Filed by Automated Filing Services Inc. (604) 609-0244 - US Geothermal Inc. - Exhibit 10.13





 EMPLOYMENT AGREEMENT 


  
    
      
          THIS AGREEMENT made as of the 17th day of
          December, 2004 

      

    

  




BETWEEN: 


  
    
      
          US Geothermal Inc., a body corporate having
          an office at Suite B 1509 Tyrell Lane Boise, Idaho 83706

          (the "Company") 

      

    

  




AND: 


  
    
      
          Kerry D. Hawkley of 11917 W Fiddler, Boise,
          Idaho 83713 

          (the "Employee") 

      

    

  




WHEREAS: 

 (A)                                   the
  Company is in the business of developing its Raft River geothermal property;


 (B)                                   the
  Company wishes to engage the Employee as Chief Financial Officer and Secretary;
  and 

 (C)                                   the
  parties hereto wish to enter into this Agreement for the purpose of fixing the
  compensation and terms applicable to the employment of the Employee during the
  period hereinafter set out. 

                                            NOW
  THEREFORE THIS AGREEMENT WITNESSES that the parties hereto, in consideration
  of the respective covenants and agreements on the part of each of them herein
  contained, do hereby covenant and agree as follows: 

 1.                                        Employment
  

                                           The
  Company hereby engages the Employee as Chief Financial Officer and Secretary
  of the Company, and the Employee hereby accepts such employment, upon the terms
  and conditions hereinafter set out. 

 2.                                        Term
  

                                           This
  Agreement will be effective from January 1, 2005 and will remain in full force
  and effect until terminated as hereinafter provided. 

 3.                                        Responsibility
  

                                           The
  Employee will devote one half of his working time to his Employment hereunder,
  and while engaged in his employment will have the authority and duty to perform
  and 








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carry out such duties and responsibilities as are customarily carried out by persons holding similar positions in other mining companies comparable in size to the Company and such additional and related duties as may from time to time be assigned,
delegated, limited or determined by the President.

 4.                                        Other
  Business Activities 

                                              It
  is agreed that the Employee's employment hereunder shall constitute one half
  of his working time which shall be devoted exclusively for the benefit of the
  Company, and therefore: 

	 	 	 (a)      	 the Employee may engage in any other business
        activities, so long as such activities will not interfere with, or impede,
        in any significant manner the performance of his duties as Controller
        of the Company provided, however, that: 

	 
	 	 	 	 (i)   
          
	 other than the business activities already disclosed
        to the President, before the Employee can engage in any such other business
        activity which involves the Employee owning or acquiring any interest,
        directly or indirectly, in any geothermal property or the rendering of
        any advice or service to another person, partnership or other legal entity
        or a joint venture engaged in the business of exploring for and/or developing
        geothermal resources the Employee must disclose full particulars thereof
        in writing to the Board, and within 15 days after the date of such disclosure,
        the Employee must receive from the President a decision that such activities
        by the Employee will not, in the opinion of the President, interfere or
        be in conflict with the Employee's performance of his duties to the Company
        hereunder; 

	 
	 	 	 	 (ii)     
      
	 before engaging in any such other business activity
        other than an investment or acquisition of the kind described in sub-paragraph
        (a)(i) of this Section 4, the Employee shall have disclosed same in writing
        to the President; and, 

	 
	 	 	 	 (iii)     
      
	 an investment or acquisition of the kind described
        in sub-paragraph (a)(i) of this Section 4 does not include investment
        in publicly traded mining companies, where such investment does not constitute
        10%, either directly or after exercise of any share acquisition rights,
        of the issued capital of the company in question, nor a control position,
        nor part of a control block. 

	 
	 	     	(b)  	the Employee shall refer to the President
        any and all matters and transactions in respect of which an actual or
        potential conflict of interest between the Employee and the Company has
        arisen or may arise, however remote the possibility, and the Employee
        shall not proceed with any such matter or transaction until the President's
        approval 









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	 	 	 	therefore is obtained. For purposes of clarification,
        this provision is not intended to limit in any way the Employee's other
        fiduciary obligations to the Company which may arise in law or in equity.
      



