Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.16







FIRST AMENDED AND RESTATED MERGER AGREEMENT


              FIRST
  AMENDED AND RESTATED MERGER AGREEMENT, dated effective November 20, 2003 (the
  “First Amendment”), by and among U.S. Cobalt Inc., a Delaware
  corporation (the “Company”), EverGreen Power Inc., an Idaho
  corporation and a wholly-owned subsidiary of the Company (“Sub”),
  U.S. Geothermal Inc., an Idaho corporation (“Geo”), and the
  stockholders of Geo set forth on the signature pages hereto (collectively, the
  “Principal Geo Shareholders”). Geo and Sub are sometimes herein
  collectively referred to as the “Constituent Corporations.”


 RECITALS 

              A.
  Geo is engaged in the business of acquiring and developing one or more geothermal
  projects (the “Business”). 

              B.
  The Company, Sub and Geo desire to effect a merger (“Merger”)
  of Sub with Geo, pursuant to which (i) subject to Sections 2.1(f) and 2.5 hereof,
  (a) each share of Geo’s common stock, $.001 par value per share (“Geo
  Common Stock”) will be converted into shares of the voting Common Stock
  of the Company, $.001 par value per share (“Company Common Stock”),
  and (b) all outstanding common share purchase warrants of Geo will be converted
  into warrants to purchase Company Common Stock and (ii) the Company will become
  the sole stockholder of the Surviving Corporation (as defined below). 

              C.
  The Boards of Directors of the Company, Sub and Geo have each approved the Merger
  upon the terms and subject to the conditions set forth herein and deem it advisable
  and in the best interests of their respective stockholders that the Merger be
  consummated. 

              D.
  For federal income tax purposes, it is intended that the Merger shall qualify
  as a reorganization within the meaning of Section 368(a)(2)(E) of the Internal
  Revenue Code of 1986, as amended (the “Code”). 

              E.
  Effective February 28, 2003, the parties entered into a Merger Agreement (the
  “Agreement”), to memorialize the terms of the Merger. Since
  that time, certain facts and circumstances have changed, and the parties wish
  to amend and restate the Agreement to reflect their agreement with and to such
  changes. 

              F.
  Capitalized terms used herein are defined or their definitions are referenced
  on Schedule E hereto. 

 AGREEMENTS 

              NOW,
  THEREFORE, in consideration of the recitals (which are deemed to be a part of
  this First Amendment), mutual covenants, representations, warranties and agreements
  contained herein and other good and valuable consideration, the receipt and
  sufficiency of which are hereby acknowledged, the parties hereto agree to amend
  and restate the Agreement and agree as follows: 

 ARTICLE I 

THE MERGER 

              SECTION
  1.1. The Merger; Surviving Corporation. Upon the terms and subject to
  the conditions hereof, and in accordance with the provisions of the Idaho Code
  § 30-1-1101 et seq , as amended (the 









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 “Idaho Code”), Sub shall be merged with and
  into Geo as soon as practicable after satisfaction or waiver of the conditions
  set forth in Article VII. Following the Merger, the separate existence of Sub
  shall cease, and Geo shall continue as the surviving corporation in the Merger
  (the “Surviving Corporation”). 

              SECTION
  1.2. Effect of the Merger. The Merger shall have the effects set forth
  in the Idaho Code. From and after the Effective Time, the Surviving Corporation
  shall be a wholly-owned subsidiary of the Company. 

              SECTION
  1.3. Articles of Incorporation of the Surviving Corporation. The Articles
  of Incorporation of Geo, as in effect immediately prior to the Effective Time
  of the Merger, shall be the Articles of Incorporation of the Surviving Corporation
  until thereafter changed or amended as provided therein or by applicable law.


              SECTION
  1.4. Bylaws of the Surviving Corporation. At the Effective Time and without
  any further action on the part of the Constituent Corporations, the Bylaws of
  Geo shall be the Bylaws of the Surviving Corporation. 

              SECTION
  1.5. Board of Directors and Officers of the Surviving Corporation. At
  the Effective Time, the persons listed on Schedule 1.5(a) shall be the
  directors of the Surviving Corporation and the persons listed on Schedule
  1.5(b) shall be the officers of the Surviving Corporation, holding such
  positions as are indicated on such Schedule, each of such directors and officers
  to hold office until their respective successors are duly elected and qualified,
  or their earlier death, resignation or removal. 

              SECTION
  1.6. Effective Time of the Merger. The Constituent Corporations will
  cause articles of merger and such other documents as are required by the Idaho
  Code to be duly filed with the Secretary of State of the State of Idaho (the
  “Idaho Authority”). The Merger shall become effective upon
  the filing of articles of merger substantially in the form attached hereto as
  Exhibit A with the Idaho Authority. 

 ARTICLE II 

CONVERSION OF SHARES 

              SECTION
  2.1. Conversion of Capital Stock. As of the Effective Time, by virtue
  of the Merger and without any action on the part of the holders of the capital
  stock of the Constituent Corporations: 

              (a)
  Sub Common Stock. All of the issued and outstanding shares of Sub common
  stock, $.001 par value per share (“Sub Common Stock”), shall
  be converted into and become one fully paid and non-assessable share of common
  stock of the Surviving Corporation. 

              (b)
  Cancellation of Treasury Stock. All shares, if any, of Geo Common Stock
  and Geo Warrants or other rights to acquire any interest in the equity of Geo,
  directly or indirectly (collectively “Geo Securities”) that
  are owned directly or indirectly by Geo shall be cancelled, and no consideration
  shall be delivered in exchange therefor. 

              (c)
  Conversion of Geo Common Stock. Except as provided in Sections 2.2 and
  2.3 and subject to Section 2.1(e), all of the issued and outstanding shares
  of Geo Common Stock issued and outstanding immediately prior to the Effective
  Time shall be converted into the right to receive and exchanged solely for 6,939,992
  shares of Company Common Stock (after giving effect to the Consolidation), which
  shall be distributed to the Geo Shareholders as set forth in Schedule 2.1(c)
  hereto. 









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              (d)
  Conversion of Geo Warrants. Except as provided in Sections 2.2 and 2.3
  and subject to Section 2.1(e), all of the issued and outstanding Geo Warrants
  issued and outstanding immediately prior to the Effective Time shall be converted
  into the right to receive and exchanged solely for the 2,420,217 Exchange Warrants
  which shall be distributed to Vulcan. 

              (e)
  Escrow Shares. Notwithstanding the foregoing, the Company shall deposit
  into the Escrow (as defined below) 5,782,993 shares (or such greater number
  as shall be required under an Escrow Agreement (as defined below)) of the Company
  Common Stock and all of the Exchange Warrants otherwise deliverable pursuant
  to Section 2.1(c) and Section 2.1(d) hereof (the “Escrow Securities”),
  which Escrow Securities shall, immediately after the Closing without any further
  action by any Person, become subject to the terms and conditions of the escrow
  (the “Escrow”) established pursuant to one or more escrow agreements
  to be entered into among the Company, the Escrow Agent and certain shareholders
  of the Company on such terms and conditions as are agreed among the Company,
  the Exchange and Escrow Agent (the “Escrow Agreement(s)”).


              (f)
  Equitable Adjustments. Notwithstanding the foregoing, the number of shares
  of Company Common Stock and Exchange Warrants to be issued pursuant to Sections
  2.1(c) and 2.1(d) of this First Amendment (including the number of Escrow Securities)
  shall be equitably adjusted to the extent that such adjustment is necessary
  to preserve the economic value of such shares as determined by an independent
  accounting firm selected by the Company in the event of a change in the number
  of outstanding shares of the Company’s capital stock resulting from a stock
  dividend, stock split, reverse stock split, share combination, recapitalization,
  merger, consolidation, acquisition of property or shares, asset spin-off, split-off,
  reorganization, stock rights offering, liquidation or similar event (other than
  the Consolidation), of or by the Company between the date hereof and the date
  such shares are distributed. 

              (g)
  Definition of Merger Consideration. The shares of the Company Common
  Stock and the Exchange Warrants (including, without limitation, the Escrow Securities)
  to be received pursuant to Sections 2.1(c) and this 2.1(d) upon the conversion
  of Geo Securities shall be referred to as the “Merger Consideration.”


              SECTION
  2.2. Dissenters’ Rights. It is a condition to the obligations of
  the Company and Sub to proceed to closing under this First Amendment that no
  Geo Shareholders exercise any dissenters’ rights under applicable law.
  If such condition is waived (but without creating or implying any obligation
  to do so), the Geo Shareholders as to which dissenters’ rights shall have
  been duly demanded under applicable law (“Dissenting Shares”),
  if any, shall be entitled to payment by the Surviving Corporation only of the
  fair value of such shares plus accrued interest to the extent permitted by and
  in accordance with the provisions of applicable law; provided, however,
  that (i) if any holder of Dissenting Shares shall, under the circumstances permitted
  by applicable law, subsequently deliver a written withdrawal of such holder’s
  demand or (ii) if any holder fails to establish such holder’s entitlement
  to demand or receive payment as provided under applicable law, such holder or
  holders (as the case may be) shall forfeit such right to payment for such Geo
  Securities and such securities shall thereupon be deemed to have been converted
  into Company Common Stock as of the Effective Time in accordance with Section
  2.1 hereof (including, without limitation, that such shares of Company Common
  Stock shall constitute additional Escrow Securities subject to the terms of
  the Escrow in accordance with Section 2.1(e)). 

              SECTION
  2.3. No Fractional Shares. No certificates representing fractional shares
  of Company Common Stock shall be issued upon the surrender for exchange of certificates
  formerly representing Geo Common Stock or deposited into the Escrow pursuant
  to this Article II. Fractions of shares will be rounded down to the closest
  whole number. 









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              SECTION
  2.4. Certificates; Surrender and Payment. 

              (a)
  Effect of Merger on Geo Stock Certificates. As of the Effective Time,
  each certificate representing Geo Securities shall cease to represent such Geo
  Securities and shall represent only (i) in the case of Dissenting Shares, if
  any, the rights of the holder as provided in Section 2.2 or (ii) in all other
  cases, the right to receive Merger Consideration pursuant to and in accordance
  with the terms hereof and any holder thereof shall cease to have any rights
  as a securityholder of Geo or the Surviving Geo. 

              (b)
  Surrender and Payment. On or before the Closing Date, the Geo Shareholders
  shall surrender the certificates for their Geo Securities to the Company along
  with fully-executed forms of the Transferee Acknowledgement and Warranty included
  in the Merger Materials, and the Company shall issue the Exchange Securities
  to the Geo Shareholders in accordance with the provisions of Sections 2.1(c)
  and 2.1(d) hereof, subject to the provisions of the Escrow Agreement(s). 

              (c)
  Closing of Geo’s Transfer Books. After the Effective Time, no transfers
  of Geo Securities shall be recorded in the stock transfer books of the Surviving
  Corporation or its transfer agent. 

              SECTION
  2.5. Transfer of Company Common Stock. No Geo Shareholder shall sell,
  assign, convey or otherwise transfer any Company Common Stock or Exchange Warrants
  issued pursuant to this First Amendment except pursuant to an effective registration
  statement under the Securities Act of 1933, as amended, (the “Securities
  Act”) or an applicable exemption from registration thereunder and otherwise
  in accordance with all applicable federal and state securities laws. Unless
  and until otherwise permitted by this First Amendment, each certificate of Company
  Common Stock and Exchange Warrants issued pursuant to this First Amendment to
  any Stockholder or his or her nominee, or to any subsequent transferee of such
  certificate shall be stamped or otherwise imprinted with a legend in substantially
  the following form: 


   “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
    NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE
    SECURITIES LAWS. THESE SECURITIES HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION
    OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
    TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
    SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES
    LAWS, OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT REGISTRATION
    IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR UNDER APPLICABLE STATE
    SECURITIES LAWS.” 




ARTICLE III


 REPRESENTATIONS AND WARRANTIES 

  OF GEO AND THE PRINCIPAL GEO SHAREHOLDERS 

              Geo
  and the Principal Geo Shareholders hereby jointly and severally represent and
  warrant to each of the Company and Sub as of the date hereof and as of the Effective
  Time as set forth below. The information disclosed on any Schedule attached
  hereto shall be deemed to relate solely to the section of this Article III to
  which such Schedule relates and shall not be deemed made for other sections
  to which such disclosure may apply unless such disclosure is cross-referenced
  in the Schedule(s) relating to such other section(s), and only to the extent
  that the applicable information or risk is described. 









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              SECTION
  3.1. Organization and Authority. Geo is duly incorporated, validly existing
  and in good standing under the laws of the State of Idaho, with all requisite
  power and authority to own, lease and operate its properties and to carry on
  its business as now being conducted. No order has been made or petition presented
  or resolution adopted which relates to the winding-up of Geo or for an administration
  order in respect of Geo, nor has any administrative or other receiver been appointed
  by any Governmental Authority or other Person with respect to all or part of
  the assets of Geo, and no power to make any such appointment has arisen. Geo
  has delivered to the Company complete and correct copies of the Articles of
  Incorporation and Bylaws presently in effect for Geo, and Geo is not in default
  under or in violation of any provision of such documents. 

              SECTION
  3.2. Qualification. Geo is qualified and licensed to do business and
  is in good standing in the State of Idaho, and is not required to be licensed
  or qualified in any other jurisdiction. 

              SECTION
  3.3. Authorization. Geo has full corporate power and authority to enter
  into, execute and deliver this First Amendment and the Additional Agreements
  to which it is a party and to perform and observe fully its obligations hereunder
  and thereunder and to perform the transactions contemplated hereby and thereby;
  provided, however that consummation of the Merger shall require approval of
  the Geo Shareholders in accordance with the Idaho Code and Geo’s Articles
  of Incorporation and By-laws (“Geo Shareholder Approval”).
  Geo’s Board of Directors has taken all action required by law, Geo’s
  Articles of Incorporation and Bylaws, or otherwise to authorize the execution,
  delivery and performance of this First Amendment and the Additional Agreements
  to which Geo is a party and the consummation by Geo of the transactions contemplated
  hereby and thereby, and no other corporate proceedings on the part of Geo are
  necessary to authorize the entry into, execution, delivery or performance of
  this First Amendment and the Additional Agreements other than Geo Shareholder
  Approval. This First Amendment and the Additional Agreements to which Geo is
  a party have been duly and validly executed and delivered by Geo, and, assuming
  due authorization, execution and delivery by the Company and Sub, constitute
  valid and binding legal obligations of Geo, enforceable against Geo in accordance
  with their terms. 

              SECTION
  3.4. No Violation. Neither the execution, delivery or performance of
  this First Amendment or the Additional Agreements nor (assuming Geo Shareholder
  Approval) the consummation of the transactions contemplated hereby or thereby
  will (a) violate, conflict with or result in any breach of any provision of
  the Articles of Incorporation or Bylaws of Geo, (b) violate, conflict with or
  result in a violation or breach of, or constitute a default (with or without
  due notice or lapse of time or both) under, or permit the termination of, or
  require any notice under, or require the consent of any other party to, or result
  in the acceleration of, or entitle any party to accelerate (whether as a result
  of a change in control of Geo or otherwise) any obligation or agreement, or
  result in the loss of any benefit or the imposition of any fee or penalty, or
  give rise to the creation of any Lien upon any of the properties or assets of
  Geo, in each case under any of the terms, conditions or provisions of any debt,
  note, bond, mortgage, indenture, deed of trust, license, lease, permit, agreement
  or other instrument or obligation to which Geo is a party or by which it or
  any of its properties or assets may be bound or affected (unless requisite waivers
  or consents satisfactory in form and substance to the Company shall have been
  obtained in writing and delivered to the Company prior to the Closing) or (c)
  violate any Rules (including foreign, federal and state securities laws) of
  any Governmental Authority applicable to Geo or any of its properties, assets
  or operations. 

