliance with Law. Pledgor is in compliance with all Legal Requirements,
except noncompliance which could not reasonably be expected to have a Material
Adverse Effect, and no written notices of any material violation of any
Governmental Rule relating to the Project or any Operative Document have been
received by Pledgor.

5.8 No Litigation. There are no pending or, to Pledgor’s knowledge, threatened
in writing actions, suits, proceedings or investigations of any kind, including
actions or proceedings of or before any Governmental Authority, relating to the
Collateral or to which Pledgor is a party or is subject, or by which it or its
properties are bound that, if adversely determined to or against Pledgor could
reasonably be expected to have a Material Adverse Effect.

Exhibit D-2-5

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5.9 Financial Statements. The financial statements of Pledgor delivered to
Lender pursuant to Sections 3.1(q) and 5.4 of the Financing Agreement, if any,
are true, complete and correct in all material respects as of the date of such
statements and fairly presented the financial condition of Pledgor as of the
date thereof and fairly presented the results of the operations and cash flow of
Pledgor for the periods then ending. Such financial statements have been
prepared in accordance with GAAP.

5.10 Permitted Activities of the Equity Pledgor. Pledgor shall not fail to hold
itself out to the public as a legal entity separate and distinct from all other
Persons.

5.11 Taxes. Pledgor has timely filed all federal, state and local tax returns
that it is required to file, has paid all taxes it is required to pay to the
extent due (other than those taxes that it is contesting in good faith and by
appropriate proceedings, for which adequate reserves have been established for
such taxes in accordance with GAAP) and, to the extent such taxes are not due,
has established reserves that are adequate for the payment thereof to the extent
required by GAAP. Pledgor knows of no proposed tax assessment against it which
could reasonably be expected to have a Material Adverse Effect (other than as is
being actively contested by Pledgor in good faith and by appropriate proceedings
and for which reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP have been made or provided therefore).

5.12 Investment Company Act; Federal Energy Laws. Pledgor is not an investment
company or a company controlled by an investment company, within the meaning of
the Investment Company Act of 1940, as amended. No provision of the FPA or PUHCA
precludes Pledgor from entering into and performing its obligations hereunder.

5.13 Name; Organizational Number. The name of Pledgor is as set forth in the
preamble hereto, as indicated in the public records of the State of Idaho, and
Pledgor’s Federal Employer Identification Number and Idaho organizational number
are as set forth below its signature hereto.

5.14 Pledged Company Information. Pledgor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial or otherwise) of Pledged Company and its
properties on a continuing basis, and Pledgor now is and hereafter will be
completely familiar with the businesses, operations and condition (financial or
otherwise) of Pledged Company and its properties. Pledgor hereby agrees that
Lender shall not have any duty to advise Pledgor of information known to Lender
regarding such condition or any such circumstances or of any changes or
potential changes affecting the Collateral. In the event Lender, in its
respective discretion, undertakes at any time or from time to time to provide
any such information to Pledgor, Lender shall be under no obligation (a) to
undertake any investigation not a part of its regular business routine, or
reasonable commercial lending practices or (b) to make any other or future
disclosure of such information to Pledgor.

5.15 Capital Adequacy; Etc.

(a) After giving effect to the transactions contemplated by this Agreement and
the contingent obligations evidenced hereby (but excluding the effect of the
provisions of Article III which limit the Obligations to an amount that would
not render Pledgor’s indebtedness, liabilities or obligations under this
Agreement subject to avoidance), Pledgor is Solvent on both an unconsolidated
basis and a consolidated basis with any subsidiaries of Pledged Company, and
Pledgor has and will have assets which, fairly valued, exceed its indebtedness,
liabilities or obligations.

Exhibit D-2-6

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(b) Pledgor is not executing this Agreement with any intention to hinder, delay
or defraud any present or future creditor or creditors of Pledgor.

5.16 Perfection of Security Interest. The security interest granted to Lender,
pursuant to this Agreement constitutes as to personal property included in the
Collateral a valid lien. The security interest granted to Lender pursuant to
this Agreement in the Collateral consisting of personal property will be
perfected (a) with respect to any property that can be perfected by filing, upon
the filing of financing statements in the filing offices identified on Exhibit
D-8 to the Financing Agreement, and (b) with respect to any property that can be
perfected by control, upon Lender receiving possession thereof, and, in each
case, such security interest will be, as to Collateral perfected under the UCC
or otherwise as aforesaid, superior and prior to the rights of all third persons
now existing or hereafter arising whether by way of mortgage, lien, security
interests, encumbrance, assignment or otherwise except (i) Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and (ii) to the
extent required by Governmental Rule, Permitted Liens described in clause (b) of
the definition thereof. Except to the extent control of portions of such
Collateral is required for perfection, all such action as is necessary has been
taken to establish and perfect Lender’s rights in and to such Collateral to the
extent Lender’s security interest can be perfected by filing, including any
recording, filing, registration, giving of notice or other similar action. As of
the Financial Closing Date, no filing, recordation, re-filing or re-recording
other than those listed on Exhibit D-8 to the Financing Agreement is necessary
to perfect and maintain the perfection of the interest, title or Liens of this
Agreement that can be perfected by filing, and on the Financial Closing Date all
such filings or recordings will have been made to the extent Lender’s security
interest can be perfected by filing. Pledgor has properly delivered, caused to
be delivered or is concurrently delivering to Lender all such Collateral that
requires perfection of the Lien and security interest described above by
control.

5.17 After Acquired Collateral. It is understood and agreed that the foregoing
representations and warranties shall apply only to the Collateral delivered on
the date hereof and that, with respect to Collateral delivered thereafter,
Pledgor shall, upon the written request of Lender, be required to make
representations and warranties in form and substance substantially similar to
the foregoing in supplements hereto and that such representations and warranties
contained in such supplements hereto shall be applicable to such Collateral
hereafter delivered.

5.18 No Ownership by Disqualified Persons. Neither Pledgor nor any direct or
indirect owner of Pledgor is a Disqualified Person (other than a Disqualified
Person whose ownership interest in Pledgor is effected solely through a direct
or indirect ownership interest through an entity that is treated as a C
corporation for Federal income tax purposes).

Exhibit D-2-7

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ARTICLE VI.
COVENANTS OF PLEDGOR

Pledgor covenants, to and in favor of Lender as follows:

6.1 Compliance with Obligations. Pledgor shall perform and comply in all
material respects with all obligations and conditions on its part to be
performed hereunder with respect to the Collateral.

6.2 Defense of Collateral. Pledgor shall, until the payment in full in cash of
all Obligations and the termination of the Loan Commitment and all other
obligations of Lender under the Financing Documents (other than any unasserted
contingent reimbursement or indemnify obligations), defend its title to the
Collateral and the interest of Lender in the Collateral pledged hereunder
against the claims and demands of all other Persons.

6.3 Preservation of Value; Limitation of Liens. Pledgor shall not take or permit
to be taken any action in connection with the Collateral which would impair the
Liens granted herein; provided, however, that nothing in this Agreement shall
prevent Pledgor, prior to the exercise by Lender of any rights pursuant to the
terms hereof, from undertaking Pledgor’s operations in the ordinary course of
business not in violation of the Financing Documents. Pledgor shall not directly
or indirectly create, incur, assume or suffer to exist any Liens on or with
respect to all or any part of the Collateral (other than Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and, to the
extent required by Governmental Rule, clause (b) of the definition thereof).
Pledgor shall at its own cost and expense promptly take such action as may be
necessary to discharge any such Liens.

6.4 No Other Filings. Pledgor shall not file or authorize or permit to be filed
in any jurisdiction any financing statements under the UCC or any like statement
relating to the Collateral in which Lender is not named as the sole secured
party.

6.5 No Sale of Collateral. Except as expressly permitted by this Agreement or
the other Financing Documents, Pledgor shall not cause, suffer or permit the
sale, assignment, conveyance, pledge or other transfer of all or any portion of
Pledgor’s ownership or interest in Pledged Company or any other portion of the
Collateral. As used herein, the transfer of an ownership interest in Pledged
Company shall not include any transfer of an ownership interest in Pledgor, to
the extent such transfer is permitted under the Financing Documents.

6.6 Notice. Pledgor shall promptly, upon acquiring notice or giving notice, as
the case may be, or obtaining knowledge thereof, give written notice (with
copies of any such underlying notices) to Lender of any change in or transfer of
ownership interests in Pledgor, such notice to be given promptly, but in any
event no later than fifteen (15) days prior to any such change or transfer, and
to include the identity of any transferee and such transferee’s interest in
Pledgor.

6.7 Filing of Bankruptcy Proceedings. To the extent it may do so under
applicable Legal Requirements, Pledgor, for itself, its successors and assigns,
shall not cast any vote as an owner in Pledged Company (a) in favor of the
commencement of a voluntary case or other proceeding seeking liquidation,
reorganization, rehabilitation or other relief with respect to Pledged Company
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect in any jurisdiction or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the owners of
Pledged Company or any substantial part of Pledged Company’s property, (b) to
authorize Pledged Company to consent to any such aforesaid relief or to the
appointment of or taking possession by any such aforesaid official in an
involuntary case or other proceeding commenced against Pledged Company or (c) to
authorize Pledged Company to make a general assignment for the benefit of
creditors.

Exhibit D-2-8

--------------------------------------------------------------------------------

6.8 Distributions. If Pledgor in its capacity as an owner of Pledged Company
receives any income, dividend or other distribution of money or property of any
kind from Pledged Company (other than as expressly permitted by the Financing
Documents), then Pledgor shall hold such income or distribution as trustees for
and shall promptly deliver the same to Lender.

6.9 Maintenance of Records. Pledgor shall, at all times, keep accurate and
complete records of the Collateral. Pledgor shall permit representatives of
Lender, upon reasonable prior notice, at any time during normal business hours
of Pledgor to inspect and make abstracts from Pledgor’s books and records
pertaining to the Collateral. Upon the occurrence and during the continuation of
any Event of Default, at Lender’s request, Pledgor shall promptly deliver copies
of any and all such records to Lender.

6.10 Name; Jurisdiction of Organization. Pledgor shall not change its name, its
jurisdiction of organization, its organization identification number or its
fiscal year without notice to Lender at least thirty (30) days prior to such
change. In the event Pledgor changes the location of its principal place of
business, Pledgor shall provide notice to Lender of such change no later than
thirty (30) days after such change. In the event of any of the foregoing
changes, Pledgor shall at its expense or at the expense of Pledged Company
execute and deliver such instruments and documents as may be required by Lender
or applicable Legal Requirements to maintain a prior perfected security interest
in the Collateral.

6.11 Certificated Securities. Pledgor shall cause its partnership interests in
Pledged Company to be evidenced by and remain “certificated securities” as
defined in Article 8 of the UCC.

6.12 Amendments to Organizational Documents. Except as expressly permitted by
this Agreement or the other Financing Documents (including in relation to a
Permitted Transfer), Pledgor shall not terminate, amend, supplement or otherwise
modify, or cancel, the governing documents of Pledged Company.

6.13 Proceeds of Collateral. Pledgor shall, at all times, keep pledged to Lender
pursuant hereto all Collateral and all dividends, distributions, interest,
principal and other proceeds received by Lender with respect thereto, and all
other Collateral and other securities, instruments, proceeds and rights from
time to time received by or distributable to Pledgor in respect of any
Collateral and shall not permit Pledged Company to issue any equity interests
which shall not have been immediately duly pledged to Lender hereunder on a
first priority perfected basis.

Exhibit D-2-9

--------------------------------------------------------------------------------

ARTICLE VII.
REMEDIES UPON EVENT OF DEFAULT.

7.1 Remedies Upon an Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Lender shall have the right, at its
election, but not the obligation, to do any of the following:

(a) vote or exercise any and all of Pledgor’s rights or powers incident to the
ownership of the Pledged Ownership Interests, including any rights or powers to
manage or control Pledged Company;

(b) demand, sue for, collect or receive any money or property at any time
payable to or receivable by Pledgor on account of or in exchange for all or any
part of the Collateral;

(c) cause any action at law or suit in equity or other proceeding to be
instituted and prosecuted to collect or enforce any obligation or right
hereunder or included in the Collateral, including specific enforcement of any
covenant or agreement contained herein, or to foreclose or enforce the security
interest in all or any part of the Collateral granted herein, or to enforce any
other legal or equitable right vested in it by this Agreement or by applicable
Legal Requirements;

(d) amend, terminate, supplement or modify Pledged Company’s governing
documents; (e) incur reasonable expenses, including reasonable attorneys’ fees,
reasonable consultants’ fees, and other costs appropriate to the exercise of any
right or power under this Agreement;

(f) perform any obligation of Pledgor hereunder or under any other Financing
Document, make payments, purchase, contest or compromise any encumbrance,
charge, or lien, pay taxes and expenses and insure, process and preserve the
Collateral without, however, any obligation to do so;

(g) secure the appointment of a receiver of the Collateral or any part thereof
without notice to Pledged Company or Pledgor, whether incidental to a proposed
sale of the Collateral or otherwise, and all disbursements made by such receiver
and the expenses of such receivership shall be added to and be made a part of
the Obligations, and, whether or not said principal sum, including such
disbursements and expenses, exceeds the indebtedness originally intended to be
secured hereby, the entire amount of said sum, including such disbursements and
expenses, shall be secured by this Agreement and shall be due and payable upon
demand therefor and thereafter shall bear interest at the Default Rate or the
maximum rate permitted by applicable Legal Requirements, whichever is less;

(h) exercise any other or additional rights or remedies granted to Lender under
any other provision of this Agreement or any other Financing Document, or
exercisable by a secured party under the UCC or under any other applicable Legal
Requirement;

Exhibit D-2-10

--------------------------------------------------------------------------------

(i) take any other action which Lender deems necessary or desirable to protect
or realize upon its security interest in the Collateral or any part thereof, and
Pledgor hereby irrevocably appoints Lender as its attorney-in-fact (as set forth
in Section 8.3) to take any such action, including the execution and delivery of
any and all documents or instruments related to the Collateral or any part
thereof in Pledgor’s name, and said appointment shall create in Lender a power
coupled with an interest which shall be irrevocable; or

(j) appoint another Person (who may be an employee, officer or other
representative of Lender) to do any of the foregoing, or take any other action
permitted hereunder, on behalf of Lender.

7.2 Minimum Notice Period. If, pursuant to applicable Legal Requirements, prior
notice of any action described in Section 7.1 is required to be given to Pledgor
or Pledged Company, Pledgor and Pledged Company hereby acknowledge and agree
that the minimum time required by such applicable Legal Requirements, or if no
minimum is specified, ten (10) Banking Days, shall be deemed a reasonable notice
period.

7.3 Right to Cure. In addition to the foregoing remedies, Lender may, but shall
not be obligated to, cure any Event of Default and incur reasonable fees, costs
and expenses in doing so, in which event Pledgor and Pledged Company shall
reimburse Lender after demand for all such fees, costs and expenses as provided
for in Section 7.4 below.

7.4 Expenses; Interest.

(a) Pledgor and Pledged Company jointly and severally agrees to pay on demand to
Lender all costs and expenses incurred by Lender (including the reasonable fees
and disbursements of counsel) incident to its enforcement, exercise, protection
or preservation of any of its rights, remedies or claims under this Agreement,
but without duplication to any cost or expenses previously paid by Pledgor or
any Borrower Affiliate Entities under the other Financing Documents.

(b) Any amount required to be paid by Pledgor or Pledged Company pursuant to the
terms hereof that is not paid when due shall bear interest at the Default Rate
or the maximum rate permitted by applicable Legal Requirements, whichever is
less, from the date due until paid in full.

7.5 Sale of Collateral. In addition to exercising the foregoing rights, upon the
occurrence and during the continuation of an Event of Default, Lender may, to
the extent permitted by applicable Legal Requirements, arrange for and conduct a
sale of the Collateral at a public or private sale (as Lender may elect) which
sale may be conducted by an employee or representative of Lender, without any
demand of performance or notice of intention to sell or dispose of, or of time
or place of sale or disposition (except such notice as required by any
applicable Legal Requirement), and any such sale shall be considered or deemed
to be a sale made in a commercially reasonable manner. Lender may release,
temporarily or otherwise, to Pledgor any item of Collateral of which Lender has
taken possession pursuant to any right granted to Lender by this Agreement
without waiving any rights granted to Lender under this Agreement, the Financing
Agreement or the other Financing Documents. Pledgor, in dealing with or
disposing of the Collateral or any part thereof, hereby waives all rights, legal
and equitable, it may now or hereafter have to require marshaling of assets or
to require, upon foreclosure, sales of assets in a particular order. Pledgor
also waives its right to challenge the reasonableness of any disclaimer of
warranties, title and the like made by Lender in connection with a sale of the
Collateral. Each successor and assign of Pledgor, including a holder of a Lien
subordinate to the Lien created hereby (without implying that Pledgor has,
except as expressly provided herein, a right to grant an interest in, or a
subordinate Lien on, any of the Collateral), except as otherwise agreed between
such successor or assign of Pledgor and Lender, by acceptance of its interest or
Lien agrees that it shall be bound by the above waiver, to the same extent as if
such holder gave the waiver itself. If Lender sells any of the Collateral upon
credit, Pledgor will be credited only with payments actually made by the
purchaser, received by Lender and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Lender may resell
the Collateral and Pledgor shall be credited with the proceeds of the sale. In
the event Lender shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by Legal Requirements or this Agreement or any other
Financing Document, Lender may bid all or less than the amount of the
Obligations. To the extent permitted by applicable Legal Requirements, the
amount of the successful bid at any such sale, whether Lender or any other party
is the successful bidder, shall, absent fraud or gross negligence, be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations.

Exhibit D-2-11

--------------------------------------------------------------------------------

7.6 Compliance With Limitations and Restrictions. Pledgor hereby agrees that in
respect of any sale of any of the Collateral pursuant to the terms hereof,
Lender is hereby authorized to comply with any limitation or restriction in
connection with such sale as Lender may be advised by counsel is necessary in
order to avoid any violation of applicable Legal Requirements, or in order to
obtain any required approval of the sale or of the purchaser by any Governmental
Authority or official, and Pledgor further agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner, nor shall Lender be liable or accountable to
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

7.7 No Impairment of Remedies. If, in the exercise of any of such rights and
remedies under this Agreement, Lender shall forfeit any of its rights or
remedies, whether because of any applicable Legal Requirements pertaining to
“election of remedies” or otherwise, Pledgor hereby consents to such action by
Lender and, to the extent permitted by applicable Legal Requirements, waives any
claim based upon such action, even if such action by Lender shall result in a
full or partial loss of any rights of subrogation, indemnification or
reimbursement which Pledgor might otherwise have had but for such action by
Lender or the terms herein. Any election of remedies which results in the denial
or impairment of the right of Lender to seek a deficiency judgment against any
of the parties to any of the Financing Documents shall not, to the extent
permitted by applicable Legal Requirements, impair Pledgor’s obligation
hereunder.

Exhibit D-2-12

--------------------------------------------------------------------------------

ARTICLE VIII.
MISCELLANEOUS.

8.1 Remedies Cumulative; Delay Not Waiver.

8.1.1 Remedies Cumulative. No right, power or remedy herein conferred upon or
reserved to Lender is intended to be exclusive of any other right, power or
remedy, and every such right, power and remedy shall, to the extent permitted by
applicable Legal Requirements, be cumulative and in addition to every other
right, power and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by Lender may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both. If Lender may, under applicable Legal Requirements,
proceed to realize its benefits under this Agreement or any other Financing
Document giving Lender a Lien upon any Collateral, whether owned by Pledgor or
by any other Person, either by judicial foreclosure or by nonjudicial sale or
enforcement, Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of the rights and remedies of Lender
under this Agreement.

8.1.2 No Waiver; Separate Causes of Action. No delay or omission to exercise any
right, power or remedy accruing to Lender upon the occurrence and during the
continuance of any Event of Default as aforesaid shall impair any such right,
power or remedy of Lender, nor shall it be construed to be a waiver of any such
Event of Default or of any similar breach or default thereafter occurring or an
acquiescence therein, nor shall any waiver of any other breach or default under
this Agreement or any other Financing Document be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Each and every default by
Pledgor in payment hereunder shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises and every power and remedy given by this Agreement may be exercised from
time to time, and as often as shall be deemed expedient, by Lender.

8.1.3 Application of Proceeds. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied as described in the
Liquidation Preference provision of Article 7 of the Financing Agreement.
Pledged Company shall remain liable for any deficiency.

Exhibit D-2-13

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8.1.4 Certain Waivers. Pledgor hereby waives and relinquishes, to the maximum
extent permitted by applicable Legal Requirements, all rights and remedies
accorded to pledgors, sureties or guarantors and agrees not to assert or take
advantage of any such rights or remedies, including: (a) any law limiting
remedies under an obligation secured by a mortgage or deed of trust on real
property if the real property is sold under a power of sale contained in the
mortgage or deed of trust, and all defenses based on any loss whether as a
result of any such sale or otherwise; (b) any right to require Lender to proceed
against Pledged Company or any other Person or to proceed against or exhaust any
security held by Lender at any time or to pursue any other remedy in Lender’s
power before proceeding against Pledgor; (c) any defense that may arise by
reason of the incapacity, lack of power or authority, death, dissolution,
merger, termination or disability of Pledgor, Pledged Company or any other
Person or the failure of Lender to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any of Pledgor,
Pledged Company or any other Person; (d) any right to enforce any remedy that
Lender may have against Pledged Company or any other Person and any right to
participate in any security held by Lender until the Obligations have been paid
and the covenants of the Financing Documents have been performed in full; (e)
any right to require Lender to give any notices of any kind, including, without
limitation, notices of nonpayment, nonperformance, protest, dishonor, default,
delinquency or acceleration, or to make any presentments, demands or protests,
except as set forth herein or expressly provided in the Financing Agreement or
any of the Financing Documents; (f) any right to assert the bankruptcy or
insolvency of Pledged Company or any other Person as a defense hereunder or as
the basis for rescission hereof and any defense arising because of Lender’s
election, in any proceeding instituted under the Bankruptcy Law, of the
application of Section 1111(b)(2) of the Bankruptcy Law; (g) subject to Section
8.9, any right under any law purporting to reduce Pledgor’s obligations
hereunder if the Obligations are reduced other than as a result of payment of
such Obligations; (h) any defense based on the repudiation of the Financing
Documents by Pledged Company or any other Person, the failure by Lender to
enforce any claim against Pledgor, Pledged Company or any other Person or the
unenforceability in whole or in part of any Financing Documents; (i) all
suretyship and guarantor’s defenses generally; (j) any right to insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshaling of assets, redemption or
similar law, or exemption, whether now or at any time hereafter in force, which
may delay, prevent or otherwise affect the performance by Pledgor of its
obligations under, or the enforcement by Lender of, this Agreement; (k) any
defense based upon an election of remedies by Lender, including an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Pledgor, the right of Pledgor to
proceed against Pledged Company or another Person for reimbursement, or both;
(l) any defense based on any offset against any amounts which may be owed by any
Person to Pledgor for any reason whatsoever; (m) any defense based on any act,
failure to act, delay or omission whatsoever on the part of Pledged Company or
any of its Affiliates or the failure by Pledged Company or any of its Affiliates
to do any act or thing or to observe or perform any covenant, condition or
agreement to be observed or performed by it under the Financing Documents, (n)
any defense, setoff or counterclaim which may at any time be available to or
asserted by Pledged Company or any of its Affiliates against Lender or any other
Person under the Financing Documents; (o) any duty on the part of Lender to
disclose to Pledgor any facts Lender may now or hereafter know about Pledged
Company or any of its Affiliates, regardless of whether Lender has reason to
believe that any such facts materially increase the risk beyond that which
Pledgor intends to assume, or have reason to believe that such facts are unknown
to Pledgor, or have a reasonable opportunity to communicate such facts to
Pledgor; (p) any defense based on any change in the time, manner or place of any
payment under, or in any other term of, the Financing Documents or any other
amendment, renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of the Financing Documents; and (q) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Bankruptcy Law.

8.1.5 Foreclosure Waiver. To the extent permitted by Legal Requirements, Pledgor
waives the posting of any bond otherwise required of Lender in connection with
any judicial process or proceeding to obtain possession of, replevy, attach, or
levy upon the Collateral, to enforce any judgment or other security for the
Obligations, to enforce any judgment or other court order entered in favor of
Lender, or to enforce by specific performance, temporary restraining order,
preliminary or permanent injunction, this Agreement or any other agermeent or
document between Pledgor, Lender. Pledgor further agrees that upon the
occurrence and during the continuation of an Event of Default, Lender may elect
to nonjudicially or judicially foreclose against any real or personal property
security it holds for the Obligations or any part thereof, or to exercise any
other remedy against Pledged Company or any other Person, any security or any
guarantor, even if the effect of that action is to deprive Pledgor of the right
to collect reimbursement from Pledged Company or any other Person for any sums
paid by Pledgor to Lender.

Exhibit D-2-14

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8.1.6 Waiver of Rights of Subrogation. Until the indefeasible payment in full in
cash of the Obligations and the termination of the Loan Commitment and all other
obligations of Lender under the Financing Documents, (a) Pledgor shall not have
any right of subrogation and waives all rights to enforce any remedy which the
Lender now has or may hereafter have against Pledged Company, and waives the
benefit of, and all rights to participate in, any security now or hereafter held
by Lender from Pledged Company, and (b) Pledgor waives any claim, right or
remedy which it may now have or hereafter acquire against Pledged Company that
arises hereunder and/or from the performance by Pledgor hereunder, including any
claim, remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Lender
against Pledged Company, or any security which Lender now have or hereafter
acquire, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise. Any amount paid to Pledgor
on account of any such subrogation rights prior to the payment in full in cash
of the Obligations and the termination of the Loan Commitment and all other
obligations of the Lender under the Financing Documents, shall be held in trust
for the benefit of Lender and shall immediately thereafter be paid to Lender.

8.2 Pledged Company’s Consent and Covenant. Pledged Company hereby consents to
the assignment of and grant of a security interest in the Collateral to Lender
and to the exercise by Lender of all rights and powers assigned or delegated to
Lender by Pledgor hereunder, including the rights upon and during an Event of
Default to exercise Pledgor’s voting rights and other rights to manage or
control Pledged Company, all in accordance with the Financing Documents.

8.3 Attorney-in-Fact. Pledgor hereby constitutes and appoints Lender and each
successor or assign of Lender, the true and lawful attorney-in-fact of Pledgor,
with full power and authority in the place and stead of Pledgor and in the name
of Pledgor, Lender or otherwise, subject to the terms of the Financing Agreement
and the other Financing Documents, to enforce all rights, interests and remedies
of Pledgor with respect to the Collateral, including the right: (a) to ask,
require, demand, receive and give acquittance for any and all moneys and claims
for money due and to become due under or arising out of the Collateral,
including any insurance policies;

Exhibit D-2-15

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(b) to elect remedies under the Collateral and to endorse any checks or other
instruments or orders in connection therewith;

(c) to vote, demand, receive and enforce Pledgor’s rights with respect to the
Collateral;

(d) to give appropriate receipts, releases and satisfactions for and on behalf
of and in the name of Pledgor or, at the option of Lender, in the name of
Lender, with the same force and effect as Pledgor could do if this Agreement had
not been made;

(e) to file any claims or take any action or institute any proceedings in
connection therewith which Lender may reasonably deem to be necessary or
advisable; and

(f) to pay, settle or compromise all bills and claims which may be or become
liens or security interests against any or all of the Collateral, or any part
thereof, unless a bond or other security satisfactory to Lender has been
provided;

provided, however, that Lender shall not exercise any of the aforementioned
rights unless an Event of Default has occurred and is continuing and has not
been waived in accordance with the Financing Documents. This power of attorney
is a power coupled with an interest and shall be irrevocable; provided, however,
that nothing in this Agreement shall prevent Pledgor from, prior to the exercise
by Lender of any of the aforementioned rights, undertaking Pledgor’s operations
in the ordinary course of business in accordance with the Collateral and the
Financing Documents.

8.4 Perfection; Further Assurances.

8.4.1 Perfection. Pledgor agrees that from time to time, at the expense of
Pledged Company, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary, or that Lender may reasonably request, in order to perfect, to ensure
the continued perfection of, and to protect the assignment and security interest
granted or intended to be granted hereby or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor shall (a) deliver the
Collateral or any part thereof to Lender, as Lender may request, accompanied by
such duly executed instruments of transfer or assignment as Lender may request,
and (b) authorize, execute and file such financing or continuation statements,
or amendments thereto, and such other instruments, endorsements or notices, as
may be reasonably necessary or desirable or as Lender may reasonably request, in
order to perfect and preserve the assignments and security interests granted or
purported to be granted hereby.

8.4.2 Filing of Financing and Continuation Statements. Pledgor hereby authorizes
the filing of any financing statements or continuation statements, and
amendments to financing statements, or any similar document in any jurisdictions
and with any filing offices as Lender may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to Lender
herein. Such financing statements may describe the Collateral in substantially
the same manner as described herein or may contain an indication or description
of the Collateral that describes such property in any other manner as Lender may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted to Lender
herein.

Exhibit D-2-16

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8.4.3 Information Concerning Collateral. Pledgor shall, promptly upon request,
provide to Lender all information and evidence it may reasonably request
concerning the Collateral to enable Lender to enforce the provisions of this
Agreement.

8.5 Payment of Taxes. Pledgor shall pay or cause to be paid, before any fine,
penalty, interest or cost attaches thereto, all taxes, assessments and other
governmental or nongovernmental charges or levies (other than those taxes that
it is contesting in good faith and by appropriate proceedings, and in respect of
which it has established adequate reserves for such taxes) now or hereafter
assessed or levied against the Collateral pledged by it hereunder (or against
the Collateral in which Pledgor has granted to Lender a security interest of
first priority) and shall retain copies of, and, upon request, permit Lender to
examine receipts showing payment of any of the foregoing.

8.6 Place of Business; Location of Records. Unless Lender is otherwise notified
under Section 6.10, the chief executive office of Pledgor is, and all records of
Pledgor concerning the Collateral are and will be, located at the address set
forth in Section 8.13.

8.7 Continuing Assignment and Security Interest; Transfer of Note. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash and performance in full of the Obligations (other
than any unasserted contingent reimbursement or indemnity obligations) and as
otherwise provided in Section 8.17; (b) be binding upon Pledged Company,
Pledgor, and their respective successors and assigns; and (c) inure, together
with the rights and remedies of Lender, to the benefit of Lender, and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), Lender may assign or otherwise transfer the Note or
other evidence of indebtedness held by them to any other Person to the extent
permitted by and in accordance with the Financing Agreement, and such other
Person shall thereupon become vested with all or an appropriate part of the
benefits in respect thereof granted to the Lender herein or otherwise. The
release of the security interest in any or all of the Collateral, the taking or
acceptance of additional security, or the resort by Lender to any security it
may have in any order it may deem appropriate, shall not affect the liability of
any Person on the indebtedness secured hereby.

8.8 Termination of Security Interest. Upon the payment in full in cash of all
Obligations and the termination of the Loan Commitment and all other obligations
of the Lender under the Financing Documents (other than the obligations that are
intended to survive the termination of the Financing Documents), this Agreement
and the security interest and all other rights granted hereby shall terminate
and all rights to the Collateral shall revert to Pledgor. Upon any such
termination, Lender will return all certificates previously delivered to Lender
representing the Pledged Ownership Interests and, at Pledgor’s expense and upon
its written direction, execute and, subject to Section 8.17, deliver to Pledgor
such documents (including UCC-3 termination statements) as Pledged Company or
Pledgor shall reasonably request to evidence such termination, to release all
security interest on the Collateral and to return such Collateral to Pledgor. If
this Agreement shall be terminated or revoked by operation of law, Pledgor shall
indemnify and save Lender and the other Secured Parties harmless from any loss
which may be suffered or incurred by Lender in acting hereunder prior to the
receipt by Lender, its successors, transferees, or assigns of notice of such
termination or revocation.

Exhibit D-2-17

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8.9 Security Interest Absolute. All rights of Lender and the security interest
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of: (a) any lack of validity or enforceability of the
Financing Agreement, any other Financing Document or any other agreement or
instrument relating thereto; (b) the exercise by Lender of any remedy, power or
privilege contained in any Financing Document or available at law, equity or
otherwise; (c) the failure of Lender (i) to assert any claim or demand or to
enforce any right or remedy against Pledged Company, any Affiliate of Pledged
Company or any other Person under the provisions of the Financing Agreement, the
Note, any other Financing Document or otherwise or (ii) to exercise any right or
remedy against any other guarantor of, or collateral securing, any of the
Obligations; (d) any change in the time, manner or place of payment of, or in
any other term of the Obligations (including any increase in the amount
thereof), or any other amendment or waiver of or any consent to any departure
from the Financing Agreement or any other Financing Document; (e) any action by
Lender to take and hold security or collateral for the payment of the
Obligations, or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Lender has been granted a
Lien, to secure any indebtedness to Lender of Pledgor, Pledged Company, any of
their respective Affiliates or any other Person party to a Financing Document;
(f) any reduction, limitation, impairment or termination of any of the
Obligations for any reason other than the written agreement of the Lender to
terminate the Obligations in full, but including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to, and Pledgor
hereby waives any right to or claim of, any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligation of Pledged Company, any Affiliate
of Pledged Company or otherwise; (g) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of the
Financing Agreement, the Note, or any other Financing Document; (h) any
exchange, surrender, release or non-perfection of any Collateral, or any
release, amendment or waiver or addition of or consent to departure from any
other security interest held by Lender securing any of the Obligations; (i) the
application by Lender of any sums by whomever paid or however realized to any
amounts owing by Pledgor, Pledged Company or any other Person party to the
Financing Documents to Lender in such manner as Lender shall determine in its
discretion; (j) any bankruptcy or insolvency of Pledged Company, Pledgor or any
other Person; or (k) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor or any third party pledgor
(other than the defense of payment).

