U.S. Geothermal Inc.: Exhibit 10.1  - Filed by newsfilecorp.com






SUBSCRIPTION AGREEMENT FOR UNITS

TO:    U.S. Geothermal Inc. (the
“Company”)

The undersigned (the “Investor”) hereby subscribes for
and agrees to purchase the number of Units of the Company (the “Units”)
set forth below at a price of US$0.37 per Unit, for the total aggregate
subscription price set forth below (the “Aggregate Subscription Price”),
upon and subject to the terms and conditions set forth in this agreement (the
“Subscription Agreement”). Attached as Annex I and Annex II to this
Subscription Agreement is a summary of the terms and conditions of the sale of
the Units and the representations, warranties and covenants hereby made by the
Investor (on its own behalf and, if applicable, on behalf of the others for whom
it is contracting hereunder) and the Company, all of which Annex I and Annex II
forms part of and is hereby incorporated by reference into this Subscription
Agreement (collectively, the “Terms and Conditions”).

	  	 	Number of
      Units:                       
      [•]
	  	 	No. of Warrant
      Shares:            
      [•]
	 	 	 
	
      By: 
	
       
	 	Aggregate Subscription
      Price:          
      US$[•]
		
      (Authorized Signature)  
	 	Per Unit Subscription
      Price:               US$0.37
    
	 	 	 	 
	
      (Official Capacity or Title – please print) 
	 	 The relationship between the Investor and the
      registered 
	
      
	 	holder listed: 
	
      (Please print name of individual whose signature appears
      
	 	 
	
      above) 
	 	 
	  	 	 
	(Investor’s Address) 	 	 
	  	 	 
	  	 	(Name of DTC Participant (broker-dealer at which
      the account 
	  	 	or accounts to be credited with the Shares are
      maintained) 
	 	 	 
	  	 	 
	(Telephone Number) 	 	(DTC Participant Number) 
	 	 	 
	(E-mail Address) 	 	(Name of Account at DTC Participant being credited
      with the 
	  	 	Shares) 
	 	 	 
	Business Identification Number or Social Insurance
      Number of 	 	(Account Number at DTC Participant being credited
      with the 
	the registered holder (as applicable) 	 	Shares) 
	 	 	 
	  	 	 
	Register the Shares and Warrants as set forth
      below: 	 	Deliver the Warrants as set forth
      below: 
	 	 	 
	(Name) 	 	(Name) 
	  	 	 
	(Account reference, if applicable) 	 	(Account reference, if applicable) 
	 	 	 
	(Address) 	 	(Contact Name) 
	 	 	 
	  	 	(Address) 


ACCEPTANCE: U.S. Geothermal Inc. hereby accepts the
subscription as set forth above upon and subject to the terms and conditions
contained in this Subscription Agreement.

__________________, 2012

	U.S. GEOTHERMAL INC. 	 	 
	 	 	 
	By: ___________________________	 	 


This Signature Page is the first page of a Subscription
Agreement comprised of 12 pages (not including Exhibit A).




ANNEX I

TERMS AND CONDITIONS OF SUBSCRIPTION FOR 
UNITS OF U.S.
GEOTHERMAL INC.

     The Investor hereby confirms its
agreement with U.S. Geothermal Inc., a Delaware corporation, as follows:

     1. This Subscription Agreement,
including the Additional Terms and Conditions For Purchase of Units attached
hereto as Annex II (collectively, (this “Subscription Agreement”)
is made as of the date set forth on the Signature Page hereto between the
Company and the Investor.

     2. The Company has authorized the
sale and issuance to certain investors of up to an aggregate of 11,960,792 units
of the Company (the “Units”), subject to adjustment by the Company’s
Board of Directors, or a committee thereof, with each Unit consisting of (i) one
share of common stock of the Company, par value US$0.001 per share (the
“Common Shares”), and (ii) one-half of one common share purchase warrant
(a “Warrant” and, collectively, the “Warrants”). Each whole
Warrant will entitle the holder to purchase one (1) Common Share at an exercise
price of US$0.50 per Common Share (subject to adjustment) and is exercisable for
a period of sixty (60) months from the Closing Date (as defined in Annex II to
this Subscription Agreement). The certificate representing the Warrants shall be
in substantially the form of Exhibit A attached hereto (the “Warrant
Certificate”). The aggregate of up to 11,960,792 Common Shares comprising
the Units proposed to be sold is hereinafter referred to as the “Shares.”
The Units will not be issued or certificated. The Shares and the Warrants are
immediately separable and will be issued separately. The Common Shares issuable
upon exercise of the Warrants are referred to herein as the “Warrant
Shares” and, together with the Units, the Shares and the Warrants, are
referred to herein as the “Securities”).

     3. The offer and sale of the
Units (the “Offering”) are being made pursuant to (1) the Company’s
effective Registration Statement including a base prospectus (the “Base
Prospectus”) on Form S-3 (File No. 333-170202) (which, together with all
amendments or supplements thereto is referred to herein as the
“Registration Statement”) filed by the Company with the U.S.
Securities and Exchange Commission (the “Commission”), (2) if applicable,
certain “free writing prospectuses” (as that term is defined in Rule 405 under
the U.S. Securities Act of 1933, as amended (the “Securities Act”)), that
have been or will be filed with the Commission and delivered to the Investor on
or prior to the date hereof (each, an “Issuer Free Writing Prospectus”),
and (3) a Prospectus Supplement (the “Prospectus Supplement” and together
with the Base Prospectus, the “Prospectus”) containing certain
supplemental information regarding the Units and the terms of the Offering that
has been or will be filed with the Commission and delivered to the Investor (or
made available to the Investor by the filing by the Company of an electronic
version thereof with the Commission).

     4. The Company and the Investor
agree that the Investor will purchase from the Company and the Company will
issue and sell to the Investor the Units set forth on the Signature Page hereto
for the aggregate purchase price set forth on the Signature Page. The Units
shall be purchased pursuant to the Additional Terms and Conditions for Purchase
of Units attached hereto as Annex II and incorporated herein by this
reference as if fully set forth herein. The Investor acknowledges that the
Offering is not being underwritten by the placement agent (the “Placement
Agent”) named in the Prospectus Supplement.

     5. The manner of settlement of
the Shares included in the Units purchased by the Investor shall be as
follows:

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     Delivery by crediting the account
of the Investor’s prime broker (as specified by such Investor on Exhibit A
annexed hereto) with The Depository Trust Company (“DTC”) through its
Deposit/Withdrawal At Custodian (“DWAC”) system, whereby the Investor’s
prime broker shall initiate a DWAC transaction on the Closing Date using its DTC
participant identification number, and released by Computershare Trust Company,
N.A., the Company’s transfer agent (the “Transfer Agent”), to the
Investor at the Company’s direction. No later than one (1) business day after
the execution of this Subscription Agreement by the Investor and the Company,
the Investor shall:

	 	(I) 	
      DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR
      ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC
      INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
      SHARES, AND

	 	 	 
	 	(II) 	
      REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO
      THE AGGREGATE PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR
      TO THE FOLLOWING ACCOUNT:



[Note: Wire instructions will be provided
separately.]

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE
NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER ACCOUNT
BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT
BY WAY OF DWAC IN A TIMELY MANNER. IF THE INVESTOR DOES NOT
DELIVER THE AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES
NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY
MANNER, THE SHARES AND WARRANTS MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM
THE CLOSING ALTOGETHER. IF THE INVESTOR IS EXCLUDED FROM
THE CLOSING THEN ALL FUNDS FORWARDED TO THE COMPANY BY THE
INVESTOR WILL BE RETURNED WITHOUT INTEREST WITHIN ONE WEEK
AFTER THE CLOSING.

For purposes of this Subscription Agreement, “business
day” means any day which is not Saturday or Sunday or a legal holiday in the
City of New York, New York.

     6. The executed Warrants shall be
delivered in accordance with the terms thereof.

     7. The Investor represents that,
except as set forth below, (a) it has had no position, office or other material
relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a member of the Financial
Industry Regulatory Authority, Inc. 