              SECTION
  3.5. Capitalization of Geo. The authorized capital stock of Geo consists
  of 10,000,000 shares of Geo Common Stock. There are issued and outstanding 6,079,836
  shares of Geo Common Stock owned of record and beneficially by the Persons and
  in the amounts specified on Schedule 3.5(a) attached hereto, free and
  clear of all Liens, other than the Lien created by the Vulcan Agreement, which










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 will terminate at Closing. There are no Geo Securities held
  by Geo as treasury stock. All of the issued and outstanding Geo Securities are
  validly issued, fully paid, non-assessable and are without, and were not issued
  in violation of, any preemptive rights, and were not issued in violation of
  federal or state securities laws. No other class of capital stock of Geo other
  than the Geo Common Stock is issued or outstanding, and other than the 1,612,000
  Geo Warrants (which Geo Warrants and their holders are accurately described
  on Schedule 3.5(b)), there are no options, warrants, calls, subscriptions,
  conversion or other rights, agreements or commitments to acquire from Geo any
  shares of capital stock or any other securities convertible into, exchangeable
  for or evidencing the right to subscribe for any shares of capital stock or
  any other security of Geo or the Surviving Corporation. There are no outstanding
  or authorized stock appreciation, phantom stock or similar rights with respect
  to Geo. Geo is not subject to any obligation (contingent or otherwise) to repurchase
  or otherwise acquire or retire any shares of its capital stock. Geo has delivered
  to the Company accurate and complete copies of the stock records of Geo including
  copies of the duly cancelled certificates representing any shares of the capital
  stock of Geo which were previously issued and then cancelled. 

              SECTION
  3.6. No Subsidiaries. Geo does not own any investment, equity securities
  or other legal and/or beneficial interests in any Person. 

              SECTION
  3.7. Consents and Approvals. Except for consents and approvals of or
  filings or registrations with (a) the Idaho Authority relating to the filing
  of a certificate of merger pursuant to the Idaho Code, and (b) as set forth
  on Schedule 3.7, no filing or registration with, no notice to and no
  permit, authorization, consent or approval of, any third party or any Governmental
  Authority is necessary for the consummation by the Geo Shareholders and Geo
  of the transactions contemplated by this First Amendment or the Additional Agreements
  or to enable Geo to continue to conduct its business after the Effective Time
  in a manner which is consistent with that in which it is presently conducted
  or contemplated to be conducted. 

              SECTION
  3.8. Books and Records. The books and records of Geo are, and have been,
  maintained in the usual, regular, ordinary and appropriate manner by Geo, and
  all of the transactions of Geo are properly reflected therein. 

              SECTION
  3.9. Financial Statements. Geo has furnished to the Company copies of
  the audited balance sheet of Geo as of September 30, 2002 (such balance sheet
  being referred to herein as the “Most Recent Balance Sheet”),
  together with the related audited statements of income, stockholders’ equity
  and changes in cash flows for the period from Geo’s inception until September
  30, 2002, and the notes and supplementary information thereto, accompanied by
  the report thereon of Geo’s independent public accountant (such financial
  statements being hereinafter referred to as the “Financial Statements”).
  The Financial Statements and each item therein, including the notes thereto
  (i) were prepared in accordance with generally accepted accounting principles
  in the United States of America applied on a consistent basis throughout the
  periods covered thereby (“GAAP”), (ii) present fairly the financial
  position, results of operations and changes in cash flows, as applicable, of
  Geo, (iii) are accurate, correct and complete and are, in all material respects,
  in accordance with the books of account and records of Geo and (iv) can be reconciled
  with the financial statements and the financial records maintained and the accounting
  methods applied by Geo for federal income tax purposes. 

              SECTION
  3.10. Absence of Undisclosed Liabilities. Notwithstanding any limitations
  or qualifications of, or exceptions to any other representation and warranty
  contained in this Article III, (a) there are no Liabilities, commitments or
  obligations of Geo of any kind whatsoever, (b) neither Geo nor any Principal
  Geo Shareholder Knows of any valid basis for the assertion of any such Liabilities,
  commitments or obligations, and (c) neither Geo nor any Principal Geo Shareholder
  Knows of any 







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 existing condition, situation or set of circumstances which
  is reasonably likely to result in such a Liability, commitment or obligation,
  other than (x) Liabilities, commitments and obligations to the extent and in
  the amounts set forth on the Most Recent Balance Sheet (none of which results
  from, arises out of, relates to, is in the nature of or was caused by any breach
  of contract, breach of warranty, tort, infringement or violation of law), (y)
  obligations to perform the executory portions of contracts to which Geo is a
  party, provided that such obligations are set forth in such contracts, such
  contracts are set forth on Schedule 3.14 hereto, and such contracts were entered
  into in the ordinary course of business and have been made available to the
  Company, and (z) additional accruals of Liabilities of the type that would be
  included on a balance sheet of Geo in accordance with GAAP incurred in the ordinary
  course of business consistent with past practices subsequent to the date of
  the Most Recent Balance Sheet and prior to the date hereof or the Closing Date
  (as applicable), provided that none of such additional accruals results from,
  arises out of, relates to, is in the nature of, or was caused by any breach
  of contract, breach of warranty, tort, infringement or violation of law or relates
  to indebtedness for borrowed money or inter-company debt or debt owed to Affiliates
  and such additional accruals are not, in the aggregate, material.

              SECTION
  3.11. Absence of Certain Changes. Except as set forth on Schedule 3.11
  hereto, since September 30, 2002, Geo has conducted its businesses only in the
  ordinary and usual course using its best efforts to maintain and enhance the
  Business and there has been no material adverse change in the assets, properties,
  business, operations, prospects, customer, licensor, licensee, supplier or employee
  relations, net income or condition (financial or otherwise) of Geo or in the
  ability of Geo or any of the Principal Geo Shareholders to perform this First
  Amendment, the Additional Agreements and the transactions contemplated hereby
  and thereby (a “Material Adverse Effect”). For purposes of
  this First Amendment, any change or effect exceeding an amount or value or having
  an impact of $5,000 or more individually, or $10,000 or more in the aggregate,
  or adversely affecting Geo’s rights under the Geothermal Agreements or
  the Vulcan Agreement, shall be deemed to be “material” and result
  in a Material Adverse Effect. There is no event, condition, circumstance or,
  to the Knowledge of Geo or any Principal Geo Shareholder, prospective development
  which has had or may have a Material Adverse Effect. Without limiting the generality
  of the foregoing, except as set forth on Schedule 3.11 hereto, Geo has not since
  September 30, 2002:

             
  (a)   declared, set aside or paid any dividend or other distribution
  (whether in cash, stock or property) with respect to the equity interests of
  Geo,

             
  (b)  purchased, redeemed (or called for redemption), issued, sold,
  or otherwise acquired or disposed of any shares of capital stock or other equity
  securities of Geo, or granted any options, warrants or other rights to purchase,
  or convert any obligation into, shares of capital stock or any evidence of indebtedness
  or other securities of Geo,

             
  (c)  incurred or assumed any indebtedness (whether directly or by
  way of guarantee or otherwise) for borrowed money, or become bound to repay
  prematurely any borrowed money,

             
  (d)  forgiven or canceled any debts or claims,

             
  (e)  discharged or satisfied any Lien, or paid any Liability, other
  than current liabilities for trade or business obligations shown on the Most
  Recent Balance Sheet or incurred thereafter (but only to the extent such payment
  was in the ordinary course of business consistent with past practices),

             
  (f)  changed its credit policies or practices,






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  (g)   (i) increased the rate or terms of compensation (including
  termination and severance pay) payable or to become payable by Geo to its directors,
  officers, employees or agents, or increased the rate or terms of any bonus,
  insurance, pension or other employee benefit plan, program or arrangement made
  to, for or with any such directors, officers, employees or agents, except increases
  occurring in the ordinary course of business consistent with past practice or
  as required by applicable law, or (ii) entered into any employment, severance
  or termination agreement with any such Person,

             
  (h)  made any loan, advance or capital contribution to any Person,

             
  (i)   waived any significant rights relating to the business
  of Geo or arising under or relating to any of its assets, interests or properties,

             
  (j)   experienced any damage, destruction or loss to the properties
  or assets owned, leased or used by Geo, whether or not covered by insurance
  and whether as a result of fire, flood, riot, strike, act of God, other hazard
  or otherwise,

             
  (k)  changed its financial or tax accounting principles or methods,

             
  (l)   changed, or authorized any change, in its Articles of Incorporation
  or Bylaws,

            
  (m)  changed any of its business policies, customs or practices, including
  advertising, licensing, investment, marketing, pricing, credit, the collection
  of receivables, the payment of payables, purchasing, production, personnel,
  sales, returns, budget, research and development and product acquisition policies,

             
  (n)  commenced, accelerated, ceased or curtailed any research and
  development efforts other than in the ordinary course of business, consistent
  with past practices,

             
  (o)  sold, leased, licensed, abandoned or made any other disposition
  of, or created or permitted to exist any Liens with respect to, any of its properties,
  Proprietary Rights or assets or made any acquisition of all or any part of the
  properties, assets, capital stock or business of any other Person,

             
  (p)   entered into any merger, consolidation, recapitalization
  or other business combination or reorganization,

             
  (q)   amended, terminated or failed to renew, or received any
  threat to terminate or fail to renew, any Contract (as hereinafter defined)
  or other agreement other than in the ordinary course of business and where such
  amendment, termination, failure to renew or threat, singly or together with
  other such actions, will not have a Material Adverse Effect,

             
  (r)    failed to pay trade payables of its business in the
  ordinary course of business or done anything to adversely affect its relationship
  with customers, suppliers, licensors or licensees,

             
  (s)   induced any employee, agent or consultant of Geo to leave
  or terminate his or her employment or engagement with Geo or acted to otherwise
  adversely affect the relation of Geo with any key employee, consultant or agent,

             
  (t)   terminated, amended or modified any Plans, or adopted any
  employee benefit plan, agreement, arrangement, commitment, policy or practice,






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              (u)
    without limiting the foregoing, engaged in any other material transaction
  other than in the ordinary course of business consistent with past practices,
  or

             
  (v)  agreed, either in writing or in a binding oral agreement, to
  do any of the foregoing.

              SECTION
  3.12. Litigation. There are no Claims pending or, to the Knowledge of
  Geo or the Principal Geo Shareholders, threatened by or before any Governmental
  Authority or before any arbitrator of any nature, brought by or against Geo,
  or any of its officers, directors, stockholders, employees or agents involving,
  affecting or relating to the business, assets, operations or securities of Geo,
  or the transactions contemplated by this First Amendment or the Additional Agreements,
  nor is there any basis for any such Claim. Neither Geo nor any of its businesses,
  assets or properties is subject to any order, writ, judgment, award, injunction
  or decree of any Governmental Authority or arbitrator. No present or former
  employee of Geo (or any predecessor of its business) has made or is entitled
  to assert any Claim against Geo.

              SECTION
  3.13. Assets; Liens and Encumbrances. Geo has never held and does not
  currently own or use in its business and operations any material tangible personal
  property assets. There are no Liens with respect to Geo, its assets, businesses
  or operations except for Liens (a) for taxes not yet delinquent or the validity
  of which are being contested in good faith by appropriate actions, and (b) on
  assets leased or licensed by Geo as described in any Schedule hereto, in which
  case Geo holds a leasehold or licensed interest free and clear of all other
  Liens except for the lessor’s or licensor’s interest therein. Neither
  Geo nor any of the Principal Geo Shareholders are aware of (i) any assets of
  Geo which require substantial repair or replacement, (ii) any manufacturer,
  supplier or servicer of any assets of Geo which has terminated its operations
  or suffered a significant adverse change in its condition (financial or otherwise)
  or (iii) any other facts or circumstances which would materially adversely affect
  the Surviving Corporation’s ability to obtain repair or replacement products,
  parts or services with respect to any assets of Geo after the Closing.

              SECTION
  3.14. Contracts. Set forth on Schedule 3.14 attached hereto is a list
  of all contracts, mortgages, notes, security agreements, trust indentures, arrangements,
  leases, licenses, commitments and other agreements and instruments (collectively,
  “Contracts”) to which Geo is a party which are material and
  relate to or affect the capital stock, business, assets, properties or operations
  of Geo or to which Geo or its business, assets, properties or operations may
  be bound or subject, including all written or oral, express or implied Contracts
  (a) relating to Proprietary Rights owned or used by Geo, (b) not made in the
  ordinary course of business, (c) relating to the borrowing of money or for lines
  of credit,(d)  involving leases and subleases of real or personal
  property, (e) for the sale of any assets other than in the ordinary course of
  business or for the grant of any options or preferential rights to purchase
  any assets, property or rights, (f) granting any power of attorney with respect
  to the affairs of Geo, (g)  involving suretyship contracts, working capital
  maintenance or other form of guaranty agreements, (h) limiting or restraining
  Geo from engaging or competing in any lines of business or with any Person,
  (i) involving partnerships or joint ventures which Geo is a partner or
  participant in, (j) pursuant to which Geo may make or receive payments in excess
  of $5,000, (k) with any current or former stockholder, officer, director, employee,
  agent or consultant of Geo, or with any entity in which any of the foregoing
  is or was a controlling person, (l) involving any Plan, (m) involving non-competition,
  secrecy or confidentiality agreements, (n) involving the employment of temporary
  employees or the retention of independent contractors, (o) the benefits or which
  are contingent or accelerated, or the terms of which are altered, by the occurrence
  of, or the value of any benefits of which will be calculated on the basis of,
  any of the transactions contemplated by this First Amendment or the Additional
  Agreements, (p) which involves exclusive dealing, supply or requirements obligations,
  (q) pursuant to which Geo has any indemnification obligations, (r) which provide
  for warranties or return of product, (s) which is a








- 10 -


 “futures” contract committing Geo to purchase, or
  accept delivery of product at future times at fixed prices, or (t) involving
  amendments, modifications, extensions or renewals of any of the foregoing. Schedule
  3.14 also sets forth all such material contracts and agreements currently
  being negotiated by Geo. The Contracts can be performed in the ordinary course
  of business (consistent with past practices). Each of the Contracts is valid
  and binding and in full force and effect and is enforceable against the parties
  thereto in accordance with its terms, and there are no existing defaults or
  events of default which (whether with or without notice, lapse of time or the
  happening or occurrence of any other event) would constitute a default by Geo
  thereunder or any other party thereto. Except as set forth on Schedule 3.14,
  the consummation of the transactions contemplated hereby, without notice to
  or consent or approval of any party, will not constitute a default under or
  a breach of any provisions of any Contracts and the Company and the Surviving
  Corporation will have and may enjoy and enforce all rights and benefits under
  each such Contract. There is no Lien on Geo’s interests under any of the
  Contracts. True and complete originals or copies of the Contracts listed or
  required to be listed in Schedule 3.14 have been delivered by Geo to
  the Company. Geo is not a party to any oral Contract. 

              SECTION
  3.15. Employee Benefit Plans. Geo does not have any Plans. 