8.10 Limitation on Duty of Lender with Respect to the Collateral. The powers
conferred on Lender hereunder are solely to protect its interest in the
Collateral and shall not impose any duty on Lender or any of its designated
agents to exercise any such powers. Except for the safe custody of any
Collateral in its possession, the accounting for monies actually received by it
hereunder and any duty expressly imposed on Lender by applicable Legal
Requirements with respect to any Collateral that has not been waived hereunder,
Lender shall have no duty with respect to any Collateral and no implied duties
or obligations shall be read into this Agreement against Lender. Lender shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment that is
substantially equivalent to that which Lender accords its own property, it being
expressly agreed, to the maximum extent permitted by applicable Legal
Requirements, that Lender shall have no responsibility for (a) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral, or (b) taking any action to protect against any diminution in value
of the Collateral, but, in each case, Lender may do so and all expenses
reasonably incurred in connection therewith shall be part of the Obligations.

Exhibit D-2-18

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8.11 Liability. Recourse against the Non-Recourse Parties under this Agreement
shall be limited to the extent provided in Article 8 of the Financing Agreement.

8.12 Amendments; Waivers; Consents. This Agreement may not be amended, amended
and restated, supplemented or otherwise modified, except in a writing signed by
each of the parties hereto and otherwise in accordance with the provisions of
the Financing Agreement.

8.13 Notices. All notices required or permitted under the terms and provisions
hereof shall be in writing, and any such notice shall be effective if given in
accordance with the provisions of Section 10.1 of the Financing Agreement.
Notices to Lender may be given at the address set forth in Section 10.1 of the
Financing Agreement. Notices to Pledgor may be given at the following address
(or such other address as notified by Pledgor):

  U.S. Geothermal Inc.   Address: 1505 Tyrell Lane     Boise, ID 83706  
Telephone: (208) 424-1027   Fax: (208) 424-1030   Attention: Jonathan Zurkoff

Notices to Pledged Company may be given at the following address (or such other
address as notified by Pledged Company):

  Nevada USG Holdings, LLC   Address: 1505 Tyrell Lane     Boise, ID 83706  
Telephone: (208) 424-1027   Fax: (208) 424-1030   Attention: Jonathan Zurkoff

8.14 Modification of Obligations. If Lender shall at any time or from time to
time, with or without the consent of, or notice to, the Pledgor:

(a) change or extend the manner, place or terms of payment of, or renew or alter
all or any portion of, the Obligations;

Exhibit D-2-19

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(b) take any action under or in respect of the Financing Documents in the
exercise of any remedy, power or privilege contained therein or available at
law, equity or otherwise, or waive or refrain from exercising any such remedies,
power or privileges;

(c) amend or modify, in any manner whatsoever, the Financing Documents;

(d) extend or waive the time for Pledgor’s, Pledged Company’s or any other
Person’s performance of, or compliance with, any term, covenant or agreement on
its part to be performed or observed under the Financing Documents, or waive
such performance or compliance or consent to a failure of, or departure from,
such performance or compliance;

(e) take and hold security or collateral for the payment of the Obligations, or
sell, exchange, release, dispose of, or otherwise deal with, any property
pledged, mortgaged or conveyed, or in which Lender has been granted a Lien, to
secure any indebtedness of Pledgor, Pledged Company or any other Person party to
a Financing Document to Lender;

(f) release or limit the liability of anyone who may be liable in any manner for
the payment of any amounts owed by Pledgor, Pledged Company or any other Person
party to a Financing Document to Lender;

(g) modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of Pledgor, Pledged
Company or any other Person party to a Financing Document are subordinated to
the claims of Lender; or

(h) apply any sums by whomever paid or however realized to any amounts owing by
Pledgor or Pledged Company to Lender in such manner as Lender shall determine in
its discretion;

then, subject to Section 8.9, Lender shall not incur any liability to Pledgor
pursuant hereto as a result thereof and no such action shall impair or release
the obligations of Pledgor under this Agreement.

8.15 Delivery of Collateral; Proxy. All certificates or instruments representing
or evidencing the Collateral shall be delivered to and held by or on behalf of
Lender pursuant hereto. All such certificates or instruments shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
acceptable to Lender. Lender shall have the right, at any time in its discretion
and without prior notice to Pledgor, following the occurrence and during the
continuation of an Event of Default, to transfer to or to register in the name
of Lender or any of its nominees any or all of the Collateral and to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations; provided,
however, that once such Event of Default has been cured, Lender will promptly
transfer to or register in the name or cause its nominees to transfer to or
register in the name of Pledgor, as applicable, all such Collateral. In
furtherance of the foregoing, Pledgor shall further execute and deliver to
Lender an irrevocable power in the form of Exhibit A with respect to the
ownership interests of Pledged Company owned by Pledgor.

Exhibit D-2-20

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8.16 Reinstatement. This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time any payment
pursuant to this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, liquidation of
Pledgor, Pledged Company or any other Person party to a Financing Document or
upon the dissolution of, or appointment of any intervenor or conservator of, or
trustee or similar official for, Pledgor, Pledged Company or any other Person
party to a Financing Document or any substantial part of Pledgor’s, any Pledged
Company’s or any other such Person’s assets, or otherwise, all as though such
payments had not been made, and Pledged Company shall pay Lender on demand all
reasonable costs and expenses (including reasonable fees of counsel) incurred by
Lender in connection with such rescission or restoration.

8.17 Severability. The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

8.18 Survival of Provisions. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the other
Financing Documents and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Pledgor set forth
herein shall terminate at the same time as the security interest and other
rights granted hereunder shall terminate pursuant to Section 8.8.

8.19 Headings Descriptive. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.

8.20 Entire Agreement. This Agreement, together with each other Financing
Document, is executed in connection herewith, is intended by the parties as a
final expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.

8.21 Time. Time is of the essence of this Agreement.

8.22 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.

8.23 Limitation of Liability. No claim shall be made by Pledgor or Pledged
Company against Lender or any of its Affiliates, directors, employees, attorneys
or agents for any loss of profits, business or anticipated savings, special or
punitive damages or any indirect or consequential loss whatsoever in respect of
any breach or wrongful conduct (whether or not the claim therefor is based on
contract, tort or duty imposed by law), in connection with, arising out of or in
any way related to the transactions contemplated by this Agreement or the other
Financing Documents or any act or omission or event occurring in connection
therewith; and Pledgor and Pledged Company hereby waive, release and agree not
to sue upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in their favor.

Exhibit D-2-21

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8.24 Submission to Jurisdiction. Lender, Pledged Company and Pledgor agree that
any legal action or proceeding by or against Pledgor or Pledged Company or with
respect to or arising out of this Agreement or any other Financing Document may
be brought in or removed to the courts of the State of New York, in and for the
County of New York, or of the United States of America for the Southern District
of New York, as Lender may elect. By execution and delivery of this Agreement,
Lender, Pledged Company and Pledgor accept, for themselves and in respect of
their property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts. Lender, Pledged Company and Pledgor irrevocably consent to
the service of process out of any of the aforementioned courts in any manner
permitted by law. Nothing herein shall affect the right of Lender to bring legal
action or proceedings in any other competent jurisdiction. Lender, Pledged
Company and Pledgor hereby waive any right to stay or dismiss any action or
proceeding under or in connection with this Agreement brought before the
foregoing courts on the basis of forum non-conveniens.

8.25 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OR PRIORITY OF THE LIEN AND SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

8.26 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE,
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER FINANCING DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
BORROWER AFFILIATE ENTITY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY THE LENDER IN
RESPECT OF RIGHTS UNDER ANY FINANCING DOCUMENT GOVERNED BY LAWS OTHER THAN THE
LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT
THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY BORROWER
AFFILIATE ENTITY AT ITS ADDRESS PROVIDED

Exhibit D-2-22

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IN ACCORDANCE WITH SECTION 8.13; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER ANY BORROWER
AFFILIATE ENTITY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT
THE LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO BRING PROCEEDINGS AGAINST ANY BORROWER AFFILIATE ENTITY IN THE COURTS
OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER
ANY FINANCING DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

8.27 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING HEREUNDER OR UNDER ANY OF THE OTHER FINANCING DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTIONS OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.27 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER FINANCING
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

8.28 Knowledge and Attribution. Reference in this Agreement to the “knowledge”,
“best knowledge” or facts and circumstances “known to” Pledgor, and all like
references, means facts or circumstances of which a Responsible Officer of
Pledgor has actual knowledge.

8.29 Rights of Lender. Lender shall be entitled to the rights, protections,
immunities and indemnities set forth in the Financing Agreement as if
specifically set forth herein.

Exhibit D-2-23

--------------------------------------------------------------------------------

8.30 Consent and Acknowledgement. Pledgor hereby acknowledges receiving copies
of the Financing Agreement, and the other Financing Documents and consent to the
terms and provisions of each.

8.31 Third Party Beneficiaries. Nothing in this Agreement, expressed or implied,
is intended or shall be construed to confer upon, or give to any Person, other
than Pledgor, Pledged Company, and Lender, any security, rights, remedies or
claims, legal or equitable, under or by reason hereof, or any covenant or
condition hereof; and this Agreement and the covenants and agreements herein
contained are and shall be held to be for the sole and exclusive benefit of
Pledgor, Pledged Company, and Lender.

8.32 Waiver of Transfer Restrictions. Notwithstanding anything to the contrary
contained in the Holdings LLC Agreement, Pledgor hereby waives any requirement
contained in the Holdings LLC Agreement that it consent to a transfer of a
ownership interest in Pledged Company in connection with a foreclosure on such
ownership interest under the Financing Documents.

8.33 Article 8 Securities. Pledgor hereby represents and warrants that (a) the
terms of each of the Pledged Ownership Interests expressly provide that they are
securities governed by Article 8 of the UCC as in effect in each applicable
jurisdiction and (b) Section 5.2 of the Holdings LLC Agreement is in full force
and effect. Pledgor hereby covenants and agrees that it will not agree to any
amendment or repeal of Section 5.2 of the Holdings LLC Agreement without the
prior express written consent of Lender and, in any event, shall promptly notify
Lender in writing if for any reason the Pledged Ownership Interests shall cease
to be securities for purposes of the UCC in any applicable jurisdiction.

8.34 Appointment of Agent. Pledgor hereby irrevocably designates, appoints and
empowers CT Corporation System (the “Process Agent”), with offices on the date
hereof at 111 Eighth Avenue, New York, New York 10011, as its permitted
designee, appointee and agent to receive and forward, for and on its behalf,
service of any and all legal process, writs, summons, notices and documents
which may be served in any action or proceeding arising out of this Agreement or
any other Financing Document. Pledged Company hereby agrees to cause the Process
Agent to execute and deliver to the Lender a letter from the Process Agent to
the effect of the foregoing. If for any reason such Process Agent shall cease to
act as such, Pledgor agrees hereby to designate a new permitted designee,
appointee and agent in New York City on terms satisfactory to the Lender.
Pledgor shall promptly inform the Process Agent of any change to Pledgor’s
address for forwarding such items.

[SIGNATURE PAGES FOLLOW]

Exhibit D-2-24

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Agreement to be duly executed
and delivered as of the date first above written.

U.S. GEOTHERMAL INC.,
an Idaho corporation,
as Pledgor

                           By: ____________________________________            
                   Name: ____________________________________                  
             Title: ____________________________________   Federal Employer  
Identification No. ____________________________________   Idaho   Organizational
No. ____________________________________               NEVADA USG HOLDINGS, LLC,
  a Delaware limited liability company,   as Pledged Company                    
               By: ____________________________________                        
       Name: ____________________________________                              
 Title: ____________________________________   Federal Employer   Identification
No. ____________________________________   Delaware   Organizational No.
____________________________________

[SIGNATURE PAGE TO IDAHO SPONSOR PLEDGE AGREEMENT]

--------------------------------------------------------------------------------

ARES CAPITAL CORPORATION,
a Maryland corporation,
as Lender

  By: ____________________________________       Name:
____________________________________       Title:
____________________________________

[SIGNATURE PAGE TO IDAHO SPONSOR PLEDGE AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT A
IRREVOCABLE PROXY

Date: November 9, 2011

The undersigned hereby appoints ARES CAPITAL CORPORATION, a Maryland
corporation, (“Lender”), as Proxy with full power of substitution, and hereby
authorizes Lender to represent and vote all of the ownership interests of NEVADA
USG HOLDINGS, LLC, a Delaware limited liability company, owned by the
undersigned on the date of exercise hereof during the continuance of an Event of
Default under, and as defined in, the Idaho Sponsor Pledge Agreement, dated as
of November 9, 2011 among U.S. Geothermal Inc., Nevada USG Holdings, LLC, and
Lender at any meeting or at any other time chosen by Lender in its sole
discretion.

[SIGNATURE PAGE FOLLOWS]

Exhibit A

--------------------------------------------------------------------------------

U.S. GEOTHERMAL INC.,
an Idaho corporation,
as Pledgor

By: ____________________________________

Name: ____________________________________

Title: ____________________________________

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT B
TRANSFER DOCUMENT

FOR VALUE RECEIVED, U.S. Geothermal Inc., an Idaho corporation hereby sells,
assigns and transfers unto _______________________________all of its ownership
interest(s) in Nevada USG Holdings, LLC, a Delaware limited liability company
(“Pledged Company”), standing in its name on the books of Pledged Company,
represented by the following certificate(s): 001, and irrevocably appoints
____________________________as attorney to transfer the ownership interests with
full power of substitution in the premises.

[SIGNATURE PAGE FOLLOWS]

Exhibit A

--------------------------------------------------------------------------------

U.S. GEOTHERMAL INC.,
an Idaho corporation,
as Pledgor

By: ____________________________________

Name:____________________________________

Title: ____________________________________

In the presence of: ____________________________________

Exhibit B

--------------------------------------------------------------------------------

SCHEDULE I
DESCRIPTION OF OWNERSHIP INTERESTS

Certificate No. Description: 001 100% of the ownership interests of Nevada USG
Holdings, LLC, a Delaware limited liability company

Schedule I

--------------------------------------------------------------------------------

EXHIBIT D-3 to Financing Agreement

FORM OF
MEMBER PLEDGE AGREEMENT

among

NEVADA USG HOLDINGS, LLC,
a Delaware limited liability company
(Pledgor)

and

USG NEVADA LLC,
a Delaware limited liability company
(Pledged Company)

and

ARES CAPITAL CORPORATION,
a Maryland corporation
(Lender)

Dated as of November 9, 2011  

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS 1                          1.1 Defined Terms 1          
         1.2 Financing Agreement and UCC Definitions 2                    1.3
Rules of Interpretation 2 ARTICLE II. PLEDGE AND GRANT OF SECURITY INTEREST 2  
                       2.1 Granting Clause 2                    2.2 Delivery of
Certificates 3                    2.3 Retention of Certain Rights 3 ARTICLE III.
OBLIGATIONS SECURED 4       ARTICLE IV. EVENTS OF DEFAULT 4       ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PLEDGOR 4                          5.1
Organization 4                    5.2 Power and Authorization; Enforceable
Obligations 4                    5.3 No Legal Bar 5                    5.4
Beneficial Ownership; Pledged Ownership Interests 5                    5.5 No
Prior Assignment 5                    5.6 No Other Financing Documents 5        
           5.7 Compliance with Law 5                    5.8 No Litigation 5    
               5.9 Financial Statements 6                    5.10 Permitted
Activities of the Equity Pledgor. 6                    5.11 Taxes 6            
       5.12 Investment Company Act; Federal Energy Laws. 6                  
 5.13 Name; Organizational Number 6                    5.14 Pledged Company
Information 6                    5.15 Capital Adequacy; Etc. 6                  
 5.16 Perfection of Security Interest 7                    5.17 After Acquired
Collateral 7                    5.18 No Ownership by Disqualified Persons 7
ARTICLE VI. COVENANTS OF PLEDGOR 8                          6.1 Compliance with
Obligations 8                    6.2 Defense of Collateral 8                  
 6.3 Preservation of Value; Limitation of Liens 8                    6.4 No
Other Filings 8                    6.5 No Sale of Collateral 8                  
 6.6 Notice 8                    6.7 Filing of Bankruptcy Proceedings 8        
           6.8 Distributions 9                    6.9 Maintenance of Records 9

Exhibit D-2-i

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                   6.10 Name; Jurisdiction of Organization 9                  
 6.11 Certificated Securities 9                    6.12 Amendments to
Organizational Documents 9                    6.13 Proceeds of Collateral 9
ARTICLE VII. REMEDIES UPON EVENT OF DEFAULT 10                          7.1
Remedies Upon an Event of Default 10                    7.2 Minimum Notice
Period 11                    7.3 Right to Cure 11                    7.4
Expenses; Interest 11                    7.5 Sale of Collateral 11              
     7.6 Compliance With Limitations and Restrictions 12                    7.7
No Impairment of Remedies 12 ARTICLE VIII. MISCELLANEOUS. 13                    
     8.1 Remedies Cumulative; Delay Not Waiver 13                    8.2 Pledged
Company’s Consent and Covenant 15                    8.3 Attorney-in-Fact 15    
               8.4 Perfection; Further Assurances 16                    8.5
Payment of Taxes 17                    8.6 Place of Business; Location of
Records 17                    8.7 Continuing Assignment and Security Interest;
Transfer of Note 17                    8.8 Termination of Security Interest 17  
                 8.9 Security Interest Absolute 18                    8.10
Limitation on Duty of Lender with Respect to the Collateral 18                  
 8.11 Liability 19                    8.12 Amendments; Waivers; Consents 19    
               8.13 Notices 19                    8.14 Modification of
Obligations 19                    8.15 Delivery of Collateral; Proxy 20        
           8.16 Reinstatement 20                    8.17 Severability 21        
           8.18 Survival of Provisions 21                    8.19 Headings
Descriptive 21                    8.20 Entire Agreement 21                  
 8.21 Time 21                    8.22 Counterparts 21                    8.23
Limitation of Liability 21                    8.24 Submission to Jurisdiction 21
                   8.25 APPLICABLE LAW. 22                    8.26 CONSENT TO
JURISDICTION 22                    8.27 WAIVER OF JURY TRIAL 23                
   8.28 Knowledge and Attribution 23                    8.29 Rights of Lender 23
                   8.30 Consent and Acknowledgement 23                    8.31
Third Party Beneficiaries 23                    8.32 Waiver of Transfer
Restrictions 24

Exhibit D-3-ii

--------------------------------------------------------------------------------

                   8.33 Article 8 Securities 24                    8.34
Appointment of Agent. 24

EXHIBITS AND SCHEDULE

Exhibit A Irrevocable Proxy Exhibit B Transfer Document Schedule I Description
of Ownership Interests

Exhibit D-3-iii

--------------------------------------------------------------------------------

MEMBER PLEDGE AGREEMENT

This MEMBER PLEDGE AGREEMENT, dated as of November 9, 2011 (as amended, amended
and restated, supplemented or otherwise modified from time to time, this
“Agreement”), is entered into by and among NEVADA USG HOLDINGS, LLC, a limited
liability company formed under the laws of the State of Delaware (“Pledgor”),
USG Nevada LLC, a limited liability company formed under the laws of the State
of Delaware (“Pledged Company”), and ARES CAPITAL CORPORATION, a corporation
formed under the laws of the State of Marlyand (together with its successors,
designees and assigns in such capacity, “Lender”).

RECITALS

A. Pledged Company owns and intends to develop, construct, install, test, own,
operate and use an approximately 8 MW geothermal power facility located in
Washoe County, Nevada (the “Project”).

B. Pledged Company has entered into, among other things, (i) that certain
Financing Agreement, dated as of the date hereof (as amended, amended and
restated, modified or supplemented from time to time, the “Financing
Agreement”), by and among Pledged Company and Lender, pursuant to which, among
other things, Lender has extended commitments to make loans and other financial
accommodations to, and for the benefit of Pledged Company, and (ii) certain
other documents related to the Financing Agreement (collectively, the “Financing
Documents”).

C. Pledgor directly owns 100% of the ownership interests of Pledged Company.

D. It is a condition precedent to the effectiveness of the Financing Agreement
and the other Financing Documents, and the making of the advances of credit
contemplated thereby, that Pledgor and Pledged Company shall have executed and
delivered this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and to induce
the Lender to enter into the Financing Documents and to make the advances of
credit to Pledged Company contemplated thereby, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledged Company and Pledgor hereby agree with Lender, as follows:

ARTICLE I.
DEFINITIONS

1.1 Defined Terms. The following terms (whether or not underscored) when used in
this Agreement, including its preamble and recitals, shall have the following
meanings: “Collateral” has the meaning given in Section 2.1.

Exhibit D-3-1

--------------------------------------------------------------------------------

“Financing Agreement” has the meaning given in the recitals to this Agreement.

“Financing Documents” has the meaning given in the recitals to this Agreement.

“Lender” has the meaning given in the preamble to this Agreement.

“Pledged Company” has the meaning given in the preamble to this Agreement.

“Pledged Ownership Interests” has the meaning given in Section 2.1. “Pledgor”
has the meaning given in the preamble to this Agreement. “Project” has the
meaning given in the recitals to this Agreement.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, however, that in the event that,
by reason of mandatory provisions of law, any or all of the perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.

1.2 Financing Agreement and UCC Definitions. Unless otherwise defined herein,
all capitalized terms used in this Agreement shall have the meanings provided in
Exhibit A to the Financing Agreement or, if not defined therein, the UCC.

1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Financing Agreement shall apply to
this Agreement, including its preamble and recitals.

ARTICLE II.
PLEDGE AND GRANT OF SECURITY INTEREST

2.1 Granting Clause. To secure the timely payment in full in cash and
performance in full of the Obligations, Pledgor hereby assigns, grants and
pledges to Lender, a continuing security interest in all the estate(s),
right(s), title(s) and interest(s) of Pledgor, now owned or hereafter existing
or acquired, in, to and under any and all of the following (the “Collateral”):
Any and all of Pledgor’s right(s), title(s) and interest(s), whether now owned
or hereafter existing or acquired, in Pledged Company, and all of Pledgor’s
ownership interests in Pledged Company related thereto (the “Pledged Ownership
Interests”), including the ownership interests of Pledgor described on Schedule
I hereto and Pledgor’s share of:

Exhibit D-3-2

--------------------------------------------------------------------------------

(a) all rights to receive income, gain, profit, dividends and other
distributions allocated or distributed to Pledgor in respect of or in exchange
for all or any portion of the Pledged Ownership Interests;

(b) all capital or ownership interest, including capital accounts, in Pledged
Company, and all accounts, deposits or credits of any kind with Pledged Company;

(c) all voting rights in or rights to control or direct the affairs of Pledged
Company;

(d) all rights, title and interest, as a member of Pledged Company, in, to or
under any and all of Pledged Company’s assets or properties;

(e) all other rights, title and interest in or to Pledged Company derived from
the Pledged Ownership Interests;

(f) all indebtedness or other obligations of Pledged Company owed to Pledgor;

(g) all claims of Pledgor for damages arising out of, or for any breach or
default relating to, the Collateral, other than any claims against Lender;

(h) all rights of Pledgor to terminate, amend, supplement, modify, or cancel,
the governing documents of Pledged Company, to take all actions thereunder and
to compel performance and otherwise exercise all remedies thereunder;

(i) all securities, notes, certificates and other instruments representing or
evidencing any of the foregoing rights and interests or the ownership thereof
and any interest of Pledgor reflected in the books of any financial intermediary
pertaining to such rights and interests and all non-cash dividends, cash,
options, warrants, stock splits, reclassifications, rights, instruments or other
investment property and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such rights and interests; and

(j) all proceeds of the foregoing Collateral, whether cash or non-cash;
provided, however, that “Collateral” shall not include any distribution to
Pledgor expressly permitted pursuant to the terms of the Financing Agreement or
any other Financing Document.

2.2 Delivery of Certificates. All certificates, notes and other instruments
representing or evidencing any Collateral (including the certificates described
on Schedule I hereto) shall be delivered to and held by or on behalf of, and, in
the case of notes, endorsed to the order of, Lender, or its designee pursuant
hereto, in the manner set forth in Section 8.15.

2.3 Retention of Certain Rights. So long as Lender has not exercised remedies
with respect to the Collateral under this Agreement or any other Financing
Document upon the occurrence and during the continuation of an Event of Default,
Pledgor reserves the right to exercise all voting and other rights with respect
to the Collateral (except as limited by the Financing Documents) and to receive
all income, dividends and other distributions from the Collateral (except as
limited by the Financing Documents).

Exhibit D-3-3

--------------------------------------------------------------------------------

ARTICLE III.
OBLIGATIONS SECURED

Without limiting the generality of the foregoing, this Agreement and all of the
Collateral secure the payment and performance when due of all Obligations of
Pledged Company to Lender pursuant to the Financing Documents. If,
notwithstanding the representation and warranty set forth in Section 5.15 or
anything to the contrary herein, enforcement of the liability of Pledgor under
this Agreement for the full amount of the Obligations would be an unlawful or
voidable transfer under any applicable fraudulent conveyance or fraudulent
transfer law or any comparable law, then the liability of Pledgor hereunder
shall be reduced to the highest amount for which such liability may then be
enforced without giving rise to an unlawful or voidable transfer under any such
law.

ARTICLE IV.
EVENTS OF DEFAULT

The occurrence of an Event of Default under, and as defined in, the Financing
Agreement shall constitute an Event of Default hereunder.

ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PLEDGOR

Pledgor represents and warrants, to and in favor of Lender, as of the date
hereof, as follows: 5.1 Organization. Pledgor is (a) a limited liability company
duly formed, validly existing and in good standing solely under the laws of the
State of Delaware, and (b) duly qualified, authorized to do business and in good
standing in each jurisdiction in which such qualification is necessary to
execute, deliver and perform this Agreement and each of the other Operative
Documents to which it is a party, except where failure to do so would not cause
a Material Adverse Effect.

5.2 Power and Authorization; Enforceable Obligations. Pledgor has the full power
and authority to execute, deliver and perform this Agreement and each other
Operative Document to which it is a party and to take all action as may be
necessary to complete the transactions contemplated hereunder and thereunder.
Pledgor has taken all necessary limited liability company action to authorize
the execution, delivery and performance of this Agreement and each other
Operative Document to which it is a party and to complete the transactions
contemplated hereby and thereby. No consent or authorization of, filing with, or
other act by or in respect of any other Person or Governmental Authority is
required in connection with the execution, delivery or performance by Pledgor,
or the validity or enforceability as to Pledgor, of this Agreement and each
other Operative Document to which it is a party, except such consents or
authorizations or filings or other acts as have already been obtained or made or
where the failure to obtain such consent or authorization could not reasonably
be expected to have a Material Adverse Effect. This Agreement and each other
Operative Document to which Pledgor is a party have been duly executed and
delivered by Pledgor and constitute, and each other Operative Document to which
it is a party will upon execution and delivery thereof by Pledgor and the other
parties thereto (if any) constitute, a legal, valid and binding obligation of
Pledgor enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the right of creditors
generally and by general principles of equity.

Exhibit D-3-4

--------------------------------------------------------------------------------

5.3 No Legal Bar. The execution, delivery and performance by Pledgor of this
Agreement and each other Operative Document to which it is a party and the
consummation of the transactions contemplated hereby (including the granting of
security interests hereunder) or under any other Operative Document to which it
is a party do not or will not violate any applicable Legal Requirement or any
material contractual obligation of Pledgor and do not and will not result in, or
require, the creation or imposition of any Lien (other than Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and, to the
extent required by Governmental Rule, clause (b) of the definition thereof) on
any of the properties or revenues of Pledgor pursuant to any applicable Legal
Requirement or any such contractual obligation.

5.4 Beneficial Ownership; Pledged Ownership Interests. Pledgor is the lawful and
beneficial owner of and has full right, title and interest in, to and under
rights and interests comprising the Collateral, subject to no Liens (except
Permitted Liens described in clause (a) of the definition of “Permitted Liens”
and, to the extent required by Governmental Rule, clause (b) of the definition
thereof). The Pledged Ownership Interests listed next to Pledgor’s name on
Schedule 1 (a) have been duly authorized and validly issued, (b) are fully paid
and non-assessable and (c) constitute all of Pledgor’s outstanding ownership
interests of Pledged Company.

5.5 No Prior Assignment. Pledgor has not previously assigned any of its rights
in, to or under all or any portion of the Collateral, except as specifically
permitted by the Financing Agreement or the other Financing Documents.

5.6 No Other Financing Documents. Pledgor has not executed and is not aware of
any effective financing statement, security agreement or other instrument
similar in effect covering all or any part of the Collateral on file in any
recording office, except such as may have been filed pursuant to this Agreement
and the other Financing Documents.

5.7 Compliance with Law. Pledgor is in compliance with all Legal Requirements,
except noncompliance which could not reasonably be expected to have a Material
Adverse Effect, and no written notices of any material violation of any
Governmental Rule relating to the Project or any Operative Document have been
received by Pledgor.

5.8 No Litigation. There are no pending or, to Pledgor’s knowledge, threatened
in writing actions, suits, proceedings or investigations of any kind, including
actions or proceedings of or before any Governmental Authority, relating to the
Collateral or to which Pledgor is a party or is subject, or by which it or its
properties are bound that, if adversely determined to or against Pledgor could
reasonably be expected to have a Material Adverse Effect.

Exhibit D-3-5

--------------------------------------------------------------------------------

5.9 Financial Statements. The financial statements of Pledgor delivered to
Lender pursuant to Sections 3.1(q) and 5.4 of the Financing Agreement, if any,
are true, complete and correct in all material respects as of the date of such
statements and fairly presented the financial condition of Pledgor as of the
date thereof and fairly presented the results of the operations and cash flow of
Pledgor for the periods then ending. Such financial statements have been
prepared in accordance with GAAP.

5.10 Permitted Activities of the Equity Pledgor. Pledgor shall neither (a)
engage in any business or activity or own any assets other than holding the
ownership interests of Pledged Company and performing activities incidental
thereto or (b) fail to hold itself out to the public as a legal entity separate
and distinct from all other Persons.

5.11 Taxes. Pledgor has timely filed all federal, state and local tax returns
that it is required to file, has paid all taxes it is required to pay to the
extent due (other than those taxes that it is contesting in good faith and by
appropriate proceedings, for which adequate reserves have been established for
such taxes in accordance with GAAP) and, to the extent such taxes are not due,
has established reserves that are adequate for the payment thereof to the extent
required by GAAP. Pledgor knows of no proposed tax assessment against it which
could reasonably be expected to have a Material Adverse Effect (other than as is
being actively contested by Pledgor in good faith and by appropriate proceedings
and for which reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP have been made or provided therefore).

5.12 Investment Company Act; Federal Energy Laws. Pledgor is not an investment
company or a company controlled by an investment company, within the meaning of
the Investment Company Act of 1940, as amended. No provision of the FPA or PUHCA
precludes Pledgor from entering into and performing its obligations hereunder.

5.13 Name; Organizational Number. The name of Pledgor is as set forth in the
preamble hereto, as indicated in the public records of the State of Delaware,
and Pledgor’s Federal Employer Identification Number and Delaware organizational
number are as set forth below its signature hereto.

5.14 Pledged Company Information. Pledgor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial or otherwise) of Pledged Company and its
properties on a continuing basis, and Pledgor now is and hereafter will be
completely familiar with the businesses, operations and condition (financial or
otherwise) of Pledged Company and its properties. Pledgor hereby agrees that
Lender shall not have any duty to advise Pledgor of information known to Lender
regarding such condition or any such circumstances or of any changes or
potential changes affecting the Collateral. In the event Lender, in its
respective discretion, undertakes at any time or from time to time to provide
any such information to Pledgor, Lender shall be under no obligation (a) to
undertake any investigation not a part of its regular business routine, or
reasonable commercial lending practices or (b) to make any other or future
disclosure of such information to Pledgor.

5.15 Capital Adequacy; Etc.

Exhibit D-3-6

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(a) After giving effect to the transactions contemplated by this Agreement and
the contingent obligations evidenced hereby (but excluding the effect of the
provisions of Article III which limit the Obligations to an amount that would
not render Pledgor’s indebtedness, liabilities or obligations under this
Agreement subject to avoidance), Pledgor is Solvent on both an unconsolidated
basis and a consolidated basis with any subsidiaries of Pledged Company, and
Pledgor has and will have assets which, fairly valued, exceed its indebtedness,
liabilities or obligations.

(b) Pledgor is not executing this Agreement with any intention to hinder, delay
or defraud any present or future creditor or creditors of Pledgor.

5.16 Perfection of Security Interest. The security interest granted to Lender,
pursuant to this Agreement constitutes as to personal property included in the
Collateral a valid lien. The security interest granted to Lender pursuant to
this Agreement in the Collateral consisting of personal property will be
perfected (a) with respect to any property that can be perfected by filing, upon
the filing of financing statements in the filing offices identified on Exhibit
D-8 to the Financing Agreement, and (b) with respect to any property that can be
perfected by control, upon Lender receiving possession thereof, and, in each
case, such security interest will be, as to Collateral perfected under the UCC
or otherwise as aforesaid, superior and prior to the rights of all third persons
now existing or hereafter arising whether by way of mortgage, lien, security
interests, encumbrance, assignment or otherwise except (i) Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and (ii) to the
extent required by Governmental Rule, Permitted Liens described in clause (b) of
the definition thereof. Except to the extent control of portions of such
Collateral is required for perfection, all such action as is necessary has been
taken to establish and perfect Lender’s rights in and to such Collateral to the
extent Lender’s security interest can be perfected by filing, including any
recording, filing, registration, giving of notice or other similar action. As of
the Financial Closing Date, no filing, recordation, re-filing or re-recording
other than those listed on Exhibit D-8 to the Financing Agreement is necessary
to perfect and maintain the perfection of the interest, title or Liens of this
Agreement that can be perfected by filing, and on the Financial Closing Date all
such filings or recordings will have been made to the extent Lender’s security
interest can be perfected by filing. Pledgor has properly delivered, caused to
be delivered or is concurrently delivering to Lender all such Collateral that
requires perfection of the Lien and security interest described above by
control.

5.17 After Acquired Collateral. It is understood and agreed that the foregoing
representations and warranties shall apply only to the Collateral delivered on
the date hereof and that, with respect to Collateral delivered thereafter,
Pledgor shall, upon the written request of Lender, be required to make
representations and warranties in form and substance substantially similar to
the foregoing in supplements hereto and that such representations and warranties
contained in such supplements hereto shall be applicable to such Collateral
hereafter delivered.