(“FINRA”) or an Associated Person (as such term is
defined under the FINRA’s NASD Membership and Registration Rules Section 1011)
as of the Closing, and (c) neither the Investor nor any group of Investors (as
identified in a public filing made with the Commission) of which the Investor is
a part in connection with the Offering, acquired, or obtained the right to
acquire, twenty percent (20%) or more of the Common Shares (or securities
convertible into or exercisable for Common Shares) or the voting power of the
Company on a post-Closing basis. Exceptions: 

3




     (If no exceptions, write “none.”
If left blank, response will be deemed to be “none.”)

     8. The Investor represents that
it has received (or otherwise had made available to it by the filing by the
Company of an electronic version thereof with the Commission) the Base
Prospectus contained as part of the Company’s Registration Statement filed on
November 24, 2010 and declared effective on December 1, 2010, the documents
incorporated by reference therein and any Issuer Free Writing Prospectus
(collectively, the “Disclosure Package”), prior to or in connection with
the receipt of this Subscription Agreement.

     9. No offer by the Investor to
buy Units will be accepted and no part of the purchase price will be delivered
to the Company until the Investor has received the Disclosure Package and the
Company has accepted such offer by countersigning a copy of this Subscription
Agreement, and any such offer may be withdrawn or revoked, without obligation or
commitment of any kind, at any time prior to the Company (or the Placement Agent
on behalf of the Company) sending (orally, in writing or by electronic mail)
notice of its acceptance of such offer. An indication of interest will involve
no obligation or commitment of any kind until the Investor has been delivered
the Disclosure Package and this Subscription Agreement is accepted and
countersigned by or on behalf of the Company.

4




ANNEX II

ADDITIONAL TERMS AND CONDITIONS FOR PURCHASE OF UNITS

     1. Authorization and
Sale of the Units. Subject to the terms and conditions of this Subscription
Agreement, the Company has authorized the sale of the Units.

     2. Agreement to Sell and
Purchase the Units; Placement Agent.

               2.1
At the Closing (as defined in Section 3.1), the Company will sell to the
Investor, and the Investor will purchase from the Company, upon the terms and
conditions set forth herein, the number of Units set forth on the signature page
of the Subscription Agreement to which these Additional Terms and Conditions for
Purchase of Units are attached as Annex II (the “Signature Page”)
for the aggregate purchase price therefor set forth on the Signature Page.

               2.2
The Company proposes to enter into substantially this same form of Subscription
Agreement with each investor that was solicited (collectively, the “Other
Investors”) and expects to complete sales of Units to them. The Investor and
the Other Investors are hereinafter sometimes collectively referred to as the
“Investors”.

               2.3
The Investor acknowledges that the Company intends to pay Kuhns Brothers
Securities Corporation (the “Placement Agent”) a cash fee equal to 6.0%
of the gross proceeds received by the Company for the Offering.

               2.4
The Company confirms that neither it nor any other person acting on its behalf
has provided the Investor or their agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, nonpublic
information, except as will be disclosed in the Prospectus and/or in any Current
Report on Form 8-K filed or to be filed by the Company with the Commission. The
Company understands and confirms that the Investor will rely on the foregoing
representations in effecting transactions in securities of the Company.

     3. Closings and Delivery
of the Units and Funds.

               3.1
Closing. The completion of the purchase and sale of the Units (the
“Closing”) will occur at a place and time (the “Closing Date”) to
be specified by the Company and the Placement Agent, and of which the Investors
will be notified in advance by the Placement Agent in accordance with Rule
15c6-l promulgated under the U.S. Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Under Rule 15c6-1 under the Exchange Act, trades in
the secondary market generally are required to settle in three business days,
unless the parties to any such trade expressly agree otherwise. The Closing Date
may not occur within three business days of the execution of this Subscription
Agreement. Accordingly, Investors who wish to trade Shares on any day prior to
three business days before delivery should consult their own advisors and may be
required to specify alternative settlement arrangements to prevent a failed
settlement. At the Closing, (a) the Company shall cause the Transfer Agent to
deliver to the Investor the number of Shares set forth on the Signature Page
registered in the name of the Investor or, if so indicated on the Signature Page
in the name of a nominee designated by the Investor, (b) the Company shall cause
to be delivered to the Investor one Warrant Certificate representing the right
to purchase the number of Warrant Shares set forth on the Signature Page, and
(c) the aggregate purchase price for the Units being purchased by the Investor
will be delivered by or on behalf of the Investor to the Company.

5




               3.2
Conditions to the Obligations of the Parties. 

                         (a)
Conditions to the Company’s Obligations. The Company’s obligation to
issue and sell the Units to the Investor shall be subject to: (i) the receipt by
the Company of the aggregate purchase price for the Units being purchased
hereunder as set forth on the Signature Page; (ii) the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing Date; and
(iii) approval of the NYSE MKT LLC and the Toronto Stock Exchange (the
“TSX”) to list the Shares and Warrant Shares.

                         (b)
Conditions to the Investor’s Obligations. The Investor’s obligation to
purchase the Units will be subject to the accuracy of the representations and
warranties made by the Company and the fulfillment of those undertakings of the
Company to be fulfilled prior to the Closing Date. The Investor’s obligations
are expressly not conditioned on the purchase by any or all of the Other
Investors of the Units that they have agreed to purchase from the Company.

               3.3
Delivery of Funds. Delivery by Electronic Book-Entry at The Depository
Trust Company. No later than one (1) business day after the execution
of this Subscription Agreement by the Investor and the
Company, the Investor shall remit by wire transfer the amount of
funds equal to the aggregate purchase price for the Units being purchased by the
Investor to the following account designated by the Company:

                    
[Note: Wire instructions will be provided separately.]

               3.4
Delivery of Shares. Delivery by Electronic Book-Entry at The
Depository Trust Company. No later than one (1) business day after the
execution of this Subscription Agreement by the Investor
and the Company, the Investor shall direct the broker-dealer at
which the account or accounts to be credited with the Shares being purchased by
such Investor are maintained, which broker/dealer shall be a DTC participant, to
set up a DWAC instructing the Transfer Agent to credit such account or accounts
with the Shares. Such DWAC instruction shall indicate the settlement date for
the deposit of the Shares, which date shall be provided to the Investor by the
Placement Agent. Upon the closing of the Offering, the Company shall direct the
Transfer Agent to credit the Investor’s account or accounts with the Shares
pursuant to the information contained in the DWAC.

     4. Representations,
Warranties and Covenants of the Investor.

          The
Investor acknowledges, represents and warrants to, and agrees with, the Company
and the Placement Agent that: 

               4.1
The Investor (a) is knowledgeable, sophisticated and experienced in making, and
is qualified to make decisions with respect to, investments in securities
presenting an investment decision like that involved in the purchase of the
Units, including investments in securities issued by the Company and investments
in comparable companies, and has requested, received, reviewed and considered
all information it deemed relevant in making an informed decision to purchase
the Units, (b) the Investor has answered all questions on the Signature Page and
on Page 3 of this Subscription Agreement for use in preparation of the
Prospectus Supplement and the answers thereto are true and correct as of the
date hereof and will be true and correct as of the Closing Date and (c) the
Investor, in connection with its decision to purchase the number of Units set
forth on the Signature Page, is relying only upon the Disclosure Package and the
documents incorporated by reference therein.

               4.2
(a) Other than the Company’s application to the TSX to list the Shares and
Warrant Shares, no action has been or will be taken in any jurisdiction outside
the United States by the Company or the Placement Agent that would permit an
offering of the Securities, or possession or distribution of offering materials in connection with the issue
of the Securities, in any jurisdiction outside the United States where action
for that purpose is required, (b) the Investor will comply with all applicable
laws and regulations in each jurisdiction in which it purchases, offers, sells
or delivers Securities or has in its possession or distributes any offering
material, in all cases at its own expense, and (c) the Placement Agent is not
authorized to make and has not made any representation, disclosure or use of any
information in connection with the issue, placement, purchase and sale of the
Securities, except as set forth or incorporated by reference in the
Prospectus.