              SECTION
  3.16. Taxes. Geo is a calendar year taxpayer which began operations in
  2002. It has not yet filed, and is not delinquent with respect to, any federal,
  state, local and foreign Tax (as defined below) or information returns, forms,
  estimates, information statements and reports (“Returns”) required
  to be filed by it on or before the Effective Time and will pay or caused to
  be paid, or make adequate provision or set up an adequate accrual or reserve
  for the payment of, all Taxes required to be paid in respect of the periods
  for which such Returns are due. For these purposes, the Tax attributable to
  the period including the Effective Time should be determined as if the taxable
  year ended at the Effective Time. Geo is not delinquent in the payment of any
  Tax, and, no deficiencies for any Tax, assessment or governmental charge have
  been claimed, proposed, assessed or, to the Knowledge of Geo or the Principal
  Geo Shareholders, threatened. There are no Liens on the assets of Geo for unpaid
  Taxes, except for Liens relating to Taxes that are not yet due and payable.
  No waiver or extension of time to assess any Taxes has been given or requested.
  No claim has been made by any taxing authority in any jurisdiction where Geo
  does not file Tax returns that Geo is or may be subject to taxation by that
  jurisdiction. For the purposes of this Section, the term “Tax”
  shall include all taxes, charges, withholdings, fees, levies, penalties, additions,
  interest or other assessments imposed by any federal, state, local or foreign
  or other taxing authority on Geo or any of its properties, assets or operations
  (including as a result of being a member of an affiliated, combined or unitary
  group or as a result of any obligation arising out of an agreement to indemnify
  any other Person), and including those related to income, employee welfare or
  retirement (including social security), gross receipts, sales, use, occupation,
  services, leasing, valuation, addition of value, transfer, license, excise,
  customs duties or franchise. Geo has not been a member of an Affiliated Group
  or been included in a combined, consolidated or unitary Tax return. Geo is not
  a party to or bound by any Tax allocation or Tax sharing agreement or has any
  current or potential obligation to indemnify any other Person with respect to
  Taxes. Geo has not been a United States real property holding corporation within
  the meaning of Code Section 897(c)(2) during the applicable periods specified
  in Code Section 897(c)(1)(A). Geo is not required to make any adjustments under
  Section 481(a) of the Code by reason of a change in accounting method which
  affects any taxable year ending after the Closing Date, or has any application
  pending to effect such a change of accounting method. Geo is not obligated to
  make any payments, or is a party to an agreement that could make it obligated
  to make payments, which will not be deductible under Section 280G of the Code.










- 11 -


              SECTION
  3.17. Compliance with Applicable Law. 

              (a)
  The only licenses, permits, franchises, authorizations, registrations and approvals
  (the “Licenses”) issued or granted to Geo by any Governmental
  Authority and all pending applications therefor are Geo’s organizational
  documents filed with the Idaho Authority, complete and correct copies of which
  have been delivered to the Company. Geo holds, and at all times has held, all
  Licenses necessary for the lawful conduct of its business under and pursuant
  to, and the business of Geo is not being and has not been conducted in violation
  of, any Rule of any Governmental Authority applicable to Geo or any of its properties,
  assets or operations. 

              (b)
  Geo has complied with the Rules, and has not received any notification of any
  asserted present or past failure by it to comply with the Rules. None of Geo,
  any of Geo’s officers, agents or employees nor any distributor, licensee
  or any other Person acting on behalf of Geo has (i) made any unlawful political
  contributions, (ii) made any payment or provided services which were not legal
  to make or provide or which such Person Knew or should have Known were not legal
  for the payee or the recipient of such services to receive, (iii) received any
  payments, services or gratuities which were not legal to receive or which Geo
  or such Persons should have Known were not legal for the payor or the provider
  to make or provide, (iv) had any transactions or payments which are not recorded
  in its accounting books and records or disclosed in its financial statements,
  (v) has had any off-book bank or cash accounts or “slush funds”, (vi)
  made any payments to governmental officials in their individual capacities for
  the purpose of affecting their action or the action of the government they represent
  to obtain special concessions, or (vii) made illegal payments to obtain or retain
  business. 

              SECTION
  3.18. Brokers’ Fees and Commissions. Except for a sponsorship agreement
  with First Associates, neither Geo nor any Principal Geo Shareholder nor any
  of their respective directors, officers, employees or agents has employed any
  investment banker, broker, finder or intermediary in connection with the transactions
  contemplated hereby. A true and correct copy of the First Associates sponsorship
  agreement has been delivered to the Company. 

              SECTION
  3.19. Labor Matters. Geo has never had and currently has no employees
  nor has it offered employment to any Person. Geo has no and has never had any
  ERISA Affiliates. Schedule 3.19 sets forth a true and complete
  list of directors and officers who perform services for Geo, and for each such
  Person includes a complete and accurate summary description of the material
  compensation paid to such Person (including the date of the most recent increase
  thereof) and any severance pay, lump sum or other payment, compensation or other
  remuneration that such Person is or would be eligible to receive, or has received,
  upon termination of employment or service or as a result of any of the transactions
  contemplated by this First Amendment. Geo has no oral or written severance policy
  or severance obligations. 

              SECTION
  3.20. Non-Compete Agreements. No oral or written Contract, license or
  permit restricts the ability of Geo to own, possess or use its assets or conduct
  its business or operations in any geographic area or other market or market
  segment or restricts in any way the full participation of the Principal Geo
  Shareholders or, to the Knowledge of Geo or the Principal Geo Shareholders,
  any key employees, officers, agents or consultants of Geo in the operation of
  such business. 

              SECTION
  3.21. Inventory and Accounts Receivable. Geo does not have any inventory
  or accounts receivable. 









- 12 -


              SECTION
  3.22. Bank Accounts. Schedule 3.22 attached hereto sets forth
  the names and addresses of all banks, trust companies, savings and loan associations
  and other financial institutions at which Geo maintains an account, deposit,
  safe deposit box, lock box or other arrangement for the collection of accounts
  receivable or line of credit or other loan facility relationship or accounts
  of any nature and the names of all Persons authorized to draw thereon, make
  withdrawals therefrom or have access thereto. Prior to or at the Effective Time,
  Geo will deliver or make available to the Company copies of all records pertaining
  to such bank accounts. Schedule 3.22 sets forth an accurate and complete
  list of all certificates of deposit, debt or equity securities and other investments
  owned, beneficially or of record, by Geo (“Investments”). Geo
  has good and marketable title to all of the Investments. 

              SECTION
  3.23. Insurance. Geo carries a $2,000,000 Commercial General Liability
  insurance policy. 

              SECTION
  3.24. Real Property. 

              (a)
  Geo has good and marketable fee title to an undivided twenty percent (20%) interest
  the Vulcan Property, and there are no liens, encumbrances, leases, security
  interests, easements, rights-of-way, charges, adverse claims, management agreements,
  continuing contracts or other exceptions to title affecting title to the Vulcan
  Property other than the matters set forth in the Preliminary Commitment for
  Title Insurance issued by Commonwealth Land Title Insurance Company under Order
  No. 35376, (the “Title Report”) a true and correct copy of which has
  been provided to the Company. 

              (b)
  The Geothermal Properties comply in all material respects with all applicable
  laws, ordinances, rules and regulations (including without limitation those
  relating to zoning and platting), and none of Geo or the Principal Geo Shareholders
  has any Knowledge of a violation of any such laws, ordinances, rules or regulations.
  There is sufficient access to the Geothermal Properties to permit Geo to conduct
  the Business as contemplated. 

              (c)
  All notices, licenses, permits, certificates and authority required in connection
  with the construction, use, occupancy, and operation of the Geothermal Properties
  by Geo prior to and as of the date hereof and the Effective Time, have been
  obtained and are in full force and effect, and none will be adversely affected
  by the Merger. 

              (d)
  None of Geo or the Principal Geo Shareholders has any Knowledge of any structural
  defects in any improvements located on the Geothermal Properties. 

              (e)
  Schedule 3.24 sets forth an accurate, correct and complete list of the
  Geothermal Agreements, a description of the leasehold rights, street address
  (if applicable), annual rent, royalty or other consideration obligations, expiration
  date, other material provisions, and list of contracts, agreements, leases,
  subleases, options and commitments, oral or written, affecting the Geothermal
  Properties or any interest therein to which Geo is a party or by which any of
  its interests in the Geothermal Properties is bound, and all improvements thereon.
  Geo has been in peaceable possession of the real property covered by each Geothermal
  Agreement since the commencement of the original term of such agreement, and
  has performed all obligations required to be performed by it to date under such
  Geothermal Agreement. Except as disclosed on Schedule 3.24, neither the
  Geothermal Properties nor the leasehold interest nor any of the leasehold improvements
  of Geo with respect to the Geothermal Properties is subject to any Liens; and
  none of the Geothermal Properties is subject to any easements, rights of way,
  licenses, grants, building or use restrictions, exceptions, reservations, limitations
  or other impediments which adversely affect the value of the Geo’s interest
  therein or which interfere with or impair the present and continued use thereof
  in the usual and normal conduct of the business of Geo as contemplated to be
  conducted. 









- 13 -


 Neither Geo nor, to the Knowledge of Geo or the Principal
  Geo Shareholders, any other party to the Geothermal Agreements is in default
  under any of the Geothermal Agreements. 

              (f)
  Except as disclosed on Schedule 3.24, no real property other than the
  Geothermal Properties is or has been used in the business of Geo. Except as
  disclosed on Schedule 3.24, to the Knowledge of Geo and the Principal
  Geo Shareholders, no Geothermal Property is located within a wetland or flood
  or waterfront erosion hazard area, and the buildings, structures and improvements
  situated thereon and appurtenances thereto and are in good condition (subject
  to normal wear and tear), and as such are adequate to conduct the business of
  Geo as presently conducted and as contemplated. Neither the whole nor any portion
  of any Geothermal Property has been condemned, requisitioned or otherwise taken
  by any public authority, and no notice of any such condemnation, requisition
  or taking has been received. No such condemnation, requisition or taking is,
  to the Knowledge of Geo or the Principal Geo Shareholders, threatened or contemplated.
  Except as disclosed on Schedule 3.24, there are no public improvements
  pending or contemplated which may result in special assessments against or otherwise
  affect the Geothermal Properties. 

              (g)
  The Geothermal Properties are, to the Knowledge of Geo and the Principal Geo
  Shareholders, in compliance with, include all rights necessary to assure compliance
  with, and all buildings, structures, other improvements and fixtures on such
  Properties and the operations thereon conducted conform in all respects to,
  all applicable health, fire, water, environmental, safety, zoning, building,
  use or similar Rules. The zoning of each parcel of the Geothermal Properties
  permits the existing improvements and the continuation following consummation
  of the transactions contemplated hereby of the business of Geo as presently
  conducted thereon. Geo has all licenses, certificates of occupancy, permits
  and authorizations required to operate its businesses and utilize the Geothermal
  Properties. Geo has all easements and rights necessary or appropriate to conduct
  its operations, including easements for all utilities, services, roadway and
  other means of ingress and egress and each parcel of the Geothermal Properties
  has direct access to public roadways. The execution, delivery and performance
  of this First Amendment and the transactions contemplated hereby will not result
  in the imposition of any transfer or other Tax with respect to the Geothermal
  Properties. 

              SECTION
  3.25. Transactions with Related Parties. Except as set forth on Schedule
  3.25 attached hereto, (a) there have never been nor are there now any transactions
  between Geo and (i) any director, officer, employee, stockholder or Affiliate
  of Geo, or (ii) any relative or spouse (or relative of such spouse) of any such
  director, officer, employee, stockholder or Affiliate (such Persons in (i) and
  (ii) being referred to herein as a “Related Party” or collectively
  as the “Related Parties”), (b) no Related Party has ever been
  a director or officer of, or has had any direct or indirect interest in, any
  firm, corporation, association or business enterprise which during such period
  has been a supplier, customer, sales agent, licensor, licensee, lessor or lessee
  of Geo, or has competed with or been engaged in any business of the kind being
  conducted by Geo, (c) no Related Party has an interest in or owns, directly
  or indirectly, in whole or in part, any tangible or intangible property of Geo,
  or that Geo uses in the conduct of its business, (d) no Related Party has any
  cause of action or other claim whatsoever against or owes any money or other
  amounts to, nor is any Related Party owed any money or other amounts by, Geo
  other than amounts owed for compensation, employee benefits or travel expenses
  incurred in the ordinary course of business and (e) no Related Party is a party
  to any contract, lease, agreement, arrangement or commitment used in the operations
  of Geo. Except as set forth on Schedule 3.25 attached hereto, Geo has
  no indebtedness to or from any Related Party. 

              SECTION
  3.26. Names. Geo has never operated under any name other than U.S. Geothermal
  Inc. 









- 14 -


              SECTION
  3.27. Disclosure. All documents, agreements and other papers and materials
  delivered by or on behalf of Geo or the Principal Geo Shareholders in connection
  with this First Amendment, the Additional Agreements and the transactions contemplated
  hereby and thereby are true, complete and accurate. All documents referred to
  in this First Amendment, including in the Schedules or Exhibits, and the corporate
  minute books of Geo have been delivered to the Company. Such corporate minute
  books contain all of the minutes of meetings of stockholders, board of directors,
  and any committees of the board of directors that have been held and all of
  the written consents to action executed in lieu thereof. None of the representations,
  warranties or statements of Geo or the Principal Geo Shareholders contained
  in this First Amendment, in the Schedules or Exhibits hereto, or in any other
  agreement, instrument or document executed or delivered by or on behalf of such
  Person in connection with the transactions contemplated by this First Amendment
  contains any untrue statement of a material fact or omits to state any material
  fact required to be stated therein or necessary to make the representations,
  warranties or statements made, in the context in which made, not false or misleading.
  There is no fact that Geo or the Principal Geo Shareholders have not disclosed
  to the Company and Sub in writing that causes a Material Adverse Effect or could
  result in a Material Adverse Effect. Without limiting the generality of the
  foregoing, the information with respect to Geo in the Information Circular does
  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 representations,
  warranties or statements made, in the context in which made, not false or misleading.
  Geo and the Principal Geo Shareholders acknowledge that the statements contained
  in this Section shall not be deemed to limit or qualify any of the other representations
  or warranties contained in this First Amendment, in the Schedules or Exhibits
  hereto or in any agreement or document delivered in connection herewith. 


ARTICLE IV


 REPRESENTATIONS AND WARRANTIES

  OF THE PRINCIPAL GEO SHAREHOLDERS 

              Each
  of the Principal Geo Shareholders hereby represents and warrants, severally
  but not jointly, to each of the Company and Sub as of the date hereof and as
  of the Effective Time as set forth below. The information disclosed on any Schedule
  attached hereto shall be deemed to relate solely to the section of this Article
  IV to which such Schedule relates and shall not be deemed made by other sections
  to which such discloses may apply unless such disclosure is cross-referenced
  in the Schedule(s) relating to such other section(s), and only to the extent
  that the applicable information or risk is described. 

              SECTION
  4.1. Authorization. Each Principal Geo Shareholder, to the extent that
  it is not a natural person, is an entity duly organized, validly existing and
  in good standing under the laws of its jurisdiction of organization, with full
  power and authority to enter into, execute and deliver this First Amendment
  and the Additional Agreements to which it is a party and to perform and observe
  fully its obligations hereunder and thereunder and to perform the transactions
  contemplated hereby and thereby. Each Principal Geo Shareholder, to the extent
  that he or she is a natural person, has the legal capacity to enter into this
  First Amendment and the Additional Agreements to which such Person is a party
  and to consummate the transactions contemplated hereby and thereby. Each Principal
  Geo Shareholder has taken all action required by law, Geo’s Articles of
  Incorporation and Bylaws, its own organizational documents, if applicable, or
  otherwise to authorize the execution, delivery and performance of this First
  Amendment and the Additional Agreements to which such Person is a party and
  the consummation by such Principal Geo Shareholder of the transactions contemplated
  hereby and thereby. This First Amendment and the Additional Agreements to which
  such Person is a party have been duly and validly authorized (if applicable),
  executed and delivered by each Principal Geo Shareholder and, assuming due authorization,
  execution and delivery by the Company and Sub, constitute valid and binding
  legal 









- 15 -


 obligations of such Principal Geo Shareholder, enforceable
  against such Principal Geo Shareholder in accordance with their terms. 