5.18 No Ownership by Disqualified Persons. Neither Pledgor nor any direct or
indirect owner of Pledgor is a Disqualified Person (other than a Disqualified
Person whose ownership interest in Pledgor is effected solely through a direct
or indirect ownership interest through an entity that is treated as a C
corporation for Federal income tax purposes).

Exhibit D-3-7

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ARTICLE VI.
COVENANTS OF PLEDGOR

Pledgor covenants, to and in favor of Lender as follows:

6.1 Compliance with Obligations. Pledgor shall perform and comply in all
material respects with all obligations and conditions on its part to be
performed hereunder with respect to the Collateral.

6.2 Defense of Collateral. Pledgor shall, until the payment in full in cash of
all Obligations and the termination of the Loan Commitment and all other
obligations of Lender under the Financing Documents (other than any unasserted
contingent reimbursement or indemnify obligations), defend its title to the
Collateral and the interest of Lender in the Collateral pledged hereunder
against the claims and demands of all other Persons.

6.3 Preservation of Value; Limitation of Liens. Pledgor shall not take or permit
to be taken any action in connection with the Collateral which would impair the
Liens granted herein; provided, however, that nothing in this Agreement shall
prevent Pledgor, prior to the exercise by Lender of any rights pursuant to the
terms hereof, from undertaking Pledgor’s operations in the ordinary course of
business not in violation of the Financing Documents. Pledgor shall not directly
or indirectly create, incur, assume or suffer to exist any Liens on or with
respect to all or any part of the Collateral (other than Permitted Liens
described in clause (a) of the definition of “Permitted Liens” and, to the
extent required by Governmental Rule, clause (b) of the definition thereof).
Pledgor shall at its own cost and expense promptly take such action as may be
necessary to discharge any such Liens.

6.4 No Other Filings. Pledgor shall not file or authorize or permit to be filed
in any jurisdiction any financing statements under the UCC or any like statement
relating to the Collateral in which Lender is not named as the sole secured
party.

6.5 No Sale of Collateral. Except as expressly permitted by this Agreement or
the other Financing Documents, Pledgor shall not cause, suffer or permit the
sale, assignment, conveyance, pledge or other transfer of all or any portion of
Pledgor’s ownership or interest in Pledged Company or any other portion of the
Collateral. As used herein, the transfer of an ownership interest in Pledged
Company shall not include any transfer of an ownership interest in Pledgor, to
the extent such transfer is permitted under the Financing Documents.

6.6 Notice. Pledgor shall promptly, upon acquiring notice or giving notice, as
the case may be, or obtaining knowledge thereof, give written notice (with
copies of any such underlying notices) to Lender of any change in or transfer of
ownership interests in Pledgor, such notice to be given promptly, but in any
event no later than fifteen (15) days prior to any such change or transfer, and
to include the identity of any transferee and such transferee’s interest in
Pledgor.

6.7 Filing of Bankruptcy Proceedings. To the extent it may do so under
applicable Legal Requirements, Pledgor, for itself, its successors and assigns,
shall not cast any vote as an owner in Pledged Company (a) in favor of the
commencement of a voluntary case or other proceeding seeking liquidation,
reorganization, rehabilitation or other relief with respect to

Exhibit D-3-8

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Pledged Company or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect in any jurisdiction or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of the
owners of Pledged Company or any substantial part of Pledged Company’s property,
(b) to authorize Pledged Company to consent to any such aforesaid relief or to
the appointment of or taking possession by any such aforesaid official in an
involuntary case or other proceeding commenced against Pledged Company or (c) to
authorize Pledged Company to make a general assignment for the benefit of
creditors.

6.8 Distributions. If Pledgor in its capacity as an owner of Pledged Company
receives any income, dividend or other distribution of money or property of any
kind from Pledged Company (other than as expressly permitted by the Financing
Documents), then Pledgor shall hold such income or distribution as trustees for
and shall promptly deliver the same to Lender.

6.9 Maintenance of Records. Pledgor shall, at all times, keep accurate and
complete records of the Collateral. Pledgor shall permit representatives of
Lender, upon reasonable prior notice, at any time during normal business hours
of Pledgor to inspect and make abstracts from Pledgor’s books and records
pertaining to the Collateral. Upon the occurrence and during the continuation of
any Event of Default, at Lender’s request, Pledgor shall promptly deliver copies
of any and all such records to Lender.

6.10 Name; Jurisdiction of Organization. Pledgor shall not change its name, its
jurisdiction of organization, its organization identification number or its
fiscal year without notice to Lender at least thirty (30) days prior to such
change. In the event Pledgor changes the location of its principal place of
business, Pledgor shall provide notice to Lender of such change no later than
thirty (30) days after such change. In the event of any of the foregoing
changes, Pledgor shall at its expense or at the expense of Pledged Company
execute and deliver such instruments and documents as may be required by Lender
or applicable Legal Requirements to maintain a prior perfected security interest
in the Collateral.

6.11 Certificated Securities. Pledgor shall cause its partnership interests in
Pledged Company to be evidenced by and remain “certificated securities” as
defined in Article 8 of the UCC.

6.12 Amendments to Organizational Documents. Except as expressly permitted by
this Agreement or the other Financing Documents, Pledgor shall not terminate,
amend, supplement or otherwise modify, or cancel, the governing documents of
Pledged Company.

6.13 Proceeds of Collateral. Pledgor shall, at all times, keep pledged to Lender
pursuant hereto all Collateral and all dividends, distributions, interest,
principal and other proceeds received by Lender with respect thereto, and all
other Collateral and other securities, instruments, proceeds and rights from
time to time received by or distributable to Pledgor in respect of any
Collateral and shall not permit Pledged Company to issue any equity interests
which shall not have been immediately duly pledged to Lender hereunder on a
first priority perfected basis.

Exhibit D-3-9

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ARTICLE VII.
REMEDIES UPON EVENT OF DEFAULT.

7.1 Remedies Upon an Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Lender shall have the right, at its
election, but not the obligation, to do any of the following:

(a) vote or exercise any and all of Pledgor’s rights or powers incident to the
ownership of the Pledged Ownership Interests, including any rights or powers to
manage or control Pledged Company;

(b) demand, sue for, collect or receive any money or property at any time
payable to or receivable by Pledgor on account of or in exchange for all or any
part of the Collateral;

(c) cause any action at law or suit in equity or other proceeding to be
instituted and prosecuted to collect or enforce any obligation or right
hereunder or included in the Collateral, including specific enforcement of any
covenant or agreement contained herein, or to foreclose or enforce the security
interest in all or any part of the Collateral granted herein, or to enforce any
other legal or equitable right vested in it by this Agreement or by applicable
Legal Requirements;

(d) amend, terminate, supplement or modify Pledged Company’s governing
documents; (e) incur reasonable expenses, including reasonable attorneys’ fees,
reasonable consultants’ fees, and other costs appropriate to the exercise of any
right or power under this Agreement;

(f) perform any obligation of Pledgor hereunder or under any other Financing
Document, make payments, purchase, contest or compromise any encumbrance,
charge, or lien, pay taxes and expenses and insure, process and preserve the
Collateral without, however, any obligation to do so;

(g) secure the appointment of a receiver of the Collateral or any part thereof
without notice to Pledged Company or Pledgor, whether incidental to a proposed
sale of the Collateral or otherwise, and all disbursements made by such receiver
and the expenses of such receivership shall be added to and be made a part of
the Obligations, and, whether or not said principal sum, including such
disbursements and expenses, exceeds the indebtedness originally intended to be
secured hereby, the entire amount of said sum, including such disbursements and
expenses, shall be secured by this Agreement and shall be due and payable upon
demand therefor and thereafter shall bear interest at the Default Rate or the
maximum rate permitted by applicable Legal Requirements, whichever is less;

(h) exercise any other or additional rights or remedies granted to Lender under
any other provision of this Agreement or any other Financing Document, or
exercisable by a secured party under the UCC or under any other applicable Legal
Requirement;

Exhibit D-3-10

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(i) take any other action which Lender deems necessary or desirable to protect
or realize upon its security interest in the Collateral or any part thereof, and
Pledgor hereby irrevocably appoints Lender as its attorney-in-fact (as set forth
in Section 8.3) to take any such action, including the execution and delivery of
any and all documents or instruments related to the Collateral or any part
thereof in Pledgor’s name, and said appointment shall create in Lender a power
coupled with an interest which shall be irrevocable; or

(j) appoint another Person (who may be an employee, officer or other
representative of Lender) to do any of the foregoing, or take any other action
permitted hereunder, on behalf of Lender.

7.2 Minimum Notice Period. If, pursuant to applicable Legal Requirements, prior
notice of any action described in Section 7.1 is required to be given to Pledgor
or Pledged Company, Pledgor and Pledged Company hereby acknowledge and agree
that the minimum time required by such applicable Legal Requirements, or if no
minimum is specified, ten (10) Banking Days, shall be deemed a reasonable notice
period.

7.3 Right to Cure. In addition to the foregoing remedies, Lender may, but shall
not be obligated to, cure any Event of Default and incur reasonable fees, costs
and expenses in doing so, in which event Pledgor and Pledged Company shall
reimburse Lender after demand for all such fees, costs and expenses as provided
for in Section 7.4 below.

7.4 Expenses; Interest.

(a) Pledgor and Pledged Company jointly and severally agrees to pay on demand to
Lender all costs and expenses incurred by Lender (including the reasonable fees
and disbursements of counsel) incident to its enforcement, exercise, protection
or preservation of any of its rights, remedies or claims under this Agreement,
but without duplication to any cost or expenses previously paid by Pledgor or
any Borrower Affiliate Entities under the other Financing Documents.

(b) Any amount required to be paid by Pledgor or Pledged Company pursuant to the
terms hereof that is not paid when due shall bear interest at the Default Rate
or the maximum rate permitted by applicable Legal Requirements, whichever is
less, from the date due until paid in full.

Exhibit D-3-11

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7.5 Sale of Collateral. In addition to exercising the foregoing rights, upon the
occurrence and during the continuation of an Event of Default, Lender may, to
the extent permitted by applicable Legal Requirements, arrange for and conduct a
sale of the Collateral at a public or private sale (as Lender may elect) which
sale may be conducted by an employee or representative of Lender, without any
demand of performance or notice of intention to sell or dispose of, or of time
or place of sale or disposition (except such notice as required by any
applicable Legal Requirement), and any such sale shall be considered or deemed
to be a sale made in a commercially reasonable manner. Lender may release,
temporarily or otherwise, to Pledgor any item of Collateral of which Lender has
taken possession pursuant to any right granted to Lender by this Agreement
without waiving any rights granted to Lender under this Agreement, the Financing
Agreement or the other Financing Documents. Pledgor, in dealing with or
disposing of the Collateral or any part thereof, hereby waives all rights, legal
and equitable, it may now or hereafter have to require marshaling of assets or
to require, upon foreclosure, sales of assets in a particular order. Pledgor
also waives its right to challenge the reasonableness of any disclaimer of
warranties, title and the like made by Lender in connection with a sale of the
Collateral. Each successor and assign of Pledgor, including a holder of a Lien
subordinate to the Lien created hereby (without implying that Pledgor has,
except as expressly provided herein, a right to grant an interest in, or a
subordinate Lien on, any of the Collateral), except as otherwise agreed between
such successor or assign of Pledgor and Lender, by acceptance of its interest or
Lien agrees that it shall be bound by the above waiver, to the same extent as if
such holder gave the waiver itself. If Lender sells any of the Collateral upon
credit, Pledgor will be credited only with payments actually made by the
purchaser, received by Lender and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Lender may resell
the Collateral and Pledgor shall be credited with the proceeds of the sale. In
the event Lender shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by Legal Requirements or this Agreement or any other
Financing Document, Lender may bid all or less than the amount of the
Obligations. To the extent permitted by applicable Legal Requirements, the
amount of the successful bid at any such sale, whether Lender or any other party
is the successful bidder, shall, absent fraud or gross negligence, be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations.

7.6 Compliance With Limitations and Restrictions. Pledgor hereby agrees that in
respect of any sale of any of the Collateral pursuant to the terms hereof,
Lender is hereby authorized to comply with any limitation or restriction in
connection with such sale as Lender may be advised by counsel is necessary in
order to avoid any violation of applicable Legal Requirements, or in order to
obtain any required approval of the sale or of the purchaser by any Governmental
Authority or official, and Pledgor further agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner, nor shall Lender be liable or accountable to
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

7.7 No Impairment of Remedies. If, in the exercise of any of such rights and
remedies under this Agreement, Lender shall forfeit any of its rights or
remedies, whether because of any applicable Legal Requirements pertaining to
“election of remedies” or otherwise, Pledgor hereby consents to such action by
Lender and, to the extent permitted by applicable Legal Requirements, waives any
claim based upon such action, even if such action by Lender shall result in a
full or partial loss of any rights of subrogation, indemnification or
reimbursement which Pledgor might otherwise have had but for such action by
Lender or the terms herein. Any election of remedies which results in the denial
or impairment of the right of Lender to seek a deficiency judgment against any
of the parties to any of the Financing Documents shall not, to the extent
permitted by applicable Legal Requirements, impair Pledgor’s obligation
hereunder.

Exhibit D-3-12

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ARTICLE VIII.
MISCELLANEOUS.

8.1 Remedies Cumulative; Delay Not Waiver.

8.1.1 Remedies Cumulative. No right, power or remedy herein conferred upon or
reserved to Lender is intended to be exclusive of any other right, power or
remedy, and every such right, power and remedy shall, to the extent permitted by
applicable Legal Requirements, be cumulative and in addition to every other
right, power and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by Lender may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both. If Lender may, under applicable Legal Requirements,
proceed to realize its benefits under this Agreement or any other Financing
Document giving Lender a Lien upon any Collateral, whether owned by Pledgor or
by any other Person, either by judicial foreclosure or by nonjudicial sale or
enforcement, Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of the rights and remedies of Lender
under this Agreement.

8.1.2 No Waiver; Separate Causes of Action. No delay or omission to exercise any
right, power or remedy accruing to Lender upon the occurrence and during the
continuance of any Event of Default as aforesaid shall impair any such right,
power or remedy of Lender, nor shall it be construed to be a waiver of any such
Event of Default or of any similar breach or default thereafter occurring or an
acquiescence therein, nor shall any waiver of any other breach or default under
this Agreement or any other Financing Document be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Each and every default by
Pledgor in payment hereunder shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises and every power and remedy given by this Agreement may be exercised from
time to time, and as often as shall be deemed expedient, by Lender.

8.1.3 Application of Proceeds. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied as described in the
Liquidation Preference provision of Article 7 of the Financing Agreement.
Pledged Company shall remain liable for any deficiency.

Exhibit D-3-13

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8.1.4 Certain Waivers. Pledgor hereby waives and relinquishes, to the maximum
extent permitted by applicable Legal Requirements, all rights and remedies
accorded to pledgors, sureties or guarantors and agrees not to assert or take
advantage of any such rights or remedies, including: (a) any law limiting
remedies under an obligation secured by a mortgage or deed of trust on real
property if the real property is sold under a power of sale contained in the
mortgage or deed of trust, and all defenses based on any loss whether as a
result of any such sale or otherwise; (b) any right to require Lender to proceed
against Pledged Company or any other Person or to proceed against or exhaust any
security held by Lender at any time or to pursue any other remedy in Lender’s
power before proceeding against Pledgor; (c) any defense that may arise by
reason of the incapacity, lack of power or authority, death, dissolution,
merger, termination or disability of Pledgor, Pledged Company or any other
Person or the failure of Lender to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any of Pledgor,
Pledged Company or any other Person; (d) any right to enforce any remedy that
Lender may have against Pledged Company or any other Person and any right to
participate in any security held by Lender until the Obligations have been paid
and the covenants of the Financing Documents have been performed in full; (e)
any right to require Lender to give any notices of any kind, including, without
limitation, notices of nonpayment, nonperformance, protest, dishonor, default,
delinquency or acceleration, or to make any presentments, demands or protests,
except as set forth herein or expressly provided in the Financing Agreement or
any of the Financing Documents; (f) any right to assert the bankruptcy or
insolvency of Pledged Company or any other Person as a defense hereunder or as
the basis for rescission hereof and any defense arising because of Lender’s
election, in any proceeding instituted under the Bankruptcy Law, of the
application of Section 1111(b)(2) of the Bankruptcy Law; (g) subject to Section
8.9, any right under any law purporting to reduce Pledgor’s obligations
hereunder if the Obligations are reduced other than as a result of payment of
such Obligations; (h) any defense based on the repudiation of the Financing
Documents by Pledged Company or any other Person, the failure by Lender to
enforce any claim against Pledgor, Pledged Company or any other Person or the
unenforceability in whole or in part of any Financing Documents; (i) all
suretyship and guarantor’s defenses generally; (j) any right to insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshaling of assets, redemption or
similar law, or exemption, whether now or at any time hereafter in force, which
may delay, prevent or otherwise affect the performance by Pledgor of its
obligations under, or the enforcement by Lender of, this Agreement; (k) any
defense based upon an election of remedies by Lender, including an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Pledgor, the right of Pledgor to
proceed against Pledged Company or another Person for reimbursement, or both;
(l) any defense based on any offset against any amounts which may be owed by any
Person to Pledgor for any reason whatsoever; (m) any defense based on any act,
failure to act, delay or omission whatsoever on the part of Pledged Company or
any of its Affiliates or the failure by Pledged Company or any of its Affiliates
to do any act or thing or to observe or perform any covenant, condition or
agreement to be observed or performed by it under the Financing Documents, (n)
any defense, setoff or counterclaim which may at any time be available to or
asserted by Pledged Company or any of its Affiliates against Lender or any other
Person under the Financing Documents; (o) any duty on the part of Lender to
disclose to Pledgor any facts Lender may now or hereafter know about Pledged
Company or any of its Affiliates, regardless of whether Lender has reason to
believe that any such facts materially increase the risk beyond that which
Pledgor intends to assume, or have reason to believe that such facts are unknown
to Pledgor, or have a reasonable opportunity to communicate such facts to
Pledgor; (p) any defense based on any change in the time, manner or place of any
payment under, or in any other term of, the Financing Documents or any other
amendment, renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of the Financing Documents; and (q) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Bankruptcy Law.

8.1.5 Foreclosure Waiver. To the extent permitted by Legal Requirements, Pledgor
waives the posting of any bond otherwise required of Lender in connection with
any judicial process or proceeding to obtain possession of, replevy, attach, or
levy upon the Collateral, to enforce any judgment or other security for the
Obligations, to enforce any judgment or other court order entered in favor of
Lender, or to enforce by specific performance, temporary restraining order,
preliminary or permanent injunction, this Agreement or any other agreement or
document between Pledgor, Lender. Pledgor further agrees that upon the
occurrence and during the continuation of an Event of Default, Lender may elect
to nonjudicially or judicially foreclose against any real or personal property
security it holds for the Obligations or any part thereof, or to exercise any
other remedy against Pledged Company or any other Person, any security or any
guarantor, even if the effect of that action is to deprive Pledgor of the right
to collect reimbursement from Pledged Company or any other Person for any sums
paid by Pledgor to Lender.

Exhibit D-3-14

--------------------------------------------------------------------------------

8.1.6 Waiver of Rights of Subrogation. Until the indefeasible payment in full in
cash of the Obligations and the termination of the Loan Commitment and all other
obligations of Lender under the Financing Documents, (a) Pledgor shall not have
any right of subrogation and waives all rights to enforce any remedy which the
Lender now has or may hereafter have against Pledged Company, and waives the
benefit of, and all rights to participate in, any security now or hereafter held
by Lender from Pledged Company, and (b) Pledgor waives any claim, right or
remedy which it may now have or hereafter acquire against Pledged Company that
arises hereunder and/or from the performance by Pledgor hereunder, including any
claim, remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Lender
against Pledged Company, or any security which Lender now have or hereafter
acquire, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise. Any amount paid to Pledgor
on account of any such subrogation rights prior to the payment in full in cash
of the Obligations and the termination of the Loan Commitment and all other
obligations of the Lender under the Financing Documents, shall be held in trust
for the benefit of Lender and shall immediately thereafter be paid to Lender.

8.2 Pledged Company’s Consent and Covenant. Pledged Company hereby consents to
the assignment of and grant of a security interest in the Collateral to Lender
and to the exercise by Lender of all rights and powers assigned or delegated to
Lender by Pledgor hereunder, including the rights upon and during an Event of
Default to exercise Pledgor’s voting rights and other rights to manage or
control Pledged Company, all in accordance with the Financing Documents.

8.3 Attorney-in-Fact. Pledgor hereby constitutes and appoints Lender and each
successor or assign of Lender, the true and lawful attorney-in-fact of Pledgor,
with full power and authority in the place and stead of Pledgor and in the name
of Pledgor, Lender or otherwise, subject to the terms of the Financing Agreement
and the other Financing Documents, to enforce all rights, interests and remedies
of Pledgor with respect to the Collateral, including the right:

(a) to ask, require, demand, receive and give acquittance for any and all moneys
and claims for money due and to become due under or arising out of the
Collateral, including any insurance policies;

Exhibit D-3-15

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(b) to elect remedies under the Collateral and to endorse any checks or other
instruments or orders in connection therewith;

(c) to vote, demand, receive and enforce Pledgor’s rights with respect to the
Collateral;

(d) to give appropriate receipts, releases and satisfactions for and on behalf
of and in the name of Pledgor or, at the option of Lender, in the name of
Lender, with the same force and effect as Pledgor could do if this Agreement had
not been made;

(e) to file any claims or take any action or institute any proceedings in
connection therewith which Lender may reasonably deem to be necessary or
advisable; and

(f) to pay, settle or compromise all bills and claims which may be or become
liens or security interests against any or all of the Collateral, or any part
thereof, unless a bond or other security satisfactory to Lender has been
provided;

provided, however, that Lender shall not exercise any of the aforementioned
rights unless an Event of Default has occurred and is continuing and has not
been waived in accordance with the Financing Documents. This power of attorney
is a power coupled with an interest and shall be irrevocable; provided, however,
that nothing in this Agreement shall prevent Pledgor from, prior to the exercise
by Lender of any of the aforementioned rights, undertaking Pledgor’s operations
in the ordinary course of business in accordance with the Collateral and the
Financing Documents.

8.4 Perfection; Further Assurances.

8.4.1 Perfection. Pledgor agrees that from time to time, at the expense of
Pledged Company, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary, or that Lender may reasonably request, in order to perfect, to ensure
the continued perfection of, and to protect the assignment and security interest
granted or intended to be granted hereby or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor shall (a) deliver the
Collateral or any part thereof to Lender, as Lender may request, accompanied by
such duly executed instruments of transfer or assignment as Lender may request,
and (b) authorize, execute and file such financing or continuation statements,
or amendments thereto, and such other instruments, endorsements or notices, as
may be reasonably necessary or desirable or as Lender may reasonably request, in
order to perfect and preserve the assignments and security interests granted or
purported to be granted hereby.

8.4.2 Filing of Financing and Continuation Statements. Pledgor hereby authorizes
the filing of any financing statements or continuation statements, and
amendments to financing statements, or any similar document in any jurisdictions
and with any filing offices as Lender may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to Lender
herein. Such financing statements may describe the Collateral in substantially
the same manner as described herein or may contain an indication or description
of the Collateral that describes such property in any other manner as Lender may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted to Lender
herein.

Exhibit D-3-16

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8.4.3 Information Concerning Collateral. Pledgor shall, promptly upon request,
provide to Lender all information and evidence it may reasonably request
concerning the Collateral to enable Lender to enforce the provisions of this
Agreement.

8.5 Payment of Taxes. Pledgor shall pay or cause to be paid, before any fine,
penalty, interest or cost attaches thereto, all taxes, assessments and other
governmental or nongovernmental charges or levies (other than those taxes that
it is contesting in good faith and by appropriate proceedings, and in respect of
which it has established adequate reserves for such taxes) now or hereafter
assessed or levied against the Collateral pledged by it hereunder (or against
the Collateral in which Pledgor has granted to Lender a security interest of
first priority) and shall retain copies of, and, upon request, permit Lender to
examine receipts showing payment of any of the foregoing.

8.6 Place of Business; Location of Records. Unless Lender is otherwise notified
under Section 6.10, the chief executive office of Pledgor is, and all records of
Pledgor concerning the Collateral are and will be, located at the address set
forth in Section 8.13.

8.7 Continuing Assignment and Security Interest; Transfer of Note. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash and performance in full of the Obligations (other
than any unasserted contingent reimbursement or indemnity obligations) and as
otherwise provided in Section 8.17; (b) be binding upon Pledged Company,
Pledgor, and their respective successors and assigns; and (c) inure, together
with the rights and remedies of Lender, to the benefit of Lender, and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), Lender may assign or otherwise transfer the Note or
other evidence of indebtedness held by them to any other Person to the extent
permitted by and in accordance with the Financing Agreement, and such other
Person shall thereupon become vested with all or an appropriate part of the
benefits in respect thereof granted to the Lender herein or otherwise. The
release of the security interest in any or all of the Collateral, the taking or
acceptance of additional security, or the resort by Lender to any security it
may have in any order it may deem appropriate, shall not affect the liability of
any Person on the indebtedness secured hereby.

8.8 Termination of Security Interest. Upon the payment in full in cash of all
Obligations and the termination of the Loan Commitment and all other obligations
of the Lender under the Financing Documents (other than the obligations that are
intended to survive the termination of the Financing Documents), this Agreement
and the security interest and all other rights granted hereby shall terminate
and all rights to the Collateral shall revert to Pledgor. Upon any such
termination, Lender will return all certificates previously delivered to Lender
representing the Pledged Ownership Interests and, at Pledgor’s expense and upon
its written direction, execute and, subject to Section 8.17, deliver to Pledgor
such documents (including UCC-3 termination statements) as Pledged Company or
Pledgor shall reasonably request to evidence such termination, to release all
security interest on the Collateral and to return such Collateral to Pledgor. If
this Agreement shall be terminated or revoked by operation of law, Pledgor shall
indemnify and save Lender and the other Secured Parties harmless from any loss
which may be suffered or incurred by Lender in acting hereunder prior to the
receipt by Lender, its successors, transferees, or assigns of notice of such
termination or revocation.

Exhibit D-3-17

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8.9 Security Interest Absolute. All rights of Lender and the security interest
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of: (a) any lack of validity or enforceability of the
Financing Agreement, any other Financing Document or any other agreement or
instrument relating thereto; (b) the exercise by Lender of any remedy, power or
privilege contained in any Financing Document or available at law, equity or
otherwise; (c) the failure of Lender (i) to assert any claim or demand or to
enforce any right or remedy against Pledged Company, any Affiliate of Pledged
Company or any other Person under the provisions of the Financing Agreement, the
Note, any other Financing Document or otherwise or (ii) to exercise any right or
remedy against any other guarantor of, or collateral securing, any of the
Obligations; (d) any change in the time, manner or place of payment of, or in
any other term of the Obligations (including any increase in the amount
thereof), or any other amendment or waiver of or any consent to any departure
from the Financing Agreement or any other Financing Document; (e) any action by
Lender to take and hold security or collateral for the payment of the
Obligations, or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Lender has been granted a
Lien, to secure any indebtedness to Lender of Pledgor, Pledged Company, any of
their respective Affiliates or any other Person party to a Financing Document;
(f) any reduction, limitation, impairment or termination of any of the
Obligations for any reason other than the written agreement of the Lender to
terminate the Obligations in full, but including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to, and Pledgor
hereby waives any right to or claim of, any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligation of Pledged Company, any Affiliate
of Pledged Company or otherwise; (g) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of the
Financing Agreement, the Note, or any other Financing Document; (h) any
exchange, surrender, release or non-perfection of any Collateral, or any
release, amendment or waiver or addition of or consent to departure from any
other security interest held by Lender securing any of the Obligations; (i) the
application by Lender of any sums by whomever paid or however realized to any
amounts owing by Pledgor, Pledged Company or any other Person party to the
Financing Documents to Lender in such manner as Lender shall determine in its
discretion; (j) any bankruptcy or insolvency of Pledged Company, Pledgor or any
other Person; or (k) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor or any third party pledgor
(other than the defense of payment).

8.10 Limitation on Duty of Lender with Respect to the Collateral. The powers
conferred on Lender hereunder are solely to protect its interest in the
Collateral and shall not impose any duty on Lender or any of its designated
agents to exercise any such powers. Except for the safe custody of any
Collateral in its possession, the accounting for monies actually received by it
hereunder and any duty expressly imposed on Lender by applicable Legal
Requirements with respect to any Collateral that has not been waived hereunder,
Lender shall have no duty with respect to any Collateral and no implied duties
or obligations shall be read into this Agreement against Lender. Lender shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment that is
substantially equivalent to that which Lender accords its own property, it being
expressly agreed, to the maximum extent permitted by applicable Legal
Requirements, that Lender shall have no responsibility for (a) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral, or (b) taking any action to protect against any diminution in value
of the Collateral, but, in each case, Lender may do so and all expenses
reasonably incurred in connection therewith shall be part of the Obligations.

Exhibit D-3-18

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8.11 Liability. Recourse against the Non-Recourse Parties under this Agreement
shall be limited to the extent provided in Article 8 of the Financing Agreement.

8.12 Amendments; Waivers; Consents. This Agreement may not be amended, amended
and restated, supplemented or otherwise modified, except in a writing signed by
each of the parties hereto and otherwise in accordance with the provisions of
the Financing Agreement.

8.13 Notices. All notices required or permitted under the terms and provisions
hereof shall be in writing, and any such notice shall be effective if given in
accordance with the provisions of Section 10.1 of the Financing Agreement.
Notices to Lender or Pledged Company may be given at the address set forth in
Section 10.1 of the Financing Agreement. Notices to Pledgor may be given at the
following address (or such other address as notified by Pledgor):

  Nevada USG Holdings, LLC   Address: 1505 Tyrell Lane     Boise, ID 83706  
Telephone: (208) 424-1027   Fax: (208) 424-1030   Attention: Jonathan Zurkoff

8.14 Modification of Obligations. If Lender shall at any time or from time to
time, with or without the consent of, or notice to, the Pledgor:

(a) change or extend the manner, place or terms of payment of, or renew or alter
all or any portion of, the Obligations;

(b) take any action under or in respect of the Financing Documents in the
exercise of any remedy, power or privilege contained therein or available at
law, equity or otherwise, or waive or refrain from exercising any such remedies,
power or privileges;

(c) amend or modify, in any manner whatsoever, the Financing Documents;

(d) extend or waive the time for Pledgor’s, Pledged Company’s or any other
Person’s performance of, or compliance with, any term, covenant or agreement on
its part to be performed or observed under the Financing Documents, or waive
such performance or compliance or consent to a failure of, or departure from,
such performance or compliance;

Exhibit D-3-19

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(e) take and hold security or collateral for the payment of the Obligations, or
sell, exchange, release, dispose of, or otherwise deal with, any property
pledged, mortgaged or conveyed, or in which Lender has been granted a Lien, to
secure any indebtedness of Pledgor, Pledged Company or any other Person party to
a Financing Document to Lender;

(f) release or limit the liability of anyone who may be liable in any manner for
the payment of any amounts owed by Pledgor, Pledged Company or any other Person
party to a Financing Document to Lender;

(g) modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of Pledgor, Pledged
Company or any other Person party to a Financing Document are subordinated to
the claims of Lender; or

(h) apply any sums by whomever paid or however realized to any amounts owing by
Pledgor or Pledged Company to Lender in such manner as Lender shall determine in
its discretion; then, subject to Section 8.9, Lender shall not incur any
liability to Pledgor pursuant hereto as a result thereof and no such action
shall impair or release the obligations of Pledgor under this Agreement.

8.15 Delivery of Collateral; Proxy. All certificates or instruments representing
or evidencing the Collateral shall be delivered to and held by or on behalf of
Lender pursuant hereto. All such certificates or instruments shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
acceptable to Lender. Lender shall have the right, at any time in its discretion
and without prior notice to Pledgor, following the occurrence and during the
continuation of an Event of Default, to transfer to or to register in the name
of Lender or any of its nominees any or all of the Collateral and to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations; provided,
however, that once such Event of Default has been cured, Lender will promptly
transfer to or register in the name or cause its nominees to transfer to or
register in the name of Pledgor, as applicable, all such Collateral. In
furtherance of the foregoing, Pledgor shall further execute and deliver to
Lender an irrevocable power in the form of Exhibit A with respect to the
ownership interests of Pledged Company owned by Pledgor.

8.16 Reinstatement. This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time any payment
pursuant to this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, liquidation of
Pledgor, Pledged Company or any other Person party to a Financing Document or
upon the dissolution of, or appointment of any intervenor or conservator of, or
trustee or similar official for, Pledgor, Pledged Company or any other Person
party to a Financing Document or any substantial part of Pledgor’s, any Pledged
Company’s or any other such Person’s assets, or otherwise, all as though such
payments had not been made, and Pledged Company shall pay Lender on demand all
reasonable costs and expenses (including reasonable fees of counsel) incurred by
Lender in connection with such rescission or restoration.

Exhibit D-3-20

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8.17 Severability. The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

8.18 Survival of Provisions. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the other
Financing Documents and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Pledgor set forth
herein shall terminate at the same time as the security interest and other
rights granted hereunder shall terminate pursuant to Section 8.8.

8.19 Headings Descriptive. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.

8.20 Entire Agreement. This Agreement, together with each other Financing
Document, is executed in connection herewith, is intended by the parties as a
final expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.

8.21 Time. Time is of the essence of this Agreement.

8.22 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.

8.23 Limitation of Liability. No claim shall be made by Pledgor or Pledged
Company against Lender or any of its Affiliates, directors, employees, attorneys
or agents for any loss of profits, business or anticipated savings, special or
punitive damages or any indirect or consequential loss whatsoever in respect of
any breach or wrongful conduct (whether or not the claim therefor is based on
contract, tort or duty imposed by law), in connection with, arising out of or in
any way related to the transactions contemplated by this Agreement or the other
Financing Documents or any act or omission or event occurring in connection
therewith; and Pledgor and Pledged Company hereby waive, release and agree not
to sue upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in their favor.