6




               4.3
(a) The Investor has full right, power, authority and capacity to enter into
this Subscription Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Subscription Agreement, and (b) this Subscription
Agreement constitutes a valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as to the enforceability of any rights to
indemnification or contribution that may be violative of the public policy
underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation).

               4.4
The Investor understands that nothing in this Subscription Agreement, the
Prospectus, the Disclosure Package or any other materials presented to the
Investor in connection with the purchase and sale of the Units constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors and made such investigation as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of Units.
The Investor also understands that there is no established public trading market
for the Warrants being offered in the Offering, and that the Company does not
expect such a market to develop. In addition, the Company does not intend to
apply for listing of the Warrants on any securities exchange. The Investor
understands that without an active market, the liquidity of the Warrants will be
limited.

               4.5
The Investor will maintain the confidentiality of all information acquired as a
result of the transactions contemplated hereby prior to the public disclosure of
that information by the Company in accordance with Section 14 of this
Annex II.

               4.6
Since the time at which the Placement Agent first contacted such Investor about
the Offering, the Investor has not disclosed any information regarding the
Offering to any third parties (other than its legal, accounting and other
advisors in connection with the Offering) and has not engaged in any purchases
or sales of the securities of the Company (including, without limitation, any
Short Sales (as defined herein) involving the Company’s securities). The
Investor covenants that it will not engage in any purchases or sales of the
securities of the Company (including Short Sales) prior to the time that the
transactions contemplated by this Subscription Agreement are publicly disclosed.
The Investor agrees that it will not use any of the Securities acquired pursuant
to this Subscription Agreement to cover any short position in the Common Shares
if doing so would be in violation of applicable securities laws. For purposes
hereof, “Short Sales” include, without limitation, all “short sales” as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or
not against the box, and all types of direct and indirect share pledges, forward
sales contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.

7




               4.7
The Investor represents and warrants that it is a resident of the jurisdiction
set out on the Signature Page of this Subscription Agreement, which
address is the residence, registered office or place of business of the
Investor, and that such Investor (i) is not a resident of Canada nor is it
purchasing the Units for the account or benefit of a Canadian resident; (ii) was
not offered the Units in Canada, and (iii) did not execute or deliver this
Subscription Agreement in Canada. In addition, the Investor understands and
acknowledges that (a) no securities commission or similar regulatory authority
in Canada has reviewed or passed on the merits of the Securities, (b) there is
no government or other insurance covering the Securities, (c) there are risks
associated with the purchase of the Securities, (d) there are restrictions on
the Investor’s ability to resell the Securities in Canada and it is the
responsibility of the Investor to find out what those restrictions are and to
comply with them before selling the Securities, and (e) the Securities will not
be freely tradeable in Canada for a period of four (4) months and one (1) day
from Closing, and as a result, the Securities may not be sold, transferred or
otherwise disposed of to a Canadian resident during this period, nor may the
Investor enter into any discussions, negotiations or agreements within Canada
with respect to the sale, transfer or disposition of any of the Securities for a
period of four (4) months and one (1) day from Closing.

               4.8
The Investor agrees that at no time within four (4) months and one (1) day after
the Closing Date will it (i) sell, transfer or otherwise dispose of any
Securities to a Canadian resident or, (ii) enter into any discussions,
negotiations or agreements within Canada with respect to the sale, transfer or
disposition of any Securities. 

     5. Representations,
Warranties and Covenants of the Company.

         The Company
represents and warrants to, and agrees with, the Investor that: 

               5.1
The Company and each of its subsidiaries is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted and as described in the Disclosure Package. Neither the
Company nor any of its subsidiaries is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. The Company and each of its
subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

               5.2
Neither the Company nor any of its subsidiaries is a party to any actions, suits
or proceedings which could materially affect its business or financial
condition, and no such actions, suits or proceedings have been threatened or, to
the Company’s knowledge, are pending, except as disclosed in the Disclosure
Package.

               5.3
The Company is the beneficial owner of the properties, business and assets or
the interests in the properties, business and assets disclosed in the Disclosure
Package, all material agreements by which the Company holds an interest in a
property, business or asset are in good standing according to their terms except
as disclosed in the Disclosure Package or where any such default would not have
a material adverse effect on the Company, and there has not been any breach of
the applicable laws of the jurisdictions in which such properties, business and
assets are situated which would have a material adverse effect on such
properties, business and assets.

8




               5.4
The Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Subscription Agreement and
otherwise to carry out its obligations hereunder. The execution and delivery of this
Subscription Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Company’s Board of Directors or the Company’s shareholders in
connection therewith. This Subscription Agreement has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

               5.5
The execution, delivery and performance by the Company of this Subscription
Agreement, the issuance and sale of the Units to the Investor and the
consummation by it of the transactions contemplated hereby will not (i) conflict
with or violate any provision of the Company’s or any subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) result in the creation of any lien upon any of the properties
or assets of the Company or any subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of or conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, any
agreement, credit facility, debt or other instrument (evidencing a Company or
subsidiary debt or otherwise) or other understanding to which the Company or any
subsidiary is a party or by which any property or asset of the Company or any
subsidiary is bound or affected, or (iii) conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a subsidiary
is bound or affected.

               5.6
The Company has properly prepared and filed all tax returns and all taxes
payable have been paid except where the Company is contesting in good faith any
re-assessments of its taxes payable thereunder.

               5.7
Except as disclosed in the Disclosure Package and except for options granted in
the ordinary course under the Company’s stock option and incentive plans, there
are no outstanding options, warrants or other securities exercisable to purchase
or convertible or exchangeable into Common Shares.

               5.8
The Company is not required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any court
or other federal, state, local or other governmental authority or any other
person or entity (including, without limitation, any shareholder of the
Company), in connection with the execution, delivery and performance by the
Company of this Subscription Agreement and the consummation of the transactions
contemplated hereby, including the sale and issuance of the Units to the
Investor, other than the approval of the Toronto Stock Exchange and the NYSE MKT
LLC and the filing with the Commission of the Prospectus Supplement, or such
other consents or various waivers which have already been obtained.

               5.9
The Shares are duly authorized and, when issued and paid for in accordance with
this Subscription Agreement, will be duly and validly issued, fully paid and
non-assessable, free and clear of all liens. Upon the Closing, the Warrant
Shares will have been duly allotted and reserved for issuance and, when issued
upon the due exercise of the Warrants, will be duly issued as fully paid and
non-assessable Common Shares. The Company has reserved from its duly authorized
capital the maximum number of Common Shares issuable pursuant to this
Subscription Agreement. The Registration Statement conforms with the
requirements of the Securities Act, including the Base Prospectus, and such
amendments and supplements thereto as may have been required as of the date of
this Subscription Agreement. The Registration Statement is effective in respect
of the Units under the Securities Act and no stop order preventing or suspending
the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are threatened by the Commission. The Company has
filed or will file the Prospectus Supplement with the Commission within the time
required by the rules and regulations of the Commission. At the time the
Registration Statement and any amendments thereto became effective and at the
date of this Subscription Agreement, the Registration Statement (including
documents incorporated by reference therein) and any amendments thereto filed as
of the applicable time, conformed and will conform in all material respects to
the requirements of the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
and the Prospectus (including any documents incorporated by reference therein)
and any amendments or supplements thereto, at the time the Prospectus or any
amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain any untrue statement of any material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

9




               5.10
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and any
Prospectus Supplement, being collectively referred to herein as the “SEC
Reports”). The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except to the extent that unaudited financial statements may not contain all
footnotes required by GAAP, and such statements fairly present in all material
respects the financial position of the Company on a consolidated basis as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

               5.11
The Common Shares are registered pursuant to Section 12(b) of the Exchange Act,
and the Company has taken no action designed to, or that to its knowledge is
likely to have the effect of, terminating the registration of the Common Shares
under the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration. The Common Shares are
listed on the Toronto Stock Exchange under the symbol “GTH” and NYSE MKT LLC
under the symbol “HTM”.