              SECTION
  4.2. No Violation. Neither the execution, delivery or performance of
  this First Amendment or the Additional Agreements by each Principal Geo Shareholder
  nor the consummation of the transactions contemplated hereby or thereby will
  (a) violate, conflict with or result in any breach of any provision of the organizational
  or governing documents of such Principal Geo Shareholder, (b) violate, conflict
  with or result in a violation or breach of, or constitute a default (with or
  without due notice or lapse of time or both) under, or permit the termination
  of, or require any notice under, or require the consent of any other party to,
  or result in the acceleration of, or entitle any party to accelerate (whether
  as a result of a change in control of Geo or otherwise) any obligation or agreement,
  or result in the loss of any benefit or the imposition of any fee or penalty,
  or give rise to the creation of any Lien upon any of the respective properties
  or assets of Geo or such Principal Geo Shareholder (including the Principal
  Geo Shareholder’s Geo Securities), in each case under any of the terms,
  conditions or provisions of any debt, note, bond, mortgage, indenture, deed
  of trust, license, lease, permit, agreement or other instrument or obligation
  to which Geo or such Principal Geo Shareholder is a party or by which they or
  any of their respective properties or assets may be bound or affected (unless
  requisite waivers or consents satisfactory in form and substance to the Company
  shall have been obtained in writing and delivered to the Company prior to the
  Closing) or (c) violate any Rules (including foreign, federal and state securities
  laws) of any Governmental Authority applicable to Geo or such Principal Geo
  Shareholder or any of their respective properties, assets or operations. 

              SECTION
  4.3. Ownership of Securities. Each Principal Geo Shareholder owns of
  record and beneficially the amounts and type of Geo Securities specified as
  owned by such Principal Geo Shareholder on Schedule 3.5 attached hereto,
  free and clear of all Liens and no Principal Geo Shareholder owns, beneficially
  or of record, any other debt or equity securities of Geo or any option, warrant,
  call, subscription or any other right to acquire any such securities. There
  are no options, warrants, calls, subscriptions, conversion or other rights,
  agreements or commitments to acquire from any Principal Geo Shareholder any
  shares of capital stock of Geo or any other securities convertible into, exchangeable
  for or evidencing the right to subscribe for any shares of capital stock or
  any other security of Geo or the Surviving Corporation. There are no voting
  agreements, voting trust agreements, proxies or stockholder or similar agreements
  relating to the capital stock of Geo to which any Principal Geo Shareholder
  is a party. Each Principal Geo Shareholder has sole power of disposition and
  voting with respect to all of Geo Securities owned beneficially or of record
  by such Principal Geo Shareholder, including without limitation, the sole power
  to demand, assert or otherwise exercise dissenter’s or appraisal rights,
  regardless of whether such Principal Geo Shareholder is a resident of any state
  which is subject to community property laws. 

              SECTION
  4.4. Investment Representation. Each Principal Geo Shareholder will accept
  the Merger Consideration for his, her or its own account and not for any other
  Person and for investment purposes only and without any view to distribute,
  resell or otherwise transfer the same. Each Principal Geo Shareholder represents,
  warrants and acknowledges that he, she or it has such knowledge and experience
  in business and financial matters as to be capable of evaluating the merits
  and risks of the investment contemplated to be made hereunder and that he, she
  or it has sufficient financial strength to hold the same as an investment and
  to bear the economic risks of such investment (including possible loss of such
  investment) for an indefinite period of time. Each Principal Geo Shareholder
  acknowledges that he, she or it is fully informed that the Merger Consideration
  is being issued pursuant to a private offering exemption of the Securities Act,
  and is not being registered under the Securities Act or under the securities
  or blue sky laws of any state or foreign jurisdiction; that such securities
  must be held indefinitely unless they are subsequently registered under the
  Securities Act and any applicable state 









- 16 -


 securities or blue sky laws, or unless an exemption from registration
  is available thereunder; and that the Company has no obligation to register
  such securities. Each Principal Geo Shareholder acknowledges that he, she or
  it has such knowledge and experience in financial and business matters so as
  to be capable of evaluating the risks and merits of this investment, that all
  public documents and records pertaining to the investment in the Company have
  been made available or delivered to them; that they have had an opportunity
  to ask questions of and receive answers from the Company concerning the terms
  and conditions of this First Amendment and the Additional Agreements and to
  obtain additional information, to the extent that the Company possesses such
  information or can acquire it without unreasonable effort or expense, necessary
  to verify the accuracy of the information contained in such public documents
  and records. Each Principal Geo Shareholder acknowledges that the Merger Consideration
  is being issued pursuant to exemptions provided under the Securities Act
  (British Columbia) and as such the securities comprising the Merger Consideration
  will also be subject to resale restrictions under the Securities Act
  (British Columbia). 

              SECTION
  4.5 Environmental Matters. 

              (a)
  Except as set forth on Schedule 4.5 attached hereto, Geo (and its predecessors)
  are, and at all times have been, in compliance with all applicable Environmental
  Laws, which compliance includes the possession by Geo (and such predecessors)
  of all permits and other governmental authorizations required under applicable
  Environmental Laws, and compliance with the terms and conditions thereof. Except
  as set forth on Schedule 4.5 attached hereto, Geo has not received any
  communication (written or oral), and Geo and the Principal Geo Shareholders
  have no Knowledge that the any predecessor to Geo or its business has received
  any communication (written or oral), whether from a Governmental Authority,
  Person, citizens group or otherwise, that alleges that Geo or any such predecessor
  is not or was not in compliance with any Environmental Law, and there are no
  circumstances that may prevent or interfere with such compliance in the future.
  All permits and other governmental authorizations currently held by Geo pursuant
  to the Environmental Laws are identified on Schedule 4.5. Schedule
  4.5 sets forth all environmental audits and similar reports with respect
  to each parcel of the Geothermal Properties and each parcel of real property
  which Geo previously owned, used, leased or subleased. Geo has provided the
  Company with accurate and complete copies of such environmental audits and similar
  reports. 

              (b)
  Except as set forth on Schedule 4.5, there is no Environmental Claim
  pending or, to the Knowledge of Geo or the Principal Geo Shareholders, threatened
  against Geo or against any Person whose Liability for any Environmental Claim
  that Geo has or may have retained or assumed either contractually or by operation
  of law. 

              (c)
  To the Knowledge of the Company and the Principal Geo Shareholders, there are
  no past or present actions, activities, circumstances, conditions, events or
  incidents, including the release, emission, discharge, presence or disposal
  of any Materials of Environmental Concern, or exposures of employees or other
  Persons to Materials of Environmental Concern that could form the basis of any
  Environmental Claim against Geo or against any Person whose Liability for any
  Environmental Claim Geo has or may have retained or assumed either contractually
  or by operation of law. 

              (d)
  Without in any way limiting the generality of the foregoing, (i) all on-site
  and off-site locations where Geo has stored or has disposed or arranged for
  the disposal of, Materials of Environmental Concern, are identified in Schedule
  4.5, (ii) all underground storage tanks previously or presently located
  on property owned or leased by Geo are identified in Schedule 4.5, along
  with a description of the capacity and contents of such tanks, any removal or
  closure activities associated with such tanks and the compliance of such tanks
  with underground storage tank requirements and (iii) except as set forth in










- 17 -


              Schedule
  4.5, there is no asbestos contained in or forming part of any building,
  building component, equipment, structure or office space owned or leased by
  Geo. 


ARTICLE V


 REPRESENTATIONS AND WARRANTIES 

  OF THE COMPANY AND SUB 

              The
  Company and Sub hereby jointly and severally represent and warrant to Geo and
  the Principal Geo Shareholders that: 

              SECTION
  5.1. Organization and Qualification. Each of the Company and Sub is a
  corporation duly organized, validly existing and in good standing under the
  laws of the State of Delaware and Idaho, respectively. 

              SECTION
  5.2. Authorization. The Company and Sub each have full corporate power
  and authority to execute and deliver this First Amendment and the Additional
  Agreements to which it is a party and to perform and observe fully their respective
  obligations hereunder and thereunder and to consummate the transactions contemplated
  hereby and thereby, subject to receipt of the Company Shareholder Approval and
  Regulatory Approval (each as defined in Section 8.2 hereof). Each of the Company
  and Sub has or prior to Closing will have taken all corporate action required
  to authorize the execution, delivery and performance by it of this First Amendment
  and the Additional Agreements to which it is a party and the consummation by
  it of the transactions contemplated hereby and thereby. This First Amendment
  and the Additional Agreements to which the Company or Sub is a party have been
  duly and validly executed and delivered by the Company or Sub, as applicable,
  and, assuming due authorization, execution and delivery by Geo and the Principal
  Geo Shareholders, will constitute a valid and binding obligation of the Company
  or Sub, as applicable, subject to receipt of the Company Shareholder Approval
  and Regulatory Approval. 

              SECTION
  5.3. No Violation. Subject to receipt of the Company Shareholder Approval
  and Regulatory Approval, neither the execution and delivery of this First Amendment
  by the Company and Sub and the performance by the Company and Sub of their obligations
  hereunder nor the consummation by the Company and Sub of the transactions contemplated
  hereby will (a) violate, conflict with or result in any breach of any provision
  of the respective Certificate or Articles of Incorporation or Bylaws of the
  Company or Sub, (b) violate, conflict with or result in a violation or breach
  of, or constitute a default (with or without due notice or lapse of time or
  both) under, or permit the termination of, or result in the acceleration of,
  any of the terms, conditions or provisions of any note, bond, mortgage, indenture,
  deed of trust, license, lease, agreement or other instrument or obligation to
  which the Company or Sub is a party or by which they or any of their respective
  properties or assets may be bound or affected or (c) violate any Rule of any
  Governmental Authority applicable to the Company or Sub or any of their respective
  properties, assets or operations, excluding from the foregoing clauses (b) and
  (c) violations, conflicts, breaches or defaults which, in the aggregate would
  not have a material adverse effect on the business, properties, operations or
  condition (financial or otherwise) of the Company or Sub. 

              SECTION
  5.4. Capitalization of the Company. The authorized capital stock of the
  Company consists of 100,000,000 shares of Company Common Stock. At the Effective
  Time, including the issuance of the Merger Consideration, the Company will have
  issued and outstanding not more than 9,500,000 shares of Company Common Stock
  and warrants to purchase 2,420,217 shares of Company Common Stock (after giving
  effect to the Consolidation), and upon completion of the Proposed Transactions,
  the Company will have issued and outstanding (on a fully-diluted basis) not
  more than 









- 18 -


 18,000,000 shares of Company Common Stock (after giving effect
  to the Consolidation); all of which (assuming full performance by subscribers
  in the Private Placement and in exercising the Exchange Warrants and the Warrants)
  will be validly issued, fully paid, non-assessable and free and clear of preemptive
  rights and Liens (except as may arise from any action of the holder thereof).


              SECTION
  5.5. Consents and Approvals. Subject to receipt of the Company Shareholder
  Approval and Regulatory Approval, the filing of a certificate of merger pursuant
  to the Idaho Code and requirements of federal and state securities laws, no
  filing or registration with, no notice to and no permit, authorization, consent
  or approval of, any public or governmental body or authority is necessary for
  the consummation by the Company or Sub of the transactions contemplated by this
  First Amendment. 

              SECTION
  5.6. Brokers. Except for the finders agreement with Toll Cross and the
  sponsorship agreement with First Associates, the Company has not engaged any
  investment banker, broker or finder in connection with the transactions contemplated
  hereby. 

              SECTION
  5.7 TSX Listing. The shares of Company Common Stock are listed and posted
  for trading on the Exchange, although trading is currently suspended. 

              SECTION
  5.6. Disclaimer. No promises or representations have been or are made
  by the Company to Geo or any Principal Geo Shareholder except as expressly set
  forth in this First Amendment, whether regarding the Company’s conduct
  of the Business following the Closing, the operations of the Company following
  the Closing, any projections or forecasts of the Business or the Company relating
  to the period following the Closing, or otherwise and Geo and the Principal
  Geo Shareholders, in entering into this First Amendment, have not relied on
  any representations or promises except as set forth in this First Amendment.



ARTICLE VI



COVENANTS


              SECTION
  6.1. Conduct of Business of Geo Prior to the Effective Time. From the
  date hereof through the Effective Time, Geo and the Principal Geo Shareholders
  agree that, except as expressly contemplated or permitted by this First Amendment
  or to the extent that the Company shall otherwise consent in writing, Geo and
  the Principal Geo Shareholders shall use their best efforts to carry on their
  respective business and affairs in such a manner so that the representations
  and warranties contained in Article III shall continue to be true and correct
  on and as of the Closing as if made again by Geo and the Principal Geo Shareholders
  on the Closing Date, and Geo shall carry on its business in the usual, regular
  and ordinary course in substantially the same manner as heretofore conducted,
  and use its best efforts to preserve intact its property, assets and real property
  interests (including, without limitation, the Vulcan Property and the Geothermal
  Agreements) and its present business organizations, keep available the services
  of its present officers, timely and fully perform all of its obligations under
  any Contract to which it is a party, and preserve its relationships with Persons
  having business dealings with Geo. From the date hereof through the Effective
  Time, the Principal Geo Shareholders agree that except as expressly contemplated
  or permitted by this First Amendment or to the extent that the Company shall
  otherwise consent in writing, the Principal Geo Shareholders shall carry on
  their affairs so that the representations and warranties contained in Article
  IV hereof shall continue to be true and correct on and as of the Closing as
  if made again by the Principal Geo Shareholders on the Closing Date. Without
  limiting the generality of the foregoing, prior to the Effective Time, and except
  as expressly 







- 19 -

 contemplated or permitted by this First Amendment, Geo and
  the Principal Geo Shareholders agree Geo will not, without the prior written
  consent of the Company:

             
  (a)  split, combine or reclassify any shares of its capital stock
  or other equity interests, declare, pay or set aside for payment any dividend
  or other distribution in respect of its capital stock or other equity interests,
  or directly or indirectly, redeem, purchase or otherwise acquire any shares
  of its capital stock or other securities;

             
  (b)  issue, sell, pledge, dispose of, encumber or deliver (whether
  through the issuance or granting of any options, warrants, commitments, subscriptions,
  rights to purchase or otherwise) any stock or other equity interests of any
  class of Geo or any securities convertible into or exercisable or exchangeable
  for shares of stock or other equity interests of any class of Geo (other than
  the issuance of stock certificates in replacement of lost certificates;

             
  (c)  incur any Liability or obligation other than in the ordinary
  and usual course of business and consistent with past practice, issue any debt
  securities, make, create, incur, assume or suffer to exist any Lien on its assets,
  or assume, guarantee, endorse or otherwise as an accommodation become responsible
  for the Liabilities of any other Person;

             
  (d)  pay any deferred Tax Liability or repay any other Tax Liability
  other than in the ordinary course of business;

             
  (e)  acquire (by merger, consolidation, acquisition of stock or assets
  or otherwise) any corporation, partnership or other business organization or
  division or significant assets thereof or acquire, directly or indirectly, any
  equity interest in any Person or incur any capital expenditures;