8.24 Submission to Jurisdiction. Lender, Pledged Company and Pledgor agree that
any legal action or proceeding by or against Pledgor or Pledged Company or with
respect to or arising out of this Agreement or any other Financing Document may
be brought in or removed to the courts of the State of New York, in and for the
County of New York, or of the United States of America for the Southern District
of New York, as Lender may elect. By execution and delivery of this Agreement,
Lender, Pledged Company and Pledgor accept, for themselves and in respect of
their property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts. Lender, Pledged Company and Pledgor irrevocably consent to
the service of process out of any of the aforementioned courts in any manner
permitted by law. Nothing herein shall affect the right of Lender to bring legal
action or proceedings in any other competent jurisdiction. Lender, Pledged
Company and Pledgor hereby waive any right to stay or dismiss any action or
proceeding under or in connection with this Agreement brought before the
foregoing courts on the basis of forum non-conveniens.

Exhibit D-3-21

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8.25 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OR PRIORITY OF THE LIEN AND SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

8.26 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE,
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER FINANCING DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
BORROWER AFFILIATE ENTITY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY THE LENDER IN
RESPECT OF RIGHTS UNDER ANY FINANCING DOCUMENT GOVERNED BY LAWS OTHER THAN THE
LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT
THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY BORROWER
AFFILIATE ENTITY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 8.13; (D)
AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER
PERSONAL JURISDICTION OVER ANY BORROWER AFFILIATE ENTITY IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (E) AGREES THAT THE LENDER RETAINS THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY
BORROWER AFFILIATE ENTITY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION
WITH THE EXERCISE OF ANY RIGHTS UNDER ANY FINANCING DOCUMENT OR THE ENFORCEMENT
OF ANY JUDGMENT.

Exhibit D-3-22

--------------------------------------------------------------------------------

8.27 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING HEREUNDER OR UNDER ANY OF THE OTHER FINANCING DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTIONS OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.27 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER FINANCING
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

8.28 Knowledge and Attribution. Reference in this Agreement to the “knowledge”,
“best knowledge” or facts and circumstances “known to” Pledgor, and all like
references, means facts or circumstances of which a Responsible Officer of
Pledgor has actual knowledge.

8.29 Rights of Lender. Lender shall be entitled to the rights, protections,
immunities and indemnities set forth in the Financing Agreement as if
specifically set forth herein.

8.30 Consent and Acknowledgement. Pledgor hereby acknowledges receiving copies
of the Financing Agreement, and the other Financing Documents and consent to the
terms and provisions of each.

8.31 Third Party Beneficiaries. Nothing in this Agreement, expressed or implied,
is intended or shall be construed to confer upon, or give to any Person, other
than Pledgor, Pledged Company, and Lender, any security, rights, remedies or
claims, legal or equitable, under or by reason hereof, or any covenant or
condition hereof; and this Agreement and the covenants and agreements herein
contained are and shall be held to be for the sole and exclusive benefit of
Pledgor, Pledged Company, and Lender.

Exhibit D-3-23

--------------------------------------------------------------------------------

8.32 Waiver of Transfer Restrictions. Notwithstanding anything to the contrary
contained in the Borrower LLC Agreement, Pledgor hereby waives any requirement
contained in the Borrower LLC Agreement that it consent to a transfer of a
ownership interest in Pledged Company in connection with a foreclosure on such
ownership interest under the Financing Documents.

8.33 Article 8 Securities. Pledgor hereby represents and warrants that (a) the
terms of each of the Pledged Ownership Interests expressly provide that they are
securities governed by Article 8 of the UCC as in effect in each applicable
jurisdiction and (b) Section 5.2 of the Borrower LLC Agreement is in full force
and effect. Pledgor hereby covenants and agrees that it will not agree to any
amendment or repeal of Section 5.2 of the Borrower LLC Agreement without the
prior express written consent of Lender and, in any event, shall promptly notify
Lender in writing if for any reason the Pledged Ownership Interests shall cease
to be securities for purposes of the UCC in any applicable jurisdiction.

8.34 Appointment of Agent. Pledgor hereby irrevocably designates, appoints and
empowers CT Corporation System (the “Process Agent”), with offices on the date
hereof at 111 Eighth Avenue, New York, New York 10011, as its permitted
designee, appointee and agent to receive and forward, for and on its behalf,
service of any and all legal process, writs, summons, notices and documents
which may be served in any action or proceeding arising out of this Agreement or
any other Financing Document. Pledged Company hereby agrees to cause the Process
Agent to execute and deliver to the Lender a letter from the Process Agent to
the effect of the foregoing. If for any reason such Process Agent shall cease to
act as such, Pledgor agrees hereby to designate a new permitted designee,
appointee and agent in New York City on terms satisfactory to the Lender.
Pledgor shall promptly inform the Process Agent of any change to Pledgor’s
address for forwarding such items.

[SIGNATURE PAGES FOLLOW]

Exhibit D-3-24

--------------------------------------------------------------------------------

 IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Agreement to be duly executed
and delivered as of the date first above written.

  NEVADA USG HOLDINGS, LLC,   a Delaware limited liability company,   as Pledgor
                                   By: ________________________________        
                       Name: ________________________________                  
             Title: ________________________________   Federal Employer  
Identification No. ________________________________   Delaware   Organizational
No. ________________________________               USG NEVADA LLC,   a Delaware
limited liability company,   as Pledged Company                                
   By: ________________________________                                Name:
________________________________                                Title:
________________________________   Federal Employer   Identification No.
________________________________   Delaware   Organizational No.
________________________________

[SIGNATURE PAGE TO MEMBER PLEDGE AGREEMENT]

--------------------------------------------------------------------------------

ARES CAPITAL CORPORATION,
a Maryland corporation,
as Lender

  By: ________________________________       Name:
________________________________       Title: ________________________________

[SIGNATURE PAGE TO MEMBER PLEDGE AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT A
IRREVOCABLE PROXY

Date: November 9, 2011

The undersigned hereby appoints ARES CAPITAL CORPORATION, a Maryland
corporation, (“Lender”), as Proxy with full power of substitution, and hereby
authorizes Lender to represent and vote all of the ownership interests of USG
NEVADA LLC, a Delaware limited liability company, owned by the undersigned on
the date of exercise hereof during the continuance of an Event of Default under,
and as defined in, the Member Pledge Agreement, dated as of November 9, 2011
among Nevada USG Holdings, LLC, USG Nevada LLC, and Lender at any meeting or at
any other time chosen by Lender in its sole discretion.

[SIGNATURE PAGE FOLLOWS]

Exhibit A

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NEVADA USG HOLDINGS, LLC, a Delaware limited liability company, as Pledgor   By:
________________________________   Name: ________________________________  
Title: ________________________________

Exhibit A

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EXHIBIT B
TRANSFER DOCUMENT

FOR VALUE RECEIVED, Nevada USG Holdings, LLC, a Delaware limited liability
company hereby sells, assigns and transfers unto
_______________________________all of its ownership interest(s) in USG Nevada
LLC, a Delaware limited liability company (“Pledged Company”), standing in its
name on the books of Pledged Company, represented by the following
certificate(s): 001, and irrevocably appoints ____________________________as
attorney to transfer the ownership interests with full power of substitution in
the premises.

[SIGNATURE PAGE FOLLOWS]

Exhibit B

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NEVADA USG HOLDINGS, LLC, a Delaware limited liability company, as Pledgor   By:
________________________________   Name: ________________________________  
Title: ________________________________   In the presence of:
________________________________

Exhibit B

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SCHEDULE I
DESCRIPTION OF OWNERSHIP INTERESTS

Certificate No. Description: 001 100% of the ownership interests of USG Nevada
LLC, a Delaware limited liability company

Schedule I

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EXHIBIT D-4 to Financing Agreement

FORM OF
SPONSOR CASH GRANT SHORTFALL GUARANTY

among

U.S. GEOTHERMAL INC.,
a Delaware corporation
(Sponsor)

and

U.S. GEOTHERMAL INC.,
an Idaho corporation
(Idaho Sponsor)

and

USG NEVADA LLC,
a Delaware limited liability company
(Borrower)

and

ARES CAPITAL CORPORATION,
a Maryland corporation
(Lender)

Dated as of November 9, 2011  

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TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS 2                          1.1 Defined Terms. 2          
         1.2 General Definitions 3                    1.3 Rules of
Interpretation. 3       ARTICLE II. GUARANTY 3                          2.1
Guaranty 3                    2.2 Obligations Absolute and Unconditional 4      
ARTICLE III. REPRESENTATIONS AND WARRANTIES 5                          3.1
Guarantors’ Representations and Warranties 5                    3.2 Borrower’s
Representations and Warranties; Covenants. 7       ARTICLE IV. COVENANTS 8      
                   4.1 Maintenance of Corporate Existence 8                  
 4.2 Compliance with Obligations. 8                    4.3 Compliance with Laws.
8                    4.4 Notice of Material Adverse Effect and Default. 8      
             4.5 Financial Statements. 8                    4.6 Restrictions on
Debt; Guaranties. 8                    4.7 Sponsor’s Minimum Net Worth 8      
ARTICLE V. SUBORDINATION; SUBROGATION; ETC. 9                          5.1 Taxes
9                    5.2 Subordination 9                    5.3 Waiver 9        
           5.4 Subrogation 11                    5.5 Bankruptcy 11              
     5.6 Reinstatement 12       ARTICLE VI. MISCELLANEOUS 12                    
     6.1 Successions or Assignments. 12                    6.2 Other Waivers. 13
                   6.3 Headings. 13                    6.4 Remedies Cumulative.
13                    6.5 Severability. 13

Exhibit D-4-i

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                   6.6 Amendments. 13                    6.7 APPLICABLE LAW. 13
                   6.8 CONSENT TO JURISDICTION. 13                    6.9 WAIVER
OF JURY TRIAL. 14                    6.10 Integration of Terms. 15
                   6.11 Notices. 15                    6.12 Interest; Collection
Expenses; Set-Off 16                    6.13 Counterparts 16
                   6.14 Time. 16                    6.15 Termination 16
                   6.16 Appointment of Agent. 17

Exhibit D-4-ii

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SPONSOR CASH GRANT SHORTFALL GUARANTY

This SPONSOR CASH GRANT SHORTFALL GUARANTY, dated as of November 9, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this “Guaranty”), is entered into by and among U.S. GEOTHERMAL INC., a
corporation organized and existing under the laws of the State of Delaware
(“Sponsor”), U.S. GEOTHERMAL INC., a corporation organized and existing under
the laws of the State of Idaho (“Idaho Sponsor”, and together with Sponsor, the
“Guarantors”), USG NEVADA LLC, a limited liability company organized and
existing under the laws of the State of Delaware (“Borrower”), and ARES CAPITAL
CORPORATION, a Maryland corporation, (together with its successors, designees
and assigns in such capacity, “Lender”).

RECITALS

A. Borrower owns and intends to develop, construct, install, test, own, operate
and use an approximately 8 MW geothermal power facility located in Washoe
County, Nevada (the “Project”).

B. Borrower has entered into, among other things, (i) that certain Financing
Agreement, dated as of the date hereof (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Financing
Agreement”), by and between Borrower and Lender, pursuant to which, among other
things, Lender has extended commitments to make loans and other financial
accommodations to, and for the benefit of, Borrower, and (ii) certain Financing
Documents (as defined in the Financing Agreement).

C. The Guarantors indirectly own one hundred percent (100%) of the ownership
interests of Borrower. Sponsor directly owns one hundred percent (100%) of the
membership interests of Idaho Sponsor. Idaho Sponsor directly owns one hundred
percent (100%) of the membership interests of Nevada USG Holdings, LLC, a
Delaware limited liability company (“Holdings”). Holdings directly owns one
hundred percent (100%) of the ownership interests of Borrower.

D. Borrower will file a Cash Grant Application with respect to the Project as
and when required pursuant to the Financing Agreement.

E. The primary source of repayment to Lender with respect to the Loans will be
the proceeds from Cash Grant paid by the United States Treasury Department in
connection with the filing of the Cash Grant Application.

F. The Guarantors will derive economic benefit from the Loans to be made to
Borrower pursuant to the Financing Agreement.

G. It is a condition precedent to the effectiveness of the Financing Agreement
and the other Financing Documents, and the making of the advances of credit
contemplated thereby, that the Guarantors and Borrower shall have executed and
delivered this Guaranty.

Exhibit D-4-1

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AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and to induce
the Lender to enter into the Financing Documents and to make the advances of
credit to Borrower contemplated thereby, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each
of the Guarantors and Borrower hereby agrees with Lender as follows:

ARTICLE I.
DEFINITIONS

1.1 Defined Terms. The following terms (whether or not underscored) when used in
this Guaranty, including its preamble and recitals, shall have the following
meanings: “Borrower” has the meaning given in the preamble to this Guaranty.

“Cash Grant Filing Date” means the date on which Borrower submits to the United
States Treasury Department its Cash Grant Application with respect to the
Project.

“Cash Grant Receipt Date” means the date on which the Cash Grant is actually
received by Borrower or Lender.

“Financing Agreement” has the meaning given in the recitals to this Guaranty.

“Guaranteed Obligations” has the meaning given in Section 2.1 of this Guaranty.
“Guaranty” has the meaning given in the preamble to this Guaranty.

“Guarantors” has the meaning given in the preamble to this Guaranty.

“Idaho Sponsor” has the meaning given in the preamble to this Guaranty. “Lender”
has the meaning given in the preamble to this Guaranty.

“Material Adverse Effect” means (i) a material and adverse change in the
business, property, results of operation or financial condition of a Guarantor,
(ii) a material and adverse effect on a Guarantor’s ability to perform its
obligations under this Guaranty, or (iii) any “Material Adverse Effect” under,
and as defined in, the Financing Agreement.

“Outstanding Loan Amount” shall mean, as of any given date, the aggregate amount
of the Loans (including principal and interest accrued thereon, together with
any costs, fees and expenses related thereto) then outstanding.

“Project” has the meaning given in the recitals to this Guaranty.

“Received Cash Grant Amount” means the actual amount, if any, of the Cash Grant
received by Borrower or Lender with respect to the Cash Grant Application
submitted by Borrower with respect to the Project.

Exhibit D-4-2

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“Requested Cash Grant Amount” means the amount of the Cash Grant applied for
under the Cash Grant Application submitted by Borrower with respect to the
Project.

“Sponsor” has the meaning given in the preamble to this Guaranty.

“Sponsor’s Net Worth” means the three day average market capitalization for
Sponsor as stated by Bloomberg World Exchange Market Capitalization USG at 4:30
PM EST.

1.2 General Definitions. Unless otherwise defined herein or unless the context
otherwise requires, capitalized terms used in this Guaranty, including its
preamble and recitals, have the respective meanings provided in the Financing
Agreement.

1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Financing Agreement shall apply to
this Guaranty, including its preamble and recitals.

ARTICLE II.
GUARANTY

2.1 Guaranty. For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and as an inducement to Lender to enter into
the Financing Documents, each Guarantor hereby unconditionally, absolutely and
irrevocably guarantees, on a joint and several basis, to Lender each of the
following (collectively, the “Guaranteed Obligations”):

(a) in the event that the Requested Cash Grant Amount is less than the
Outstanding Loan Amount on the Cash Grant Filing Date, such Guarantor shall pay
to Lender on the Cash Grant Filing Date an amount equal to the positive
difference (if any) between the Outstanding Loan Amount on the Cash Grant Filing
Date and the Requested Cash Grant Amount;

(b) in the event that the Received Cash Grant Amount is less than the
Outstanding Loan Amount on the Cash Grant Receipt Date, such Guarantor shall pay
to Lender on the Maturity Date an amount equal to the positive difference (if
any) between the then Outstanding Loan Amount on the Cash Grant Receipt Date and
the Received Cash Grant Amount; and

(c) in the event that, as of the Maturity Date, no Cash Grant has been received,
such Guarantor shall pay the then Outstanding Loan Amount to Lender on the
Maturity Date.

With respect to payment obligations set forth above, such payments shall be due
and payable (i) within five (5) Banking Days from the Cash Grant Filing Date in
the case of a Guaranteed Obligation under Section 2.1(a), (ii) within five (5)
Banking Days of the Cash Grant Receipt Date in the case of a Guaranteed
Obligation under Section 2.1(b) above, and (iii) on the Maturity Date in the
case of a Guaranteed Obligation under Section 2.1(c).

Exhibit D-4-3

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2.2 Obligations Absolute and Unconditional.

(a) The obligations of the Guarantors hereunder are primary obligations of each
Guarantor, on a joint and several basis, and are an absolute, unconditional,
continuing and irrevocable guaranty of payment of the Guaranteed Obligations and
the other obligations of the Guarantors hereunder and not of collectability, and
are in no way conditioned on or contingent upon any attempt to enforce in whole
or in part Borrower’s or any other Person’s liabilities and obligations to
Lender. Each Guarantor, on a joint and several basis, shall pay each Guaranteed
Obligation in immediately available funds as and when it is due. Each failure by
the Guarantors to pay a Guaranteed Obligation or any other obligation hereunder
shall give rise to a separate cause of action herewith, and separate suits may
be brought hereunder as each cause of action arises.

(b) Each Guarantor agrees that it is directly and primarily liable to Lender,
that its obligations hereunder are independent of the obligations of any other
guarantor of the Guaranteed Obligations, and that a separate action or actions
may be brought and prosecuted against such Guarantor, whether action is brought
against Borrower (or any other guarantor of the Guaranteed Obligations) or
whether Borrower (or any such other guarantor) is joined in any such action or
actions. Each Guarantor agrees that any release which may be given to Borrower,
the other Guarantor or any other person or entity directly or indirectly liable
for the Guaranteed Obligations shall not release such Guarantor from its
obligations under this Guaranty.

(c) Lender may, at any time and from time to time (whether or not after
revocation or termination of this Guaranty) without the consent of or notice to
any Guarantor, except such notice as may be required by the Financing Documents
or applicable law which cannot be waived, without incurring responsibility to
any Guarantor, without impairing or releasing the obligations of any Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:

(i) consent to any change in the manner, place and terms of payment of, or renew
or alter, any Guaranteed Obligation, or any obligations and liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, or consent to any modification or amendment of the Cash Grant
Applications, and the guarantees herein made shall apply to the Guaranteed
Obligations or such other obligations as changed, extended, renewed, modified,
amended, supplemented or altered in any manner;

(ii) exercise or refrain from exercising any rights against Borrower or others
(including the Guarantors) or otherwise act or refrain from acting;

(iii) add or release any other guarantor from its obligations without affecting
or impairing the obligations of the Guarantors hereunder;

(iv) settle or compromise any Guaranteed Obligations or any obligations and
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment or performance of any obligations and liabilities which
may be due to Lender or others;

Exhibit D-4-4

--------------------------------------------------------------------------------

(v) sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner or in any order any property by whomsoever pledged or mortgaged to
secure or howsoever securing the Guaranteed Obligations or any liabilities or
obligations (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof and/or any offset there against;

(vi) apply any sums by whomsoever paid or howsoever realized to any obligations
and liabilities of Borrower to Lender under the Financing Documents in the
manner provided therein regardless of what obligations and liabilities remain
unpaid; and

(vii) act or fail to act in any manner referred to in this Guaranty which may
deprive any Guarantor of its right to subrogation against Borrower to recover
full indemnity for any payments or performances made pursuant to this Guaranty
or of its right of contribution against any other party.

(d) No invalidity, irregularity or unenforceability of the Guaranteed
Obligations or invalidity, irregularity, unenforceability or non-perfection of
any collateral therefor, shall affect, impair or be a defense to this Guaranty,
which is the primary obligation of the Guarantors.

This is a continuing guaranty and all obligations to which it applies or may
apply under the terms hereof shall be conclusively presumed to have been created
in reliance hereon. In the event that, notwithstanding the provisions of Section
2.2 above, this Guaranty shall be deemed revoked in accordance with applicable
law, then any such revocation shall become effective only upon receipt by Lender
of written notice of revocation signed by each Guarantor. To the extent
permitted by applicable law, no revocation or termination hereof shall affect,
in any manner, rights arising under this Guaranty with respect to Guaranteed
Obligations (i) arising prior to receipt by Lender of written notice of such
revocation or termination or (ii) arising as a result of an Event of Default
under the Financing Agreement occurring by reason of the revocation or
termination of this Guaranty.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1 Guarantors’ Representations and Warranties. Each Guarantor represents and
warrants to and in favor of Lender, as of the date hereof, that: 3.1.1
Organization. (a) it is a corporation duly organized, validly existing and in
good standing under the laws of the State of its formation, and (b) it is duly
qualified, authorized to do business and in good standing in each jurisdiction
in which such qualification is necessary to execute, deliver and perform this
Guaranty.

3.1.2 Power and Authorization; Enforceable Obligations. Such Guarantor has the
full corporate power and authority to execute, deliver and perform this Guaranty
and to take all action as may be necessary to complete the transactions
contemplated hereunder and thereunder. Such Guarantor has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Guaranty and to complete the transactions contemplated hereby and thereby. No
consent or authorization of, filing with, or other act by or in respect of any
other Person or Governmental Authority is required in connection with the
execution, delivery or performance by such Guarantor, or the validity or
enforceability as to such Guarantor, of this Guaranty, except such consents or
authorizations or filings or other acts as have already been obtained or made or
where the failure to obtain such consent or authorization could not reasonably
be expected to have a Material Adverse Effect. This Guaranty has been duly
executed and delivered by such Guarantor and constitutes a legal, valid and
binding obligation of such Guarantor enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the right of
creditors generally and by general principles of equity.

Exhibit D-4-5

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3.1.3 No Legal Bar. The execution, delivery and performance by such Guarantor of
this Guaranty and the consummation of the transactions contemplated hereby
(including the agreements, guarantees and payments contemplated hereby) will not
violate any applicable Legal Requirement or any material contractual obligation
of such Guarantor and will not result in, or require, the creation or imposition
of any Lien on any of the properties or revenues of such Guarantor pursuant to
any applicable Legal Requirement or any such contractual obligation except, in
each case, where such violation, creation or imposition could not reasonably be
expected to have a Material Adverse Effect.

3.1.4 Compliance with Law. Such Guarantor is in compliance with all Legal
Requirements, except noncompliance which could not reasonably be expected to
have a Material Adverse Effect.

3.1.5 No Litigation. There are no pending or, to such Guarantor’s knowledge,
threatened in writing actions, suits, proceedings or investigations of any kind,
including actions or proceedings of or before any Governmental Authority, to
which such Guarantor is a party or is subject, or by which it or its properties
are bound that, if adversely determined to or against such Guarantor, could
reasonably be expected to have a Material Adverse Effect.

3.1.6 Financial Statements. The financial statements of the Guarantors delivered
to Lender pursuant to Sections 3.1(q) and 5.4 of the Financing Agreement are
true, complete and correct in all material respects as of the date of such
statements and fairly presented the financial condition of each Guarantor as of
the date thereof and fairly presented the results of the operations and cash
flow of each Guarantor for the periods then ending. Such financial statements
have been prepared in accordance with GAAP.

3.1.7 Taxes. Such Guarantor has timely filed all federal, state and local tax
returns that it is required to file (except where a failure to file such local
tax return could not reasonably be expected to have a Material Adverse Effect),
has paid all taxes it is required to pay to the extent due (other than those
taxes that it is contesting in good faith and by appropriate proceedings, with
adequate reserves established for such taxes) and, to the extent such taxes are
not due, has established reserves that are adequate for the payment thereof to
the extent required by GAAP. Such Guarantor knows of no tax assessment that has
been proposed in writing against it which could reasonably be expected to have a
Material Adverse Effect (other than as is being actively contested by such
Guarantor in good faith and by appropriate proceedings and for which reserves or
other appropriate provisions, if any, as shall be required in conformity with
GAAP have been made or provided therefor).

Exhibit D-4-6

--------------------------------------------------------------------------------

3.1.8 Investment Company Act; Federal Energy Laws. Such Guarantor is not an
“investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended. No
provision of the FPA or PUHCA precludes such Guarantor from entering into and
performing its obligations under this such Guaranty.

3.1.9 Financial and Other Information. Such Guarantor has established adequate
means of obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of Borrower and its
properties on a continuing basis, and such Guarantor now is and hereafter will
have responsibility for maintaining familiarity with the businesses, operations
and condition (financial and otherwise) of Borrower and its properties.

Operative Documents. Such Guarantor has reviewed and is familiar with the terms
of each of the Financing Documents (including the Financing Agreement) that has
been or will be executed and delivered on or prior to the date hereof.

3.1.10 Adequate Financial Means.

(a) After giving effect to the transactions contemplated by this Guaranty and
the contingent obligations evidenced hereby, such Guarantor is Solvent, both on
an unconsolidated basis and a consolidated basis with any subsidiaries of the
Guarantors.

(b) Such Guarantor is not executing this Guaranty with any intention to hinder,
delay or defraud any present or future creditor or creditors of such Guarantor.

(c) Such Guarantor is not engaged in any business or transaction which, after
giving effect to the transactions contemplated by this Guaranty, will leave such
Guarantor with capital or assets which are unreasonably small in relation to the
business or transactions engaged by such Guarantor, and such Guarantor does not
intend to engage in any such business or transaction.

(d) Such Guarantor does not intend to incur, nor does such Guarantor believe
that it will incur, debts beyond such Guarantor’s ability to repay such debts as
they mature.

3.2 Borrower’s Representations and Warranties; Covenants. Borrower represents
and warrants to and in favor of Lender, as of the date hereof, that Borrower has
provided the Guarantors with true, correct and complete copies of each of the
Operative Documents (including the Financing Agreement) that has been or will be
executed and delivered on or prior to the Financial Closing Date and any
amendments, supplements or modifications thereto.

Exhibit D-4-7

--------------------------------------------------------------------------------

ARTICLE IV.
COVENANTS

Each Guarantor hereby covenants and agrees for the benefit of Borrower and
Lender as follows, as long as this Guaranty remains in effect: 4.1 Maintenance
of Corporate Existence. Such Guarantor shall maintain and preserve its existence
in good standing in the state of its formation and its qualification to do
business in each other jurisdiction where such qualification is necessary to
perform its obligations hereunder and all material rights, privileges and
franchises necessary in the normal conduct of its business.

4.2 Compliance with Obligations. Such Guarantor shall maintain in full force and
effect all consents and approvals of any Governmental Authority that are
required to be obtained by it in order for it to perform its obligations under
this Guaranty and each other Operative Document to which it is a party. Each
Guarantor shall obtain any such consents and approvals that may become required
in the future as and when the same shall be so required.

4.3 Compliance with Laws. Such Guarantor shall promptly comply with all
Governmental Rules, except where the failure to comply could not reasonably be
expected to have a Material Adverse Effect.

4.4 Notice of Material Adverse Effect and Default. Promptly, and in any event
within fifteen (15) Business Days after a Responsible Officer of such Guarantor
obtains knowledge thereof, such Guarantor shall give to Lender notice of (a) the
occurrence of any event (including any litigation or governmental proceeding
affecting or pending against such Guarantor or any of its Affiliates) which has
had, or could reasonably be expected to have, a Material Adverse Effect and (b)
the occurrence of any Event of Default.

4.5 Financial Statements. Such Guarantor shall provide each of the financial
statements required by such Guarantor pursuant to Section 5.4 of the Financing
Agreement.

4.6 Restrictions on Debt; Guaranties. Such Guarantor shall not, without the
consent of the Lender (which shall not be unreasonably withheld, delayed or
conditioned) incur, create, assume or permit to exist any Debt or execute any
guaranties, other than this Agreement, or provide other credit support
(including grants of Liens on any assets owned by the Guarantors) to the extent
that the issuance of such guaranties or credit support could reasonably be
expected to cause a Material Adverse Effect.

4.7 Sponsor’s Minimum Net Worth. On the Financial Closing Date and at all times
until the indefeasible payment and performance in full in cash of all
Obligations and the termination of the Loan Commitment, Sponsor’s Net Worth was
and shall remain equal to at least twenty million Dollars ($20,0000,000).

Exhibit D-4-8

--------------------------------------------------------------------------------

ARTICLE V.
SUBORDINATION; SUBROGATION; ETC.

5.1 Taxes. Except as otherwise required by applicable Governmental Rules, each
payment required to be made by the Guarantors hereunder shall be made without
deduction or withholding for or on account of Taxes, Excluded Taxes or Other
Taxes.

5.2 Subordination. Except as otherwise specifically provided in this Guaranty,
all existing and future indebtedness of, or other obligations owed by Borrower
to the Guarantors is hereby subordinated to all of the Obligations. Without the
prior written consent of Lender, such subordinated indebtedness (including
interest thereon) shall not be paid or withdrawn in whole or in part, nor shall
the Guarantors accept any payment of or on account of any such indebtedness, in
each case until the indefeasible payment and performance in full of all
Obligations (other than unasserted contingent indemnity obligations) and the
termination of the Loan Commitment under the Financing Agreement and the other
obligations of the Lender under the Financing Documents. Any payment by Borrower
in violation of this Section 5.2 shall be received by the Guarantors in trust
for Lender, and the Guarantors shall cause the same to be paid to Lender
immediately upon demand by Lender on account of the Obligations. The Guarantors
shall not assign all or any portion of such indebtedness while the Guaranty
remains in effect except upon prior written notice to Lender by which the
assignee of any such indebtedness agrees that the assignment is made subject to
the terms of this Guaranty, and that any attempted assignment of such
indebtedness in violation of the provisions hereof shall be void. Nothing in
this Section 5.2 shall operate to limit Borrower’s ability to make distributions
to the Guarantors as and to the extent expressly performed under Section 6.6 of
the Financing Agreement.

5.3 Waiver. Each Guarantor hereby unconditionally and irrevocably waives and
relinquishes, to the maximum extent permitted by applicable Governmental Rules,
all rights and remedies accorded to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, other than, subject to
Section 5.6, defenses of payment or performance of the applicable Guaranteed
Obligations, including:

(a) any right to require Lender to proceed against Borrower or any other Person
or to proceed against or exhaust any security held by Lender at any time or to
pursue any other remedy in Lender’s power before proceeding against any
Guarantor;

(b) any defense that may arise by reason of the incapacity, lack of power or
authority, death, dissolution, merger, termination or disability of any
Guarantor, Borrower or any other Person or the failure of Lender to file or
enforce a claim against the estate (in administration, bankruptcy or any other
proceeding) of any Guarantor, Borrower or any other Person;

(c) promptness, diligence, demand, presentment, protest and notice of any kind,
including notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of Borrower, Lender, any endorser or creditor of the foregoing or on the part of
any other Person under this or any other instrument in connection with any
obligation or evidence of indebtedness held by Lender as collateral or in
connection with any Guaranteed Obligation;

Exhibit D-4-9

--------------------------------------------------------------------------------

(d) any defense based upon an election of remedies by Lender, including an
election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of any Guarantor or the
right of any Guarantor to proceed against Borrower or another Person for
reimbursement, or both;

(e) any defense based on any offset against any amounts which may be owed by any
Person to any Guarantor for any reason whatsoever;

(f) any defense based on any act, failure to act, delay or omission whatsoever
on the part of Borrower or any of its Affiliates or the failure by Borrower or
any of its Affiliates to do any act or thing or to observe or perform any
covenant, condition or agreement to be observed or performed by such Person
under any other Operative Document;

(g) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal;

(h) any defense (including failure of consideration, breach of warranty, statute
of frauds, statute of limitations, accord and satisfaction and usury), setoff or
counterclaim which may at any time be available to or asserted by Borrower
against Lender, or any other Person under the Financing Agreement or any
Operative Document;

(i) any duty on the part of Lender to disclose to the Guarantors any facts
Lender may now or hereafter know about Borrower or any Affiliate thereof,
regardless of whether Lender has reason to believe that any such facts
materially increase the risk beyond that which the Guarantors intend to assume,
or have reason to believe that such facts are unknown to the Guarantors, or have
a reasonable opportunity to communicate such facts to the Guarantors, since each
Guarantor acknowledges that such Guarantor is fully responsible for being and
keeping informed of the financial condition of Borrower and of all circumstances
bearing on the risk of non-payment of any Guaranteed Obligation;

(j) the fact that each Guarantor may at any time in the future dispose of all or
part of its direct or indirect interest in Borrower;

(k) any defense based on any change in the time, manner or place of any payment
or performance under, or in any other term of, the Financing Agreement, any
other Operative Document, or any other amendment, renewal, extension,
acceleration, compromise or waiver of or any consent or departure from the terms
of the Financing Agreement or any other Operative Document;

(l) any right to assert the bankruptcy or insolvency of Borrower or any other
Person as a defense hereunder or as the basis for rescission hereof and any
defense arising because of Lender’s election, in any proceeding instituted under
the Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy
Law;

(m) any defense based upon any borrowing or grant of a security interest under
Section 364 of the Bankruptcy Law; and

Exhibit D-4-10

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(n) any act or omission by Borrower, or any existence of or reliance on any
representation by Borrower or Lender that might otherwise constitute a defense
available to, or discharge of, any guarantor or surety.

5.4 Subrogation. Until the indefeasible payment and performance in full of all
Obligations (other than unasserted contingent indemnity obligations) and the
termination of the Loan Commitment under the Financing Agreement and the other
obligations of Lender under the Financing Documents, (a) the Guarantors shall
not exercise any right of subrogation or enforce any remedy which Lender may
have now or may hereafter have against Borrower and will not claim the benefit
of any rights to, or seek to participate in, any security now or hereafter held
by Lender from Borrower, and (b) the Guarantors shall not enforce any claim,
right or remedy which the Guarantors may now have or may hereafter acquire
against Borrower that arises hereunder, from the existence or enforcement of
this Guaranty or from the performance by the Guarantors hereunder (including any
claim, remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Lender
against Borrower or any security which Lender now may have or may hereafter
acquire), whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise.