               5.12
The Company and the Company’s Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
jurisdiction of incorporation that is or could become applicable to the Investor
as a result of the transactions contemplated hereby and the Company and the
Investor fulfilling their obligations or exercising their rights under this
Subscription Agreement, including, without limitation, as a result of the
Company’s issuance of the Units and the Investor’s ownership of the Units.

               5.13
The Company acknowledges and agrees that the Investor is acting solely in the
capacity of an arm’s length purchaser with respect to this Subscription
Agreement and the transactions contemplated hereby. The Company further
acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Subscription Agreement and the transactions
contemplated hereby and any advice given by the Investor or any of its
representatives or agents in connection with this Subscription Agreement and the
transactions contemplated hereby is merely incidental to the Investor’s purchase
of the Units. The Company further represents to the Investor that the Company’s
decision to enter into this Subscription Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

10




               5.14
The Company has not, and to its knowledge no one acting on its behalf has,
taken, directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.

     6. Survival of
Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Subscription Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Investor herein will survive the execution of this
Subscription Agreement, the delivery to the Investor of the Shares and Warrants
being purchased and the payment therefor. The Placement Agent shall be a third
party beneficiary with respect to the representations, warranties and agreements
of the Investor in Section 4 hereof.

     7. Notices. All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electronic confirmation of receipt and will be
delivered and addressed as follows:

if to the Company, to:

U.S. Geothermal Inc. 
1505 Tyrell
Lane 
Boise, Idaho 83706 
Attention: Daniel J Kunz, Chief Executive
Officer 
Facsimile: (208) 424-1030

with copies to:

Dorsey & Whitney LLP 
Columbia
Center 
701 Fifth Avenue, Suite 6100 
Seattle, Washington 98104

Attention: Christopher J. Barry

                  
Kimberley R. Anderson 
Facsimile: (206) 903-8820

if to the Investor, at its address on
the Signature Page hereto, or at such other address or addresses as may have
been furnished to the Company in writing.

     8. Changes. This
Subscription Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the
Investor.

11




     9. Headings. The
headings of the various sections of this Subscription Agreement have been
inserted for convenience of reference only and will not be deemed to be part of
this Subscription Agreement.

     10. Severability.
In case any provision contained in this Subscription Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any way
be affected or impaired thereby.

     11. Governing Law.
This Subscription Agreement will be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the
principles of conflicts of law that would require the application of the laws of
any other jurisdiction.

     12. Counterparts.
This Subscription Agreement may be executed in two or more counterparts,
each of which will constitute an original, but all of which, when taken
together, will constitute but one instrument, and will become effective when one
or more counterparts have been signed by each party hereto and delivered to the
other parties. The Company and the Investor acknowledge and agree that the
Company shall deliver its counterpart to the Investor along with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission).

     13. Confirmation of
Sale. The Investor acknowledges and agrees that such Investor’s receipt of
the Company’s signed counterpart to this Subscription Agreement, together with
the Prospectus Supplement (or the filing by the Company of an electronic version
thereof with the Commission) shall constitute written confirmation of the
Company’s sale of Units to such Investor.

     14. Press Release.
The Company and the Investor agree that the Company shall (a) prior to the
opening of the financial markets in New York City on the business day
immediately after the date hereof or as soon thereafter as possible issue a
press release announcing the Offering and disclosing all material information
regarding the Offering and (b) as promptly as practicable thereafter, file a
Current Report on Form 8-K with the Commission including, but not limited to, a
form of this Subscription Agreement and a form of the Warrant Certificate.

12




EXHIBIT A

U.S. GEOTHERMAL INC.

FORM OF WARRANT CERTIFICATE

(See attached)




U.S. GEOTHERMAL INC.

	NO. • 	• WARRANTS 


Date of Issuance: December [•], 2012 (the “Issuance
Date”)

COMMON SHARE PURCHASE WARRANTS

THIS IS TO CERTIFY THAT for value received [•], the
registered holder hereof or its permitted assigns (the “Holder”), is
entitled, subject to the terms set forth below, for each whole warrant
represented by this certificate (this “Warrant Certificate”) to purchase,
at any time or times on or after the Issuance Date up to and including 5:00 p.m.
(New York time) on December [•], 2017 (the “Time of Expiry”), one fully
paid and non-assessable common share (“Common Share”) in the capital of
U.S. Geothermal Inc. (the “Company”) (such common share, a “Warrant
Share” and collectively, the “Warrant Shares”) at a price per share
of US$0.50 (the “Exercise Price”), subject to adjustment as hereinafter
referred to. The warrants represented by this Warrant Certificate are the
warrants to purchase Common Shares (the “Warrants”) issued pursuant to
(i) that certain Subscription Agreement, dated as of December [•], 2012, by
and between the Company and the Holder (the “Subscription Agreement”) and
(ii) the Company’s Registration Statement on Form S-3 (File number 333-170202)
including the exhibits thereto, as amended at the date of this Warrant
Certificate, the Prospectus contained therein filed with the Securities and
Exchange Commission (the “Commission”), effective December 1, 2010, and a
Prospectus Supplement containing certain supplemental information regarding the
securities sold pursuant to the Subscription Agreement that has been or will be
filed with the Commission.

1.   Exercise of Warrants.

1.1 Election to Purchase.

     The rights evidenced by this
Warrant Certificate may be exercised by the Holder on any day on or after the
Issuance Date, in whole or in part, up to and including the Time of Expiry in
accordance with the provisions hereof. The exercise may be effected by providing
to the Company at 1505 Tyrell Lane, Boise, Idaho 83706 (or such other address as
may be notified in writing by the Company) (i) this Warrant Certificate and a
duly completed and executed Subscription Form in substantially the form attached
as Exhibit “1” hereto (“Subscription Form”) and (ii) (A) payment of the
Exercise Price by a certified cheque, bank draft or money order payable at par
to the order of the Company, or by wire or electronic funds transfer to an
account designated by the Company, in each case in the amount of the aggregate
Exercise Price for the number of Warrant Shares specified in the Subscription
Form (the “Aggregate Exercise Price”) or (B) provided the conditions for
cashless exercise set forth in Section 1.5 are satisfied, by notifying the
Company that the Warrants are being exercised pursuant to a Cashless Exercise
(as defined in Section 1.5) . A duly completed and executed Subscription Form
shall be deemed to be delivered only upon personal delivery thereof to, or if
sent by mail or other means of transmission upon actual receipt thereof by, the
Company. If the Holder subscribes for a lesser number of Common Shares than may
be subscribed for pursuant to this Warrant Certificate, the Holder shall be
entitled to receive, without charge to the Holder, a new warrant certificate in
respect of the balance of the Warrants referred to in any
surrendered warrant certificate but not exercised pursuant to the Subscription
Form. On or before the first (1st) business day following the date on
which the Company has received each of this Warrant Certificate, the duly
completed and executed Subscription Form and the Aggregate Exercise Price (or
notice of a Cashless Exercise) (collectively, the “Exercise Delivery
Documents”), the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and to the Company’s transfer agent (the “Transfer Agent”).
For purposes of this Warrant Certificate, “business day” means any day
which is not Saturday or Sunday or a legal holiday in the City of New York, New
York.




- 2 -

1.2 Exercise.

      The Company shall, as soon as
possible following the date of receipt of the Exercise Delivery Documents (the
“Exercise Date”) and in accordance with Section 1.3, issue as of the
Exercise Date that number of Warrant Shares specified in the Subscription Form
as fully paid and non-assessable Common Shares in the capital of the Company.
The Company shall pay any and all transfer taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of the
Warrants.