             
  (f)  amend, modify or waive compliance with the Articles of Incorporation
  or Bylaws of Geo or the terms of any securities;

             
  (g) sell, lease, license, encumber or otherwise dispose of any assets;

             
  (h)  make any change in financial or tax accounting methods, principles
  or practices or make or cause to be made any elections on Tax returns of Geo,
  except as consistent with past practices;

             
  (i)   enter into, amend or terminate, or agree to enter into,
  amend or terminate, any Contract other than in the ordinary course of business
  unless, in each case, such amendment, termination, or agreement, singly or together
  with other such actions, will not have a Material Adverse Effect;

             
  (j)   fail to maintain and keep in full force and effect all
  insurance on assets and property or for the benefit of employees of the business,
  all liability and other casualty insurance, and all bonds on personnel, presently
  carried, fail to present all claims under such insurance policies in a proper
  and timely manner or breach any obligation under such insurance policies;

             
  (k)  fail to preserve intact the organization of the business, keep
  all Licenses in full force and effect, keep available the services of the present
  executives, employees and agents of the business (other than customary turnover
  not initiated by Geo) and preserve and enhance the goodwill of suppliers, distributors,
  customers and others having business relationships with Geo;

             
  (l)   fail to maintain its books, accounts and records in the
  usual, regular and ordinary manner on a basis consistent with prior years;






- 20 -

              (m)  fail
  to conduct its business in the usual and ordinary course consistent with past
  practices;

             
  (n) take any action that would require disclosure under Section 3.11 hereof;

             
  (o) directly or indirectly engage in any transaction with any officer,
  director, stockholder or other insider or Affiliate which is not at arm’s
  length;

             
  (p)  fail to use its best efforts to take or omit to take any action
  where such failure would make any representation or warranty in Article III
  hereof untrue or incorrect as of the Closing provided, however, that the failure
  to spend money outside the usual and ordinary course of business shall not constitute
  a violation of this subsection (p);

             
  (q) adopt any Plan;

             
  (r)  grant, or become obligated to grant, any increase in the compensation
  of officers or employees of Geo (except for increases in compensation in the
  ordinary course of business consistent with past practice);

             
  (s)  enter into any employment or similar agreement or arrangement
  with any director or employee of Geo or any independent contractor to provide
  services to Geo; or

             
  (t)  terminate or waive any right of substantial value;

             
  (u)  make any capital expenditures;

             
  (v)   agree, in writing or otherwise, to do any of the foregoing.

              SECTION
  6.2. No Solicitation. Neither Geo nor the Principal Geo Shareholders
  shall, and each shall cause their respective Affiliates, officers, partners,
  directors, employees, representatives and agents, not to, directly or indirectly,
  encourage, solicit, initiate, engage or participate in discussions or negotiations
  with, or provide any information to, any Person other than the Company, Sub
  or their Affiliates (a “Third Party”) in connection with any
  exchange offer, merger, consolidation, sale of substantial or material assets,
  sale of securities, acquisition of beneficial ownership of or the right to vote
  securities, liquidation, dissolution or similar transaction involving Geo (such
  proposals, announcements or transactions being referred to herein as “Acquisition
  Proposals”). Geo and the Principal Geo Shareholders shall promptly
  inform the Company of any inquiry (including the terms thereof and the identity
  of the Third Party making such inquiry) which any one of them may receive in
  respect of an Acquisition Proposal and furnish to the Company a copy of any
  such written inquiry.

              SECTION
  6.3. Access to Information. Between the date of this First Amendment
  and the Effective Time, at reasonable times without significant disruption to
  the business of Geo, Geo will give the Company and its authorized representatives
  full access at the Company’s expense to all personnel, Geothermal Properties,
  offices and other facilities, and to all books and records of Geo (including
  Tax returns and accounting work papers) and shall permit the Company to make
  and shall fully cooperate with regard to such inspections (in order to conduct,
  among other things, interviews of individuals, visual inspections of facilities,
  and environmental and similar assessments of the Geothermal Properties and other
  facilities) as it may require and shall cause its officers to furnish the Company
  such financial and operating data and other information with respect to the
  business and properties of Geo as the Company may from time to time reasonably
  request. The representations and warranties of Geo and the Principal Geo Shareholders
  contained herein or in any certificate or other documents delivered to the








- 21 -


 Company shall not be deemed waived or otherwise affected by
  any such investigation made by the Company or any of its representatives. 

              SECTION
  6.4. All Reasonable Efforts. Subject to the terms and conditions herein
  provided, each of the parties hereto agrees to use all reasonable efforts to
  take, or cause to be taken, all action, and to do, or cause to be done as promptly
  as practicable, all things necessary, proper and advisable under applicable
  laws and regulations to consummate and make effective the transactions contemplated
  by this First Amendment. If at any time after the date hereof any further action
  is necessary or desirable to carry out the purposes of this First Amendment,
  including the execution of additional instruments, each party to this First
  Amendment shall take all such necessary action. 

              SECTION
  6.5. Consents and Approvals. Geo and the Principal Geo Shareholders shall
  (a) use their best efforts to obtain all necessary permits, consents, waivers,
  approvals, orders and authorizations of all Governmental Authorities and other
  Persons required to be obtained by Geo and the Principal Geo Shareholders in
  connection with the execution, delivery and performance of this First Amendment,
  the Additional Agreements and the consummation of the transactions contemplated
  hereby and thereby by each such party, (b) diligently assist and cooperate with
  the Company in preparing and filing all documents required to be submitted by
  the Company to any Governmental Authority or its stockholders in connection
  with the execution, delivery and performance of this First Amendment, the Additional
  Agreements and the consummation of the transactions contemplated hereby and
  thereby and the obtaining of the Company Shareholder Approval and Regulatory
  Approval (which assistance and cooperation shall include timely furnishing to
  the Company of all information concerning Geo or Geo Shareholders which, in
  the opinion of counsel to the Company, is required to be included in such documents),
  and in obtaining any permits, consents, waivers, approvals, orders and authorizations
  which may be required to be obtained by the Company in connection therewith
  and (c) keep the Company apprised of the status of any inquiries made of such
  party by any Governmental Authority with respect to this First Amendment, the
  Additional Agreements or the transactions contemplated hereby and thereby. 

              SECTION
  6.6. Public Announcements. The Company shall determine when and the extent
  to which it is desirable or necessary to issue any press release or other public
  statements with respect to the transactions contemplated by this First Amendment,
  including the Merger and neither Geo nor the Principal Geo Shareholders shall
  make any such press release or public statement without the prior consent of
  the Company. The Company shall not issue any such press release or make any
  such public statement without consulting with Geo and providing Geo with a copy
  of any such written press release, except as may be required by applicable law
  or by obligations pursuant to any listing agreement with any securities market
  or any securities market regulations. 

              SECTION
  6.7. Disclosure Supplements. Geo and the Principal Geo Shareholders shall
  promptly deliver to the Company in writing any information which, if existing,
  occurring or Known at the date of this First Amendment, would have been required
  to be set forth or described in any Schedule hereto or which is necessary to
  correct any information in any Schedule which has been rendered inaccurate thereby.


              SECTION
  6.8. Geo Shareholder Approval. 

              (a)
  As promptly as practicable, Geo and the Principal Geo Shareholders shall (i)
  in accordance with the applicable provisions of the Idaho Code and Geo’s
  Articles of Incorporation and By-laws, call, give notice, convene a special
  meeting, or solicit written consents of Geo Shareholders for the purpose of
  approving the Merger, (ii) recommend such approvals to Geo Shareholders and
  solicit proxies or 









- 22 -


 consents therefor, and (iii) use their best efforts to obtain
  such approvals of the Geo Shareholders. The Principal Geo Shareholders shall
  vote, cause to be voted or execute a written consent with respect to all Geo
  Securities directly or indirectly owned beneficially or of record by them in
  favor of such approvals, and shall use their best efforts to cause the other
  Geo Shareholders to vote or execute a written consent in favor of such approvals.
  Each Principal Geo Shareholder hereby fully and forever waives any and all dissenter’s
  or appraisal rights in connection with the Merger and any other transactions
  contemplated hereby which such Principal Geo Shareholder may now or hereafter
  have under applicable law or otherwise. 

              (b)
  In connection with the solicitation of such consent and approval, Geo will prepare
  materials with respect to the Merger and the Merger Consideration and include
  therein all of the information required to be furnished to Geo Shareholders
  under the Idaho Code, Geo’s Articles of Incorporation and By-laws and federal
  and state securities laws (the “Merger Materials”) and to be
  mailed or otherwise delivered to each Geo Shareholder, all at the earliest practicable
  time; provided, however, that the Merger Materials shall be subject
  to the prior review and approval of the Company. None of the information supplied
  or to be supplied by Geo for inclusion in or with the Merger Materials (other
  than information provided by the Company in writing expressly for inclusion
  in or with the Merger Materials) will, at the date of the Merger Materials,
  contain any untrue statement of a material fact or omit to state any material
  fact required to be stated therein or necessary in order to make the statements
  therein, in light of the circumstances under which they are made, not misleading.


              SECTION
  6.9. Directors and Officers. As of the Effective Time, upon the request
  of the Company, the Principal Geo Shareholders shall promptly cause any officer
  or director of Geo to tender his or her resignation with respect to such office
  or directorship as may be requested by the Company. 

              SECTION
  6.10. Specific Performance. Each of the parties hereto hereby acknowledges
  and agrees that the other parties would be damaged irreparably if any of the
  material provisions of this First Amendment are not substantially performed
  in accordance with their specific terms or are otherwise breached. Accordingly,
  each of the parties hereto hereby agrees that the other parties shall be entitled
  to an injunction or injunctions to prevent breaches of the material provisions
  of this First Amendment and to enforce specifically this First Amendment and
  the terms and provisions hereof in addition to any other remedy to which they
  may be entitled pursuant hereto. 


ARTICLE VII



RESTRICTIVE COVENANTS.


              In
  consideration of the Merger Consideration, each of the Principal Geo Shareholders
  covenants with the Company as follows: 

              SECTION
  7.1. Restrictions. Each Principal Geo Shareholder acknowledges that the
  Company has paid valuable consideration for Geo and its assets, particularly
  know-how, goodwill and other proprietary business information and trade secrets
  of Geo. The use by any Principal Geo Shareholder of these relationships and
  such confidential information in a business or activity which competes with
  the Company or its Affiliates would provide the competing business with an unfair
  advantage over the Company or its Affiliates. Accordingly, the Company wishes
  to restrict each Principal Geo Shareholder’s use of such information and
  each Principal Geo Shareholder’s ability to compete with the Company and
  its Affiliates. Each Principal Geo Shareholder agrees, for the Merger Consideration,
  to comply with the terms of this Article, all of which are reasonable and necessary
  to protect the confidential business information and trade secrets being acquired
  by the Company and to prevent any 









- 23 -



unfair advantage from being conferred upon a competing business of the Company or its Affiliate, as set forth below.


              SECTION
  7.2. Non-competition. For a period of three years from the date hereof,
  no Principal Geo Shareholder shall, directly or indirectly, either alone or
  as a stockholder, partner, consultant, owner, agent, creditor, coventurer of
  any other Person, or in any other capacity, directly or indirectly, engage in
  the Business within the State of Idaho; provided that nothing herein shall prohibit
  any Stockholder from being an owner of not more than 1% of the outstanding stock
  of any class of a corporation which is publicly traded, so long as such Principal
  Geo Shareholder does not actively participate in the business of such corporation.


              SECTION
  7.3. Non Interference with Business Relations. For a period of three
  years after the Closing Date, no Principal Geo Shareholder shall, directly or
  indirectly, solicit, induce or attempt to solicit or induce any customer, supplier,
  licensee, government agency, utility or other business relation of the Company
  or its Affiliates to cease doing business with the Company or its Affiliates,
  or in any way interfere with any such business relation of the Company or its
  Affiliates. 

              SECTION
  7.4. Solicitation of Customers and Employees. For a period of three years
  after the Closing Date, no Principal Geo Shareholder shall, directly or indirectly,
  either alone or as a stockholder, partner, consultant, adviser, owner, agent,
  creditor, coventurer of any other Person, or in any other capacity, solicit,
  hire, attempt to solicit or hire, or participate in any attempt to solicit or
  hire any person who was an employee of Geo or any of its Affiliates as of the
  Closing Date or within the six-month period prior thereto. 

              SECTION
  7.5. Confidential Information. Each Principal Geo Shareholder recognizes
  that the Company’s business interests require the fullest practical protection
  and confidential treatment of all information not generally known within the
  relevant trade group or by the public, including all documents, writings, memoranda,
  business plans, illustrations, designs, plans, processes, programs, inventions,
  computer software, reports, sources of supply, customer lists, supplier lists,
  trade secrets and all other valuable or unique information and techniques acquired,
  developed or used by Geo relating to its businesses, operations, employees and
  consultants (hereinafter collectively termed “Protected Information”).
  Each Principal Geo Shareholder expressly acknowledges and agrees that Protected
  Information constitutes trade secrets and confidential and proprietary business
  information of the Company. Protected Information shall not include information
  which is or becomes part of the public domain through no breach of this First
  Amendment by any Principal Geo Shareholder. Each Principal Geo Shareholder acknowledges
  that Protected Information is essential to the success of the Business, and
  it is the policy of the Company to maintain as secret and confidential Protected
  Information which gives the Company a competitive advantage over those who do
  not know the Protected Information and is expressly and implicitly protected
  by the Company from unauthorized disclosure. Accordingly, each Principal Geo
  Shareholder agrees to hold such Protected Information in a fiduciary capacity,
  to keep secret and to treat confidentially and not to, and not to permit any
  other Person to, directly or indirectly, appropriate, divulge, disclose or otherwise
  disseminate to any other Person nor use in any manner for any Principal Geo
  Shareholder or any other Person’s purposes or benefit any Protected Information,
  and not to use or aid others in using any such Protected Information in competition
  with the Company or its Affiliates except to the extent that disclosure is required
  by law; provided, however, that each Principal Geo Shareholder shall provide
  the Company with notice as far in advance of any required disclosure as is practicable
  in order for the Company to obtain an order or other assurance that any information
  required to be disclosed will be treated as Protected Information and each Principal
  Geo Shareholder shall use all reasonable efforts to cooperate with the Company
  in connection therewith and in 







- 24 -

furtherance thereof. This obligation of non-disclosure of information
  shall continue to exist for so long as such information remains Protected Information.

              SECTION
  7.6. Scope. If, at the time of enforcement of this Article VII, a court
  shall hold that the duration, scope or area restrictions stated herein are unreasonable
  under circumstances then existing, the parties agree that the maximum duration,
  scope or area reasonable under such circumstances shall be substituted for the
  stated duration, scope or area.

              SECTION
  7.7. Remedies. Each Principal Geo Shareholder agrees that if he, she
  or it shall commit or threaten to commit a breach of any of the covenants contained
  in this Article VII, then the Company shall have the right to obtain all appropriate
  injunctive and other equitable remedies therefor, in addition to any other rights
  and remedies that may be available at law, it being acknowledged and agreed
  that any such breach would cause irreparable injury to the Company and that
  money damages would not provide an adequate remedy therefor.

 ARTICLE VIII

 CLOSING CONDITIONS

             
  SECTION 8.1. Conditions to Each Party’s Obligations under this First
  Amendment.

             (a)  The
  respective obligations of each party under this First Amendment shall be subject
  to the fulfillment at or prior to the Effective Time of the following conditions
  precedent:

                          
  (i)  The Consolidation shall have become effective.