5.5 Bankruptcy.

(a) To the extent permitted under applicable Legal Requirements, the Guarantors
shall not, without the prior written consent of Lender, commence, or join with
any other Person in commencing any bankruptcy, reorganization, or insolvency
proceeding against Borrower. The obligations of the Guarantors under this
Guaranty shall not be altered, limited or affected by any proceeding, voluntary
or involuntary, involving the bankruptcy, reorganization, insolvency,
receivership, liquidation or arrangement of Borrower, or any Affiliate thereof,
or by any defense which Borrower or any Affiliate thereof may have by reason of
any order, decree or decision of any court or administrative body resulting from
any such proceeding.

(b) The Guarantors shall file, in any bankruptcy or other proceeding in which
the filing of claims is required or permitted by law, all claims which the
Guarantors may have against Borrower, relating to any indebtedness of Borrower
to Guarantor, and hereby assigns to Lender all rights of the Guarantors
thereunder. If the Guarantors do not file any such claim, Lender, as
attorney-in-fact for the Guarantors, is hereby authorized to do so in the name
of the Guarantors or, in Lender’s discretion, to assign the claim to a nominee
and to cause proofs of claim to be filed in the name of Lender’s nominee. The
foregoing power of attorney is coupled with an interest and cannot be revoked.
Lender or its nominee shall have the sole right to accept or reject any plan
proposed in any such proceeding and to take any other action which a party
filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to Lender to the extent of any Obligations which then
remain unpaid or unperformed, and, to the full extent necessary for that
purpose, the Guarantors hereby assign to Lender all of the Guarantors’ rights to
all such payments or distributions to which the Guarantors would otherwise be
entitled; provided, however, that the Guarantors’ obligations hereunder shall
not be satisfied except to the extent that Lender receives cash by reason of any
such payment or distribution. If Lender receives anything hereunder other than
cash, the same shall be held as collateral for amounts due under this Guaranty.

Exhibit D-4-11

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(c) Each Guarantor hereby irrevocably waives, to the extent it may do so under
applicable Governmental Rules, any protection to which it may be entitled under
Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or equivalent
provisions of the laws or regulations of any other jurisdiction with respect to
any proceedings, or any successor provision of law of similar import, in the
event of any Bankruptcy Event with respect to Borrower. Specifically, in the
event that the trustee (or similar official) in a Bankruptcy Event with respect
to Borrower or the debtor-in-possession takes any action (including the
institution of any action, suit or other proceeding for the purpose of enforcing
the rights of Borrower under this Guaranty or any other Financing Document), the
Guarantors shall not assert any defense, claim or counterclaim denying liability
hereunder on the basis that this Guaranty or any other Financing Document is an
executory contract or a “financial accommodation” that cannot be assumed,
assigned or enforced or on any other theory directly or indirectly based on
Section 365(c)(1), 365(c)(2) or 365(e)(2) of the Bankruptcy Law, or equivalent
provisions of the law or regulations of any other jurisdiction with respect to
any proceedings or any successor provision of law of similar import. If a
Bankruptcy Event with respect to Borrower shall occur, the Guarantors agree
after the occurrence of such Bankruptcy Event, to reconfirm in writing, to the
extent permitted by applicable Governmental Rules, its pre-petition waiver of
any protection to which it may be entitled under Sections 365(c)(1), 365(c)(2)
and 365(e)(2) of the Bankruptcy Law or equivalent provisions of the laws or
regulations of any other jurisdiction with respect to proceedings and, to give
effect to such waiver, each Guarantor consents to the assumption and enforcement
of each provision of this Guaranty and any other Financing Document by the
debtor-in-possession or Borrower’s trustee in bankruptcy, as the case may be.

5.6 Reinstatement. This Guaranty and the obligations of the Guarantors hereunder
shall continue to be effective or be automatically reinstated, as the case may
be, if and to the extent that for any reason any payment by or on behalf of any
Guarantor in respect of the Guaranteed Obligations is rescinded or otherwise
restored to any Guarantor or Borrower, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as if such payment had not been
made, and each Guarantor agrees that it will indemnify Lender and its successors
and assigns, on demand for all reasonable costs and expenses (including
reasonable fees of counsel) incurred by Lender and its successors and assigns in
connection with any such rescission or restoration.

ARTICLE VI.
MISCELLANEOUS

6.1 Successions or Assignments.

(a) This Guaranty shall inure to the benefit of the successors or permitted
assigns of Lender who shall have, to the extent of their interest, the rights of
Lender hereunder. Lender shall not assign this Agreement except in conjunction
with an assignment of the Financing Agreement as provided therein.

Exhibit D-4-12

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(b) This Guaranty is binding upon each of Borrower and each Guarantor and their
respective successors and permitted assigns. Neither Borrower nor any Guarantor
may assign any of its obligations hereunder without the prior written consent of
Lender (and any purported assignment in violation of this Section shall be
void).

6.2 Other Waivers.

(a) No delay or omission on the part of Lender in exercising any of its rights
(including those hereunder) and no partial or single exercise thereof and no
action or non-action by Lender, with or without notice to the Guarantors,
Borrower or any other Person, shall constitute a waiver of any rights or shall
affect or impair this Guaranty.

(b) Each of Borrower and each Guarantor hereby irrevocably waives, to the extent
it may do so under applicable Governmental Rules, any defense based on the
adequacy of a remedy at law that may be asserted as a bar to the remedy of
specific performance in any action brought against Borrower or any Guarantor for
specific performance of this Guaranty by Lender or for its benefit by a
receiver, custodian or trustee appointed for any Guarantor or Borrower or in
respect of all or a substantial part of its assets under the bankruptcy or
insolvency laws of any jurisdiction to which any Guarantor, Borrower or its
respective assets are subject.

6.3 Headings. The headings in this Guaranty are for convenience of reference
only and shall not constitute a part of this Guaranty for any other purpose or
be given any substantive effect.

6.4 Remedies Cumulative. Each and every right and remedy of Lender hereunder
shall be cumulative and shall be in addition to any other right or remedy given
hereunder or under any other Financing Document, or now or hereafter existing at
law or in equity.

6.5 Severability. Any provision of this Guaranty that may be determined by
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

6.6 Amendments. This Guaranty may be amended, waived or otherwise modified only
with the written consent of the parties hereto.

6.7 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF.

6.8 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE,
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER FINANCING DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS GUARANTY, EACH
BORROWER AFFILIATE ENTITY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY THE LENDER IN
RESPECT OF RIGHTS UNDER ANY FINANCING DOCUMENT GOVERNED BY LAWS OTHER THAN THE
LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT
THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY BORROWER
AFFILIATE ENTITY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 6.11; (D) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER ANY BORROWER AFFILIATE ENTITY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (E) AGREES THAT THE LENDER RETAINS THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY BORROWER
AFFILIATE ENTITY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
EXERCISE OF ANY RIGHTS UNDER ANY FINANCING DOCUMENT OR THE ENFORCEMENT OF ANY
JUDGMENT.

Exhibit D-4-13

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6.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING HEREUNDER OR UNDER ANY OF THE OTHER FINANCING DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTIONS OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS GUARANTY, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 6.9 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER FINANCING
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

Exhibit D-4-14

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6.10 Integration of Terms. This Guaranty, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof

6.11 Notices. All notices required or permitted under the terms and provisions
hereof shall be in writing and any such notice shall be effective if given in
accordance with the provisions of Section 10.1 of the Financing Agreement.
Notices to the Guarantors may be given at the following addresses (or such other
address as notified by Guarantor to Lender and Borrower in writing): Sponsor:

  U.S. GEOTHERMAL INC.   Address: 1505 Tyrell Lane     Boise, ID 83706  
Telephone:                        (208) 424-1027   Fax: (208) 424-1030  
Attention: Jonathan Zurkoff         Idaho Sponsor:           U.S. GEOTHERMAL
INC.   Address: 1505 Tyrell Lane     Boise, ID 83706   Telephone: (208) 424-1027
  Fax: (208) 424-1030   Attention: Jonathan Zurkoff               Borrower:    
      USG NEVADA LLC   Address: 1505 Tyrell Lane     Boise, ID 83706  
Telephone: (208) 424-1027   Fax: (208) 424-1030   Attention: Jonathan Zurkoff

Exhibit D-4-15

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6.12 Interest; Collection Expenses; Set-Off.

(a) Without regard to any limitation set forth in this Guaranty, any amount
required to be paid by the Guarantors pursuant to the terms hereof shall bear
interest at the lower of (i) the interest rate equivalent to the Default Rate
under the Financing Agreement and (ii) the maximum rate permitted by law from
the date due until paid in full in cash.

(b) Without regard to any limitation set forth in this Guaranty, if Lender is
required to pursue any remedy against the Guarantors hereunder, the Guarantors
shall pay to Lender, upon demand therefor, all reasonable attorneys’ fees and
all other costs and expenses incurred by Lender in enforcing this Guaranty (and
such fees, costs and expenses shall be deemed to be part of the Guaranteed
Obligations).

(c) In addition to any rights now or hereafter granted under applicable
Governmental Rules or otherwise, and not by way of limitation of any such
rights, upon the failure of the Guarantors to make any payment as required
hereunder, Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Guarantors,
Borrower or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by Lender
(including by branches and agencies of Lender wherever located) to or for the
credit or the account of the Guarantors against and on account of the
obligations of the Guarantors under this Guaranty.

6.13 Counterparts. This Guaranty and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.

6.14 Time. Time is of the essence of this Guaranty.

6.15 Termination. Subject to Section 5.6, this Guaranty and all of the
obligations of the Guarantors hereunder shall terminate on the earliest to occur
of (a) the indefeasible payment and performance in full in cash of all
Obligations (other than unasserted contingent indemnity obligations) and the
termination of the Loan Commitment under the Financing Agreement and the other
obligations of the Lender under the Financing Documents and (b) the indefeasible
payment in full in cash and performance in full of all of the Guaranteed
Obligations in accordance with the terms hereof; provided, however, that the
provisions of this Article 6 shall survive termination. Upon the indefeasible
payment and performance in full of all Obligations (other than unasserted
contingent indemnity obligations) and the termination of the Loan Commitment
under the Financing Agreement and the other obligations of the Lender under the
Financing Documents, Lender shall reassign back to the Guarantors any and all
rights that the Guarantors may have assigned to Lender pursuant to Section
5.5(b).

Exhibit D-4-16

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6.16 Appointment of Agent. The Guarantors hereby irrevocably designate, appoint
and empower CT Corporation System (the “Process Agent”), with offices on the
date hereof at 111 Eighth Avenue, New York, New York 10011, as its permitted
designee, appointee and agent to receive and forward, for and on its behalf,
service of any and all legal process, writs, summons, notices and documents
which may be served in any action or proceeding arising out of this Guaranty or
any other Financing Document. The Guarantors hereby agree to cause the Process
Agent to execute and deliver to the Lender a letter from the Process Agent to
the effect of the foregoing. If for any reason such Process Agent shall cease to
act as such, the Guarantors agree hereby to designate a new permitted designee,
appointee and agent in New York City on terms satisfactory to the Lender. The
Guarantors shall promptly inform the Process Agent of any change to the
Guarantors’ addresses for forwarding such items.

[SIGNATURE PAGES FOLLOW]

Exhibit D-4-17

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Guaranty to be duly executed and
delivered as of the date first above written.

  USG NEVADA LLC,   a Delaware limited liability company,   as Borrower        
           By:                                                                  
             
 Name:                                                                         
         Title:                                                                
    U.S. GEOTHERMAL INC.,   a Delaware corporation,   as Sponsor  
By:                                                                
Name:                                                                
Title:                                                                     U.S.
GEOTHERMAL INC.,   an Idaho corporation,   as Idaho Sponsor  
By:                                                                
Name:                                                                
Title:                                                              

[SIGNATURE PAGE TO SPONSOR CASH GRANT SHORTFALL GUARANTY]

--------------------------------------------------------------------------------

  ARES CAPITAL CORPORATION,   a Maryland corporation,   as Lender  
By:                                                                
Name:                                                                
Title:                                                              

[SIGNATURE PAGE TO SPONSOR CASH GRANT SHORTFALL GUARANTY]

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     EXHIBIT D-5
to Financing Agreement

FORM OF
INTERCREDITOR AGREEMENT

by and between

SAIC CONSTRUCTORS, LLC

(formerly known as Benham Constructors, LLC)

as Construction Lender

and

ARES CAPITAL CORPORATION

as Cash Grant Bridge Lender

Dated as of November 9, 2011

--------------------------------------------------------------------------------

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (this “Agreement”), dated as of November 9, 2011 by
and between SAIC CONSTRUCTORS, LLC, an Oklahoma limited liability company and
formerly known as Benham Constructors, LLC, having an office at 9400 N.
Broadway, Suite 300, Oklahoma City, Oklahoma 73114 (together with its successors
and permitted assigns, “Construction Lender”), and ARES CAPITAL CORPORATION,
having an office at 245 Park Avenue, 44th Floor, New York, New York 10167
(together with its successors and permitted assigns, “Cash Grant Bridge
Lender”), and acknowledged and agreed by USG NEVADA LLC, a Delaware limited
liability company (“Borrower”).

RECITALS

WHEREAS, pursuant to the terms, provisions and conditions set forth in that
certain Credit Addendum to Engineering, Procurement and Construction Contract,
dated August 27, 2010, as amended by that certain First Amendment to Credit
Addendum dated May 20, 2011, between Borrower and Construction Lender (as
further amended, restated, supplemented, modified, replaced or refinanced from
time to time subject to the provisions hereof the “Construction Loan
Agreement”), Construction Lender has made a loan to Borrower in the original
principal amount of $24,553,000 (the “Construction Loan”), which Construction
Loan is evidenced by that certain Promissory Note, dated as of August 27, 2010,
made by Borrower to Construction Lender in the amount of the Construction Loan
(the “Construction Note”), and secured by, among other things, certain deeds of
trust made by Borrower in favor of Construction Lender (as amended, restated,
supplemented, modified or replaced from time to time, the “Construction
Mortgage”), which Construction Mortgage encumbers the real property described on
Exhibit A attached hereto and made a part hereof, and all improvements thereon
and appurtenances thereto (collectively, the “Site”); and

WHEREAS, pursuant to the terms, provisions and conditions set forth in that
certain Financing Agreement, dated as of November 9, 2011, between Borrower and
Cash Grant Bridge Lender (as amended, restated, supplemented, modified, replaced
or refinanced from time to time subject to the provisions hereof the “Cash Grant
Bridge Loan Agreement”), Cash Grant Bridge Lender is the owner and holder of a
loan to Borrower in the original principal amount of $9,000,000 (the “Cash Grant
Bridge Loan”), which Cash Grant Bridge Loan is evidenced by that certain Note,
dated as of November 9, 2011, made by Borrower in favor of Cash Grant Bridge
Lender in the amount of the Cash Grant Bridge Loan (the “Cash Grant Bridge Loan
Note”), and secured by, among other things, (i) a Member Pledge Agreement, dated
as of November 9, 2011, from Nevada USG Holdings I LLC, a Delaware limited
liability company (“Holdings”), pursuant to which Cash Grant Bridge Lender is
granted a first priority security interest in all of Holdings’ ownership
interests in Borrower (as amended, restated, supplemented, modified or replaced
from time to time subject to the provisions hereof, the “Member Pledge
Agreement”); (ii) an Idaho Sponsor Pledge Agreement, dated as of November 9,
2011, from U.S. Geothermal Inc., an Idaho corporation (“Idaho Sponsor”),
pursuant to which Cash Grant Bridge Lender is granted a first priority security
interest in all of Idaho Sponsor’s ownership interests in Holdings (as amended,
restated, supplemented, modified or replaced from time to time subject to the
provisions hereof, the “Idaho Sponsor Pledge Agreement”); (iii) a Cash Grant
Security Agreement, dated as of November 9, 2011, made by Borrower in favor Cash
Grant Bridge Lender (as amended, restated, supplemented, modified, replaced or
refinanced from time to time subject to the provisions hereof the “Cash Grant
Security Agreement”) pursuant to which Cash Grant Bridge Lender is granted a
first priority security interest in all of Borrower’s right, title and interest
in the Cash Grant Proceeds (as defined therein); (iv) a Sponsor Cash Grant
Shortfall Guaranty, dated as of November 9, 2011, from U.S. Geothermal Inc., a
Delaware corporation (“Sponsor”), and Idaho Sponsor in favor of Cash Grant
Bridge Lender, pursuant to which Sponsor and Idaho Sponsor jointly and severally
indemnify Cash Grant Bridge Lender from and against any Cash Grant Shortfall (as
defined therein) (as amended, restated, supplemented, modified or replaced from
time to time subject to the provisions hereof, the “Sponsor Cash Grant Shortfall
Guaranty”); and (v) a Deposit Account Control Agreement, pursuant which Borrower
grants Cash Grant Bridge Lender a first priority security interest in a blocked
account (the “Blocked Account”) (as amended, restated, supplemented, modified or
replaced from time to time subject to the provisions hereof, the “Deposit
Account Control Agreement”); and

--------------------------------------------------------------------------------

WHEREAS, Borrower will use the net proceeds from the Construction Loan and the
Cash Grant Bridge Loan to, among other things, expand and repower an existing 3
MW geothermal power project located on the Site and thereby increase the output
thereof to approximately 8 MW, as more fully described in the EPC Contract (as
defined below) (the geothermal project developed by such expansion and
repowering, the “Project”); and

WHEREAS, Construction Lender and Cash Grant Bridge Lender desire to enter into
this Agreement to provide for the relative priority of the Construction Loan
Documents (as such term is hereinafter defined) and the Cash Grant Bridge Loan
Documents (as such term is hereinafter defined) on the terms and conditions
hereinbelow set forth, and to evidence certain agreements with respect to the
relationship between the Cash Grant Bridge Loan and the Cash Grant Bridge Loan
Documents, on the one hand, and the Construction Loan and the Construction Loan
Documents, on the other hand.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Construction Lender and Cash Grant Bridge Lender hereby agree as
follows:

1.   CERTAIN DEFINITIONS; RULES OF CONSTRUCTION.

1.1 As used in this Agreement, the following capitalized terms shall have the
following meanings:

“Affiliate” means, as to any particular Person, any Person directly or
indirectly, through one or more intermediaries, controlling, controlled by or
under common control with the Person or Persons in question.

“Agreement” means this Intercreditor Agreement, as the same may be amended,
modified and in effect from time to time, pursuant to the terms hereof.

“Blocked Account” has the meaning provided in the Recitals hereto.

D-5-2

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“Borrower” has the meaning provided in the Preamble hereto.

“Borrower Affiliate Entity” means each of Borrower, Holdings, Idaho Sponsor and
Sponsor.

“Business Day” means any day other than (i) a Saturday and a Sunday and (ii) a
day on which federally insured depository institutions in the State of New York
or the State of Oklahoma are authorized or obligated by law, governmental decree
or executive order to be closed.

“Cash Grant” means, with respect to the Project, the cash grant in lieu of the
renewable energy tax credits available under Sections 45 and 48 of the Code
issued by the United States Treasury Department pursuant to the terms of Section
1603 of the American Recovery and Reinvestment Act of 2009 and the Cash Grant
Terms and Conditions.

“Cash Grant Application” means an “Application for Section 1603: Payments for
Specified Renewable Energy Property in Lieu of Tax Credits” to be filed by
Borrower, as an applicant, for the Cash Grant with respect to the Project.

“Cash Grant Bridge Lender” has the meaning provided in the Preamble hereto.

“Cash Grant Bridge Loan” has the meaning provided in the Recitals hereto.

“Cash Grant Bridge Loan Agreement“ has the meaning provided in the Recitals
hereto.

“Cash Grant Bridge Loan Documents” means the Cash Grant Bridge Loan Agreement,
the Cash Grant Bridge Loan Note, the Cash Grant Notice of Assignment, the Member
Pledge Agreement, the Idaho Sponsor Pledge Agreement, the Cash Grant Security
Agreement, the Sponsor Cash Grant Shortfall Guaranty, the Cash Grant Power of
Attorney and the Deposit Account Control Agreement, together with all other
material documents and instruments set forth on Exhibit B hereto (if any), as
any of the foregoing may be modified, amended, extended, supplemented, restated
or replaced from time to time, subject to the limitations and agreements
contained in this Agreement.

“Cash Grant Bridge Loan Modification” has the meaning provided in Section 7.2
hereof.

“Cash Grant Bridge Loan Note” has the meaning provided in the Recitals hereto.

“Cash Grant Notice of Assignment” means that certain Notice of Assignment
entered into as provided in the Cash Grant Bridge Loan Agreement, by and between
Borrower and Cash Grant Bridge Lender.

“Cash Grant Power of Attorney” has the meaning provided in the Section 12.5
hereof.

“Cash Grant Proceeds” has the meaning provided in the Cash Grant Security
Agreement.

“Cash Grant Security Agreement” has the meaning provided in the Recitals hereto.

“Cash Grant Terms and Conditions” means Section 1603 of the American Recovery
and Reinvestment Act of 2009, as amended, the “Payments for Specified Energy
Property in Lieu of Tax Credits under the American Recovery and Reinvestment Act
of 2009 – Terms and Conditions” issued by the United States Treasury Department
and the United States Treasury Department’s program guidance publication
entitled “Payments for Specific Energy Property in Lieu of Tax Credits under the
American Recovery and Reinvestment Act of 2009,” dated July 2009 and revised
March 2010, in each case, as the same may be amended, and any other guidance,
instructions or terms and conditions published or issued by the United States
Treasury Department in respect of the Cash Grant or any Cash Grant Application.

D-5-3

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“Code” means the Internal Revenue Code of 1986, as amended, including any
applicable United States Treasury Department Regulations.

“Construction Lender” has the meaning provided in the Preamble hereto.

“Construction Loan” has the meaning provided in the Recitals hereto.

“Construction Loan Agreement” has the meaning provided in the Recitals hereto.

“Construction Loan Default Notice” has the meaning provided in Section 10.1
hereof.

“Construction Loan Documents” means the EPC Contract, the Construction Loan
Agreement, the Construction Note, the Construction Security Agreement and the
Construction Mortgage, together with the other material instruments and
documents set forth on Exhibit C hereto, as any of the foregoing may be
modified, amended, extended, supplemented, restated or replaced from time to
time, subject to the limitations and agreements contained in this Agreement.

“Construction Loan Modification” has the meaning provided in Section 7.1 hereof.

“Construction Mortgage” has the meaning provided in the Recitals hereto.

“Construction Note” has the meaning provided in the Recitals hereto.

“Construction Security Agreement” means that certain Security Agreement, dated
as of August 27, 2010, by and between Borrower and Construction Lender.

“Control” means the ownership, directly or indirectly, in the aggregate of more
than fifty percent (50%) of the beneficial ownership interests of an entity and
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise. The terms
“controlled by,” “controlling” and “under common control with” shall have the
respective correlative meanings thereto. For purposes of this definition, if
more than one Qualified Transferee owns (directly or indirectly) more than fifty
percent (50%) of the beneficial ownership interests of an entity and one or more
of the Qualified Transferees possess the power to direct or cause the direction
of the management or policies of the entity, whether through the ability to
exercise voting power, by contract or otherwise, even though each such Qualified
Transferee individually owns less than fifty percent (50%) of such beneficial
interests, such entity shall be deemed to be “controlled by” a Qualified
Transferee.

“Deed in Lieu” has the meaning provided in Section 11 hereof.

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“Deposit Account Control Agreement” has the meaning provided in the Recitals
hereto.

“Disqualified Person” means, at any time during the Recapture Period, (i) any
Federal, State or local government (or any political subdivision, agency or
instrumentality thereof); (ii) any organization described in Section 501(c) of
the Code and exempt from tax under Section 501(a) of the Code; (iii) any entity
referenced in Section 54(j)(4) of the Code; (iv) any foreign person or entity as
defined in Section 168(h)(2)(C) of the Code unless the exception under Section
168(h)(2)(B) of the Code applies with respect to the income from Borrower for
that Person; and (v) a partnership or other “pass-thru entity” (within the
meaning of paragraph (g)(4) of Section 1603 of division B of the American
Recovery and Reinvestment Act of 2009, including a single member disregarded
entity and a foreign partnership or foreign pass-through entity) any direct or
indirect partner (or other holder of an equity or profits interest) of which is
a person described in (i) through (iv) above unless such person owns such direct
or indirect interest in the partnership or pass-through entity through a
“taxable C corporation” (other than a real estate investment trust or regulated
investment company), as that term is used in the Cash Grant Terms and
Conditions; provided, further, that if and to the extent the definition of
“Disqualified Person” under Section 1603(g) of division B of the American
Recovery and Reinvestment Act of 2009 is amended after the date of this
Agreement and such amendment is applicable to the Cash Grant, the definition of
“Disqualified Person” under this Agreement shall be interpreted to conform to
such amendment and any Cash Grant Terms and Conditions with respect thereto.

“Eligibility Requirements” means, with respect to any Person, that such Person
(i) has total assets (in name or under management) in excess of $600,000,000 and
(except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder’s equity of $250,000,000, (ii) is
regularly engaged in, or has an investment advisor or asset manager that is
regularly engaged in, the business of making or owning commercial real estate
loans (including Cash Grant Bridge loans or loan participations) or operating
commercial mortgage properties, and (iii) is not a Disqualified Person.

“Enforcement Action” means any (i) judicial or non-judicial foreclosure
proceeding, the exercise of any power of sale, the taking of a deed or
assignment in lieu of foreclosure, the obtaining of a receiver or the taking of
any other enforcement action against the Project or Borrower, including, without
limitation, the taking of possession or control of the Project, (ii)
acceleration of, or demand or action taken in order to collect, all or any
indebtedness secured by the Project (other than giving of notices of default and
statements of overdue amounts) or (iii) exercise of any right or remedy
available to Construction Lender under the Construction Loan Documents, at law,
in equity or otherwise with respect to Borrower and/or the Project.

“EPC Contract” means that certain Engineering, Procurement and Construction
Contract, dated August 27, 2010, between Borrower and Construction Lender, as
amended by (i) Change Order No. 1, dated November 12, 2010, (ii) Change Order
No. 2, dated November 12, 2010, (iii) Change Order No. 3, dated November 18,
2010, (iv) Change Order No. 4, dated December 1, 2010, (v) Change Order No. 5,
dated December 29, 2010, (vi) Change Order No. 6, dated January 14, 2011, (vii)
Change Order No. 7, dated March 11, 2011, (viii) Change Order No. 8, dated May
23, 2011, (ix) Change Order No. 9, dated June 2, 2011, (x) Change Order No. 10,
dated July 11, 2011, (xi) Change Order No. 11, dated August 30, 2011, (xii)
Change Order No. 12, dated September 16, 2011, (xiii) Change Order No. 13, dated
September 23, 2011, and (xiv) Change Order No. 14, dated October 27, 2011, and
as further amended, restated, supplemented, modified, replaced or refinanced
from time to time, subject to the limitations and agreements contained in this
Agreement.

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“Equity Collateral” means the: (i) equity interests in Borrower, pledged by
Holdings to Cash Grant Bridge Lender pursuant to the Member Pledge Agreement;
and (ii) equity interest in Holdings, pledged by Idaho Sponsor to Cash Grant
Bridge Lender pursuant to the Idaho Sponsor Pledge Agreement.

“Equity Collateral Enforcement Action” means any action or proceeding or other
exercise of Cash Grant Bridge Lender’s rights and remedies commenced by Cash
Grant Bridge Lender (other than the giving of notices of default and statements
of overdue amounts), in law or in equity, or otherwise, in order to realize upon
the Equity Collateral, in whole or in part, or any transaction, whether in the
nature of a transfer in lieu of foreclosure or otherwise, in order to acquire
the Equity Collateral, in whole or in part.

“Event of Default” as used herein means (i) with respect to the Construction
Loan and the Construction Loan Documents, any Event of Default thereunder which
has occurred, is continuing (i.e., has not been cured by Borrower or by Cash
Grant Bridge Lender in accordance with the terms of the Construction Loan
Agreement or this Agreement, respectively, or has not otherwise been waived in
accordance with the Construction Loan Documents) and (ii) with respect to the
Cash Grant Bridge Loan and the Cash Grant Bridge Loan Documents, any Event of
Default thereunder which has occurred and is continuing (i.e., has not been
cured by Borrower or has not otherwise been waived in accordance with the Cash
Grant Bridge Loan Documents). “Holdings” has the meaning provided in the
Recitals hereto.

“Idaho Sponsor” has the meaning provided in the Recitals hereto.

“Idaho Sponsor Pledge Agreement” has the meaning provided in the Recitals
hereto.

“Loan Purchase Price” has the meaning provided in Section 11 hereof.

“Member Pledge Agreement” has the meaning provided in the Recitals hereto.

“Person” means any individual, sole proprietorship, corporation, general
partnership, limited partnership, limited liability company or partnership,
joint venture, association, joint stock company, bank, trust, estate
unincorporated organization, any federal, state, county or municipal government
(or any agency or political subdivision thereof) endowment fund or any other
form of entity.

“Placed in Service Date” means, with respect to the Project, the date on which
the Project shall be “placed in service” under and in accordance with the Cash
Grant Terms and Conditions

“Proceeding” has the meaning provided in Section 9.2 hereof.

“Project” has the meaning provided in the Recitals hereto.

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“Purchase Notice” has the meaning provided in Section 11 hereof.

“Purchase Option Event” has the meaning provided in Section 11 hereof.

“Qualified Manager” shall mean an operator of the Project which is a reputable
owner and operator having at least five (5) years’ experience in the operation
and management of domestic geothermal projects similar to the Project and in an
aggregate nameplate capacity of no less than eight (8) megawatts “Qualified
Transferee” means (i) Cash Grant Bridge Lender, or (ii) one or more of the
following:

(A) a commercial bank, real estate investment trust, saving and loan
association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm, mutual
fund, government entity or plan, provided that any such Person referred to in
this clause (i)(A) satisfies the Eligibility Requirements;

(B) an investment company, money management firm or “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as
amended, or an institutional “accredited investor” within the meaning of
Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (ii)(B) satisfies the Eligibility
Requirements; or

(C) an institution substantially similar to any of the foregoing entities
described in clauses (ii)(A) or (ii)(B) that satisfies the Eligibility
Requirements.

“Recapture Event” shall mean a determination by United States Treasury
Department that all or any portion of the Cash Grant shall be recaptured,
disallowed or invalidated as a result of (i) any disposal of Specified Energy
Property (as defined in Section 1603 of the American Recovery and Reinvestment
Act of 2009) subject to the Cash Grant, (ii) any transfer of any direct or
indirect equity interest in Borrower to any Disqualified Person, or (iii)
impermissible cessation of energy production from the Project.

“Recapture Liability” or “Recapture Liabilities” shall mean an amount equal to
(i) the amount of the Cash Grant that is recaptured, disallowed, or invalidated
as a result of a Recapture Event plus (ii) any associated interest and penalties
or other amounts imposed in connection with the recapture or disallowance of the
Cash Grant.

“Recapture Period” means, with respect to any portion of the Project, the period
commencing on the Placed in Service Date and ending on the first to occur of (i)
the fifth (5th) anniversary of the Placed in Service Date or such later date if
the Cash Grant Terms and Conditions extend the applicable vesting period, and
(ii) the date on which all Recapture Liability that could arise in respect of
Borrower and the Project has been incurred and has been paid or otherwise
finally satisfied in full by or on behalf of Borrower.

“Separate Collateral” means collateral granted to the Cash Grant Bridge Lender
pursuant to the Cash Grant Bridge Loan Documents, including the following: (i)
the Equity Collateral, (ii) the Cash Grant, the Cash Grant Proceeds and all
other “Collateral” as defined in the Cash Grant Security Agreement; and (iii)
the Blocked Account.

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“Site” has the meaning provided in the Recitals hereto.

“Sponsor” has the meaning provided in the Recitals hereto.

“Sponsor Cash Grant Shortfall Guaranty” has the meaning provided in the Recitals
hereto.

“Transfer” means any assignment, pledge, conveyance, sale, transfer, mortgage,
encumbrance, grant of a security interest, issuance of a participation interest,
or other disposition, either directly or indirectly, by operation of law or
otherwise.

1.2 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

1.2.1 all capitalized terms defined in the recitals to this Agreement shall have
the meanings ascribed thereto whenever used in this Agreement and the terms
defined in this Agreement have the meanings assigned to them in this Agreement,
and the use of any gender herein shall be deemed to include the other genders;

1.2.2 terms not otherwise defined herein shall have the meaning assigned to them
in the Construction Loan Agreement (as in effect on the date hereof), including
the terms “payment in full,” “paid in full” and any other similar terms or
phrases;

1.2.3 all references in this Agreement to designated Sections, Subsections,
Paragraphs, Articles, Exhibits, Schedules and other subdivisions or addenda
without reference to a document are to the designated sections, subsections,
paragraphs and articles and all other subdivisions of and exhibits, schedules
and all other addenda to this Agreement, unless otherwise specified;

1.2.4 a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall apply to Paragraphs and other
subdivisions;

1.2.5 the terms “includes” or “including” shall mean without limitation by
reason of enumeration;

1.2.6 the words “herein”, “hereof”, “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular provision;

1.2.7 the words “to Cash Grant Bridge Lender’s knowledge” or “to the knowledge
of Cash Grant Bridge Lender” (or words of similar meaning) shall mean to the
actual knowledge of officers of Cash Grant Bridge Lender with direct oversight
responsibility for the Cash Grant Bridge Loan without independent investigation
or inquiry and without any imputation whatsoever; and

1.2.8 the words “to Construction Lender’s knowledge” or “to the knowledge of
Construction Lender” (or words of similar meaning) shall mean to the actual
knowledge of officers of Construction Lender with direct oversight
responsibility for the Construction Loan without independent investigation or
inquiry and without any imputation whatsoever.

D-5-8

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2.   APPROVAL OF LOANS AND LOAN DOCUMENTS.

2.1 Cash Grant Bridge Lender hereby acknowledges that it has received and
reviewed the terms and provisions of the Construction Loan Documents identified
on Exhibit C.