1.3 Share Delivery.

      As promptly as practicable after
the Exercise Date and, in any event, within three (3) business days of the
Exercise Date (the “Share Delivery Date”), the Company shall, (i) credit
such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with The
Depository Trust Company (“DTC”) through its Deposit/Withdrawal At
Custodian system, or (ii) issue and dispatch by overnight courier to the address
as specified in the Subscription Form, or, if not so specified in the
Subscription Form, cause to be held for collection by the Holder at the address
of the Company as set out in subsection 1.1 (or at such additional place as may
be decided by the Company from time to time and notified to the Holder),
certificates, registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise. Subject to applicable laws, upon delivery of
the Exercise Delivery Documents, the Holder or its designee, as applicable,
shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which the Warrants have been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s or its
designee’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be.

1.4 Company’s Failure to Timely Deliver Securities.

       If, upon the Holder’s
exercise of the Warrants, the Company shall fail for any reason or for no
reason, within three (3) trading days of receipt of the Exercise Delivery
Documents in compliance with the terms of this Section 1, to issue to the
Holder a certificate for the number of Warrant Shares to which the Holder is
entitled and register such Warrant Shares on the Company’s share register, or to
credit the Holder’s balance account with DTC for such number of Warrant Shares
to which the Holder is entitled, and if on or after such third (3rd)
business day the Holder purchases (in an open market transaction or otherwise)
Common Shares to deliver in satisfaction of a sale by the Holder of Warrant Shares issuable
upon such exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three (3) business days after
the Holder’s written request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the Common Shares so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such
certificate or to credit such balance account (and to issue such Warrant Shares)
shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Warrant Shares, or to credit the
Holder’s balance account with DTC for such Warrant Shares, and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of Common Shares, times (B) the Closing Bid Price (as
defined below) on the date of exercise.




- 3 -

     As used in this Warrant
Certificate, “Closing Bid Price” means, for any security as of any date,
the last closing bid price for such security on the Principal Market (as defined
in Section 2.1), as reported by Bloomberg, or, if the Principal Market begins to
operate on an extended hours basis and does not designate the closing bid price,
then the last bid price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid
price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” by OTC Pink (formerly the National Quotation
Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder. All such determinations to be appropriately adjusted
for any share dividend, share split, share combination or other similar
transaction during the applicable calculation period. 

1.5 Cashless Exercise Under Certain Circumstances. 

      Notwithstanding anything
contained herein to the contrary, if, at any time following the Issuance Date, a
registration statement under the United States Securities Act of 1933, as
amended, including any amendments or supplements thereto, registering the
Warrant Shares (a “Registration Statement”) is not effective thereunder,
prior to the Time of Expiry, and for so long as a Registration Statement is not
effective, any holder of any Warrant must exercise the Warrants in whole or in
part on a “cashless basis” and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, receive upon such exercise the “Net Number” of Warrant
Shares determined according to the following formula (a “Cashless
Exercise”):

Net Number = (A x B) - (A x
C) 
                                     
B

For purposes of the foregoing
formula:

A = the total number of Warrant Shares
with respect to which the Warrants are then being exercised.




- 4 -

B = the Weighted Average Price (as
defined below) of the Common Shares (as reported by Bloomberg) for the five
consecutive trading days ending on the date immediately preceding the Exercise
Date.

C = the Exercise Price then in effect
for the applicable Warrant Shares at the time of such exercise.

     As used in this Warrant
Certificate, “Weighted Average Price” means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York City
time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg
through its “Volume at Price” function or, if the foregoing does not apply, the
dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period
beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New
York City time, as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any
of the market makers for such security as reported in the “pink sheets” by OTC
Pink. If the Weighted Average Price cannot be calculated for such security on
such date on any of the foregoing bases, the Weighted Average Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder. All such determinations shall be appropriately
adjusted for any share dividend, share split or other similar transaction during
such period.

     For the avoidance of doubt, in
the event that these Warrants may not be exercised for cash pursuant to Section
1.1 hereof due to the lack of a then effective and current Registration
Statement registering the Warrant Shares with the Commission and an exemption
from registration or qualification under applicable federal and state securities
laws is not otherwise available for such exercise, the sole method of exercise
available to a Holder shall be a “cashless exercise” pursuant to Section 1.5
hereof. Notwithstanding anything contained herein to the contrary, in no event
shall the Holder be entitled to demand a “net cash settlement” of these
Warrants. 

1.6 Beneficial Ownership.

      The Company shall not effect the
exercise of the Warrants, and the Holder shall not have the right to exercise
the Warrants, to the extent that after giving effect to such exercise, such
person (together with such person’s affiliates (as such term is defined in the
Securities Exchange Act of 1934, as amended (the “Exchange Act”))) would
beneficially own in excess of 9.99% of the Common Shares outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence,
the aggregate number of Common Shares beneficially owned by such person and its
affiliates shall include the number of Warrant Shares issuable upon exercise of
the Warrants with respect to which the determination of such sentence is being
made, but shall exclude Warrant Shares which would be issuable upon (i) exercise
of the remaining, unexercised portion of the Warrants beneficially owned by such
person and its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company beneficially owned by
such person and its affiliates (including, without limitation, any convertible
notes or convertible preferred shares or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. For purposes of this Warrant Certificate, in
determining the number of outstanding Common Shares, the Holder may rely on the
number of outstanding Common Shares as reflected in the most recent of (1) the
Company’s most recent Annual Report on Form 10-K, the Company’s most recent
Quarterly Report on Form 10-Q, or other public filing by the Company with the
Commission, as the case may be, (2) a more recent public announcement by the
Company, or (3) any other notice by the Company or the Transfer Agent setting
forth the number of Common Shares outstanding. In any case, the number of
outstanding Common Shares shall be determined after giving effect to the
conversion or exercise of securities of the Company, including the Warrants, by
the Holder and its affiliates since the date as of which such number of
outstanding Common Shares was reported. The provisions of this paragraph shall
be construed, corrected and implemented in a manner so as to effectuate the
intended beneficial ownership limitation herein contained.




- 5 -

1.7 Fractional Warrant Share.

      Fractional Warrant Shares shall
not be issued upon the exercise of any Warrants. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Exercise
Price or round up to the next whole Warrant Share.

2.   Anti-Dilution Protection.


2.1 Definitions.

      For the purposes of Section 2
the words and terms defined below shall have the respective meanings specified
therefor in this subsection 2.1:

	 	(i) 	
      “Adjustment Period” means the period commencing on
      the Issuance Date and ending at the Time of Expiry;

	 	 	 
	 	(ii) 	
      “Current Market Price per Common Share”, at any
      date, means the volume weighted average price per Common Share at which
      the Common Shares have traded (each, a “Trading Day”) on the NYSE
      MKT LLC (or if the Common Shares are not then listed on the NYSE MKT LLC,
      the recognized stock exchange on which the Common Shares are listed on
      which the greatest volume of Common Shares were traded during the period
      referenced below or, if the Common Shares are not so listed on any
      recognized stock exchange, then on the over-the-counter market on which
      the Common Shares are traded as selected by action of the directors acting
      reasonably for such purpose) (the “Principal Market”), during the
      five (5) most recent Trading Days ending on the third Trading Day before
      such date on which there has occurred at least one trade of at least one
      board lot of Common Shares prior to such date, such weighted average price
      to be determined by dividing the aggregate sale price of all Common
      Shares sold in board lots on such exchange or market, as the
      case may be, during the said five (5) Trading Days, by the number of
  Common Shares so sold;








- 6 -

	 	(iii) 	
      “Dividends Paid in the Ordinary Course” means any
      dividend declared payable on the Common Shares (whether in cash,
      securities, property or assets) in any fiscal year of the Company to the
      extent that such dividends do not exceed, in the aggregate, the greater
      of: (i) the aggregate value of dividends declared payable by the Company
      on the Common Shares in its immediately preceding fiscal year; (ii) the
      arithmetic mean of the aggregate value of dividends declared payable by
      the Company on the Common Shares in its three immediately preceding fiscal
      years; and (iii) 100% of the aggregate consolidated net income of the
      Company, before extraordinary items, for its immediately preceding fiscal
      year (such consolidated net income to be computed in accordance with
      United States generally accepted accounting principles);

	 	 	 
	 	(iv) 	
      “director” means a director of the Company for the
      time being and reference herein to an “action by the directors”
      means an action by the directors of the Company as a board or, whenever
      duly empowered, an action by a committee of directors;

	 	 	 
	 	(v) 	
      “recognized stock exchange” means a stock exchange
      or quotation system recognized by the Commission; and

	 	 	 
	 	(vi) 	
      “TSX” means the Toronto Stock
  Exchange.