                          
  (ii)  No injunction, restraining order or other ruling or order issued
  by any Governmental Authority or other legal restraint or prohibition preventing
  the consummation of the Merger shall be in effect and no proceeding brought
  by any Governmental Authority shall be pending or threatened which seeks any
  injunction, restraining order or other order which would prohibit consummation
  of the Merger or materially impair the ability of the Company to own and operate
  the business and assets of the Surviving Corporation after the Effective Time.

                          
  (iii)  Geo Shareholder Approval shall have duly and validly obtained.

             
  (b)   The respective obligations of each party under this First
  Amendment shall be subject to the fulfillment immediately after the Effective
  Time of the following condition subsequent: the Company, the Principal Geo Shareholders
  and certain other Persons required by the Company, the Exchange and/or the Escrow
  Agent shall have executed and delivered the Escrow Agreements, which agreements
  shall become effective as of the Effective Time.

              SECTION
  8.2. Conditions to the Obligations of the Company and Sub under this First
  Amendment. The obligations of the Company and Sub under this First Amendment
  shall be further subject to the satisfaction, at or prior to the Effective Time,
  of the following conditions, any of which may be waived in full or part by the
  Company:

             
  (a)  Each of the covenants, obligations and conditions of Geo and
  the Principal Geo Shareholders required to be performed or complied with or
  satisfied by such Person at or prior to the Closing pursuant to this First Amendment
  shall have been duly performed, complied with and satisfied, and each of the
  representations and warranties of Geo and the Principal Geo Shareholders contained
  in this First






- 25 -

 Amendment (including the Schedules delivered on the date of
  this First Amendment but not including any information delivered to the Company
  subsequent to the date hereof pursuant to Section 6.7 hereof) shall be true
  and correct as of the date of this First Amendment and as of the Effective Time
  as though made at and as of the Effective Time, and the Company and Sub shall
  have received certificates to that effect signed by an officer of Geo and the
  Principal Geo Shareholders.

              (b) All
  (i) action required by law or otherwise to be taken by the Board of Directors
  and Shareholders of Geo to authorize the execution, delivery and performance
  of this First Amendment and the Additional Agreements and the Plan of Merger
  and the transactions contemplated hereby and thereby shall have been duly and
  validly taken, (ii) licenses, permits, consents, waivers, approvals and similar
  authorizations of or from any Governmental Authorities or other Persons necessary
  or advisable in connection with the consummation of the Merger and the other
  transactions contemplated by this First Amendment or any Additional Agreement
  or the Plan of Merger or for the lawful conduct of the business of the Surviving
  Corporation following the Closing Date shall have been delivered, made or obtained,
  and the Company shall have received copies thereof in form and substance satisfactory
  to the Company.

             
  (c)  There shall be no Dissenting Shares.

             
  (d)  The Company shall have received all permits, consents, waivers,
  approvals, orders and authorizations of all Governmental Authorities and other
  Persons required to be obtained by Geo and the Principal Geo Shareholders in
  connection with the execution, delivery and performance of this First Amendment,
  the Additional Agreements and the Plan of Merger and the consummation of the
  transactions contemplated hereby and thereby by each such party, in each case
  in form and substance satisfactory to counsel to the Company.

             
  (e)  The Company shall have received such certificates of Geo’s
  officers and the Principal Geo Shareholders and such other documents or agreements,
  in each case in form and substance satisfactory to counsel to the Company, as
  may reasonably be requested by the Company or set forth in the Plan of Merger.
  Without limiting the foregoing, each Principal Geo Shareholder shall provide
  the the Company on Closing with a certificate, in form and substance satisfactory
  to the the Company, confirming that all of the conditions of Closing have been
  waived or satisfied and certifying such other matters as may be specified by
  the the Company.

             
  (f)   The Company and Sub and their respective employees, Affiliates,
  agents, lenders, environmental consultants and accounting and legal representatives
  shall have completed their environmental, tax, accounting, business and legal
  due diligence review of Geo, and the Company and Sub shall be satisfied with
  the results of such due diligence review in their sole discretion.

             
  (g)  The Company’s shareholders shall have duly adopted and approved
  an amendment to the Company’s Certificate of Incorporation approving the
  Name Change and shall have approved the Consolidation and Merger (collectively,
  “Company Shareholder Approval”), and the Company shall have
  duly filed an amendment to its Certificate of Incorporation with the Secretary
  of State of Delaware to effect the Name Change.

             
  (h)  The Proposed Transactions shall have been accepted for filing
  by the Exchange (“Regulatory Approval”).






- 26 -

             
  (i)  The Company shall have determined that appropriate prospectus
  and registration exemptions are available under applicable securities laws in
  connection with the securities to be issued pursuant to or in connection with
  the Merger.             

             (j) The
  Company shall have received subscriptions for and shall be ready to close the
  Private Placement to permit the Company to have a minimum of Cdn $500,000 in
  net proceeds immediately after the Effective Time.

             
  SECTION 8.3. Conditions to the Obligations of Geo and the Principal Geo Shareholders
  under this First Amendment.

             
  (a)  The obligations of Geo and the Principal Geo Shareholders under
  this First Amendment shall be further subject to the satisfaction, at or prior
  to the Effective Time, of the following condition precedent, which may be waived
  in full or part by Geo: Each of the covenants, obligations and conditions of
  the Company and Sub, respectively, required to be performed, complied with or
  satisfied by either at or prior to the Closing pursuant to the terms of this
  First Amendment shall have been duly performed, complied with and satisfied,
  and each of the representations and warranties of the Company and Sub contained
  in this First Amendment shall be true and correct as of the date of this First
  Amendment and as of the Effective Time as though made at and as of the Effective
  Time.

             
  (b)  The obligations of Geo and the Principal Geo Shareholders under
  this First Amendment shall be further subject to the satisfaction, immediately
  after the Effective Time, of the following conditions subsequent, any of which
  may be waived in full or part by Geo:

                          
  (i)  There will be no more than 18,000,000 shares of Company Common
  Stock outstanding after giving effect to the Proposed Transactions, including
  the Private Placement, and assuming full exercise of warrants issued in connection
  with the Merger and the Private Placement.             

                          
  (ii)   Upon completion of the Proposed Transactions, the Company
  shall have at least Cdn $500,000 in its treasury.

 ARTICLE IX

 CLOSING

              SECTION
  9.1. Closing. The closing (the “Closing”) of the transactions
  contemplated by this First Amendment shall take place at the offices of McCullough,
  O'Connor, Irwin, Solicitors,1100-888 Dunsmuir Street, Vancouver, B.C. V6C 3K4,
  at 10:00 a.m., local time, on the first business day following the day on which
  the last of the conditions set forth in Article VIII is fulfilled or waived,
  or at such other time and place and on such other date as the Company and Geo
  shall agree (the “Closing Date”).

             
  (a)   At the Closing, Geo shall deliver to the Company the following:

                          
  (i)  all previously undelivered documents required to be delivered
  by Geo to the Company at or prior to the Closing in connection with the transactions
  contemplated hereby; and

                          
  (ii)  such other certificates, agreements and documents as the Company
  shall reasonably request.






- 27 -

              (b)
    At the Closing, the Company shall deliver to Geo the following:

                           (i)
  all previously undelivered documents required to be delivered by the Company
  to Geo at or prior to the Closing in connection with the transactions contemplated
  hereby; and

                          
  (ii)  such other certificates, agreements and documents as Geo shall
  reasonably request.

             
  (c)  At the Closing, the Company shall deliver or cause to be delivered
  to the Escrow Agent certificates evidencing the number of shares of the Company
  Common Stock and Exchange Warrants to be delivered to the Escrow Agent under
  Sections 2.1(e) hereof, which certificates will be duly issued and registered
  as required by the Escrow Agent.

 ARTICLE X

 TERMINATION AND ABANDONMENT

              SECTION
  10.1. Termination. This First Amendment may be terminated and the Merger
  contemplated hereby may be abandoned at any time prior to the Effective Time:

             
  (a)   by mutual consent of Geo and the Company;

             
  (b)   by either Geo or the Company:

                          
  (i)   if there shall have been a material breach of any representation,
  warranty, covenant or agreement on the part of the Company and Sub on the one
  hand, or Geo or any of the Principal Geo Shareholders on the other, set forth
  in this First Amendment which breach shall not have been cured without material
  cost to the breaching party, in the case of a representation or warranty, prior
  to the date on which the conditions other than the accuracy of the representation
  and warranty in question would be satisfied for the Closing or, in the case
  of a covenant or agreement, within five business days following receipt by the
  breaching party of notice of such breach;

                          
  (ii)   if a Governmental Authority shall have issued an order,
  decree or ruling or taken any other action, in each case permanently restraining,
  enjoining or otherwise prohibiting the transactions contemplated by this First
  Amendment, and such order, decree, ruling or other action shall have become
  final and nonappealable; or

                          
  (iii)   if the Effective Time shall not have occurred on or before
  December 31, 2003;

 provided, however, that the right to terminate
  this First Amendment shall not be available to any party whose breach of this
  First Amendment has been the cause of, or resulted in, the failure of the Merger
  to occur on or before such date.

              SECTION
  10.2. Procedure and Effect of Termination. In the event of termination
  of this First Amendment pursuant to Section 10.1 hereof, written notice thereof
  shall forthwith be given to the other parties to this First Amendment and this
  First Amendment shall terminate and the Merger shall be abandoned, without further
  action by any of the parties hereto. If this First Amendment is terminated as
  provided herein, no party hereto shall have any liability or further obligation
  to any other party to this First Amendment resulting from such termination except
  (i) that the provisions of this Section 10.2, and the proviso of Section 10.1(b)(iii)
  shall remain in full force and effect, and (ii) no party waives any claim or
  right against a breaching party to the extent that such termination results
  from the breach by a party








- 28 -


 hereto of any of its representations, warranties, covenants
  or agreements set forth in this First Amendment. The parties hereby acknowledge
  and agree that if Geo and the Principal Geo Shareholders, on the one hand, or
  the Company and Sub, on the other, are unable to provide the certificates required
  by Section 8.2(a) or 8.3(a), as applicable, because the representations and
  warranties of such parties contained in this First Amendment are not true and
  correct as of the Effective Time due to circumstances beyond the control of
  such parties discovered after the date hereof and prior to the Effective Time
  (an “Intervening Event”), and such Intervening Event did not
  constitute a breach of such parties’ representations and warranties made
  in this First Amendment on the date hereof, then the other set of parties may
  either (i) refuse to close the transaction for failure to satisfy the closing
  condition set forth in Section 8.2(a) or 8.3(a), as applicable, or close the
  transaction notwithstanding such failure, in which event no breach of a representation
  or warranty shall be deemed to have occurred as a result of the Intervening
  Event. If Geo and the Principal Geo Shareholders, on the one hand, or the Company
  and Sub, on the other, are unable to provide the certificates required by Section
  8.2(a) or 8.3(a), as applicable, because the representations and warranties
  of such parties contained in this First Amendment are not true and correct as
  of the Effective Time due to an Intervening Event, and such Intervening Event
  constituted a breach of such parties’ representations and warranties made
  in this First Amendment on the date hereof, then the other set of parties may
  either (i) refuse to close the transaction for failure to satisfy the closing
  condition set forth in Section 8.2(a) or 8.3(a), as applicable, and seek recourse
  pursuant to Section 11 of this First Amendment, as applicable, or (ii) close
  the transaction notwithstanding such failure and seek recourse pursuant to Section
  11 of this First Amendment, as applicable. 


ARTICLE XI



SURVIVAL AND INDEMNIFICATION


              SECTION
  11.1. Survival and Remedies. All representations and warranties of each
  of the parties hereto contained in this First Amendment or the Additional Agreements,
  including all statements contained in any certificate, schedule, document or
  other writing delivered pursuant hereto or in connection with the transactions
  contemplated hereby, shall be deemed to be representations and warranties within
  the meaning of this Section 11.1, shall be deemed to be material and to have
  been relied upon by the Company or the Principal Geo Shareholders, as the case
  may be, and shall survive the Closing. All of the covenants and agreements of
  each of the parties hereto contained in this First Amendment or in any document
  delivered pursuant to this First Amendment shall survive the Closing, and claims
  for indemnification relating to a breach of any such covenant or agreement may
  be made at any time. In the event of a breach of any of such representations,
  warranties, covenants and agreements, the party to whom such representation,
  warranty, covenant or agreement has been made shall have all rights and remedies
  for such breach available to it under the provisions of this First Amendment,
  or otherwise, whether of law or in equity, regardless of any disclosure to,
  or investigation made by or on behalf of such party on or before the Closing
  Date. The rights and remedies of any party based upon, arising out of or otherwise
  in respect of any inaccuracy in or breach of any representation, warranty, covenant
  or agreement contained in this First Amendment or any Additional Agreement shall
  in no way be limited by the fact that the act, omission, occurrence or other
  state of facts upon which any claim of any such inaccuracy or breach is based
  may also be the subject matter of any other representation, warranty, covenant
  or agreement contained in this First Amendment or any Additional Agreement as
  to which there is no inaccuracy or breach. 

              SECTION
  11.2. Indemnification of the Company by Geo and the Principal Geo Shareholders.
  Geo and the Principal Geo Shareholders shall, to the extent not covered and
  promptly paid by applicable insurance, jointly and severally indemnify, defend
  and hold harmless, the Company and its past, present 









- 29 -


 and future directors, officers, employees, agents, subsidiaries
  and Affiliates (the “Company Indemnified Parties”) for any
  and all loss, damage, expense (including court costs, amounts paid in settlement,
  judgments, attorneys’ fees and other expenses for investigating and defending),
  claim, deficiency, Liability or obligation related to, resulting from, caused
  by or arising from (a) any inaccuracy in or breach of any representation or
  warranty made by Geo or any of the Principal Geo Shareholders in this First
  Amendment (excluding Article IV hereof) or made by Geo or the Principal Geo
  Shareholders in any other agreement, instrument or document or information delivered
  or provided by Geo pursuant hereto or provided by Geo or the Principal Geo Shareholders
  to the Company for use by the Company in connection with any disclosure document,
  including, without limitation, the Merger Materials, the Information Circular
  and materials distributed by the Company in connection with the Private Placement,
  (b) any and all claims made in good faith based upon facts alleged that, if
  true, would have constituted any such inaccuracy or breach under subsection
  (a) above, (c) any failure to perform or breach by Geo prior to the Effective
  Time of any covenant or agreement made by Geo herein or in any other agreement,
  instrument or document delivered by Geo or any of their respective Affiliates
  pursuant hereto, and (d) any and all claims made in good faith based upon facts
  alleged that, if true, would have constituted any such breach or failure under
  subsection (c) above (collectively, the “Damages”). The foregoing
  in no way shall limit any remedy provided for herein or at law or equity resulting
  from a breach of any obligation under Article VII hereunder. 

              SECTION
  11.3. Indemnification of the Company by the Principal Geo Shareholders.
  Each Principal Geo Shareholder shall, to the extent not covered and promptly
  paid by applicable insurance, severally but not jointly, indemnify, defend and
  hold harmless the Company Indemnified Parties for any and all loss damage, expense
  (including court costs, amounts paid in settlement, judgments, attorneys’
  fees and other expenses for investigating and defending), Claim, deficiency,
  Liability or obligation related to, resulting from, caused by or arising from
  (a) any inaccuracy in or breach of any representation or warranty made by such
  Principal Geo Shareholder in Article IV herein or in any other agreement, instrument
  or document delivered by such Principal Geo Shareholder pursuant to Article
  IV herein, and (b) any and all claims made in good faith based upon facts alleged
  that, if true, would have constituted any such inaccuracy or breach under subsection
  (a) above, (c) any failure to perform or breach by such Principal Geo Shareholder
  of any covenant or agreement made by such Principal Geo Shareholder herein or
  in any other agreement, instrument or document delivered by such Principal Geo
  Shareholder or any of his, her or its Affiliates pursuant hereto, and (d) any
  and all claims made in good faith based upon facts alleged, that if true, would
  have constituted any such breach or failure under subsection (c) above. 