2.2 Construction Lender hereby acknowledges that:

(i) it has received and reviewed the terms and provisions of the Cash Grant
Bridge Loan Documents identified on Exhibit B, and, subject to the terms and
conditions of this Agreement, hereby consents to Borrower’s entering into the
Cash Grant Bridge Loan Documents and the making of the Cash Grant Bridge Loan;

(ii) the receipt of the Cash Grant Bridge Loan by Borrower will not constitute a
default or an event which, with the giving of notice or the lapse of time, or
both, would constitute a default under the Construction Loan Agreement; and

(iii) any conditions precedent to Construction Lender’s consent to the Cash
Grant Bridge Loan as set forth in the Construction Loan Documents or in any
other agreements with Borrower, as they apply to the Cash Grant Bridge Loan
Documents or the making of the Cash Grant Bridge Loan, have been either
satisfied or waived.

2.3 Notwithstanding any provisions herein to the contrary, Construction Lender
agrees that no default or Event of Default or the exercise of remedies and
realization upon the Separate Collateral by Cash Grant Bridge Lender under the
Cash Grant Bridge Loan Documents shall, in and of itself, constitute or give
rise to an automatic cross-default or Event of Default under the Construction
Loan Documents, entitle Construction Lender to accelerate payments under the
Construction Loan Documents or entitle Construction Lender to modify any
provisions of the Construction Loan Documents; provided, however, that the
foregoing shall not be deemed to prohibit Construction Lender from declaring an
Event of Default under the Construction Loan Documents if the underlying events
and circumstances giving rise to the default or Event of Default under the Cash
Grant Bridge Loan Documents would otherwise have constituted an independent
default or Event of Default under the Construction Loan Documents (as such
Construction Loan Documents are in effect as of the date of this Agreement) or
any Enforcement Action undertaken pursuant to the Cash Grant Bridge Loan
Documents otherwise results in a default or Event of Default under the
Construction Loan Documents, except to the extent waived pursuant to this
Agreement.

3.    CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement is
subject to the following conditions:

3.1.1 No Default or Event of Default (as such terms are defined in the
Construction Loan Documents and Cash Grant Bridge Loan Documents) shall have
occurred and be continuing as of the date hereof;

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3.1.2 Construction Lender shall have received fully executed copies of each of
the Cash Grant Bridge Loan Documents set forth on Exhibit B, and Cash Grant
Bridge Loan Lender shall have received fully executed copies of each of the
Construction Loan Documents set forth on Exhibit C; and

3.1.3 Each party hereto shall have received a fully executed copy of this
Agreement.

 4.    REPRESENTATIONS AND WARRANTIES.

4.1 Cash Grant Bridge Lender hereby represents and warrants as follows as of the
date hereof:

4.1.1 Cash Grant Bridge Lender (i) is duly organized and validly existing under
the laws of Maryland, (ii) is duly qualified, authorized to do business and in
good standing in every jurisdiction necessary to perform its obligations under
the Cash Grant Bridge Loan Documents and this Agreement, and (iii) has all
requisite power and authority to enter into and to perform its obligations
hereunder and under the Cash Grant Bridge Loan Documents, and to carry out the
terms hereof and thereof and the transactions contemplated hereby and thereby.

4.1.2 All actions necessary to authorize the execution, delivery, and
performance of this Agreement on behalf of Cash Grant Bridge Lender have been
duly taken and all such actions continue in full force and effect as of the date
hereof

4.1.3 Cash Grant Bridge Lender has duly executed and delivered this Agreement
and this Agreement constitutes the legal, valid, and binding agreement of Cash
Grant Bridge Lender enforceable against Cash Grant Bridge Lender in accordance
with its terms subject to (i) applicable bankruptcy, reorganization, insolvency
and moratorium laws, and (ii) general principles of equity which may apply
regardless of whether a proceeding is brought in law or in equity.

4.1.4 Exhibit B attached hereto and made a part hereof is a true, correct and
complete listing of the material Cash Grant Bridge Loan Documents as of the date
hereof, including all amendments, modifications, supplements and waivers with
respect thereto as of the date hereof. The Cash Grant Bridge Loan Documents and
this Agreement are the only material agreements between Borrower and Cash Grant
Bridge Lender with respect to the Cash Grant Bridge Loan and, to Cash Grant
Bridge Lender’s knowledge, there currently exists no default or event that, with
the giving of notice or the lapse of time, or both, would constitute a default
under any of the Cash Grant Bridge Loan Documents.

4.1.5 Cash Grant Bridge Lender is the legal and beneficial owner of the Cash
Grant Bridge Loan free and clear of any lien, security interest, option or other
charge or encumbrance.

4.1.6 Each of the representations and warranties set forth in this Section 4.1
shall survive the execution and delivery of this Agreement, the Cash Grant
Bridge Loan Documents and the consummation of the transactions contemplated
hereby and thereby.

4.2 Construction Lender hereby represents and warrants as follows as of the date
hereof:

D-5-10

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4.2.1 Construction Lender (i) is an Oklahoma limited liability company duly
organized and validly existing under the laws of the Oklahoma, (ii) is duly
qualified, authorized to do business and in good standing in every jurisdiction
necessary to perform its obligations under the Construction Loan Documents and
this Agreement, and (iii) has all requisite power and authority to enter into
and to perform its obligations hereunder, and to carry out the terms hereof and
the transactions contemplated hereby.

4.2.2 All actions necessary to authorize the execution, delivery, and
performance of this Agreement on behalf of Construction Lender have been duly
taken and all such actions continue in full force and effect as of the date
hereof.

4.2.3 Construction Lender has duly executed and delivered this Agreement and
this Agreement constitutes the legal, valid, and binding agreement of
Construction Lender, enforceable against Construction Lender in accordance with
its terms subject to (x) applicable bankruptcy, reorganization, insolvency and
moratorium laws and (y) general principles of equity which may apply regardless
of whether a proceeding is brought in law or in equity.

4.2.4 Exhibit C attached hereto and made a part hereof is a true, correct and
complete listing of the material Construction Loan Documents as of the date
hereof, including all amendments (including change orders under the EPC
Contract), modifications, supplements and waivers with respect thereto as of the
date hereof. The Construction Loan Documents and this Agreement are the only
material agreements between Borrower and Construction Lender with respect to the
Construction Loan and, to Construction Lender’s knowledge, there currently
exists no default or event that, with the giving of notice or the lapse of time,
or both, would constitute a default under any of the Construction Loan
Documents.

4.2.5 There is no litigation, action, suit, proceeding or investigation pending
or (to Construction Lender’s knowledge) threatened against Construction Lender
before or by any court, administrative agency, arbitrator or governmental
authority, body or agency which, if adversely determined, individually or in the
aggregate, (i) could adversely affect the performance by Construction Lender of
its obligations hereunder or under the EPC Contract or (ii) questions the
validity, binding effect or enforceability hereof, any action taken or to be
taken pursuant hereto or any of the transactions contemplated hereby.

4.2.6 Construction Lender is the legal and beneficial owner of the Construction
Loan free and clear of any lien, security interest, option or other charge or
encumbrance.

4.2.7 Each of the representations and warranties set forth in this Section 4.2
shall survive the execution and delivery of this Agreement, the Construction
Loan Documents and the consummation of the transactions contemplated hereby and
thereby.

4.2.8 As of the date hereof, the maturity date of the Construction Loan is
January 26, 2012.

5.    TRANSFER OF CASH GRANT BRIDGE LOAN OR CONSTRUCTION LOAN.

5.1 Construction Lender may, from time to time, in its sole discretion Transfer
all or any portion of the Construction Loan or any of its rights under the
Construction Loan or any interest therein to the extent permitted under the
Construction Loan Documents as in effect on the date hereof; provided, however,
that Construction Lender shall not, whether in the exercise of remedies under
the Construction Loan Documents or otherwise, Transfer all or a portion of the
Construction Loan or any interests therein or any interest in the Project to a
Disqualified Person or cause the occurrence of a Recapture Event, and provided
further that any transferee of Construction Lender’s interests or its collateral
under the Construction Loan Documents, including, without limitation, any lender
that refinances the Construction Loan or otherwise provides term loan financing
to the Project, shall agree to be bound by all of the terms, provisions and
conditions of this Agreement. Construction Lender agrees that it shall not
Transfer all or any portion of the Construction Loan or any interest therein to
Borrower or any Affiliate of Borrower unless an Event of Default is then
continuing under the Construction Loan and Cash Grant Bridge Lender shall have
been afforded the purchase opportunity described in Section 11 hereof.

D-5-11

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5.2 Subject to Section 6, Cash Grant Bridge Lender may, from time to time, in
its sole discretion, Transfer all of its portion of the Cash Grant Bridge Loan
or any part of its portion of the Cash Grant Bridge Loan or any interest
therein.

6.    FORECLOSURE OF SEPARATE COLLATERAL.

6.1 Cash Grant Bridge Lender shall not complete a foreclosure or other
realization upon the Equity Collateral under the Member Pledge Agreement or the
Idaho Sponsor Pledge Agreement (including, without limitation, obtaining title
to the Equity Collateral under the Member Pledge Agreement or the Idaho Sponsor
Pledge Agreement or selling or otherwise transferring the Equity Collateral
under the Member Pledge Agreement or the Idaho Sponsor Pledge Agreement) unless
(i) the transferee of title to the Equity Collateral under the Member Pledge
Agreement or the Idaho Sponsor Pledge Agreement is a Qualified Transferee, and
(ii) the Project will be managed by a Qualified Manager promptly after the
transfer of title to the Equity Collateral under the Member Pledge Agreement or
the Idaho Sponsor Pledge Agreement. Any such transfer by Cash Grant Bridge
Lender that complies with this Section 6.1 shall not result in an event of
default under the Construction Loan Agreement, including without limitation
Section 6.6 (Owner Change in Control) thereof.

6.2 Subject to Section 6.1 above and Section 8.2 below, nothing contained herein
shall limit or restrict the right of Cash Grant Bridge Lender to exercise its
rights and remedies under the Cash Grant Bridge Loan Documents, in law or in
equity, or otherwise, including in order to realize on any Separate Collateral
(including, without limitation, pursuant to the Cash Grant Power of Attorney),
and no consent of Construction Lender shall be required prior to the exercise by
Cash Grant Bridge Lender of any of Cash Grant Bridge Lender’s rights and
remedies under the Cash Grant Bridge Loan Documents.

7.    MODIFICATIONS, AMENDMENTS, ETC.

7.1 Subject to Section 6.2, Construction Lender shall have the right without the
consent of Cash Grant Bridge Lender in each instance to enter into any
amendment, deferral, extension, modification, increase, renewal, replacement,
consolidation, supplement or waiver (collectively, a “Construction Loan
Modification”) of the Construction Loan or the Construction Loan Documents,
provided that no such Construction Loan Modification shall (i) shorten the
scheduled maturity date of the Construction Loan, (ii) amend or modify the
provisions limiting transfers of interests in Borrower or the Project, or
provisions regarding the payment of dividends or distributions to Borrower
(including, without limitation, Section 5.15 (Restrictions on Redemptions,
Distributions, and Payments to Affiliates) of the Construction Loan Agreement),
(iii) shorten any Borrower cure period or add or modify any Borrower default
under any Construction Loan Document, (iv) create a lien on any of the Separate
Collateral, (v) amend or modify the EPC Contract to extend the Guaranteed
Substantial Completion Date (as defined therein) beyond December 23, 2011 or to
effect changes in the aggregate in excess of $500,000, or (vi) result in a
Recapture Event.

D-5-12

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7.2 Cash Grant Bridge Lender shall have the right without the consent of
Construction Lender in each instance to enter into any amendment, deferral,
extension, modification, increase, renewal, replacement, consolidation,
supplement or waiver (collectively, a “Cash Grant Bridge Loan Modification”) of
the Cash Grant Bridge Loan or the Cash Grant Bridge Loan Documents, or a
refinancing of the Cash Grant Bridge Loan or the Cash Grant Bridge Loan
Documents, provided that no such Cash Grant Bridge Loan Modification shall
create a lien on the Project, any of Borrower’s assets or any other collateral
that otherwise solely secures the Construction Loan (other than, for the
avoidance of doubt, any Separate Collateral) without the written consent of
Construction Lender unless, with respect to the creation of any such liens, such
liens are expressly subordinated to any liens in favor of Construction Lender.

7.3 Cash Grant Bridge Lender shall deliver to Construction Lender, and
Construction Lender shall deliver to Cash Grant Bridge Lender, copies of any and
all material modifications, amendments, extensions, consolidations, spreaders,
restatements, alterations, changes or revisions to any one or more of their
respective loan documents (including, without limitation, any side letters,
waivers or consents entered into, executed or delivered by them) within a
reasonable time after any of such applicable instruments have been fully
executed.

8.    PRIORITY OF SECURITY INTERESTS

8.1 Notwithstanding anything to the contrary in any Construction Loan Documents,
including but not limited to the Construction Security Agreement, Construction
Lender hereby (i) relinquishes, subordinates and makes junior any and all of its
right, title, security interests and liens on and in the Separate Collateral to
(i) the Cash Grant Bridge Loan, (ii) the liens and security interests created by
the Cash Grant Bridge Loan Documents and (iii) all of the terms, covenants,
conditions, rights and remedies contained in the Cash Grant Bridge Loan
Documents and agrees that the same shall constitute the separate collateral of,
and shall constitute security solely in favor of, Cash Grant Bridge Lender,
regardless of whether there occurs a default under any Construction Loan
Document or the exercise of any remedy by Construction Lender thereunder, and
(ii) agrees that any such Separate Collateral or proceeds thereof received by
Construction Lender in connection with the exercise of any right or remedy by
Construction Lender in contravention of this Agreement shall, whether or not any
Proceeding has been commenced by or against any Borrower Affiliate Entity, be
segregated and held in trust and forthwith paid over to the Cash Grant Bridge
Lender in the same form as received, with any necessary endorsements or as a
court of competent jurisdiction may otherwise direct. This authorization is
coupled with an interest and is irrevocable for so long as both the Cash Grant
Bridge Loan and the Construction Loan are outstanding. No amendments or
modifications to the Construction Loan Documents or waivers of any provisions
thereof shall affect the subordination thereof as set forth in this Section.
Construction Lender irrevocably authorizes and empowers Cash Grant Bridge Lender
to record the UCC-3 amendment attached hereto as Exhibit D to the UCC financing
statement filed in connection with the Construction Security Agreement to
effectuate the foregoing.

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8.2 Notwithstanding anything to the contrary in any Cash Grant Bridge Loan
Documents, including but not limited to the Cash Grant Security Agreement, Cash
Grant Bridge Lender hereby (i) relinquishes, subordinates and makes junior any
and all of its right, title, security interests and liens on and in the
collateral of Construction Lender (other than, for the avoidance of doubt, the
Separate Collateral) under the Construction Loan Documents to (i) the
Construction Loan, (ii) the liens and security interests created by the
Construction Loan Documents and (iii) all of the terms, covenants, conditions,
rights and remedies contained in the Construction Loan Documents and agrees that
the same shall constitute the separate collateral of, and shall constitute
security solely in favor of, Construction Lender, regardless of whether there
occurs a default under any Cash Grant Bridge Loan Document or the exercise of
any remedy by Cash Grant Bridge Lender thereunder, and (ii) agrees that any such
collateral of Construction Lender under the Construction Loan Documents or
proceeds thereof received by Cash Grant Bridge Lender in connection with the
exercise of any right or remedy by Cash Grant Bridge Lender in contravention of
this Agreement shall, whether or not any Proceeding has been commenced by or
against any Borrower Affiliate Entity, be segregated and held in trust and
forthwith paid over to the Construction Lender in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may
otherwise direct. This authorization is coupled with an interest and is
irrevocable for so long as both the Cash Grant Bridge Loan and the Construction
Loan are outstanding. No amendments or modifications to the Cash Grant Bridge
Loan Documents or waivers of any provisions thereof shall affect the
subordination thereof as set forth in this Section.

8.3 The parties hereto acknowledge that it is their intent that the collateral
in favor of Cash Grant Bridge Lender be separate and distinct from the
collateral in favor of Construction Lender; that Construction Lender have no
Lien upon the Separate Collateral; and that Cash Grant Bridge Lender have no
Lien upon the collateral of Construction Lender under the Construction Loan
Documents, as in effect as of the date hereof.

8.4 Until all obligations of Borrower under the Construction Loan Documents (as
in effect as of the date hereof) are paid or performed in full, Cash Grant
Bridge Lender will not pursue any remedy against Borrower other than: (i)
foreclosing upon or otherwise enforcing or exercising Cash Grant Bridge Lender's
rights to the Separate Collateral, including without limitation pursuing
collection of the Cash Grant Proceeds and exercising its rights under the Cash
Grant Power of Attorney (as hereinafter defined); (ii) naming Borrower in any
action with respect to fraud, willful misconduct, willful misrepresentation or
misappropriation of Cash Grant Proceeds or revenues that are to be deposited
into the Blocked Account, or any other earnings, revenues, or proceeds from or
of the Separate Collateral that should have been paid as provided under the Cash
Grant Bridge Loan Documents; and (iii) any other remedy at law or in equity
against Borrower (including the filing of any petition under bankruptcy,
insolvency or creditor's rights laws with respect to the Borrower) after a
period of one hundred eighty (180) days after Cash Grant Bridge Lender provides
Construction Lender notice that an Event of Default under the Cash Grant Bridge
Loan Documents has occurred.

D-5-14

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8.5 Cash Grant Bridge Lender shall be entitled to retain any proceeds generated
as a result of an Equity Collateral Enforcement Action or funds received with
respect to the Separate Collateral. Notwithstanding anything to the contrary
contained in this Agreement, Cash Grant Bridge Lender may accept payments of any
amounts due and payable (both current and delinquent) from time to time which
Borrower is obligated to pay Cash Grant Bridge Lender in accordance with the
terms and conditions of the Cash Grant Bridge Loan Documents and Cash Grant
Bridge Lender shall have no obligation to pay over to Construction Lender any
such amounts, and Cash Grant Bridge Lender may collect and receive any amounts
in respect of the Separate Collateral.

8.6 Cash Grant Bridge Lender may take any Equity Collateral Enforcement Action
which is permitted under Section 5 hereof; provided, however, that (i) Cash
Grant Bridge Lender shall, prior to commencing any Equity Collateral Enforcement
Action, give Construction Lender written notice of the default which would
permit Cash Grant Bridge Lender to commence such Equity Collateral Enforcement
Action and (ii) Cash Grant Bridge Lender shall provide Construction Lender with
copies of any and all material notices, pleadings, agreements, motions and
briefs served upon, delivered to or with any party to any Equity Collateral
Enforcement Action and otherwise keep Construction Lender reasonably apprised as
to the status of any Equity Collateral Enforcement Action.

9.    MARSHALLING OF ASSETS.

9.1 Subject to the other provisions of this Agreement, each of Cash Grant Bridge
Lender and Construction Lender hereby waives any requirement for marshaling of
assets thereby in connection with any foreclosure of any security interest or
any other realization upon collateral in respect of the Construction Loan
Documents or the Cash Grant Bridge Loan Documents, as applicable, or any
exercise of any rights of set-off or otherwise. Each of Cash Grant Bridge Lender
and Construction Lender assumes all responsibility for keeping itself informed
as to the condition (financial or otherwise) of Borrower, the condition of the
Project and all other collateral and other circumstances and, except for notices
expressly required by this Agreement, neither Construction Lender nor Cash Grant
Bridge Lender shall have any duty whatsoever to obtain, advise or deliver
information or documents to the other relative to such condition, business,
assets and/or operations.

9.2 Subject to Section 25 of this Agreement, the provisions of this Agreement
shall be applicable both before and after the commencement, whether voluntary or
involuntary, of any case, proceeding or other action against any Borrower
Affiliate Entity under any existing or future law of any jurisdiction relating
to bankruptcy, insolvency, reorganization or relief of debtors (a “Proceeding”).

10.    RIGHTS OF CURE.

10.1 Prior to Construction Lender commencing any Enforcement Action under the
Construction Loan Documents, Construction Lender shall provide Cash Grant Bridge
Lender with written notice of the default which would permit Construction Lender
to commence such Enforcement Action, whether or not Construction Lender is
obligated to give notice thereof to Borrower (each, a “Construction Loan Default
Notice”) and shall permit Cash Grant Bridge Lender an opportunity to cure such
default in accordance with the provisions of this Section 10.1.

D-5-15

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10.1.1 If the default is a monetary default relating to a liquidated sum of
money, Cash Grant Bridge Lender shall have ten (10) Business Days after receipt
of the Construction Loan Default Notice to cure such monetary default by payment
to Construction Lender of all amounts required for Borrower to cure such
default.

10.1.2 If the default is of a non-monetary nature, Cash Grant Bridge Lender
shall have the same period of time, after receipt of the Construction Loan
Default Notice, as Borrower under the Construction Loan Documents, as in effect
as of the date hereof, to cure such non-monetary default; provided, however,
that with regard to the event of default set forth at Section 6.7 of the
Construction Loan Agreement (Abandonment), Cash Grant Bridge Lender shall have
thirty (30) Business Days after receipt of the Construction Loan Default Notice
to cure such default.

10.2 In addition to Cash Grant Bridge Lender’s rights herein and notwithstanding
anything to the contrary in this Agreement or the Construction Loan Documents,
Construction Lender covenants and agrees that Construction Lender will not
exercise any remedy during the Recapture Period if such remedy would result in a
Recapture Event.

10.3 Prior to Cash Grant Bridge Lender commencing any Enforcement Action under
the Cash Grant Bridge Loan Documents, Cash Grant Bridge Lender shall provide
Construction Lender with written notice of the default which would permit Cash
Grant Bridge Lender to commence such Enforcement Action to the same extent Cash
Grant Bridge Lender is obligated to give notice thereof to Borrower (each, a
“Cash Grant Bridge Loan Default Notice”) and shall permit Construction Lender an
opportunity to cure such default in accordance with the provisions of this
Section 10.3.

10.3.1 If the default is a monetary default relating to a liquidated sum of
money, Construction Lender shall have ten (10) Business Days after receipt of
the Cash Grant Bridge Loan Default Notice to cure such monetary default by
payment to Cash Grant Bridge Lender of all amounts required for Borrower to cure
such default.

10.3.2 If the default is of a non-monetary nature, Construction Lender shall
have the same period of time, after receipt of the Cash Grant Bridge Loan
Default Notice, as Borrower under the Cash Grant Loan Documents, as in effect as
of the date hereof, to cure such non-monetary default.

10.4 To the extent that any Qualified Transferee acquires the Equity Collateral
under the Member Pledge Agreement in accordance with the provisions and
conditions of this Agreement, such Qualified Transferee shall acquire the same
subject to the Construction Loan and the terms, conditions and provisions of the
Construction Loan Documents (including any outstanding defaults or Events of
Default thereunder) for the balance of the term thereof, which shall not be
accelerated by Construction Lender solely due to such acquisition.

D-5-16

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11.    RIGHT TO PURCHASE CONSTRUCTION LOAN. If (i) the Construction Loan has
been accelerated, (ii) any Enforcement Action has been commenced and is
continuing under the Construction Loan Documents, (iii) a monetary Event of
Default has occurred under the Construction Loan Documents, (iv) Cash Grant
Bridge Lender has cured one or more defaults on the part of Borrower under the
Construction Loan Documents pursuant to Section 10 hereof, or (v) Construction
Lender proposes to Transfer the Construction Loan to any Borrower Affiliate
Entity or any Affiliate of the foregoing (each of the foregoing, a “Purchase
Option Event”), Construction Lender shall provide written notice thereof to Cash
Grant Bridge Lender whereupon, on ten (10) Business Days’ prior written notice
to Construction Lender (the “Purchase Notice”), Cash Grant Bridge Lender shall
have the right to purchase, in whole but not in part, the Construction Loan for
a price equal to the sum of the outstanding principal balance thereof, all
accrued interest thereon (including default interest), and any other fees or
amounts of any nature payable to Construction Lender in connection with the
Construction Loan (the “Loan Purchase Price”). Concurrently with payment to
Construction Lender of the Loan Purchase Price, Construction Lender shall
deliver or cause to be delivered Cash Grant Bridge Lender (A) all Construction
Loan Documents held by or on behalf of Construction Lender and will execute in
favor of Cash Grant Bridge Lender or its designee assignment documentation, in
form and substance reasonably acceptable to Cash Grant Bridge Lender and
Construction Lender, at the sole cost and expense of Cash Grant Bridge Lender to
assign the Construction Loan and its rights under the Construction Loan
Documents (without recourse, representations or warranties, except for
representations as to the outstanding balance of the Construction Loan and as to
Construction Lender’s not having assigned or encumbered its rights in the Loan)
and (B) all funds on deposit in all accounts created under the Construction Loan
Documents. The right of Cash Grant Bridge Lender to purchase the Construction
Loan shall automatically terminate (i) upon a transfer of the Project by
foreclosure sale, sale by power of sale or delivery of a deed in lieu of
foreclosure or (ii) if a Purchase Option Event ceases to exist. In addition to
any and all other rights of Cash Grant Bridge Lender herein, if Borrower offers
to deliver or actually delivers to Construction Lender a deed in lieu of
foreclosure to the Project (each, a “Deed in Lieu”), Construction Lender shall
provide Cash Grant Bridge Lender not less than seven (7) Business Days written
notice prior to accepting a Deed in Lieu to the Project, and if Cash Grant
Bridge Lender shall deliver a Purchase Notice to Construction Lender prior to
the expiration of such seven (7) Business Day period Construction Lender shall
not accept the Deed in Lieu to the Project, provided that Cash Grant Bridge
Lender pays the Loan Purchase Price to Construction Lender and acquires the
Construction Loan as and when otherwise required under this Section 11.

12. ADDITIONAL UNDERSTANDINGS. For as long as the Cash Grant Bridge Loan remains
outstanding:

12.1 EPC Contract. Subject to the provisions of Section 7.1 hereunder,
Construction Lender shall not, without the prior written consent of Cash Grant
Bridge Lender (such consent not to be unreasonably withheld, delayed or
conditioned), (i) cancel or terminate the EPC Contract except as provided in the
EPC Contract, or consent to or accept any cancellation, termination or
suspension thereof by Borrower, (ii) except as provided in the EPC Contract,
suspend performance of its obligations thereunder, or (iii) except as provided
in the EPC Contract, sell, assign or otherwise dispose (by operation of law or
otherwise) of any part of its interest in the EPC Contract.

D-5-17

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12.2 Insurance Requirements. Cash Grant Bridge Lender shall have the right to
approve (such approval not to be unreasonably withheld, conditioned or delayed)
any proposed modification or waiver of any provision of any Construction Loan
Document governing the types, nature or amounts of insurance coverage required
to be obtained and maintained by Borrower.

12.3 Use of Insurance Proceeds. In the event of any damage to or destruction of
all or any portion of the Project, the parties hereto hereby agree that: (i)
Borrower shall be required to promptly commence and proceed diligently with the
work of repair, reconstruction and restoration of the Project, and (ii) all
insurance proceeds and awards paid in connection with such casualty shall be
applied solely and exclusively to costs incurred in connection with such repair,
reconstruction and restoration.

12.4 Distributions. Borrower acknowledges that pursuant to the Construction Loan
Agreement, it is not entitled to any distributions, whether on account of
revenues generated by the Project or otherwise. Notwithstanding the foregoing,
Borrower hereby instructs Construction Lender, and Construction Lender hereby
agrees, that any dividends or other distributions, direct or indirect, on
account of any shares of any class of equity of Borrower now or hereafter, or
any other distributions (in cash, property or obligation) on, or other payment
on account of, any interest in Borrower, that are otherwise to be released to
Borrower pursuant to the Construction Loan Agreement (including pursuant to any
project revenue “waterfall”), shall be deposited into the Blocked Account, which
amounts shall be held for the benefit of the Cash Grant Bridge Lender in
accordance with the terms and provisions of the Deposit Account Control
Agreement and shall constitute Separate Collateral.

12.5 Cash Grant Power of Attorney. Construction Lender acknowledges that in
connection with the Cash Grant Application and as required by the Cash Grant
Bridge Loan Agreement, Borrower has granted to Cash Grant Bridge Lender an
irrevocable power of attorney to act in the place of Borrower with respect to
the Cash Grant Application and any filings or notices related thereto (the “Cash
Grant Power of Attorney”). Construction Lender hereby acknowledges
(notwithstanding anything to the contrary contained in the Construction Security
Agreement or any other Construction Loan Document), the sole and exclusive right
of Cash Grant Bridge Lender to exercise any and all rights under the Cash Grant
Power of Attorney.

13.    OBLIGATIONS HEREUNDER NOT AFFECTED.

13.1 All rights, interests, agreements and obligations of Construction Lender
and Cash Grant Bridge Lender under this Agreement shall remain in full force and
effect irrespective of:

13.1.1 any lack of validity or enforceability of the Construction Loan Documents
or the Cash Grant Bridge Loan Documents or any other agreement or instrument
relating thereto;

13.1.2 any taking, exchange, release or non-perfection of any other collateral,
or any taking, release or amendment or waiver of or consent to or departure from
any guaranty, for all or any portion of the Construction Loan or the Cash Grant
Bridge Loan;

D-5-18

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13.1.3 any manner of application of collateral, or proceeds thereof, to all or
any portion of the Construction Loan or the Cash Grant Bridge Loan, or any
manner of sale or other disposition of any collateral for all or any portion of
the Construction Loan or the Cash Grant Bridge Loan or any other assets of
Borrower or any Affiliates of Borrower;

13.1.4 any change, restructuring or termination of the corporate structure or
existence of Borrower or any Affiliates of Borrower; or

13.1.5 any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Borrower or a subordinated creditor subject to
the terms hereof.

13.2 This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of all or any portion of the Construction
Loan or Cash Grant Bridge Loan is rescinded or must otherwise be returned by
Construction Lender or Cash Grant Bridge Lender, as the case may be, upon the
insolvency, bankruptcy or reorganization of Borrower or otherwise, all as though
such payment had not been made.

14.    NOTICES. All notices, demands, requests, consents, approvals or other
communications required, permitted, or desired to be given hereunder shall be in
writing sent by facsimile (with answer back acknowledged) or by registered or
certified mail, postage prepaid, return receipt requested, or delivered by hand
or reputable overnight courier addressed to the party to be so notified at its
address hereinafter set forth, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section. Any such
notice, demand, request, consent, approval or other communication shall be
deemed to have been received: (i) three (3) Business Days after the date mailed,
(ii) on the date of sending by facsimile if sent during business hours (before
6:00 pm recipient local time) on a Business Day (otherwise on the next Business
Day), (iii) on the date of delivery by hand if delivered during business hours
on a Business Day (otherwise on the next Business Day) and (iv) on the next
Business Day if sent by an overnight commercial courier, in each case addressed
to the parties as follows:

  To Cash Grant Bridge Lender:       ARES CAPITAL CORPORATION,   245 Park
Avenue, 44th Floor   New York, NY 10167   Attn: Raymond Wright   Telecopy: (212)
750-1777       With a copy to:       Latham & Watkins LLP   600 West Broadway,
Suite 1800   San Diego, CA 92104   Attention: Kelley Michael Gale, Esq.  
Telecopy: (619) 696-7419       To Construction Lender:

D-5-19

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  SAIC CONSTRUCTORS, LLC   9400 N. Broadway, Suite 300   Oklahoma City, Oklahoma
73114   Attn: Greg Meacham   Telecopy: (405) 478-1238       With a copy to:    
  McAfee & Taft, A Professional Corporation   10th Floor, Two Leadership Square
  211 N. Robinson   Oklahoma City, OK 73102-7103   Attn: Robert L. Garbrecht,
Esq.   Telecopy: (405) 235-0439

15.    ESTOPPEL.

15.1 Cash Grant Bridge Lender shall, within ten (10) days following a request
from Construction Lender, provide Construction Lender with a written statement
setting forth the then current outstanding principal balance of the Cash Grant
Bridge Loan, the aggregate accrued and unpaid interest under the Cash Grant
Bridge Loan, and stating whether to Cash Grant Bridge Lender’s knowledge any
default or Event of Default exists under the Cash Grant Bridge Loan or this
Agreement.

15.2 Construction Lender shall, within ten (10) days following a request from
Cash Grant Bridge Lender, provide Cash Grant Bridge Lender with a written
statement setting forth the then current outstanding principal balance of the
Construction Loan, the aggregate accrued and unpaid interest under the
Construction Loan, and stating whether to Construction Lender’s knowledge any
default or Event of Default exists under the Construction Loan or this
Agreement.

16.    FURTHER ASSURANCES. So long as all or any portion of the Construction
Loan and the Cash Grant Bridge Loan remains unpaid, Cash Grant Bridge Lender and
Construction Lender will each execute, acknowledge and deliver to the other, any
other instruments or agreements reasonably required in order to carry out the
provisions of this Agreement or to effectuate the intent and purposes hereof.

17.    NO THIRD PARTY BENEFICIARIES; NO MODIFICATION. The parties hereto do not
intend the benefits of this Agreement to inure to any Borrower Affiliate Entity
or any other Person. This Agreement may not be changed or terminated orally, but
only by an agreement in writing signed by the party against whom enforcement of
any change is sought. Notwithstanding the foregoing, the parties hereto intend
the benefits and obligations of this Agreement to inure to Cash Grant Bridge
Lender and Construction Lender.

D-5-20

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18.    SUCCESSORS AND ASSIGNS. This Agreement shall bind all successors and
permitted assigns of Cash Grant Bridge Lender and Construction Lender and shall
inure to the benefit of all successors and permitted assigns of Construction
Lender and Cash Grant Bridge Lender.

19.    COUNTERPART ORIGINALS. This Agreement may be executed in counterpart
originals, each of which shall constitute an original, and all of which together
shall constitute one and the same agreement.