2.2 Adjustments.

      The Exercise Price and the
number of Warrant Shares shall, while any Warrants are still outstanding and
unexercised, be subject to adjustment from time to time upon the occurrence of
any of the events and in the manner provided as follows:

	 	(a) 	
      If and whenever during the Adjustment Period, the Company
      shall:

	 	 	 	 
	 		(i) 	
      declare a dividend or make a distribution on its Common
      Shares payable in Common Shares (or securities exchangeable for or
      convertible into Common Shares), other than Dividends Paid in the Ordinary
      Course; or

	 	 	 	 
	 		(ii) 	
      subdivide or change its outstanding Common Shares into a
      greater number of Common Shares; or

	 	 	 	 
	 		(iii) 	
      reduce, combine or consolidate its outstanding Common
      Shares into a lesser number or Common Shares,



(any of such events in paragraphs (i),
(ii) or (iii) above being called a “Share Reorganization”), then
effective immediately after the record date or effective date, as the case may
be, at which the holders of Common Shares are determined for the purposes of the
Share Reorganization, the Exercise Price shall be adjusted to a price determined by multiplying the applicable
      Exercise Price in effect on such effective date or record date by a
      fraction, the numerator of which shall be the number of Common Shares
      outstanding on such effective date or record date before giving effect to
      such Share Reorganization and the denominator of which shall be the number
      of Common Shares outstanding immediately after giving effect to such Share
      Reorganization (including, in the case where securities exchangeable for
      or convertible into Common Shares are distributed, the number of
      additional Common Shares that would have been outstanding had such
      securities been exchanged for or converted into Common Shares immediately
after giving effect to such Share Reorganization).




- 7 -

	 	(b) 	
      If and whenever during the Adjustment Period the Company
      shall fix a record date for the payment, issue or distribution to all or
      substantially all of the holders of the Common Shares of (i) a dividend,
      (ii) cash or assets (including evidences of the Company’s indebtedness),
      or (iii) rights or other securities (including without limitation,
      securities convertible into or exchangeable for Common Shares), and such
      payment, issue or distribution does not constitute a Dividend Paid in the
      Ordinary Course or a Share Reorganization (any of such non-excluded events
      being herein called a “Special Distribution”), the Exercise Price
      shall be adjusted as determined by action of the directors (whose
      determination shall be conclusive) effective immediately after such record
      date by an amount that is no greater than the difference between (x) the
      volume weighted average trading price of the Common Shares on the
      Principal Market for the five (5) most recent Trading Days ending
      immediately prior to the Trading Day the Common Shares begin trading on an
      “ex-distribution” basis, and (y) the volume weighted average trading price
      of the Common Shares on the Principal Market for the five (5) most recent
      Trading Days beginning immediately after the Trading Day the Common Shares
      commence trading on an “ex-distribution” basis.

	 	 	 
	 		
      Such adjustment shall be made successively whenever such
      a record date is fixed. To the extent that such payment, issuance or
      distribution is not so made or any rights, options or warrants so
      distributed are not exercised, the Exercise Price shall be readjusted
      effective immediately to the Exercise Price which would then be in effect
      based upon such payment, issuance or distribution actually made, or based
      on the Common Shares or securities exchangeable or convertible for Common
      Shares actually delivered upon the exercise of any rights, options or
      warrants as the case may be but subject to any other adjustment required
  hereunder by reason of any event arising after the record date.








- 8 -

	 	(c) 	If and whenever at any time during the Adjustment Period
      there shall be a reorganization, reclassification or other change of
      Common Shares at any time outstanding or change of the Common Shares into
      other shares or into other securities (other than a Share Reorganization),
      or a consolidation, amalgamation, arrangement or merger of the Company
      with or into any other company or other entity, or a transfer of all or
      substantially all of the undertaking or assets of the Company to another
      company or entity, in each case in which the holders
      of Common Shares are entitled to receive shares, other
      securities or property, including cash, (any of such events being herein
      called a “Capital Reorganization”), any Holder who exercises his
      right to subscribe for and purchase Warrant Shares pursuant to the
      exercise of the Warrants after the effective date of such Capital
      Reorganization shall be entitled to receive, and shall accept for the same
      aggregate consideration in lieu of the number of Warrant Shares to which
      such Holder was theretofore entitled upon such exercise, the aggregate
      number of shares, other securities or other property, including cash,
      which such Holder would have received as a result of such Capital
      Reorganization had he exercised his right to acquire Warrant Shares
      immediately prior to the effective date or record date, as the case may
      be, of the Capital Reorganization and had he been the holder of such
      Warrant Shares on such effective date or record date, as the case may be,
      subject to adjustment thereafter in accordance with provisions the same,
      as nearly as may be possible, as those contained in subsection 2.2(b). If
      determined appropriate by the directors, acting reasonably, and subject to
      any required prior approval of the NYSE MKT LLC, TSX and any other stock
      exchange or market on which the Common Shares may be listed or traded,
      appropriate adjustments shall be made as a result of any such Capital
      Reorganization in the application of the provisions set forth in this
      subsection 2.2, with respect to the rights and interests thereafter of a
      Holder to the end that the provisions set forth in this subsection 2.2
      shall thereafter correspondingly be made applicable as nearly as may
      reasonably be in relation to any shares, other securities or other
      property, including cash, thereafter deliverable upon the exercise of any
      Warrant. Any such adjustments shall be made by and set forth in an
      agreement supplemental hereto approved by action by the directors, acting
      reasonably, and shall for all purposes be conclusively deemed to be
      appropriate adjustments.





	 	(d) 	
      If and whenever at any time during the Adjustment Period
      there shall occur a Share Reorganization which results in an adjustment to
      the Exercise Price pursuant to subsection 2.2(a), the number of Warrants
      Shares purchaseable (at the adjusted Exercise Price) shall be adjusted
      contemporaneously with the adjustment of the Exercise Price by multiplying
      the number of Warrant Shares theretofore purchaseable on the exercise
      thereof by a fraction, the numerator of which shall be the applicable
      Exercise Price in effect immediately prior to such adjustment and the
      denominator of which shall be the applicable Exercise Price resulting from
      such adjustment.

	 	 	 
	 	(e) 	
      In case the Company during the Adjustment Period shall
      take any action affecting the Common Shares, other than action described
      above in this subsection 2.2 which in the opinion of the directors, acting
      reasonably, would materially adversely affect the rights of the Holder,
      the Exercise Price or the number of Warrant Shares shall be adjusted in
      such manner, if any, and at such time, by action by the directors, acting
      reasonably, as they may determine to be equitable in the circumstances,
      but subject in all cases to any necessary regulatory
  approval.