 5.                                        Compensation
  

                                           In
  consideration of the performance by the Employee of his responsibilities and
  duties as Controller hereunder: 

	 	 	 (a)      	 the Company will pay the Employee the sum of US$42,000
        per annum, payable in monthly installments. The Employee may elect to
        have any compensation payable hereunder paid into any jurisdiction of
        his choice, but the Company may decline to pay such compensation to the
        Employee at the place specified if the Company determines that such payment
        in such jurisdiction would violate the laws of the jurisdiction of the
        place of payment specified by the Employee or the laws of any other country
        or if the Company otherwise determines that payment to the Employee or
        for his account in such place would be prejudicial to the Company; 

	 	 	 	 
	 	 	 (b)      	 the Company will grant the Employee incentive stock
        options in such amount and on such conditions as the Board of Directors
        of the Company may determine from time to time; and 

	 	 	 	 
	 	 	 (c)      	 the Company will provide the Employee and his immediate
        family (consisting of spouse and children) with medical, dental and related
        coverages as are or may become available to the other employees of the
        Company. 



 6.                                        Expenses
  

                                           The
  Company will reimburse the Employee for any and all reasonable and documented
  expenses actually and necessarily incurred by the Employee in connection with
  the performance of his duties under this Agreement. The Employee will furnish
  the Company with an itemized account of his expenses in such form or forms as
  may reasonably be required by the Company and at such times or intervals as
  may be required by the Company. 

 7.                                        Vacation
  

                                           The
  Employee will be entitled to a paid vacation of three weeks within each 12 month
  period under the terms of this Agreement, to be calculated from the date of
  commencement of employment set forth in Section 2 herein. This vacation must
  be taken on dates which do not adversely compromise the Employee’s performance
  of his duties under this Agreement. 








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 8.                                        Termination
  

                                           This
  Agreement and the Employee's employment may be terminated by the Company summarily
  and without notice, payment in lieu of notice, severance payments, benefits,
  damages or any sums whatsoever, on the occurrence of any one or more of the
  following events: 

	 	 (a)      	 the Employee’s failure to carry out his duties hereunder in a competent
      and professional manner; 
	 
	 	 (b)      	 the Employee’s appropriation of corporate opportunities for the
      Employee’s direct or indirect benefit or his failure to disclose any
      material conflict of interest; 
	 
	 	 (c)      	 the Employee’s plea of guilty to, or conviction of, an indictable
      offence once all appeals (if any) have been completed without such conviction
      having been reversed; 
	 
	 	 (d)      	 the existence of cause for termination of the Employee at common law
      including but not limited to cause related to fraud, dishonesty, illegality,
      breach of statute or regulation, or gross incompetence; 
	 
	 	 (e)      	 failure on the part of the Employee to disclose material facts concerning
      his business interests or employment outside of his employment by the Company,
      provided such facts relate to the Employee’s duties hereunder; 
	 
	 	 (f)      	 refusal on the part of the Employee to follow the reasonable and lawful
      directions of the Company; 
	 
	 	 (g)      	 breach of fiduciary duty to the Company on the part of the Employee;
    
	 
	 	 (h)      	 material breach of this Agreement or gross negligence on the part of
      the Employee in carrying out his duties under this Agreement; or 
	 
	 	 (i)      	 a declaration of bankruptcy on the part of the Employee by a court of
      competent jurisdiction. 


 8.1                                      In
  the event of the early termination of the Agreement for any reason set out in
  Section 8 above, the Employee shall only be entitled to such compensation as
  would otherwise be payable to the Employee hereunder up to and including such
  date of termination, as the case may be.

 8.2                                     This
  Agreement and the Employee's employment may be terminated on notice by the Company
  to the Employee for any reason other than for the reasons set out in Section
  8 








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 above of this Agreement upon one month notice to the Employee.
  In such event, the Employee will be entitled to payment of salary and expenses
  until the date one month after which notice was given. 