20.    LEGAL CONSTRUCTION. This Agreement and any claim or controversy arising
out of the subject matter hereof (whether sounding in contract law, tort law or
otherwise) shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York (other than any choice of law rules that would
result in the application of laws other than the law of the State of New York).
The parties irrevocably (i) agree that any dispute shall be brought in any state
or federal court in Washoe County, Nevada; (ii) consent to the jurisdiction of
each such court in any dispute; (iii) waive any objection to venue of any
dispute in any of such courts and any claim that any dispute has been brought in
an inconvenient forum; and (iv) consent to service of any and all process in any
dispute by service of copies of such process at its notice address, provided
that simultaneous copies are also served on all copy recipients. Nothing in this
paragraph limits any Person’s right to serve legal process in any manner law
allows or to bring any suit, action or proceeding against Borrower or its
property anywhere. THE CONSTRUCTION LENDER AND CASH GRANT BRIDGE LENDER WAIVE
JURY TRIAL IN ANY DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT, ITS
INTERPRETATION OR ENFORCEMENT, OR THE RELATIONSHIP OF THE PARTIES WITH RESPECT
TO THE PROJECT OR ANY COLLATERAL HELD BY EITHER PARTY RELATING THERETO.

21.    NO WAIVER; REMEDIES. No failure on the part of Construction Lender or
Cash Grant Bridge Lender to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

22.    NO JOINT VENTURE. Nothing provided herein is intended to create a joint
venture, partnership, tenancy-in-common or joint tenancy relationship between or
among any of the parties hereto.

23.    CAPTIONS. The captions in this Agreement are inserted only as a matter of
convenience and for reference.

24.    CONFLICTS. In the event of any conflict, ambiguity or inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any of the Construction Loan Documents or the Cash Grant Bridge Loan
Documents, the terms and conditions of this Agreement shall control.

D-5-21

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25.    NO RELEASE. Nothing herein contained shall operate to release Borrower
from (i) its obligation to keep and perform all of the terms, conditions,
obligations, covenants and agreements contained in the Construction Loan
Documents or any liability of Borrower under the Construction Loan Documents; or
(ii) its obligation to keep and perform all of the terms, conditions,
obligations, covenants and agreements contained in the Cash Grant Bridge Loan
Documents or any liability of Borrower under the Cash Grant Bridge Loan
Documents.

26.    CONTINUING AGREEMENT. This Agreement is a continuing agreement and shall
remain in full force and effect until the earliest of payment in full of either
the Construction Loan or the Cash Grant Bridge Loan; provided, however, that any
rights or remedies of either party hereto arising out of any breach of any
provision hereof occurring prior to such date of termination shall survive such
termination.

27.    SEVERABILITY. In the event that any provision of this Agreement or the
application hereof to any party hereto shall, to any extent, be invalid or
unenforceable under any applicable statute, regulation, or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform to such statute, regulation or
rule of law, and the remainder of this Agreement and the application of any such
invalid or unenforceable provisions to parties, jurisdictions or circumstances
other than to whom or to which it is held invalid or unenforceable, shall not be
affected thereby nor shall same affect the validity or enforceability of any
other provision of this Agreement.

28.    EXPENSES.

28.1 To the extent not paid by Borrower or out of or from any collateral
securing the Construction Loan which is realized by Construction Lender, Cash
Grant Bridge Lender agrees upon demand to pay to Construction Lender the amount
of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts or agents, which
Construction Lender may incur in connection with the (i) exercise or enforcement
of any of the rights of Construction Lender against Cash Grant Bridge Lender
hereunder to the extent that Construction Lender is the prevailing party in any
dispute with respect thereto or (ii) failure by Cash Grant Bridge Lender to
perform or observe any of the provisions hereof.

28.2 To the extent not paid by Borrower out of or from any collateral securing
the Cash Grant Bridge Loan which is realized by Cash Grant Bridge Lender,
Construction Lender agrees upon demand to pay to Cash Grant Bridge Lender the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts or agents, which
Cash Grant Bridge Lender may incur in connection with the (i) exercise or
enforcement of any of the rights of Cash Grant Bridge Lender against
Construction Lender hereunder to the extent that Cash Grant Bridge Lender is the
prevailing party in any dispute with respect thereto or (ii) failure by
Construction Lender to perform or observe any of the provisions hereof.

D-5-22

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29. INJUNCTION. Construction Lender and Cash Grant Bridge Lender each
acknowledge (and waive any defense based on a claim) that monetary damages are
not an adequate remedy to redress a breach by the other hereunder and that a
breach by either Construction Lender or Cash Grant Bridge Lender hereunder would
cause irreparable harm to the other. Accordingly, Construction Lender and Cash
Grant Bridge Lender agree that upon a breach of this Agreement by the other, the
remedies of injunction, declaratory judgment and specific performance shall be
available to such non-breaching party.

30.    MUTUAL DISCLAIMER.

30.1 Each of Construction Lender and Cash Grant Bridge Lender are sophisticated
lenders and/or financiers and their respective decision to enter into the
Construction Loan and the Cash Grant Bridge Loan, as applicable, is based upon
their own independent expert evaluation of the terms, covenants, conditions and
provisions of, respectively, the Construction Loan Documents and the Cash Grant
Bridge Loan Documents and such other matters, materials and market conditions
and criteria which each of Construction Lender and Cash Grant Bridge Lender deem
relevant. Each of Construction Lender and Cash Grant Bridge Lender has not
relied in entering into this Agreement, and respectively, the Construction Loan,
the Construction Loan Documents, the Cash Grant Bridge Loan or the Cash Grant
Bridge Loan Documents, upon any oral or written information, representation,
warranty or covenant from the other, or any of the other’s representatives,
employees, Affiliates or agents other than the representations and warranties of
the other contained herein. Each of Construction Lender and Cash Grant Bridge
Lender further acknowledges that no employee, agent or representative of the
other has been authorized to make, and that each of Construction Lender and Cash
Grant Bridge Lender have not relied upon, any statements, representations,
warranties or covenants other than those specifically contained in this
Agreement.

30.2 Each of Construction Lender and Cash Grant Bridge Lender acknowledges that
the Construction Loan and the Cash Grant Bridge Loan Documents are distinct,
separate transactions and loans, separate and apart from each other.

[NO FURTHER TEXT ON THIS PAGE]

D-5-23

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IN WITNESS WHEREOF, Construction Lender and Cash Grant Bridge Lender have
executed this Intercreditor Agreement as of the date and year first set forth
above.

  CONSTRUCTION LENDER:       SAIC CONSTRUCTORS, LLC,   an Oklahoma limited
liability company          
By:                                                                 Name:  
Title:         CASH GRANT BRIDGE LENDER:   ARES CAPITAL CORPORATION          
By:                                                                 Name:  
Title:           ACKNOWLEDGED AND AGREED:       USG NEVADA LLC,   a Delaware
limited liability company          
By:                                                                 Name:  
Title:

[Signature Page to Intercreditor Agreement]

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EXHIBIT A

PARCEL A:

Parcel 2 of a Map of Division into Large Parcels for the Kosmos Company, a
portion of Mineral Survey 4036 Brimstone Placer, a portion of Section 16,
Township 29 North, Range 23 East, Mount Diablo Meridian, recorded on August 10,
1994 as File No. 1823117, Division Map No. 148, Washoe County Records.

PARCEL B:

An easement over a 50 foot roadway over Parcel 1 of said Map of Division into
Large Parcels as shown on said map.

EXCEPTING THEREFROM all oil, gas, hydrocarbons, water, geothermal resources and
minerals of whatsoever nature found under said land, together with right of
ingress and egress to conduct surveys for the substances and the right to remove
any of the substances found below the surface of the property and to maintain
any operations on the property for those purposes contemplated in that
Geothermal Resource Supply Agreement dated June 18, 1993 between vestee and
Empire Farms, a Nevada general partnership, provided that such removal or
operations shall in no way interfere with the surface of the property.

APN: 071-070-19

Exhibit A-1

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EXHIBIT B
Material Cash Grant Bridge Loan Documents

1.

Cash Grant Bridge Loan Agreement

    2.

Cash Grant Bridge Loan Note

    3.

Member Pledge Agreement

    4.

Idaho Sponsor Pledge Agreement

    5.

Cash Grant Security Agreement

    6

Sponsor Cash Grant Shortfall Guaranty

    7.

Deposit Account Control Agreement

    8.

Cash Grant Power of Attorney

    9.

Cash Grant Notice of Assignment

Exhibit B-1

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EXHIBIT C
Material Construction Loan Documents

1)

The EPC Contract.

    2)

The Construction Loan Agreement.

    3)

The Construction Note.

    4)

The Construction Security Agreement.

    5)

Leasehold Deed of Trust with Power of Sale, Security Agreement and Fixture
Filing dated as of August 27, 2010 between Borrower and Stewart Title Company of
Nevada – Northern Division, for the benefit of Construction Lender.

    6)

Environmental Indemnification Agreement dated as of August 27, 2010 between
Borrower and Construction Lender.

    7)

Collateral Assignment of Power Purchase Agreements dated as of August 27, 2010
between Borrower and Construction Lender.

    8)

Collateral Assignment of Contracts, Leases, Permits, and Rights of Way dated as
of August 27, 2010 between Borrower and Construction Lender.

    9)

UCC-1 Financing Statement filed as document # 2010 3025537 with the Delaware
Department of State.

    10)

Landlord’s Consent Agreement dated as of August 27, 2010 between U.S.
Geothermal, Inc., an Idaho corporation, and Construction Lender.

    11)

Amended and Restated Change in Control Guaranty dated as of October 13, 2010 by
U.S. Geothermal, Inc., a Delaware corporation, in favor of Construction Lender.

    12)

Indemnification Agreement dated as of August 27, 2010 between U.S. Geothermal,
Inc., a Delaware corporation, and Construction Lender.

    13)

Joint Escrow Instructions made by Borrower and Construction Lender to First
American Specialty Services.

    14)

Assignments of Record Title Interest in Leases For Oil and Gas or Geothermal
Resources (BLM Leases).

    15)

Oil, Gas, and Geothermal Notice of Change of Owner (Nevada Division of Minerals
Well Permits).

    16)

Reports of Conveyance and Notice of Pledge (Nevada Division of Water Resources
Water Permits).

Exhibit C-1

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17)

Assignment and Assumption of Lease dated as of August 27, 2010 made by Borrower
(Kosmos Lease).

    18)

Assignment and Assumption of Lease dated as of August 27, 2010 made by Borrower
(Water Lease).

    19)

Assignment and Assumption Agreement dated as of August 27, 2010 made by Borrower
(Power Purchase Agreement).

A-2

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EXHIBIT D
UCC-3 Amendment

 

Exhibit A-1

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EXHIBIT D-6
to Financing Agreement

FORM OF
IRREVOCABLE POWER OF ATTORNEY
USG NEVADA LLC

November 9, 2011

KNOW ALL MEN BY THESE PRESENTS:

USG NEVADA LLC, a Delaware limited liability company (“Borrower”), does hereby
make, constitute and appoint ARES CAPITAL CORPORATION, a Maryland corporation,
as the Lender, as its true and lawful attorney-in-fact (together with its
successors, designees and assigns in such capacity, the “Attorney-in-Fact”) with
full power and authority to act, for the purpose of performing the obligations
and exercising the rights of the Borrower with respect to the Cash Grant and the
Cash Grant Application (as each such term is defined in the Financing Agreement
described below) and such filings, reports, certifications or other documents or
actions (including communications or consultation with the United States
Treasury Department) by and among Borrower and the Attorney-in-Fact, including
but not limited to the power to execute all documents and instruments and taking
all such other actions and executing any instrument or making such
communications (including with the United States Treasury Department) which the
Attorney-in-Fact may deem necessary or advisable in connection with the Cash
Grant and the Cash Grant Application; provided, however, that Lender shall not
exercise any of the aforementioned rights unless an Event of Default has
occurred and is continuing and has not been waived in accordance with the
Financing Documents. Any capitalized terms used but not defined herein shall
have the meaning assigned to them in the Financing Agreement, dated as of the
date hereof, by and among Borrower and Lender (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Financing
Agreement”).

This power of attorney is irrevocable and coupled with an interest. This
Irrevocable Power of Attorney shall be effective until the earlier of (a) the
full satisfaction in cash of all Obligations (as defined in the Financing
Agreement), other than unasserted contingent indemnity obligations, and (b) the
end of the five-year period commencing on the Placed-in-Service Date.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Borrower has caused this Irrevocable Power of Attorney to be
executed by its officer thereunto duly authorized as of the date first written
above.

  USG NEVADA LLC,   a Delaware limited liability company,   as Borrower         
               By:                                                              
                 
 Name:                                                                          
       Title:                                                              

[SIGNATURE PAGE TO POWER OF ATTORNEY]

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

State of ______________________)

County of ______________________)

On ________________________________before me, ________________________________,

a Notary Public, personally appeared ________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of [____________]
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

________________________________(seal)
Comm. #
Exp.

[SIGNATURE PAGE TO POWER OF ATTORNEY]

--------------------------------------------------------------------------------

EXHIBIT D-7
TO FINANCING AGREEMENT

FORM OF
NOTICE OF ASSIGNMENT

This Notice refers to Treasury Application Number ____________________submitted
by USG NEVADA LLC, a Delaware limited liability company, to the United States
Department of the Treasury for payment under Section 1603 of Division B of the
American Recovery and Reinvestment Act of 2009.

The payment due or to become due under the application described above has been
assigned to the undersigned assignee, ARES CAPITAL CORPORATION, a Maryland
corporation, under the provisions of the Assignment of Claims Act of 1940, as
amended, 31 U.S.C. 3727, 41 U.S.C. 15.

A true copy of the instrument of assignment executed by the above named
applicant on ________________, 2011 is attached hereto as Exhibit A.

The payment due or to become due under the application described above should be
made payable to the undersigned assignee, provided the undersigned is registered
in the Central Contractor Registry.

[SIGNATURE PAGES FOLLOW]

Exhibit D-7-1

--------------------------------------------------------------------------------

ASSIGNOR: ASSIGNEE:         USG NEVADA LLC, ARES CAPITAL CORPORATION, a Delaware
limited liability company a Maryland corporation            
Signature:                                                               DUNS
No.:   Name:                                                              
Address: 245 Park Avenue, 44th Floor
Title:                                                                 New York,
NY 10167   Phone: (212) 750-4915   Fax: (212) 750-1777   Email:
wright@aresmgmt.com   Attn: Raymond L. Wright WITNESS 1:                
Signature:                                                              
Signature:                                                                
Name:                                                               Name:
                                                                  Title:
                                                                WITNESS 2:      
         
Signature:                                                              
Signature:                                                                
Name:                                                               Name:
                                                                  Title:
                                                               

[SIGNATURE PAGE TO NOTICE OF ASSIGNMENT]

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

State of ______________________)

County of ______________________)

On ________________________________before me, ________________________________,

a Notary Public, personally appeared ________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of [________]
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

________________________________(seal)
Comm. #
Exp.

[SIGNATURE PAGE TO NOTICE OF ASSIGNMENT]

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

State of ______________________)

County of ______________________)

On ________________________________before me, ________________________________,

a Notary Public, personally appeared ________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of [___________]
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

________________________________(seal)
Comm. #
Exp.

[SIGNATURE PAGE TO NOTICE OF ASSIGNMENT]

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

State of ______________________)

County of ______________________)

On ________________________________before me, ________________________________,

a Notary Public, personally appeared ________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of [____________]
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

________________________________(seal)
Comm. #
Exp.

[SIGNATURE PAGE TO NOTICE OF ASSIGNMENT]

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

State of ______________________)

County of ______________________)

On ________________________________before me, ________________________________,

a Notary Public, personally appeared ________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of [____________]
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

________________________________(seal)
Comm. #
Exp.

[SIGNATURE PAGE TO NOTICE OF ASSIGNMENT]

--------------------------------------------------------------------------------

     Exhibit A
to Notice of Assignment

INSTRUMENT OF ASSIGNMENT

(See attached.)

[EXECUTED COPY OF THE CASH GRANT SECURITY AGREEMENT TO BE ATTACHED]

 

Exhibit A

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     EXHIBIT D-8
to Financing Agreement

SCHEDULE OF SECURITY FILINGS

KEY TO ABBREVIATIONS

The abbreviations and words listed below when used herein have the meanings
assigned to them below.

“Borrower” = USG Nevada LLC, a Delaware limited liability company “DESS” = The
Office of the Delaware Secretary of State “Holdings” = Nevada USG Holdings, LLC,
a Delaware limited liability company “Idaho Sponsor” = U.S. Geothermal Inc., an
Idaho corporation “IDSS” = The Office of the Idaho Secretary of State “Lender” =
Ares Capital Corporation, a Maryland corporation “SAIC” = SAIC Constructors,
LLC, an Oklahoma limited liability company “Treasury” = United States Treasury
Department

Exhibit D-8-1

--------------------------------------------------------------------------------

UCC-3 AMENDMENT

Debtor

Secured Party

 Granting Document

Collateral

Filing Office

Borrower

SAIC

Intercreditor Agreement

Amendment to exclude all Collateral granted to Lender pursuant to the Cash Grant
Security Agreement

DESS

UCC-1 FINANCING STATEMENTS

     Debtor

Secured Party

Granting Document

Collateral

Filing Office

Holdings

Lender

Member Pledge Agreement

All of Holdings’ interests in Borrower and all of the membership interests of
Borrower related thereto

DESS

Idaho Sponsor

Lender

Idaho Sponsor Pledge Agreement

All of Idaho Sponsor’s interests in Holdings and all of the membership interests
of Holdings related thereto

IDSS

Borrower

Lender

Financing Agreement Cash Grant Security Agreement

All of Borrower’s interests in any proceeds of the Cash Grant

DESS

NOTICE OF ASSIGNMENT

Debtor

Secured Party

 Granting Document

Collateral

Filing Office

Borrower

Lender

Financing Agreement Cash Grant Security Agreement

All of Borrower’s interests in any proceeds of the Cash Grant

Treasury

Exhibit D-8-2

--------------------------------------------------------------------------------

EXHIBIT D-9
to Financing Agreement

FORM OF
NOTICE OF BORROWING

(Delivered pursuant to Section 2.2(e)(ii) of the Financing Agreement)

Date:                                                              

Ares Capital Corporation as Lender   Address: 245 Park Avenue, 44th Floor   New
York, NY 10167 Telephone: (212) 750-4915 Fax: (212) 750-1777 Attention: Raymond
Wright                        Re: USG Nevada LLC Geothermal Project in Washoe
County, Nevada

Ladies and Gentlemen:

This Notice of Borrowing is delivered to you pursuant to that certain Financing
Agreement dated as of November 9, 2011, (as amended, amended and restated,
modified or supplemented from time to time, the “Financing Agreement”), by and
between USG Nevada LLC, a Delaware limited liability company (“Borrower”), and
Ares Capital Corporation, a Maryland corporation (“Lender”). All capitalized
terms used herein shall have the respective meanings specified in Exhibit A to
the Financing Agreement unless otherwise defined herein or unless the context
requires otherwise.

This Notice of Borrowing constitutes a request for a Borrowing as set forth
below:

  1.

The date of the proposed Borrowing is [Insert Date], which is a Banking Day on
or before the Second Borrowing Deadline.

        3.

The aggregate principal amount of the Additional Loan requested is
$[____________].

The undersigned further confirms and certifies to Lender, as of the date of the
proposed Borrowing:

  (a)

The conditions precedent set forth in Section 3.2 of the Financing Agreement
have all been satisfied.

        (b)

Proceeds of the Borrowing shall be applied as provided in the Financing
Agreement.

[SIGNATURE PAGE FOLLOWS]

Exhibit D-9-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned party has executed this Notice of Borrowing
as of the date hereof.

  USG NEVADA LLC,   a Delaware limited liability company,   as Borrower        
           By:                                                                  
             
 Name:                                                                          
       Title:                                                              

Exhibit D-9-2

--------------------------------------------------------------------------------

EXHIBIT F-1
to Financing Agreement

FORM OF
BORROWER’S CLOSING CERTIFICATE

This certificate is delivered pursuant to Section 3.1(g) of that certain
Financing Agreement, dated as of November 9, 2011 (the “Financing Agreement”),
by and between USG Nevada LLC, a Delaware limited liability company
(“Borrower”), and Ares Capital Corporation, a Maryland corporation (“Lender”).
All capitalized terms used herein shall have the respective meanings specified
in Exhibit A of the Financing Agreement unless otherwise defined herein or
unless the context requires otherwise.

I, Kerry D. Hawkley, am the duly elected, qualified and acting Secretary of
Borrower. I have reviewed the provisions of the Financing Agreement which are
relevant to the furnishing of this Borrower’s Closing Certificate. To the extent
that this Borrower’s Closing Certificate evidences, attests or confirms
compliance with any conditions precedent provided for in the Financing
Agreement, I have made such examination or investigation as was, in my opinion,
reasonably necessary to enable me to express an informed opinion as to whether
such conditions have been complied with. I do hereby certify on behalf of
Borrower, as of the Financial Closing Date, as follows:

1. Attached as Exhibit G-7 to the Financing Agreement is a true, correct and
complete list of all agreements relating to the Project to which the Borrower or
any of its Affiliates is a party in effect as of the Financial Closing Date
(collectively, the “Project Documents”), together with all amendments and
supplements thereto and renewals thereof, and a true, correct and complete copy
of each such Project Document has been delivered to Lender on or prior to the
date hereof pursuant to Section 4.24 of the Financing Agreement, and each such
Project Document is in full force and effect.

2. Borrower is not in default under any material term of any Operative Document
or any agreement relating to any obligation of Borrower for or with respect to
borrowed money (including, without limitation, under the Construction Loan
Agreement), and to Borrower’s knowledge, no other party to any Project Document
is in material default thereunder.

 3. Except with respect to the O&M Agreement and the Power Purchase Agreement,
all conditions precedent to the performance of Borrower and, to Borrower’s
knowledge, all conditions precedent to the performance of other parties under
the Project Documents to have been performed have been satisfied

4. No consents, exemptions, approvals, authorizations, or other actions by, or
notices to, or filings with, Governmental Authorities and other Persons are
reasonably required in connection with the execution, delivery or performance by
each Borrower Affiliate Entity of the Financing Documents to which it is a party
(including all federal, state and local regulatory filings, consents and
approvals necessary in connection therewith).

Exhibit F-1

--------------------------------------------------------------------------------

5. The aggregate amount of the projected Qualifying Costs with respect to the
Project is $34,148,993, and (i) such projected Qualifying Costs have been
determined pursuant to a methodology consistent with the Cash Grant Guidance and
applicable law, (ii) the total Loan Commitment does not exceed ninety percent
(90%) of thirty percent (30%) of such Qualifying Costs basis of the Project, and
(iii) the Initial Loan does not exceed ninety percent (90%) of thirty percent
(30%) of Qualifying Costs incurred and paid as of the Financial Closing Date.

6. No direct or indirect equity interest in Borrower is beneficially owned by a
Disqualified Person. Attached hereto as Exhibit A is an ownership diagram of
Borrower, showing the complete direct and indirect ownership of Borrower, and
any partnership or other pass-through entity that directly or indirectly owns
any interest in Borrower, up to direct or indirect owners that are individuals,
non-grantor trusts, or taxable “C” corporations, but not including the owners of
a taxable “C” corporation.

7. Attached hereto as Exhibit B are true, correct and complete copies of (i) the
most recent annual audited financial statements and (ii) the most recent
unaudited quarterly financial statements, from each Borrower Affiliate Entity.
As of the Financial Closing Date, no material adverse change in the assets,
liabilities, operations or financial condition of any Borrower Affiliate Entity
has occurred from those set forth in the financial statements attached hereto as
Exhibit B.

8. Each representation and warranty of each Borrower Affiliate Entity under the
Financing Documents and the Project Documents to which it is a party is true and
correct in all material respects as of the Financial Closing Date (or if such
representation and warranty relates solely as of an earlier date, as of such
earlier date).

9. No Event of Default or Inchoate Default has occurred and is continuing as of
the Financial Closing Date or will result from the Loans and other financial
accommodations made as of the date hereof.

10. Attached hereto as Exhibit C is a Flow of Funds Memorandum which sets forth
a true and correct description of the currently anticipated sources and uses of
all proceeds of the Loans, as reasonably expected to be used by Borrower as of
the Financial Closing Date.

11. The conditions precedent set forth in Section 3.1 of the Financing Agreement
required to be satisfied by Borrower have been satisfied or have been waived in
writing in accordance with the terms of the Financing Agreement.

[SIGNATURE PAGE FOLLOWS]

Exhibit F-1-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has duly executed this Borrower’s Closing
Certificate on behalf of Borrower on the Financial Closing Date.

  USG NEVADA LLC,   a Delaware limited liability company,   as Borrower        
           By:                                                                  
             
 Name:                                                                          
       Title:                                                              

[SIGNATURE PAGE TO BORROWER’S CLOSING CERTIFICATE]

--------------------------------------------------------------------------------

EXHIBIT A

Ownership Diagram of Borrower

[Borrower to attach.]

 

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT B

Financial Statements of Borrower Affiliate Entities

[Borrower to attach.]

 

Exhibit B

--------------------------------------------------------------------------------

EXHIBIT C

Flow of Funds Memorandum

[Borrower to attach.]

 

Exhibit C

--------------------------------------------------------------------------------

     EXHIBIT F-2
to Financing Agreement

FORM OF
INDEPENDENT ACCOUNTANT’S CERTIFICATE

[Independent Accountant’s Letterhead]

[Date of Closing/Certification]

Ares Capital Corporation
245 Park Avenue, 44th Floor
New York, NY 10167

Subject: Independent Accountant’s Certificate and Report – USG Nevada LLC,   San
Emidio Geothermal Power Project in Washoe County, Nevada

Ladies and Gentlemen:

This letter is furnished pursuant to Section 3.2(j)(ii) of that certain
Financing Agreement, dated as of November 9, 2011 (as amended, amended and
restated, modified or supplemented from time to time, the “Financing Agreement”)
by and between USG Nevada LLC, a Delaware limited liability company
(“Borrower”), and Ares Capital Corporation, a Maryland corporation (“Lender”).
Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings provided in Exhibit A to the Financing Agreement.

Martinelli Mick (“Martinelli”) has been retained by Lender and Borrower as the
Independent Accountant, and it has prepared a report dated [___________], 2011
(the “Independent Accountant’s Report”), which identifies the cost categories
and amounts of Qualifying Costs and describes the methodology used in
determining the categories and amounts of Qualifying Costs, a current and
complete copy of which is attached hereto as Exhibit A.

In connection with the preparation of the Independent Accountant’s Report,
personnel of Martinelli have participated in meetings or telephone discussions
with representatives of the Borrower in regard to the approximately 8 MW
geothermal power facility located in Washoe County, Nevada (the “Project”).

Martinelli hereby certifies, in accordance with Section 3.2(j)(ii) of the
Financing Agreement, that (i) the amount of Qualifying Costs incurred (within
the meaning of the Cash Grant Guidance) through [_______________] is
[____________] Dollars ($[_________]), (ii) the Project is on schedule to be
placed in service (within the meaning of the Cash Grant Guidance) prior to the
qualification deadline of the Cash Grant (with reasonable margin for delays, to
be determined in consultation with the Independent Engineer and Lender), and
(iii) to the extent that Martinelli has relied upon a certificate from the
Independent Engineer and/or a “Report of Management on Eligible Cost Basis”
statement from Borrower, a copy of such certificate and/or report is attached
hereto as Exhibit B.

Exhibit F-2-1

--------------------------------------------------------------------------------

This letter is solely for the information of, and assistance to, Lender in
conducting and documenting its investigation of the matters covered by the
Independent Accountant’s Report in connection with the Project and is not to be
used, circulated, quoted, or otherwise referred to for any other purpose, nor is
it to be referred to in whole or in part in any other document, except that
reference may be made to it in the above-mentioned Financing Agreement and it
may be included in the closing documents pertaining to the Project.

Martinelli disclaims any obligation to update this letter. This letter is not
intended to, and may not, be relied upon by any party other than Lender.

Very truly yours,

Martinelli Mick,
as Independent Accountant

By:                                                              

Name:                                                              

Title:                                                              

Exhibit F-2-2

--------------------------------------------------------------------------------

     EXHIBIT A
to Independent Accountant’s Certificate

INDEPENDENT ACCOUNTANT’S REPORT

(See attached.)

 

Exhibit A

--------------------------------------------------------------------------------

     EXHIBIT B
to Independent Accountant’s Certificate

CERTIFICATES FROM INDEPENDENT ENGINEER AND/OR BORROWER

(See attached.)

 

Exhibit B

--------------------------------------------------------------------------------

     EXHIBIT F-3
to Financing Agreement

FORM OF
INDEPENDENT ENGINEER’S CERTIFICATE

[Independent Engineer’s Letterhead]

[Date of Closing/Certification]

Ares Capital Corporation 245 Park Avenue, 44th Floor New York, NY 10167

Subject: Independent Engineer’s Report – USG Nevada LLC, San Emidio   Geothermal
Power Project in Washoe County, Nevada

Ladies and Gentlemen:

This letter is furnished pursuant to Section 3.1(k) of that certain Financing
Agreement, dated as of November 9, 2011 (as amended, amended and restated,
modified or supplemented from time to time, the “Financing Agreement”) by and
between USG Nevada LLC, a Delaware limited liability company (“Borrower”), and
Ares Capital Corporation, a Maryland corporation (“Lender”).

Luminate, LLC (“Luminate”) has been retained by Lender and Borrower as the
Independent Engineer, and it has prepared an Independent Engineer’s Report dated
[final report date] (the “Report”), a current and complete copy of which is
attached hereto as Exhibit A.

The Report was prepared pursuant to the scope of services under our Professional
Services Agreement, dated October 21, 2011, and those services were provided in
accordance with generally accepted engineering practices. Since the date of the
Report nothing has come to our attention that would cause us to believe that the
Report, as of the date hereof, is not true and correct, in all material
respects.

In connection with the preparation of the Report, personnel of Luminate have
participated in meetings or telephone discussions with representatives of the
Borrower in regard to the 8 MW geothermal power facility located in Washoe
County, Nevada (the “Project”).

Luminate hereby certifies, in accordance with Section 3.1(k) of the Financing
Agreement, that as of the date hereof (i) the Placed in Service Date (as defined
in the Financing Agreement) is expected to occur by December 31, 2011; (ii)
construction of the Project is currently on-schedule and on-budget; (iii) there
are sufficient funds available to complete the Project in accordance with the
Project Budget (as defined in the Financing Agreement); and (iv) completion of
all work done to date has been in accordance with the Construction Contract (as
defined in the Financing Agreement).

Exhibit F-3-1

--------------------------------------------------------------------------------

This letter is solely for the information of, and assistance to, Lender in
conducting and documenting its investigation of the matters covered by the
Report in connection with the Project and is not to be used, circulated, quoted,
or otherwise referred to for any other purpose, nor is it to be referred to in
whole or in part in any other document, except that reference may be made to it
in the above-mentioned Financing Agreement and it may be included in the closing
documents pertaining to the Project.

Luminate disclaims any obligation to update this letter. This letter is not
intended to, and may not, be relied upon by any party other than Lender.

Very truly yours,
Luminate, LLC

By:                                                              

Name:                                                             

Title:                                                              

Exhibit F-3-2

--------------------------------------------------------------------------------

     EXHIBIT A
to Independent Engineer’s Certificate

INDEPENDENT ENGINEER’S REPORT

(See attached.)

 

Exhibit A

--------------------------------------------------------------------------------

     EXHIBIT F-4
to Financing Agreement

FORM OF SOLVENCY CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES, IN SUCH PERSON’S CORPORATE AND NOT INDIVIDUAL
CAPACITY, ON BEHALF OF EACH BORROWER AFFILIATE ENTITY AS FOLLOWS:

1. I am the Chief Financial Officer of U.S. Geothermal Inc., a Delaware
corporation (“Sponsor”).

2. This Solvency Certificate is being delivered pursuant to Section 3.1(ll) of
that certain Financing Agreement, dated as of November 9, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Financing Agreement”), by and between USG Nevada LLC, a Delaware limited
liability company (“Borrower”) and Ares Capital Corporation, a Maryland
corporation (“Lender”). Capitalized terms used but not defined herein have the
meanings assigned in the Financing Agreement.

3. I have reviewed the definitions and provisions contained in the Financing
Agreement and the other Financing Documents that are relevant to the matters
certified by me in Paragraph 4 below, and, in my opinion, have made, or have
caused to be made under my supervision, such examination or investigation as is
necessary to enable me to express an informed opinion as to the matters referred
to herein.

4. Based upon my review and examination described in Paragraph 3 above, I
certify that as of the date hereof, before and after giving effect to the
consummation of the Loan transaction as contemplated by and described in the
Financing Agreement and the other transactions contemplated by the Financing
Documents, that Borrower, Sponsor, U.S. Geothermal Inc., an Idaho corporation,
and Nevada USG Holdings, LLC, a Delaware limited liability company, are Solvent.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

The foregoing certifications are made and delivered as of the Financial Closing
Date.

U.S. GEOTHERMAL INC.
a Delaware corporation

By:                                                              

Name:                                                              

Title:                                                              

[Signature Page to Solvency Certificate]

--------------------------------------------------------------------------------

     EXHIBIT F-5
to Financing Agreement

FORM OF
BORROWER’S ADDITIONAL LOAN BORROWING CERTIFICATE

This certificate is delivered pursuant to Section 3.2(b) of that certain
Financing Agreement, dated as of November 9, 2011 (as amended, amended and
restated, modified or supplemented from time to time, the “Financing
Agreement”), by and between USG Nevada LLC, a Delaware limited liability company
(“Borrower”) and Ares Capital Corporation, a Maryland corporation (“Lender”).
All capitalized terms used herein shall have the respective meanings specified
in Exhibit A of the Financing Agreement unless otherwise defined herein or
unless the context requires otherwise.