- 9 -

2.3 Rules.

      For the purposes of subsection
2.2 hereof, any adjustment shall be made successively whenever an event referred
to therein shall occur, subject to the following provisions:

	 	(a) 	
      subject to subsection 2.3(b), as to any fraction of a
      Common Share which the Holder would otherwise be entitled upon the
      occurrence of the adjustment(s) described above, the Company shall, at its
      election, either pay a cash adjustment in respect of such final fraction
      in an amount equal to such fraction multiplied by the then applicable
      Exercise Price or round up to the next whole share;

	 	 	 	 
	 	(b) 	
      no adjustment to an Exercise Price shall be required
      unless such adjustment would result in a change of at least 1% in the
      prevailing Exercise Price and no adjustment in the number of Warrant
      Shares will be required to be made unless the cumulative effect of such
      adjustment or adjustments would change the number of Warrant Shares by at
      least one Warrant Share and, for greater clarity, any adjustment which,
      except for the qualification of this section, would otherwise have been
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment; provided, however, that in no event shall the
      Company be obligated to issue fractional Warrant Shares or fractional
      interests in Warrant Shares upon exercise of a Warrant;

	 	 	 	 
	 	(c) 	
      if a dispute shall at any time arise with respect to
      adjustments to the Exercise Price or the number of Warrant Shares
      purchasable pursuant to the exercise rights represented by a Warrant, such
      disputes shall be conclusively determined by the Company’s auditors or, if
      they are unable or unwilling to act, by such other firm of independent
      chartered accountants as may be selected by action by the directors and
      any such determination, shall be conclusive evidence of the correctness of
      any adjustments made;

	 	 	 	 
	 	(d) 	
      if the Company shall set a record date to determine the
      holders of its Common Shares for the purpose of entitling them to receive
      any dividend or distribution or any subscription or purchase rights,
      options or warrants and shall thereafter and before the distribution to
      such shareholders of any such dividend, distribution or subscription or
      purchase rights legally abandon its plan to pay or deliver such dividend,
      distribution or subscription or purchase rights, then no adjustment in the
      Exercise Price or the number of Warrant Shares shall be required by reason
      of the setting of such record date; and

	 	 	 	 
	 	(e) 	
      in any case in which this Warrant Certificate requires
      that an adjustment become effective immediately after a record date for an
      event referred to in subsection 2.2 hereof, the Company may defer, until
      the occurrence of such event:

	 	 	 	 
	 		(i) 	
      issuing to the Holder, to the extent that the Warrants
      are exercised after such record date and before the occurrence of such
      event, the additional Warrant Shares issuable upon such exercise by reason
      of the adjustment required by such event; and







- 10 -

	 	 	(ii) 	
      delivering to the Holder any distribution declared with
      respect to such additional Warrant Shares after such record date and
      before such event;



provided, however, that the Company
delivers to the Holder an appropriate instrument evidencing the right of the
Holder, upon the occurrence of the event requiring the adjustment, to an
adjustment in the Exercise Price and/or the number of Warrant Shares.

2.4 Taking of Actions.

      As a condition precedent to the
taking of any action which would require an adjustment pursuant to Section 2.2
hereof, the Company shall take any action that may, in the opinion of counsel,
be necessary in order that the Company may validly and legally issue as fully
paid and non-assessable all of the Common Shares which the Holder is entitled to
receive in accordance with the provisions of this Warrant Certificate.

2.5 Notice.

      At least seven days prior to the
effective date or record date, as the case may be, of any event that requires or
that may require an adjustment in any of the exercise rights of the Holder under
this Warrant Certificate, including the number of Warrant Shares, the Company
shall deliver to the Holder a certificate of the Company specifying the
particulars of such event and, if determinable, the required adjustment and the
computation of such adjustment. In case any adjustment for which a certificate
has been given is not then determinable, the Company shall promptly after such
adjustment is determinable deliver to the Holder hereof a certificate of the
Company showing how such adjustment was computed. The Company hereby covenants
and agrees that the register of transfers and share transfer books for the
Common Shares shall be open during normal business hours for inspection by the
Holder, and that the Company will not take any action which might deprive the
Holder of the opportunity of exercising the rights of subscription contained in
this Warrant Certificate, during such seven day period.

3.  Shares to be Reserved.

     The Company will at all times
take all action necessary to reserve and keep available out of its authorized
Common Shares, solely for the purpose of issue upon the exercise of the
Warrants, 100% of the number of Warrant Shares as are then issuable upon the
exercise of the Warrants (without regard to any limitations on exercise). The
Company covenants and agrees that all Warrant Shares that are so issuable will,
upon issuance in accordance with the terms of this Warrant Certificate and
applicable laws, be duly authorized, fully paid and non-assessable. The Company
will take such actions as may be reasonably necessary and as are within its
power to ensure that all such Warrant Shares may be so issued without violation
of any applicable laws or the applicable requirements of any stock exchange upon
which the Common Shares of the Company may be listed.




- 11 -

4.  Noncircumvention. 

     The Company hereby covenants and
agrees that the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant Certificate, and will at all times in good
faith comply with all the provisions of this Warrant Certificate and take all
actions consistent with effectuating the purposes of this Warrant Certificate.
Without limiting the generality of the foregoing, the Company shall take all
such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Common Shares upon the
exercise of the Warrants.

5.  Warrant Holder Not Deemed a
Shareholder. 

     Except as otherwise specifically
provided herein, the Holder, solely in such person’s capacity as a holder of the
Warrants, shall not be entitled to vote or receive dividends or be deemed the
holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant Certificate be construed to confer upon the Holder,
solely in such person’s capacity as the Holder of the Warrants, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of shares,
reclassification of share capital, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such person is then entitled to receive upon the due exercise of a
Warrant. In addition, nothing contained in this Warrant Certificate shall be
construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of a Warrant or otherwise) or as a shareholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.

6.  The Register. 

     The Company shall keep: 

	 	(a) 	
      at the principal office of the Company, a register of
      holders of the Warrants represented by this Warrant Certificate or any
      portion thereof in which shall be entered in alphabetical order the names
      and addresses of the holders and particulars of the Warrants held by them;
      and

	 	 	 
	 	(b) 	
      at the principal office of the Company, a register of
      transfers in which all transfers of the Warrants represented by this
      Warrant Certificate or any portion thereof and the date and other
      particulars of each transfer shall be entered.



7.  Transfer of Warrants. 

     Subject to the following
provisions of this Section 7 and applicable laws, the Warrants evidenced hereby
and/or any portion of the rights to subscribe for and purchase Warrant Shares
hereunder may be transferred by the Holder. No transfer of the Warrants
evidenced hereby or any portion of the rights hereunder will be valid unless
duly entered on the appropriate register of transfers, upon the surrender to the Company of this Warrant
Certificate accompanied by a duly completed Transfer Form in substantially the
form attached as Exhibit “2” hereto executed by the registered Holder or its
executors, administrators or other legal representatives or its attorney duly
appointed by an instrument in writing in form and execution satisfactory to the
Company, and, upon compliance with all applicable securities laws and such other
reasonable requirements as the Company may prescribe, such transfer will be duly
recorded by the Company on the applicable registers. If less than all of the
Warrants represented by this Warrant Certificate are transferred, the Holder
shall receive a new Warrant Certificate representing the portion of such
Warrants that were not transferred, registered in the name of the Holder.




- 12 -

     The Warrants may not be sold,
transferred or otherwise disposed of to a Canadian resident for a period of four
(4) months and one (1) day from the Issuance Date, nor may the Holder enter into
any discussions, negotiations or agreements within Canada with respect to the
sale, transfer or disposition of any of the Warrants for a period of four (4)
months and one (1) day from the Issuance Date.

8.  Replacement.

     Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, if requested by the Company, upon delivery of an
indemnity and/or surety bond in amount and form satisfactory to the Company (or,
in the case of mutilation, upon surrender of this Warrant Certificate), the
Company shall issue and deliver to the Holder a replacement certificate
containing the same legends, terms and conditions as this Warrant
Certificate.

9.  Expiry Date.

     The Warrants shall expire and all
rights to purchase Warrant Shares hereunder shall cease and become null and void
at 5:00 p.m. (New York time) on December [•], 2017.

10. Time.

      Time shall be of the essence of
this Warrant Certificate.

11. Business Day.

      In the event that any day on or
before which any action is required or permitted to be taken hereunder is not a
business day, such action shall be required or permitted to be taken on or
before the requisite time on the next succeeding day that is a business day.