              SECTION
  11.4. Indemnification Procedure for Third Party Claims. 

              (a)
  If subsequent to the Effective Time any Company Indemnified Party asserts a
  claim for indemnification or receives notice of the assertion of any claim or
  of the commencement of any action or proceeding by any entity which is not a
  party to this First Amendment (including any Governmental Authority) (a “Third
  Party Claim”) against such Company Indemnified Party, with respect
  to which the Company or the Principal Geo Shareholders (“Indemnifying
  Party”) are required to provide indemnification under this First Amendment,
  the Company Indemnified Party shall give written notice together with a statement
  of any available information regarding such claim (the “Notice of Claim”)
  to the Indemnifying Party promptly after learning of such claim; provided,
  however, that notice to the Principal Geo Shareholders in accordance
  with Section 12.6 hereof shall be deemed notice to all of the Principal Geo
  Shareholders. The Company Indemnified Party shall have the right to conduct
  such defense, at the Indemnifying Party’s expense, in good faith with counsel
  reasonably acceptable to the Indemnifying Party, but the Company Indemnified
  Party shall be prohibited from compromising or settling the claim without the
  prior written consent of the Indemnifying Party, which consent shall not be










- 30 -


 unreasonably withheld or delayed. The Indemnifying Party will,
  at its expense, make available to the Company Indemnified Party such assistance
  and materials as the Company Indemnified Party may reasonably request. 

              (c)
  The Indemnified Party will cooperate with and make available to the Company
  Indemnifying Party such assistance and materials as it may reasonably request,
  all at the expense of the Indemnifying Party. The Indemnifying Party shall have
  the right at its expense to participate in the defense assisted by counsel of
  its own choosing. If the Indemnifying Party does not cooperate with and make
  available to the Company Indemnified Party such assistance and materials as
  the Company Indemnified Party shall request, then (a) the Company Indemnified
  Party shall have the right, but not the obligation, to undertake at the expense
  of the Indemnifying Party the defense or settlement of such Third Party Claim
  for the account and at the risk of the Indemnifying Party without the prior
  written consent of the Indemnifying Party, and (b) the Indemnifying Party shall
  be bound by any defense or settlement that the Indemnified Party may make as
  to such Third Party Claim. 

              (d)
  Any judgment entered or settlement agreed upon in the manner provided herein
  shall be binding upon the Indemnifying Party, and shall be conclusively deemed
  to be an obligation with respect to which the Company Indemnified Party is entitled
  to prompt indemnification hereunder, subject to the Indemnifying Party’s
  right to appeal an appealable judgment or order. 

              SECTION
  11.4 Failure to Give Timely Notice. A failure by a Company Indemnified
  Party to give timely, complete or accurate notice as provided in this Article
  XI will not affect the rights or obligations of any party hereunder except and
  only to the extent that, as a result of such failure, any party entitled to
  receive such was actually damaged as a result of such failure to give timely
  notice. 

              SECTION
  11.5. Insurance. If an Indemnified Party both collects proceeds from
  any insurance company and receives a payment from the Indemnifying Party hereunder,
  and the sum of such proceeds and payment is in excess of the Damages or losses
  with respect to the matter that is the subject of the indemnity, then the Indemnified
  Party shall promptly refund to the Indemnifying Party the amount of such excess.



ARTICLE XII



MISCELLANEOUS PROVISIONS


              SECTION
  12.1. Amendment and Modification. This First Amendment may be amended
  only pursuant to a written instrument signed on behalf of Geo, the Company and
  the Principal Geo Shareholders. 

              SECTION
  12.2. Waiver of Compliance; Consents. Any failure of the Company or Sub,
  on the one hand or Geo or any of the Principal Geo Shareholders, on the other
  hand, to comply with any obligation, covenant, agreement or condition contained
  herein may be waived only in writing by Geo and the Principal Geo Shareholders
  or the Company and Sub, respectively, but such waiver or failure to insist upon
  strict compliance with such obligation, covenant, agreement or condition shall
  not operate as a waiver of, or estoppel with respect to, any other failure.
  The failure of any party hereto to enforce at any time any provision of this
  First Amendment shall not be construed to be a waiver of such provision, nor
  in any way to affect the validity of this First Amendment or any part hereof
  or the right of any party to enforce any such provision. Any amendment or waiver
  effected in accordance with Section 12.1 or this Section 12.2 shall be binding
  upon each of the Principal Geo Shareholders. 









- 31 -


              SECTION
  12.3. Validity. The invalidity or unenforceability of any provision of
  this First Amendment shall not affect the validity or enforceability of any
  other provisions of this First Amendment, which shall remain in full force and
  effect. 

              SECTION
  12.4. Expenses and Obligations. All costs and expenses incurred in connection
  with the consummation of the transactions contemplated by this First Amendment
  by the Company and Sub shall be paid by the Company or Sub and all costs and
  expense incurred in connection with the consummation of the transactions contemplated
  by this First Amendment by Geo or the Principal Geo Shareholders shall be paid
  by the Principal Geo Shareholders 

              SECTION
  12.5. Parties in Interest. This First Amendment shall be binding upon
  and inure solely to the benefit of each party hereto, and, nothing in this First
  Amendment except as set forth in Article X hereof, express or implied, is intended
  to confer upon any other Person any rights or remedies of any nature whatsoever
  under or by reason of this First Amendment. 

              SECTION
  12.6. Notices. All notices and other communications hereunder shall be
  in writing and shall be deemed given upon the earlier of delivery thereof if
  by hand or upon receipt if sent by mail (registered or certified mail, postage
  prepaid, return receipt requested) or on the next business day after deposit
  if sent by a recognized overnight delivery service or upon transmission if sent
  by telecopy or facsimile transmission (with request of assurance of receipt
  in a manner customary for communication of such type) as follows: 

              (a)
  If to the Company or Sub, or to Geo after the Effective Time, to: 

                                       U.S.
  Cobalt Inc. 

                                        
  775 Mariposa Street 

                                        
  Denver, Colorado 80204

             
  (b)   if to Geo or the Principal Geo Shareholders prior to the Effective
  Time, to:

                                       
  U.S. Geothermal Inc. 

                                         
  1509 Tyrell Lane, Suite B

                                       
    Boise, Idaho 83706

             
  (c)   if to any of the Principal Geo Shareholders after the Effective
  Time, to:

                                       
  c/o Doug Glaspey 

                                        
  1509 Tyrell Lane, Suite B 

                                        
  Boise, Idaho 83706 

             
  And to:

                                      
  Vulcan Power Company

                                        
  1183 NW Wall Street, Suite G

                                        
  Bend, Oregon 97701

              SECTION
  12.7. Governing Law. This First Amendment shall be governed by and construed
  in accordance with the laws of the State of Idaho without regard to the conflicts-of-laws
  rules thereof.








- 32 -


              SECTION
  12.8. Counterparts. This First Amendment may be executed in two or more
  counterparts, and by facsimile, each of which shall be deemed an original, but
  all of which together shall constitute one and the same agreement. 

              SECTION
  12.9. Headings. The article and section headings contained in this First
  Amendment are solely for the purpose of reference, are not part of the agreement
  of the parties and shall not affect in any way the meaning or interpretation
  of this First Amendment. 

              SECTION
  12.10. Entire Agreement. This First Amendment (including all Exhibits
  and Schedules attached hereto and incorporated by reference herein), the Additional
  Agreements and the documents and instruments referred to herein, and the other
  agreements included in or contemplated by the exhibits hereto (collectively,
  the “Transaction Agreements”) embody the entire agreement and
  understanding of the parties hereto with respect to the subject matter contained
  herein or therein. The Transaction Agreements supersede all prior agreements
  and understandings between the parties with respect to such subject matter,
  including, without limitation, the letter agreement among the Company, Geo and
  the Principal Shareholders dated March 28, 2002. 

              SECTION
  12.11. Assignment. This First Amendment shall not be assigned by operation
  of law or otherwise, except that it may be assigned (other than the obligations
  in Article II) by the Company or Sub to one or more of their Affiliates who
  agree in writing to be bound by the provisions hereof; provided, that
  the Company remains obligated under this First Amendment. Subject to the foregoing,
  this First Amendment will be binding upon and inure to the benefit of and be
  enforceable by the parties and their respective successors and permitted assigns.


              SECTION
  12.12. No Strict Construction. The language used in this First Amendment
  shall be deemed to be the language chosen by the parties hereto to express their
  mutual intent, and no rule of strict construction shall be applied against any
  Person. 

              SECTION
  12.13. WAIVERS OF TRIAL BY JURY. EACH OF GEO, THE STOCKHOLDERS,
  THE COMPANY AND SUB HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
  JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
  ANY OF THE ADDITIONAL AGREEMENTS, AND CONSENTS TO THE GRANTING OF SUCH LEGAL
  OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.  

              SECTION
  12.14 CONSENT TO JURISDICTION. AS AN FURTHER INDUCEMENT TO THE COMPANY
  TO ENTER INTO THIS AGREEMENT AND IN CONSIDERATION THEREFORE, GEO, THE PRINCIPAL
  GEO SHAREHOLDERS AND THE COMPANY EACH COVENANT AND AGREE (I) THAT ANY STATE
  OR FEDERAL COURT WITHIN ADA COUNTY, IDAHO SHALL HAVE JURISDICTION OF ANY ACTION
  OR PROCEEDING RELATING TO, OR ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT
  AND THE OTHER AGREEMENTS AND THE COMPANY, GEO AND EACH OF THE PRINCIPAL GEO
  SHAREHOLDERS CONSENTS TO PERSONAL JURISDICTION OF SUCH COURTS AND WAIVES ANY
  OBJECTION (WHETHER BASED ON FORUM NON CONVENIENS OR OTHERWISE) TO SUCH COURTS’
  JURISDICTION OR AS TO THE APPROPRIATENESS OR CONVENIENCE OF ANY SUCH FORUM,
  (II) THAT SERVICE OF ANY SUMMONS AND COMPLAINT OR OTHER PROCESS IN ANY SUCH
  ACTION OR PROCEEDING MAY BE MADE IN ACCORDANCE WITH SECTION 12.6 HEREOF, AND
  SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED ON THE DATE SUCH SUMMONS, COMPLAINT
  OR OTHER PROCESS WOULD BE DEEMED 









- 33 -


 DELIVERED AS SET FORTH IN SECTION 12.6 HEREOF, AND (III) TO
  WAIVE PERSONAL SERVICE OF ANY SUCH SUMMONS, COMPLAINT OR OTHER PROCESS. 

              IN
  WITNESS WHEREOF, each of the parties hereto has caused this First Amendment
  to be signed as of the day and year first above written. 

	 PRINCIPAL GEO SHAREHOLDERS: 	 	U.S. COBALT INC., a Delaware corporation
	 	 	 
		 	 
		 	 
	___________________________________________	 	By: _________________________________________
	DANIEL KUNZ  	 	Name:   Douglas J. Glaspey
	 	 	Title:   President
		 	 
	 	 	U.S. GEOTHERMAL INC., an Idaho
	 	 	corporation
	___________________________________________	 	 
	 DOUGLAS GLASPEY 	 	 
	 	 	By: _________________________________________
	 	 	Name:   Daniel Kunz
	 	 	Title:   President
		 	 
	___________________________________________ 	 	EVERGREEN POWER INC., an Idaho
	 PAUL LARKIN 	 	corporation
		 	 
		 	 
	 	 	By: _________________________________________
	___________________________________________ 	 	Name:   Douglas J. Glaspey
	 RONALD BOURGEOIS 	 	Title:   President
	 	 	 
	 	 	 
	 	 	 
	 VULCAN POWER COMPANY, a Colorado 	 	 
	 corporation 	 	 
	 	 	 
	 	 	 
	 By: _________________________________________	 	 
	Name:   Stephen Munson	 	 
	Title:   CEO and President	 	 









 - 34 - 

 EXHIBITS 

	EXHIBIT A.     
      Form of Articles of Merger to be filed with the Secretary of State of Idaho
      
	 	 
	EXHIBIT B.     
      Form of Exchange Warrant 
	 	 
	EXHIBIT C.     
      Form of Warrant for Private Placement 
	 	 
	SCHEDULES 
	 	 
	SCHEDULE E	Defined Terms
	 	 
	SCHEDULE 1.5(a)	Directors of Surviving Corporation
	 	 
	SCHEDULE 1.5(b)	Officers of Surviving Corporation
	 	 
	SCHEDULE 2.1(c)	Distribution of Merger Consideration
	 	 
	SCHEDULE 3.5.	Capitalization of Geo
	 	 
	SCHEDULE 3.7.	Consents and Approvals
	 	 
	SCHEDULE 3.11	Changes
	 	 
	SCHEDULE 3.14.	Contracts
	 	 
	SCHEDULE 3.19.	Labor Matters
	 	 
	SCHEDULE 3.22.	Bank Accounts
	 	 
	SCHEDULE 3.24.	Real Estate
	 	 
	SCHEDULE 3.25.	Transactions with Related Parties
	 	 
	SCHEDULE 4.5.	Environmental Matters








- 35 -

 EXHIBIT A 

  FORM OF

  ARTICLES OF MERGER

 EVERGREEN POWER INC., 

  an Idaho corporation

WITH AND INTO

 S. GEOTHERMAL, INC. 

  an Idaho corporation



               The
  undersigned, Douglas Glaspey and Paul Larkin, being the President and Secretary,
  respectively, of EverGreen Power Inc., an Idaho corporation, and Daniel Kunz
  and Paul Larkin, being the President and Secretary, respectively, of U. S. Geothermal,
  Inc., an Idaho corporation, DO HEREBY CERTIFY as follows:  

               (1)             EverGreen
  Power Inc., an Idaho corporation, and U. S. Geothermal, Inc., an Idaho corporation,
  are the constituent corporations of a merger; U. S. Geothermal, Inc., an Idaho
  corporation, is the surviving corporation.  

               (2)             A
  Plan of Merger has been approved, adopted and executed by each of the constituent
  corporations in accordan ce with Idaho Code §30-1-1101. 

                          (a)             The
  Plan of Merger is attached hereto as Attachment A;

                          
  (b)             The
  number of common shares outstanding of EverGreen Power Inc., an Idaho corporation,
  outstanding and entitled to vote was one hundred (100), of which one hundred
  (100) of these shares voted for and none of these shares voted against the Plan
  of Merger;

                          
  (c)             The
  number of common shares outstanding of U. S. Geothermal, Inc., an Idaho corporation,
  outstanding and entitled to vote was 6,079,836, of which 6,079,836 of these
  shares voted for and zero (0) of these shares voted against the Plan of Merger.


               IN
  WITNESS WHEREOF, the parties hereto have caused these Articles of Merger to
  be duly executed on this ___ day of December 2003.  