I, ___________________, am the duly elected, qualified and acting
____________________of Borrower. I have reviewed the provisions of the Financing
Agreement which are relevant to the furnishing of this Borrower’s Additional
Loan Borrowing Certificate. To the extent that this Borrower’s Additional Loan
Borrowing Certificate evidences, attests or confirms compliance with any
conditions precedent provided for in the Financing Agreement, I have made such
examination or investigation as was, in my opinion, reasonably necessary to
enable me to express an informed opinion as to whether such conditions have been
complied with. I do hereby certify on behalf of Borrower, as of the Second
Borrowing Date, as follows:

1. Attached hereto as Exhibit A is a true, correct and complete list of: (i)
each Additional Project Document that was entered into after the Financial
Closing Date, together with all amendments and supplements thereto and renewals
thereof, and (ii) each amendment, supplement and renewal of the Project
Documents listed on Schedule G-7 to the Financing Agreement that were entered
into after the Financial Closing Date. Borrower has delivered to Lender on or
prior to the date hereof, true, correct and complete copies of each document
referenced in clauses (i) and (ii) above, and each such document is in full
force and effect. Borrower is not in default under any material term of any
Operative Document or any agreement relating to any obligation of Borrower for
or with respect to borrowed money (including, without limitation, under the
Construction Loan Agreement), and to Borrower’s knowledge, no other party to any
Project Document is in material default thereunder.

2. The aggregate amount of the projected Qualifying Costs with respect to the
Project is $[______], and (i) such projected Qualifying Co sts have been
determined pursuant to a methodology consistent with the Cash Grant Guidance and
applicable law, and (ii) the total Loan Commitment does not exceed ninety
percent (90%) of thirty pe rcent (30%) of such Qualifying Costs basis of the
Project.

3. No direct or indirect equity interest in Borrower is beneficially owned by a
Disqualified Person. Attached hereto as Exhibit B is an ownership diagram of
Borrower, showing the complete direct and indirect ownership of Borrower, and
any partnership or other pass-through entity that directly or indirectly owns
any interest in Borrower, up to direct or indirect owners that are individuals,
non-grantor trusts, or taxable “C” corporations.

Exhibit F-5

--------------------------------------------------------------------------------

4. Each representation and warranty of each Borrower Affiliate Entity under the
Financing Documents and the Project Documents to which it is a party is true and
correct in all material respects as of the Second Borrowing Date (or if such
representation and warranty relates solely as of an earlier date, as of such
earlier date).

5. No Event of Default or Inchoate Default has occurred and is continuing as of
the Second Borrowing Date or will result from the Loans and other financial
accommodations made as of the date hereof.

6. The conditions precedent set forth in Section 3.2 of the Financing Agreement
have been satisfied or have been waived in writing in accordance with the terms
of the Financing Agreement.

[SIGNATURE PAGE FOLLOWS]

 

Exhibit F-5-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has duly executed this Borrower’s Additional
Loan Borrowing Certificate on behalf of Borrower this ___ day of __________,
2011.

  USG NEVADA LLC,   a Delaware limited liability company,       as Borrower    
               By:                                                              
                 
 Name:                                                                          
       Title:                                                              

Exhibit F-5

--------------------------------------------------------------------------------

EXHIBIT A

List of Additional Project Documents and Amendments

[Borrower to provide.]

 

Exhibit F-5

--------------------------------------------------------------------------------

EXHIBIT B

Ownership Diagram of Borrower

[Borrower to attach.]

 

Exhibit F-5

--------------------------------------------------------------------------------

     EXHIBIT G-1
to Financing Agreement

DESCRIPTION OF THE PROJECT AND THE SITE

I. The Project

The retrofit of an existing 3.6 megawatt geothermal electric generating station
located on the Site, increasing the output thereof to approximately eight
megawatts, including the development, construction, maintenance and operation of
replacement 8.6 megawatt geothermal facility, all improvements or structures
erected on the Site, all alterations thereto or replacements thereof, all
fixtures, attachments, appliances, equipment, machinery and other articles
attached thereto or used in connection therewith and all parts which may from
time to time be incorporated or installed in or attached thereto, all contracts
and agreements for the purchase or sale of commodities or other personal
property related thereto, all real or personal property owned or leased related
thereto, and all other real and tangible and intangible personal property leased
or owned by Borrower and placed upon or used in connection with the generation
of electricity upon the Site.

II. The Site

The Site is located in Washoe County, in northern Nevada and consists of the
following property:

“DeHy” Property

The “DeHy” property, located on the real property described below, is owned in
fee simple by Idaho Sponsor and leased to Borrower pursuant to that certain
Office and Land Lease Agreement, dated August 27, 2010 between Idaho Sponsor and
Borrower.

Real Property Description:

PARCEL A:
Parcel 2 of a Map of Division into Large Parcels for the Kosmos Company, a
portion of Mineral Survey 4036 Brimstone Placer, a portion of Section 16,
Township 29 North, Range 23 East, Mount Diablo Meridian, recorded on august 10,
1994 as File No. 1823117, Division Map #148, Washoe County Records.

PARCEL B:
An easement over a 50 foot roadway over Parcel 1 of said Map of Division into
Large Parcels as shown on said map.

EXCEPTING THEREFROM all oil. gas hydrocarbons, water, geothermal resources and
minerals of whatsoever nature found under said land, together with the right of
ingress and egress to conduct surveys for the substances and the right to remove
any of the substances found below the surface of the property and to maintain
any operations on the property for those purposes contemplated in that
Geothermal Resource Supply Agreement dated June 18, 1993 between vestee and
Empire Farms, a Nevada general partnership, provided that such removal or
operations shall in no way interfere with the surface of the property.

EXHIBIT G-1 - 1

--------------------------------------------------------------------------------

Kosmos Property

The Borrower has obtained a leasehold interest in the property described below
(the “Kosmos Property”), pursuant to that certain Geothermal Lease between
Kosmos Company (“Kosmos”) and Michael B. Stewart dated October 14, 1987,
recorded October 16, 1987, in Book 2633, Page 282, Document No. 1200497,
official records, Washoe County, Nevada and amended March 15, 2008 and May 5,
2007, as assigned to San Emidio Resources, Inc., by an Assignment recorded June
22, 1992, as Document No. 1583278, official records, Washoe County, Nevada, as
assigned to Empire Farms, by an Assignment recorded September 16, 1995, Document
No. 1933483, official records, Washoe County, Nevada, as assigned to Empire
Energy, LLC by an Assignment recorded May 11, 2000, as Document No. 2446152,
official records, Washoe County, Nevada, as assigned to Empire Geothermal Power,
LLC by an Assignment of Geothermal Lease dated August 31, 2003, notice of which
was placed in public record by an Assignment of Geothermal Project Rights and
Leasehold Estates dated August 31, 2003 and recorded as Document No. 2934363,
official records, Washoe County, Nevada, on October 3, 2003, as assigned to USG
Nevada, LLC on April 30, 2008 by an Assignment recorded as Document No. 3645581,
official records, Washoe County, Nevada.

Real Property Description:

All that certain property situate in the County of Washoe, State of Nevada,
being all that portion of Township 29 North and Township 30 North, Range 23
East, M.D.B.844, being contained in United States Patent No. 356675, U.S. Survey
No. 4036 and Patent No. 809407, U.S. Survey No. 4323, described as follows:

Fanny Placer Survey No. 4823
Black Sulphur Placer Survey No. 4036
Cy Edwards Placer Survey No. 4323
Brimstone Placer Survey No. 4036, also known as Parcels 1 and 2 of a Map of
Division into large Parcels for the Kosmos Company, a portion of Mineral Survey
4036 Brimstone Placer, a portion of Section 16, Township 29 North, Range 23
East, Mount Diablo Meridian, recorded on August 10, 1994, as Fle No. 1823117,
Washoe County, Records.
Washoe Placer Survey No. 4323
San Emidlo Placer Survey No. 4323
San Emilio Placer Survey No. 4323
South 460 feet of Higgins Placer Survey No. 4323
South 460 feet of Antra Placer Survey No. 4036

EXHIBIT G-1 - 2

--------------------------------------------------------------------------------

Bureau of Land Management and Department of Interior Leases, Site Licenses and
Rights of Way

The remainder of the site consists of the following leasehold interests acquired
by the Borrower:

Number

Type

Legal Description

Notes

NVN 75555

Lease

The East 1/2, and the East 1/2 of the West 1/2 of Section 24, Township 29 North,
Range 22 East, M.D.B.&M.
 

Company has complied with all stipulations necessary to construct, operate, and
maintain the plant in its current and expanded condition.

The East 1/2 , and the East 1/2 of the West 1/2 of
Section 25, Township 29 North, Range 22 East,
M.D.B.&M.

NVN 75556

Lease

The East 1/2 of the East 1/2 of Section 11, Township 29 North, Range 22 East,
M.D.B.&M. |
 

Company has complied with all stipulations necessary to construct, operate, and
maintain the plant in
its current and expanded condition.

All of Sections 12,13 and the Northeast 1/4 of the
Northeast 1/4 of 14, Township 29 North, Range 22
East, M.D.B.&M.

NVN 75557

Lease

All of Section 30 and 31 in Township 29 North, Range 23 East, M.D.B.&M.

Company has complied with all stipulations necessary to construct, operate, and
maintain the plant in its current and expanded condition.

NVN 75558

Lease

The Southeast 1/4 of the Southeast 1/4 of Section 35, Township 29 North, Range
22 East, M.D.B.&M.
 

Company has complied with all stipulations necessary to construct, operate, and
maintain the plant in
its current and expanded condition.

All of Section 36, Township 29 North, Range 22 East, M.D.B.&M.

N 63006

Lease

All of Sections 32, 33 and 34 in Township 29 North, Range 23 East, M.D.B.&M.

N 63007

Lease

All of Sections 27, 28 and 29 in Township 29 North, Range 23 East, M.D.B.&M.

N 63004

Lease

All of Sections 15 and 21 in Township 29 North, Range 23 East, M.D.B.&M.

N 42707

Lease

T. 29 N., R 23 E, Mount Diablo Meridian, State of Nevada, County of Washoe
Sec. 16: Lots 1,2,3,4;
Sec. 17: Lots 1,2,3,4, SW 1/4 NE 1/4, W 1/2 W 1/2; SE 1/4;
Sec. 20: Lot 1, NW 1/4 NE 1/4, S 1/2 NE 1/4, W 1/2, SE 1/4;
Sec. 21: Lots 1,2,3,4, S 1/2 N 1/2 , S 1/2

EXHIBIT G-1 - 3

--------------------------------------------------------------------------------

Number

Type

Legal Description

Notes

N 47169

Site license

A parcel of land situate in the Southeast one-quarter (1/4) of the Northwest
one-quarter (1/4) of Section 21, T. 29 N., R. 23 E., MDM, Washoe County, Nevada,
containing 2.709 acres of land more or less and being more particularly
described as follows: Commencing at the North one-quarter (1/4) of said Section
21 and proceeding, thence S. 5°13'58" W., 1,829.50 feet to the TRUE POINT OF
BEGINNING, being the Northeasterly corner of said parcel.

Site license that authorizes construction, operation and maintenance of current
power plant.

Thence, around said parcel, the following 14 courses and distances:

South 168.00 feet, East 58.00 feet, South 50.00 feet, West 50.00 feet, South
118.00 feet, West 212.00 feet, North 174,00 feet, West 143.00 feet, North 162.00
feet, East 25.00 feet, North 150.00 feet, East 150.00 feet, South 150.00 feet,
East 172.00 feet to the TRUE POINT OF BEGINNING.

N 57441

ROW

T. 29 N., R. 23 E., Sec. 21: Lots 2 and 3, SE 1/4 NW 1/4 Mount Diablo Meridian,
Nevada.

Authorizes holder to construct, operate, maintain, and terminate a 6” water
pipeline and buried telephone line to serve plant.

Because the Project is currently operating as a unitized resource, Borrower
currently operates the geothermal field as a unit and is not required to obtain
rights of way per regulation.

N 43284

ROW

Amended in 1993 to include buried water pipeline and telephone line described as
follows:
T. 30 N., R. 22 E., Sec. 36, NE 1/4.
T. 30 N., R. 23 E., Sec. 31, Lots 1, 2, and 3,
SE 1/4 NW 1/4, E 1/2 SW 1/4.
T. 29 N., R. 23 E., Sec. 6, Lots 2 and 3, SW 1/4 NE 1/4, N 1/2 SE 1/4, SE 1/4 SE
1/4,
Sec. 7, E 1/2 NE 1/4,
Sec. 8, Lot 4, SW 1/4 NW 1/4, W 1/2 SW 1/4, SE 1/4 SW 1/4.

ROW for access road and buried telephone cable and water pipeline.

Because the Project is currently operating as a unitized resource, Borrower
currently operates the geothermal field as a unit and is not required to obtain
rights of way per regulation.

 

 

Additionally, amended in 1993 to add a buried telephone cable that will continue
on to the ORMAT geothermal power plant another 11,107.30 feet one foot east of
the road center line.

 

EXHIBIT G-1 - 4

--------------------------------------------------------------------------------

Number

Type

Legal Description

Notes

N 47395

ROW

Mount Diablo Meridian, Nevada
T. 29 N., R. 23 E.,
Sec. 21, S 1/2 NE 1/4, SE 1/4 NW 1/4,
Sec. 22, SW 1/4 NE 1/4, S 1/2 NW 1/4, N 1/2 SE 1/4
Sec. 23, N 1/2 SW 1/4, SE 1/4 SW 1/4, S 1/2 SE 1/4
Sec. 25, Lots 3 and 4, - W 1/2 NW 1/4, SE 1/4 NW 1/4, NE 1/4 SW 1/4, NW 1/4 SE
1/4 Sec. 26, NE 1/4 NE 1/4

Right of Way for transmission line over and across Mount Diablo Meridian,
Nevada.

Because the Project is currently operating as a unitized resource,  Borrower
currently operates the geothermal field as a unit and is not required to obtain
rights of way per regulation.

N 49240

ROW

Mount Diablo Meridian, Nevada

Right of Way for roads, pipelines, buried cable and wells on public lands (or
Federal land for MLA Rights of Way).

 

T. 30 N., R. 22 E, Sec 36, NE 1/4

T. 29 N., R. 23E., Sec. 6, Lots 2 and 3, SW 1/4 NE 1/4, N 1/2 SE 1/4, SE 1/4 SE
1/4,

Sec. 7, E 1/2 NE 1/4;

Because the Project is currently operating as a unitized resource, Borrower
currently operates the geothermal field as a unit and is not required to obtain
rights of way per regulation.

Sec. 8, SW 1/4 NW 1/4, W 1/2 SW 1/4, SE 1/4

SW 1/4,

Sec. 17, SW 1/4 NE 1/4, E 1/2 NW 1/4, NE 1/4

SW 1/4, W 1/2 SE 1/4,

Sec. 20, Lot 1, NW 1/4 NE 1/4,

Sec. 21, Lot 4, S 1/2 NW 1/4

T. 30 N., R 23 E., Sec 31, Lots 1, 2, 3, SE 1/4

NW 1/4, E 1/2 SW 1/4.

EXHIBIT G-1 - 5

--------------------------------------------------------------------------------

     EXHIBIT G-2
to Financing Agreement

SCHEDULE OF APPLICABLE PERMITS

Part I - Current Permits

Agency

Permit

Notes

Nevada Division of Water Resources

Permit No. 69320

Water Right

 

Permit No. 79899

Water Right

 

Permit No. 79900

Water Right

 

Permit No. 66946

Water Right

Washoe County

Case No. SW10-002

Special Use Permit

Regional Plan Amendment required as a condition to permit, which amendment was
approved by the Regional Planning Governing Board on February 10 2011.

Assignment to USG Nevada LLC in process.

State of Nevada Commission on

Permit No. 107,

Drilling Permit

Mineral Resources, Division of

API No. 27-031-90063

 

Minerals, Oil, Gas, and Geothermal

Well Name: 43-21

 

Permits

Permit No. 136,

Drilling Permit

 

API No. 27-031-90074

 

 

Well Name: 52-21

 

 

Permit No. 161,

Drilling Permit

 

API No. 27-031-90085

 

 

Well Name: 42-21

 

 

Permit No. 163,

Drilling Permit

 

API No. 27-031-90087

 

 

Well Name: 35-21

 

 

Permit No. 164,

Drilling Permit

 

API No. 27-031-90088

 

 

Well Name: 45-21

 

 

Permit No. 173,

Drilling Permit

 

API No. 27-031-90090

 

 

Well Name: 61-21

 

 

Permit No. 179,

Drilling Permit

 

API No. 27-031-90096

 

 

Well Name: 81-21

 

 

Permit No. 180,

Drilling Permit

 

API No. 27-031-90097

 

 

Well Name: 83-21

 

 

Permit No. 187,

Drilling Permit

 

API No. 27-031-90098

 

 

Well Name: 53-21

 

EXHIBIT G-2 - 1

--------------------------------------------------------------------------------

 

Permit No. 189,

Drilling Permit

 

API No. 27-031-90100

 

 

Well Name: 63-21

 

 

Permit No. 280,

Drilling Permit

 

API No. 27-031-90133

 

 

Well Name: 51-16

 

 

Permit No. 312,

Drilling Permit

 

API No. 27-031-90152

 

 

Well Name: 75-16

 

 

Permit No. 360;

Drilling Permit

 

API No. 27-031-90160

 

 

Well Name: 65C-16

 

 

Permit No. 403;

Drilling Permit

 

API No. 27-031-90184

 

 

Well Name: 75B-16

 

 

Permit No. 418;

Drilling Permit

 

API No. 27-031-90191

 

 

Well Name: 76-16

 

 

Permit No. 279;

Drilling Permit

 

API No. 27-031-90132

 

 

Well Name: 28-9

 

 

Permit No. 204,

Drilling Permit

 

API No. 27-031-90109

 

 

Well Name 32-21

 

 

Permit No. 111,

Drilling Permit

 

API No. 27-031-90065

 

 

Well Name Obs #2

 

 

Permit No. 121;

Drilling Permit

 

API No. 27-031-90068

 

 

Well Name Obs #3

 

 

Permit No. 122;

Drilling Permit

 

API No. 27-031-90069

 

 

Well Name Obs #4

 

 

Permit No. 123;

Drilling Permit

 

API No. 27-031-90070

 

 

Well Name Obs #5

 

Washoe County Air Quality

Permit No. A01176A

Permit to Operate (Power Plant)

Management Division (Permit to Operate)

Permit No. A04-0002

Permit to Operate (Standby Generators)

 

Permit No. D10007

Permit to Operate (Dust Control)

Permit No. A08001

Permit to Operate (Exploratory Drilling)

Nevada Division of Environmental Protection

Permit No. TNEV2012334

Temporary Discharge Permit (Blowdown)

Permit No. UNEV87041

Underground Injection Control/Authorization to Inject/Discharge

 

Exempt per NDEP evaluation.

Sediment Control Plan and Permit

 

Permit No. 10-2421

Grading Permit. Final.

Washoe County Building Permit and Grading Permits

Permit No. 10-2422

Comm Bldg- H-Plans Comm. (Site improvements) (need certificate of occupancy or
completion)

EXHIBIT G-2 - 2

--------------------------------------------------------------------------------

Permit No. 11-0096

Comm Bldg- H-Plans Comm. (equipment foundation and cooling tower footing) (need
certificate of occupancy or completion)

Permit No. 11-0351

Comm Bldg- H-Plans Comm. (metal building to house chemicals) (need certificate
of occupancy or completion)

Permit No. 11-1039

Comm Bldg- H-Plans Comm. (process piping) (need certificate of occupancy or
completion)

Permit No. 11-1040

Comm Bldg- H-Plans Comm. (cooling tower) (need certificate of occupancy or
completion)

Permit No. 11-1115

Comm Bldg- H-Plans Comm. (telecommunications) (need certificate of occupancy or
completion)

Permit No. 11-1476

Pending; Comm Bldg- H-Plans Comm. (transmission lines and poles)

Permit No. 11-2244

Pending Comm Bldg- H-Plans Comm. (fire sprinklers, other replacements)

Permit No. 11-0361

Pending - Comm Bldg- H-Plans Comm. (fire alarm)

Federal Energy Regulatory Commission (“FERC”)

Form 556 filed by USG Nevada LLC on 11/4/2011

Self-Certification of Qualifying Facility Status

Part II - Pending Permits

Certificate of Compliance/Completion will be required with regard to Air Quality
Permitting.

Certificates of Completion or Occupancy will be required for final approval of
Building Permits, where noted in Part I.

Permit Nos. 11-1476, 11-2244, and 11-0361 are currently pending, but in the
process of approval, no problems are currently known or expected in obtaining
approval.

EXHIBIT G-2 - 3

--------------------------------------------------------------------------------

     EXHIBIT G-3
to Financing Agreement

PROJECT BUDGET

See attached.

 

EXHIBIT G-3 - 1

--------------------------------------------------------------------------------

San Emidio Geothermal Project - Unit 1 (Repower)                         Water
Cooled Power Plant (South of Dehy Plant)                         Capital Cost
Summary                         Rev 12i - 11/8/2011                            
                                                    Project     Included    
Previoussly     To Be Paid   Description   Costs     in Loan     Paid By Equity
    by Equity                             USG ADMINISTRATIVE:                  
           Construction Management & Operator Training/Startup Support $
 270,000               $  270,000        Permits & Bonds $  82,000   $  82,000  
            USG Administrative Cost $  352,000                                  
            EPC POWER PLANT CONTRACT:                              Power Plant
(water cooled) $  23,218,425   $  23,218,425                    Change Orders:  
                      CHANGE ORDERS - EXECUTED:                                
       - Builders Risk Insurance - Provided by USGN but added to Loan (CO#1) $
 32,419   $  32,419                              - Technical Assistance &
Services (budgeted above, but added to loan) (CO#2) $  650,000   $  650,000    
                         - Accelerated work per USGN request for ITC (CO#3) $
 41,731   $  41,731                              - Added 2x50% CW pumps, changed
to 90/10 CuNi CLF condensers, Baldor motors for CT, Thicker Fill in CT (CO#4) $
 764,594   $  764,594                            - Moved NVE transmission
interconnection cost to loan (CO#5) $  266,800   $  266,800              
               - Enhanced machinery monitoring, upgrade control infrastructure
for Phase 2, install prod. Well VFDs, remove main breaker out of MCC, Refrig.
Condenser water box protection, water pump replacement (CO#6) $  564,859   $
 564,859                          - Updated the "approved" schedule. The
Guaranteed Substantial Completion Date remains at 10/31/11, with the following
caveats; (1) Schedule bonus still based on 10/31/11, (2) the Delay Liquidated
Damage will be waived until 11/23/11. No price change. (CO#7) $  -   $  -      
                 - Added 3" brine drain line, added radiant floor heating, added
water line to dehy tanks, removed concrete fence, changed color of cooling tower
to cactus green, credit to USG for Benham's share of camera, added passive
repeater tower, change chem bldg roof color, unforeseen soil conditions along
t-line, added sales tax ($1,550,000). (CO#8) $  1,735,102   $  1,735,102        
               - Projects added to USG Scope that were previously thought to be
added to Benham scope. Included sweet water well changes (new pump, vfd, pipe
modifications, valving), additional controls for wells, remodel control room,
install 480V power to office/control room (CO#9) $  175,000   $  175,000        
               - Added CW piping ($686,262.87), drain pond & ditch for
brine/blowdown lines, evap. cooler, trench drains in chem bldg, fire
line/hydrant, brine cross over, stairway on CW pits. (CO#10) $  740,291   $
 740,291                        - Cost and scope increases for projects added to
USG Scope. Added scope is primarily for the injection controls needed to provide
back pressure during startup (CO#11) $  85,280   $  85,280          
             - Added chemical system, water skid, unforeseen soil conditions on
t-line poles, feeder cables to production wells,seal water heating, fire system
engineering, and credit for reduced blowdown piping. (CO#12) $  244,060   $
 244,060                          - Added purchase cost of Spare Parts. (CO#13)
$  234,000   $  234,000                              - Added purchase cost of
chemicals ($44,931) and added NVE cost for comm. lines ($514). (CO#14) $  45,445
  $  45,445               EXECUTED CHANGE ORDERS SUBTOTAL CHANGE ORDERS - IN
PROCESS (Estimated costs): $  5,579,580                              - Sulphric
acid detection system & communications $  5,000   $  5,000                      
       - Reduction in cost of e-monitor $  (105,000 ) $  (105,000 )            
               - Addition of oil cooler for motor thrust bearing (TAS), and
piping, instrument connections (Benham) $  15,000   $  15,000                  
           - Miscellaneous Unidentified/Unlisted Change Orders $  5,000   $
 5,000               CHANGE ORDERS IN PROCESS SUBTOTAL $  (80,000 )            
           Benham Interest During Construction (IDC) $  1,350,000   $  1,350,000
                   Sales Tax on Power Plant & Change Orders $  1,450,000        
                 Outside the Fence Costs (Costs included in Power Plant Line
Item):                                      - Production & Injection Pipelines  
                                   - Transmission Lines and Equipment          
                           - 12.5-kV Well Field Lines                          
           - Cooling Water Supply Piping, Blow-down Piping & Equipment          
                           - Davis-Bacon Allowance for DOE 1705 Loan            
            Benham EPC Subtotal $  30,068,005                          Power
Plant Cost per kW (Net of Power Plant)   3,257                                  
            NVE TRANSMISSION LINE UPGRADES:                              NVE
Interconnection $  25,000         $  25,000         NVE Transmission Upgrade
Cost $  25,000                                               USG MISCELLANEOUS:
                             Trucks, Fork Lift, Tools, Office Furnishings, Etc  
                           Sales Tax on Spare Parts $  18,077               $
 18,077        Sales Tax on Other USG Miscellaneous $  -                     USG
Miscellaneous Cost $  18,077                                               TOTAL
DIRECT CONSTRUCTION COST $  30,463,082                          Total
Construction Cost per kW (Net of Facility)   3,540                              
                CONTINGENCIES:                              Contingency for
Power Plant Scope $  50,000   $  50,000                    Contingency for USG
Scope, Except Drilling & PP $  50,000   $  50,000               Total
Contingencies $  100,000                                               TOTAL
CONSTRUCTION BUDGET AMOUNT $  30,563,082   $  30,250,005   $  25,000   $
 288,077  

--------------------------------------------------------------------------------

     EXHIBIT G-4
to Financing Agreement

PROJECT SCHEDULE

See attached.

 

EXHIBIT G-4-1

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[exhibi1.jpg]

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     EXHIBIT G-5
to Financing Agreement

PENDING LITIGATION

None.

 

EXHIBIT G-5 - 1

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     EXHIBIT G-6
to Financing Agreement

HAZARDOUS SUBSTANCES DISCLOSURE

None.

 

EXHIBIT G-6 - 1

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     EXHIBIT G-7
to Financing Agreement

SCHEDULE OF PROJECT DOCUMENTS

Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Financing Agreement.

Engineering, Procurement and Construction Contract, dated August 27, 2010,
between Borrower and SAIC Constructors, LLC, an Oklahoma limited liability
company, formerly known as Benham Constructors, LLC (the “Construction Lender”).

Credit Addendum to Engineering, Procurement and Construction Contract, dated
August 27, 2010, as amended by that certain First Amendment to Credit Addendum
dated May 20, 2011 between Borrower and Construction Lender, and all attachments
thereto and documents executed in connection therewith, including but not
limited to the following:

Promissory Note dated August 27, 2010 in the principal amount of $24,553,000 by
Borrower to the order of Construction Lender.

Security Agreement dated August 27, 2010 between Borrower and Construction
Lender; Leasehold Deed of Trust with Power of Sale, Security Agreement and
Fixture Filing, executed by Borrower, as grantor, for the benefit of
Construction Lender.

UCC-1 Financing Statement filed with the Delaware Department of State, Filing
Number 2010 3025537.

Collateral Assignment of Contracts, Leases, Permits and Rights of Way dated
August 27, 2010 between Borrower and Construction Lender.

Collateral Assignment of Power Purchase Agreements dated August 27, 2010 between
Borrower and Construction Lender.

Indemnification Agreement (Kosmos Lease) dated August 27, 2010 between U.S.
Geothermal Inc. and construction Lender.

Environmental Indemnification Agreement dated August 27, 2010 between Borrower
and Construction Lender.

Landlord’s Consent Agreement dated as of August 27, 2010 between U.S.
Geothermal, Inc., an Idaho corporation, and Construction Lender.

Exhibit G-7 - 1

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Amended and Restated Change in Control Guaranty dated as of October 13, 2010 by
U.S. Geothermal, Inc., a Delaware corporation, in favor of Construction Lender.

Joint Escrow Instructions made by Borrower and Construction Lender to First
American Specialty Services.

Assignments of Record Title Interest in Leases For Oil and Gas or Geothermal
Resources (BLM Leases).

Oil, Gas, and Geothermal Notice of Change of Owner (Nevada Division of Minerals
Well Permits).

Reports of Conveyance and Notice of Pledge (Nevada Division of Water Resources
Water Permits).

Assignment and Assumption of Lease dated as of August 27, 2010 made by Borrower
(Kosmos Lease).

Assignment and Assumption of Lease dated as of August 27, 2010 made by Borrower
(Water Lease).

Assignment and Assumption Agreement dated as of August 27, 2010 made by Borrower
(Power Purchase Agreement).

Change Order No. 001 dated November 12, 2010 regarding builders risk insurance
premium.

Change Order No. 002 dated November 12, 2010 regarding technical assistances and
consulting services.

Change Order No. 003 dated November 18, 2010 regarding early site mobilization
to expedite preliminary site work and installation of new make up water line.

Change Order No. 004 dated December 1, 2010 regarding cooling water pumps,
cooling towers and related equipment.

Change Order No. 005 dated December 29, 2010 regarding NV Energy
interconnection. Change Order No. 006 dated January 14, 2011 regarding enhanced
machinery condition monitoring, control infrastructure upgrades and other
equipment.

Change Order No. 007 dated March 11, 2011 regarding scheduling and guaranteed
substantial completion.

Change Order No. 008 dated May 23, 2011 regarding additional work and taxes.

Change Order No. 009 dated June 2, 2011 regarding changes to equipment and
remodel of control room.

Exhibit G-7 - 2

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Change Order No. 010 dated July 11, 2011 regarding equipment purchases and
additional labor.

Change Order No. 011 dated August 30, 2011 regarding repairs to fire water
system, inspections to pipeline and additional work.

Change Order No. 012 dated September 16, 2011 regarding additional work to
chemical treatment equipment, building permits, and other items.

Change Order No. 013 dated September 23, 2011 regarding spare parts for power
plant. Change Order No. 014 dated October 27, 2011 regarding increase to
interconnection task and chemicals for startup.

Management Services Agreement, dated as of September 30, 2010 between Borrower
and U.S. Geothermal Services LLC.

Amended and Restated Long-Term Portfolio Energy Credit and Renewable Power
Purchase Agreement between Borrower and Sierra Pacific Power Company, dated May
31, 2011 (subject to approval by the Public Utilities Commission of Nevada; upon
approval by PUCN, the 1987 PPA will be terminated).

Long-Term Agreement for Purchase and Sale of Electricity dated December 31, 1986
between Sierra Pacific Power Company and Borrower, as successor in interest to
Michael D. Steward, dba Empire Farms, as amended by the Amendment to Long-term
Agreement for Purchase and Sale of Electricity executed as of December 28, 1987.

Standby Service Agreement dated September 2008 between Borrower and Sierra
Pacific Power Company.

USG Nevada LLC Empire 15 MW Project Interconnection Facilities Study Report
prepared by NV Energy and dated October, 2009.

Interconnection Feasibility Study Agreement dated July 29, 2008 between Borrower
and Sierra Pacific Power Company.

Small Generator Interconnection Agreement (Service Agreement No. #10-01277),
dated as of December 28, 2010 between Sierra Pacific Power Company d/b/a NV
Energy and Borrower.

Assistance Agreement between U.S. Geothermal Inc. and U.S. Department of Energy,
Golden Field Office, dated effective January 29, 2010, Award No. DE-EE0002847.

Water Lease Agreement dated as of August 1, 2010 between US Geothermal Inc., an
Idaho corporation, and Borrower.

 Memorandum of Office and Land Lease dated as of August 27, 2010 between U.S.
Geothermal Inc. and Borrower.

Exhibit G-7 - 3

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Limited Liability Company Agreement of Borrower, dated as of March 5, 2008, as
amended by that certain First Amendment to Limited Liability Company Agreement,
dated as of September 19, 2011, and as further amended by that Second Amendment
to Limited Liability Company Agreement to be dated on or before the Financial
Closing Date.

Limited Liability Company Agreement of Nevada USG Holdings, LLC, dated as of
September 19, 2011, and amended by that certain First Amendment to Limited
Liability Company Agreement to be dated on or before the Financial Closing Date.

All of the Leases, Rights of Way and Licenses listed on Part II of Exhibit G-1.
The Applicable Permits listed on Exhibit G-2.

Exhibit G-7 - 4

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EXHIBIT H
to Financing Agreement

Insurance Requirements

U.S. GEOTHERMAL INC.
INSURANCE COVERAGE 10/31/2011

DIRECTORS & OFFICERS:

CONTINENTAL CASUALTY COMPANY
$10,000,000 Executive Liability and Indemnification
$100,000 Deductible

GENERAL LIABILITY:

FEDERAL INSURANCE COMPANY
$2,000,000 Aggregate/
$1,000,000 per Occurrence

EXCESS & UMBRELLA LIABILITY:

FEDERAL INSURANCE COMPANY
$19,000,000 Aggregate/
$19,000,000 per Occurrence

WORKERS’ COMPENSATION:

LIBERTY NORTHWEST
$1,000,000 Aggregate

SURETY BOND/ LETTERS OF CREDIT:

IDWR Reclamation Bond $260,000
NV Statewide Drilling Bond $50,000
BLM Geothermal Lease Bonds $150,000
OR DOGAMI Reclamation Program $285,000

COMMERCIAL AUTO:

FEDERAL INSURANCE COMPANY
$1,000,000 Liability

ALL RISK PROPERTY:

FEDERAL INSURANCE COMPANY
All Risk including flood, earthquake, boiler & machinery
RREI- $23,300,000 coverage/ $250,000 deductible
$4,938,000 Business Income, $648,519 Other Buildings
San Emidio- $1,800,000 Buildings, $3,200,000 Personal Property
$8,900,000 Oil & Gas Lease Property

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     EXHIBIT I
to Financing Agreement

LENDER/LENDING OFFICE

1.

Ares Capital Corporation
245 Park Avenue, 44th Floor
New York, NY 10167
Tel: (212) 750-4915
Fax: (212) 750-1777
Attention: Raymond Wright

Exhibit I-1

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