12. Notices.

      Whenever notice is required or
permitted to be given under this Warrant Certificate, unless otherwise provided
herein, such notice will be in writing, will be mailed (a) if within the
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International
Federal Express or facsimile, and will be deemed given (i) if delivered by
first-class registered or certified mail domestic, three business days after so
mailed, (ii) if delivered by nationally recognized overnight carrier,
one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile,
upon electronic confirmation of receipt and will be delivered and addressed as
follows:




- 13 -

if to the Company, to:

	 	U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Attention: Daniel J. Kunz, Chief Executive
      Officer 
	 	Facsimile: (208) 424-1030 


with copies to:

	 	Dorsey & Whitney LLP 
	 	Columbia Center 
	 	701 Fifth Avenue, Suite 6100 
	 	Seattle, Washington 98104 
	 	Attention: Christopher J. Barry 
	 	           
                     Kimberley R.
      Anderson 
	 	Facsimile: (206) 903-8820 


if to the Holder, at its address
appearing on the register hereinbefore mentioned, or at such other address or
addresses as may have been furnished to the Company in writing.

13. Amendment and Waiver. 

      These Warrants are part of a
series of warrants to purchase Common Shares of the Company issued on the
Issuance Date (collectively, the “2012 Warrants”). Except as otherwise
provided herein, the provisions of these Warrants may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of a majority of the 2012 Warrants then outstanding.

14. Governing Law.

      This Warrant Certificate shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without giving effect to the principles of conflicts
of law that would require the application of the laws of any other
jurisdiction.

15. Successor.

      The Company shall not enter into
any transaction whereby all or substantially all of its undertaking, property
and assets would become the property of any other company (herein called a
“Successor Company”) whether by way of reorganization, reconstruction,
consolidation, amalgamation, merger, transfer, sale, disposition or otherwise,
unless prior to or contemporaneously with the consummation of such transaction the
Company and the Successor Company shall have executed such instruments and done
such things as the Company, acting reasonably, considers to be necessary or
advisable to establish that upon the consummation of such transaction:




- 14 -

	 	(a) 	
      the Successor Company will have assumed all the covenants
      and obligations of the Company under this Warrant Certificate,
  and

	 	 	 
	 	(b) 	
      this Warrant Certificate will be a valid and binding
      obligation of the Successor Company entitling the Holder, as against the
      Successor Company, to all the rights of the Holder under this Warrant
      Certificate (without limitation reflecting any adjustments to which the
      Holder may be entitled as a result of such transaction pursuant to
      Sections 2.2 and 2.3).



     Whenever the conditions of this
Section 15 shall have been duly observed and performed, the Successor Company
shall possess, and from time to time may exercise, each and every right and
power of the Company under this Warrant Certificate in the name of the Company
or otherwise and any act or proceeding by any provision hereof required to be
done or performed by any director or officer of the Company may be done and
performed with like force and effect by the like directors or officers of the
Successor Company.

16. General.

      This Warrant Certificate is not
valid for any purpose whatsoever unless and until it has been signed by or on
behalf of the Company. The holding of the Warrants evidenced by this Warrant
Certificate shall not be construed as conferring upon the Holder any right or
interest whatsoever as a shareholder of the Company nor entitle the holder
hereof to any right or interest in respect thereof except as expressly provided
in this Warrant Certificate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




- 15 -

     IN WITNESS WHEREOF the
Company has caused this Warrant Certificate to be executed by its duly
authorized officer.

     DATED as of the ___ day of
________________, 2012.

	 	U.S. GEOTHERMAL INC. 
	 	  
	 	  
	 	Name: 
	 	Title: 






EXHIBIT 1

Subscription Form

     The undersigned Holder hereby
irrevocably elects to exercise the number of Warrants of U.S. Geothermal Inc.
(the “Company”) set out below for the number of Warrant Shares as set
forth below, evidenced by the attached certificate representing Warrants issued
by the Company (the “Warrant Certificate”). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Warrant Certificate:

     1. Form of Exercise Price. The
Holder intends that payment of the Exercise Price shall be made as:

	(A) 	
      ________     a “Cash
      Exercise” with respect to:

	 	 	 
		(i) 	
      Number of Warrants to be exercised:
      ______________________________

	 	 	 
		(ii) 	
      Number of Warrant Shares to be
      acquired:______________________________

	 	 	 
		(iii) 	
      Exercise Price per
      Warrant:______________________________

	 	 	 
		
      ; and/or

	 	 	 
	(B) 	
      ________     a “Cashless
      Exercise” with respect to:

	 	 	 
		(i) 	
      Number of Warrants to be
      exercised:______________________________

	 	 	 
		(ii) 	
      Number of Warrant Shares to be
      acquired:______________________________



     2. Payment of Exercise Price. In
the event that the Holder has elected a Cash Exercise with respect to some or
all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the
Aggregate Exercise Price in the sum of US$ ___________________[1(A)(ii)
multiplied by 1(A)(iii) above)] to the Company in accordance with the terms of
the Warrant Certificate.

     3. Delivery of Warrant Shares.
The Holder directs Warrant Shares to be registered and issued as directed below
and the Company shall deliver to the Holder such Warrant Shares in accordance
with the terms of the Warrant Certificate.

     4. The Holder acknowledges that
the Warrants are exercisable only in accordance with applicable laws.

Please check one of the following options and complete
the Required Information below:

Option 1 

	[ ] 	
      Please deliver the Warrant Shares by crediting the
      account of the Holder’s broker (as specified by such Holder below) with
      The Depository Trust Company (“DTC”) through its Deposit/Withdrawal
      At Custodian (“DWAC”) system, whereby the Holder’s broker will
      initiate a DWAC transaction using its DTC participant identification
      number.



OR




Option 2

	[ ] 	
      Please deliver a stock certificate evidencing the Warrant
      Shares registered in the name of the registered holder specified by the
      Holder below to the address specified by the Holder
  below.



Required Information:

	1. 	The exact name that your Warrant Shares are to    	 
	  	be registered in. You may use a nominee name if    	 
	  	appropriate: 	 
	  	  	 
	2. 	The relationship between the Holder and the 	 
	 	registered holder listed in response to item
      1  	 
	  	above: 	 
	  	  	 
	3. 	The mailing address of the registered holder
      listed 	 
	  	in response to item 1 above: 	 
	  	  	 
	4. 	The Social Security Number or Tax
      Identification 	 
	  	Number of the registered holder listed in
      response 	 
	  	to item 1 above: 	 
	  	
    
	 
	5. 	
    Name of DTC Participant (broker-dealer at which 
	 
		
       the account or accounts to be credited with
      the  
	 
	  	
      Warrant Shares are maintained) (Option 1 only):
      
	 
	  	
    
	 
	6. 	
    DTC Participant Number (Option 1 only): 
	 
	  	
    
	 
	7. 	
    Name of Account(s) at DTC Participant being 
	 
	  	
      credited with the Warrant Shares (Option 1 only):
      
	 
	  	
    
	 
	8. 	
    Account Number(s) at DTC Participant being 
	 
	  	credited with the Warrant Shares (Option 1
      only): 	 


DATED this_______ day of____________ , 20_____.

	 	 
	 	(Signature of registered Holder) 
	 	 
	 	 
	 	(Name of registered Holder)







EXHIBIT 2

Transfer Form

FOR VALUE RECEIVED, the undersigned hereby sells, transfers and
assigns to___________________ , whose address is ________________________________________Warrants
represented by the within Warrant Certificate and appoints U.S. Geothermal Inc.
attorney to transfer the said Warrants on its books with full power of
substitution in the premises.

DATED this______ day of___________ , 20_____.

 In the presence of: Signature of Holder guaranteed
by:

	 	 	 
	 	 	(Signature of registered Holder hereof) 
	 	 	 
	 	 	 
	 	 	(Name of registered Holder hereof)
  



		NOTICE: 	
      The signature to this Transfer Form must correspond
      with the name as it appears on the face of the Warrant
      Certificate, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company.
      Officers of corporations and those acting in a fiduciary or
      other representative capacity should file proper evidence of
      authority to assign the foregoing Warrants.