 8.3                                     This
  Agreement and the Employee's employment may be terminated on notice by the Employee
  to the Company for any reason upon one month notice to the Company. In such
  event, the Employee will be entitled to payment of salary and expenses until
  the date one month after which notice was given. 

 9.                                        Confidential
  Information 

                                           The
  Employee agrees to keep the affairs and Confidential Information (as defined
  below) of the Company strictly confidential and shall not disclose the same
  to any person, company or firm, directly or indirectly, during or after his
  employment by the Company except as authorized in writing by the Board. "Confidential
  Information" includes, without limitation, the following types of information
  or material, both existing and contemplated, regarding the Company or its parent,
  affiliated or subsidiary companies: corporate information, including contractual
  licensing arrangements, plans, strategies, tactics, policies, resolutions, patent,
  trademark and trade name applications; any litigation or negotiations; information
  concerning suppliers; marketing information, including sales, investment and
  product plans, customer lists, strategies, methods, customers, prospects and
  market research data; financial information, including cost and performance
  data, debt arrangements, equity structure, investors and holdings; operational
  and scientific information, including trade secrets; technical information,
  including technical drawings and designs; any information relating to any mineral
  projects in which the Company has an actual or potential interest; and personnel
  information, including personnel lists, resumes, personnel data, organizational
  structure and performance evaluations. The Employee agrees not to use such information,
  directly or indirectly, for his own interests, or any interests other than those
  of the Company, whether or not those interests conflict with the interests of
  the Company during or after his employment by the Company. The Employee expressly
  acknowledges and agrees that all information relating to the Company, whether
  financial, technical or otherwise shall, upon execution of this Agreement and
  thereafter, as the case may be, be the sole property of the Company, whether
  arising before or after the execution of this Agreement. The Employee expressly
  agrees not to divulge any of the foregoing information to any person, partnership,
  Company or other legal entity or to assist in the disclosure or divulging of
  any such information, directly or indirectly, except as required by law or as
  otherwise authorized in writing by the Board. The provisions of this Section
  9 and Section 9.1 below shall survive the termination of this Agreement.

 9.1                                     The
  Employee agrees that all documents of any nature pertaining to the activities
  of the Company or its related corporate entities, including Confidential Information,
  in the Employee's possession now or at any time during the Employee's period
  of employment, are and shall be the property of the Company and that all such
  documents and copies of them shall be 








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 surrendered to the Company when requested by the Company.

 10.                                     Non-Competition
  

                                           During
  the Non-Competition Period (as defined below), the Employee shall not, either
  individually or in partnership or jointly or in conjunction with any other person,
  entity or organization, as principal, agent, consultant, lender, contractor,
  employer, employee, investor, shareholder or in any other manner, directly or
  indirectly, advise, manage, carry on, establish, control, engage in, invest
  in, offer financial assistance or services to, or permit the Employee's name
  or any part thereof to be used by, any business in geothermal resources that
  competes with the business of the Company, its parent, affiliated or subsidiary
  companies, or any business in which the Company, its parent, affiliated or subsidiary
  companies is engaged. For purposes of this Agreement, “Non-Competition
  Period” means a period ending twelve (12) months after the end of the
  termination of this Agreement. 

 11.                                     Acknowledgement
  

                                           The
  Employee acknowledges that damages would be an insufficient remedy for a breach
  by him of this Agreement and agrees that the Company may apply for and obtain
  any relief available to it in a court of law or equity, including injunctive
  relief, to restrain breach or threat of breach of this Agreement by the Employee
  or to enforce the covenants contained therein and, in particular, the covenants
  contained in Sections 9 and 10, in addition to rights the Company may have to
  damages arising from said breach or threat of breach. 

 12.                                     Representations
  and Warranties 

                                           The
  Employee represents and warrants to the Company that the execution and performance
  of this Agreement will not result in or constitute a default, breach, or violation,
  or an event that, with notice or lapse of time or both, would be a default,
  breach, or violation, of any understanding, agreement or commitment, written
  or oral, express or implied, to which the Employee is currently a party or by
  which the Employee or Employee's property is currently bound. 

 13.                                     Governing
  Law 

                                           This
  Agreement shall be construed and enforced in accordance with the laws of the
  State of Idaho, USA. 

 14.                                     Entire
  Agreement 

                                           This
  Agreement constitutes the entire agreement between the parties hereto with respect
  to the relationship between the Company and the Employee and supersedes all
  prior arrangements and agreements, whether oral or in writing between the parties
  hereto with respect to the subject matter hereof. 








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 15.                                     Amendments
  

                                           No
  amendment to or variation of the terms of this Agreement will be effective or
  binding upon the parties hereto unless made in writing and signed by both of
  the parties hereto. 

 16.                                     Assignment
  

                                           This
  Agreement is not assignable by the Employee. This Agreement is assignable by
  the Company to any other company which controls, is controlled by, or is under
  common control with the Company. This Agreement shall enure to the benefit of
  and be binding upon the Company and its successors and permitted assigns and
  the Employee and his heirs, executors and administrators. 

 17.                                     Severability
  

                                           Any
  provision of this Agreement that is prohibited or unenforceable in any jurisdiction
  shall, as to that jurisdiction, be ineffective to the extent of the prohibition
  or unenforceability and shall be severed from the balance of this Agreement,
  all without affecting the remaining provisions of this Agreement or affecting
  the validity or enforceability of such provision in any other jurisdiction.


 18.                                     Headings
  

                                           The
  division of this Agreement into Sections and the insertion of headings are for
  convenience or reference only and shall not affect the construction or interpretation
  of this Agreement. 

 19.                                     Time
  of Essence 

                                           Time
  shall be of the essence in all respects of this Agreement. 

 20.                                     Independent
  Legal Advice 

                                           The
  Employee agrees that he has had, or has had the opportunity to obtain, independent
  legal advice in connection with the execution of this Agreement and has read
  this Agreement in its entirety, understands its contents and is signing this
  Agreement freely and voluntarily, without duress or undue influence from any
  party. 

 21.                                     Notice
  

                                           Any
  notice required or permitted to be made or given under this Agreement to either
  party shall be in writing and shall be sufficiently given if delivered personally,
  by electronic transmission, or if sent by prepaid registered mail to the intended
  recipient of such notice at their respective addresses set forth below or to
  such other address as may, from time to time, be designated by notice given
  in the manner provided in this Section: 





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US Geothermal Inc.

  1509 Tyrell Lane, Suite B 

  Boise, Idaho 83706 

  Attention: Corporate Secretary 

Fax No.: 208 424 1030 

in the case of Employee: 

Kerry D. Hawkley 

  11917 W Fiddler 

  Boise, Idaho 83713 

  Fax No.: 208 939 8369

 21.1                                    Any
  notice delivered to the party to whom it is addressed shall be deemed to have
  been given and received on the day it is so delivered or, if such day is not
  a business day, then on the next business day following any such day. Any notice
  mailed shall be deemed to have been given and received on the 10th business
  day following the date of mailing. In the case of facsimile transmission, notice
  is deemed to have been given or served on the party to whom it was sent at the
  time of dispatch if, following transmission, the sender receives a transmission
  confirmation report or, if the sender’s facsimile machine is not equipped
  to issue a transmission confirmation report, the recipient confirms in writing
  that the notice has been received. 

                                            IN
  WITNESS WHEREOF the parties hereto have executed this Agreement as of the
  day and year first above written. 

US GEOTHERMAL INC. 

	 By:  	  	 
	  	
      Authorized Signatory  	 


SIGNED by the Employee in the presence of:  

	 	 	 
	
      Witness  	 	
      Kerry D. Hawkley  
	 	 	 
	 	 	 
	 	 	 
	Printed
      Name of Witness