	EVERGREEN POWER INC.,	 	U. S. GEOTHERMAL, INC.,	 
	an Idaho corporation	 	an Idaho corporation	   
	 	 	 	 	 	 
	By:	 	 	By:	 	 
	 	Douglas Glaspey, President	 	 	Daniel Kunz, President	 
	 	 	 	 	 	 
	By:	 	 	By:	 	 
	 	Paul Larkin, Secretary	 	 	Paul Larkin, Secretary	 








 - 36 - 

 EXHIBIT B  

 FORM OF EXCHANGE WARRANT  

	Unless permitted under securities legislation, the holder of the securities
      shall not trade the securities before  •, 200 •.




	Without prior written approval of the TSX Venture
        Exchange and compliance with all applicable securities legislation,
        the securities represented by this certificate may not be sold,
        transferred, hypothecated or otherwise traded on or through the facilities
        of the TSX Venture Exchange or otherwise in Canada or to or for
        the benefit of a Canadian resident until  •, 200•
        .



 WARRANT TO PURCHASE COMMON STOCK 
  

  OF  

  U.S. GEOTHERMAL INC. 

  (formerly U.S. Cobalt Inc.) 



 THIS WARRANT AND THE SHARES OF COMMON STOCK  

  ISSUABLE PURSUANT TO THIS WARRANT HAVE 

  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 

  AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, PLEDGED OR 

  OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT OR 

  AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE  

 FOR VALUE RECEIVED  

 U.S. Geothermal Inc., a Delaware corporation (the "Company"),
  grants the following rights to Vulcan Power Company, an Oregon corporation,
  having an address at 1183 NW Wall Street, Suite G, Bend, Oregon 97701 ("Holder").


 ARTICLE 1.      DEFINITIONS 


 As used herein, the following terms shall have the following
  meanings, unless the context shall otherwise require: 

	 	(a)	"Common Stock" shall mean the
        common stock, $.001 par value per share, of the Company.

	 	 	 
	 	(b)	"Corporate Office" shall mean
        the office of the Company (or its successor) at which at any particular
        time its principal business shall be administered, which office is located
        at the date hereof at 1509 Tyrell Lane, Suite B, Boise, Idaho 83706.

	 	 	 
	 	(c)	"Exercise Date" shall mean any
        date upon which the Holder shall give the Company a Notice of Exercise,
        which shall be deemed the date the Notice of Exercise was first deposited
        in the US Mails, if mailed, or the date received by the courier company
        if delivered by recognized courier company, or the date received by the
        Company if otherwise given or delivered.









 - 37 - 

	 	(d)	"Exercise Price" shall mean the
        price to be paid to the Company for each share of Common Stock to be purchased
        upon exercise of this Warrant in accordance with the terms hereof, which
        shall be $0.75 per share.

	 	 	 
	 	(e)	"Expiration Date" shall mean
        5:00 PM (Pacific time) on the 24 month anniversary of the date hereof,
        if a business day, or the next succeeding business day thereafter.

	 	 	 
	 	(f)	"SEC" shall mean the United States
        Securities and Exchange Commission.



 ARTICLE 2.      EXERCISE  

	2.1 	Exercise of Warrant

        This Warrant shall entitle Holder to purchase up to 2,420,217 shares of
        Common Stock (the "Shares") at the Exercise Price. This Warrant shall
        be exercisable at any time and from time to time prior to the Expiration
        Date (the "Exercise Period"). This Warrant and the right to purchase Shares
        hereunder shall expire and become void at the Expiration Date.

	 	 	 
	2.2 	 Manner of Exercise

	 	(a)
	Holder may exercise this Warrant at
        any time and from time to time during the Exercise Period, in whole or
        in part (but not in denominations of fewer than 50,000 Shares, except
        upon an exercise of this Warrant with respect to the remaining balance
        of Shares purchasable hereunder at the time of exercise), by delivering
        to the Company at its Corporate Office (i) a duly executed Notice of Exercise
        in substantially the form attached as Appendix I hereto and (ii) a bank
        cashier's or certified check for the aggregate Exercise Price of the Shares
        being purchased.

	 	 	 
	 	(b)
	From time to time upon exercise of this
        Warrant, in whole or part, in accordance with its terms, the Company will
        cause its transfer agent to countersign and deliver stock certificates
        to the Holder representing the number of Shares being purchased pursuant
        to such exercise, subject to adjustment as described herein.

	 	 	 
	 	(c)
	Promptly following any exercise of this
        Warrant, if the Warrant has not been fully exercised and has not expired,
        the Company will deliver to the Holder a new Warrant for the balance of
        the Shares covered hereby.

	 	 	 
	2.3 	Termination

        All rights of the Holder in this Warrant, to the extent they have not
        previously expired or been exercised, shall terminate on the Expiration
        Date.

	 	 
	2.4 	No Rights Prior to
        Exercise

        Prior to its exercise pursuant to Section 2.2 above, this Warrant shall
        not entitle the Holder to any voting or other rights as holder of Shares.

	 	 
	2.5 	Adjustments

        In case of any reclassification, capital reorganization, stock dividend,
        or other change of outstanding shares of Common Stock, or in case of any
        consolidation or merger of the Company with or into another corporation
        (other than a consolidation or merger in which the Company is the continuing
        corporation and which does not result in any reclassification, capital
        reorganization, stock dividend, or other change of outstanding shares
        of Common Stock), or in case of any sale or conveyance to another corporation
        of the property of the Company as, or substantially as, an entirety (other
        than a sale/leaseback, mortgage or other financing transaction), the Company
        shall cause effective provision to be made so that the Holder shall have
        the right thereafter, by exercising this Warrant, to purchase the kind
        and number of shares of









 - 38 - 

	 	stock or other securities
        or property (including cash) receivable upon such reclassification, capital
        reorganization, stock dividend, or other change, consolidation, merger,
        sale or conveyance as the Holder would have been entitled to receive had
        the Holder exercised this Warrant in full immediately before such reclassification,
        capital reorganization, stock dividend, or other change, consolidation,
        merger, sale or conveyance. Any such provision shall include provision
        for adjustments that shall be as nearly equivalent as may be practicable
        to the adjustments provided for in this Section 2.5. The foregoing provisions
        shall similarly apply to successive reclassifications, capital reorganizations,
        stock dividends, and other changes of outstanding shares of Common Stock
        and to successive consolidations, mergers, sales or conveyances. The Company
        shall have the exclusive authority to make all such adjustments.

	 	 
	2.6 	Fractional Shares

        No fractional Shares shall be issuable upon exercise or conversion of
        this Warrant and the number of Shares to be issued shall be rounded down
        to the nearest whole Share. If a fractional Share interest arises upon
        any exercise or conversion of the Warrant, the Company shall eliminate
        such fractional Share interest by paying Holder the amount computed by
        multiplying the fractional interest by the closing bid price of a full
        Share on the date of the Notice of Exercise.

	 	 
	ARTICLE 3.      REPRESENTATIONS
      AND COVENANTS OF THE COMPANY
	 	 
	3.1 	Representations and
        Warranties

        The Company hereby represents and warrants to the Holder as follows:

	 	 
	 	(a)
	All Shares which may be issued upon
        the exercise of the purchase right represented by this Warrant shall,
        upon issuance, be duly authorized, validly issued, fully-paid and nonassessable,
        and free of any liens and encumbrances except for restrictions on transfer
        provided for herein or under applicable securities laws, and not subject
        to any pre-emptive rights.

	 	 	 
	 	(b)

          
	The Company is a corporation duly organized
        and validly existing under the laws of the State of Delaware and has the
        full power and authority to issue this Warrant and to comply with the
        terms hereof. The execution, delivery and performance by the Company of
        its obligations under this Warrant, including, without limitation, the
        issuance of the Shares upon any exercise of the Warrant, have been duly
        authorized by all necessary corporate action. This Warrant has been duly
        executed and delivered by the Company and is a valid and binding obligation
        of the Company, enforceable in accordance with its terms, except as enforcement
        may be limited by applicable bankruptcy, insolvency, reorganization or
        similar laws affecting enforceability of creditors' rights generally and
        except as the availability of the remedy of specific enforcement, injunctive
        relief or other equitable relief is subject to the discretion of the court
        before which any proceeding therefor may be brought.

      

	 	 	 
	 	(c)

          
	The Company is not subject to or bound
        by any provision of any certificate or articles of incorporation or by-laws,
        mortgage, deed of trust, lease, note, bond, indenture, other instrument
        or agreement, license, permit, trust, custodianship, other restriction
        or any applicable provision of any law, statute, any court, governmental
        body, administrative agency or arbitrator which could prevent or be violated
        by or under which there would be a default (or right of termination) as
        a result of the execution, delivery and performance by the Company of
        this Warrant.

      









 - 39 - 

 ARTICLE 4.      MISCELLANEOUS 

	4.1 	Restrictions on Transfer  

        This Warrant may not be transferred or assigned, in whole or in part,
        at any time, except with the consent of the Company and in compliance
        with applicable securities laws. 

	 	 
	4.2 	Loss, Theft, Destruction or Mutilation 

        If this Warrant shall become mutilated or defaced or be destroyed, lost
        or stolen, the Company shall execute and deliver a new Warrant in exchange
        for and upon surrender and cancellation of such mutilated or defaced Warrant
        or, in lieu of and in substitution for such Warrants so destroyed, lost
        or stolen, upon the Holder filing with the Company evidence satisfactory
        to it that such Warrant has been so mutilated, defaced, destroyed, lost
        or stolen. However, the Company shall be entitled, as a condition to the
        execution and delivery of such new Warrant, to demand indemnity satisfactory
        to it and payment of the expenses and charges incurred in connection with
        the delivery of such new Warrant. Any Warrant so surrendered to the Company
        shall be canceled. 

	 	 
	4.3 	Notices  

        All notices and other communications from the Company to the Holder or
        vice versa shall be deemed delivered and effective when given personally
        (including by recognized courier delivery), by facsimile transmission
        and confirmed in writing, or three (3) days after being mailed by first-class
        national mail, postage prepaid, at such address and/or facsimile number
        as may have been furnished to the Company or the Holder, as the case may
        be, in writing by the Company or the Holder from time to time; provided,
        however, that the Notice of Exercise may not be delivered by facsimile
        transmission. 

	 	 
	4.4 	Waiver  

        This Warrant and any term hereof may be changed, waived, or terminated
        only by an instrument in writing signed by the party against which enforcement
        of such change, waiver, discharge or termination is sought. 

	 	 
	4.5 	Governing Law  

        This Warrant shall be governed by and construed in accordance with the
        laws of the State of Delaware, without giving effect to
        its principles regarding conflicts of law. 

	 	 
	4.6 	Restrictions on Shares 

        This Warrant and any Shares issuable on its exercise are subject to resale
        restrictions under applicable securities laws. If the Shares underlying
        the Warrants are not the subject of an effective registration statement
        under the Act upon issuance by the Company, legends stating that such
        Shares have not been registered and referring to restrictions on transferability
        and sale of the Shares may be placed upon all certificates or other documents
        evidencing ownership, and stop-order instructions prohibiting transfer
        of the Shares or similar notations may be made on the Company's records
        to prevent the disposition of Shares other than in accordance with applicable
        law. 



Dated: _____________________________________ 

	   	U. S. Geothermal Inc., a Delaware corporation
	 	 
	 	By: ____________________________________________
	 	             Dan
      Kunz, Chief Executive Officer








 - 40 - 

 APPENDIX I  

 NOTICE OF EXERCISE  

	1.	The undersigned hereby elects to purchase
        ________ shares of the Common Stock of U. S. Geothermal Inc., a Delaware
        corporation, pursuant to the terms of the attached Warrant, and tenders
        herewith payment of the purchase price of such shares in full.

	 	 
	2.	Please issue a certificate or certificates
        representing said shares in the name of the undersigned holder as specified
        below.

	 	 
	3.	The undersigned represents it is acquiring
        the shares solely for its own account and not as a nominee for any other
        party and not with a view toward the resale or distribution thereof except
        in compliance with applicable securities laws.





	Holder: ________________________________________	 	 
	 	 	 
	 	 	 
	 	 	 
	(Signature)	 	(Date)
	 	 	 
	 	 	 
	 	 	 
	Address: ________________________________________	 	 
	 	 	 
	                  ________________________________________	 	 








 - 41 - 

 EXHIBT C  

  FORM OF UNIT WARRANT  

	Unless permitted under securities legislation, the holder of the securities
      shall not trade the securities before •  , 200•
      .




	Without prior written approval of the TSX Venture
        Exchange and compliance with all applicable securities legislation,
        the securities represented by this certificate may not be sold,
        transferred, hypothecated or otherwise traded on or through the facilities
        of the TSX Venture Exchange or otherwise in Canada or to or for
        the benefit of a Canadian resident until  •, 200•
        .



 WARRANT TO PURCHASE COMMON STOCK 
  

  OF  

  U.S. GEOTHERMAL INC.  

  (formerly U.S. Cobalt Inc.) 



 THIS WARRANT AND THE SHARES OF COMMON STOCK  

  ISSUABLE PURSUANT TO THIS WARRANT HAVE 

  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 

  AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, PLEDGED OR 

  OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT OR 

  AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE 

 FOR VALUE RECEIVED  

 U.S. Geothermal Inc., a Delaware corporation (the "Company"), grants the following
  rights to _________________________________________________________________________________________________,
  having an address at ____________________________________________________ ("Holder").


 ARTICLE 1.      DEFINITIONS  

 As used herein, the following terms shall have the following meanings, unless
  the context shall otherwise require: 

	 	(a)	“Call Event” shall
        mean that the Company (or a subsidiary thereof) has obtained a license
        from the applicable permitting authorities for a 10 megawatt power plant,
        including a power purchase agreement and transmission agreement.

	 	 	 
	 	(b)	"Common Stock" shall mean the
        common stock, $.001 par value per share, of the Company.

	 	 	 
	 	(c)	"Corporate Office" shall mean
        the office of the Company (or its successor) at which at any particular
        time its principal business shall be administered, which office is located
        at the date hereof at 1509 Tyrell Lane, Suite B, Boise, Idaho 83706.

	 	 	 
	 	(d)	"Exercise Date" shall mean any
        date upon which the Holder shall give the Company a Notice of Exercise,
        which shall be deemed the date the Notice of Exercise was first deposited
        in the US Mails, if mailed, or the date received by the courier company
        if delivered by recognized courier









 - 42 - 

	 	 	company, or the date received by the
        Company if otherwise given or delivered.

	 	 	 
	 	(e)	"Exercise Price" shall mean the
        price to be paid to the Company for each whole share of Common Stock to
        be purchased upon exercise of this Warrant in accordance with the terms
        hereof, which shall be $0.75 per share.

	 	 	 
	 	(f)	"Expiration Date" shall mean
        the first to occur of (i) 5:00 PM (Pacific time) on the 24 month anniversary
        of the date hereof, if a business day, or the next succeeding business
        day thereafter, or (ii) the end of the period of Notice set forth in Section
        2.2 if sooner called pursuant to Article 2.

	 	 	 
	 	(g)	"SEC" shall mean the United States
        Securities and Exchange Commission.



 ARTICLE 2. EXERCISE  

	2.1 	Exercise of Warrant

        This Warrant shall entitle Holder to purchase up to ____________________
        shares of Common Stock (the "Shares") at the Exercise Price. This Warrant
        shall be exercisable at any time and from time to time prior to the Expiration
        Date (the "Exercise Period"). This Warrant and the right to purchase Shares
        hereunder shall expire and become void at the Expiration Date. This Warrant
        may be exercised for whole Shares only.

	 	 
	2.2 	Acceleration of Exercise
        Period

        The Company shall have the right, at any time after the occurrence of
        a Call Event, to accelerate the Exercise Period by sending to the Holder,
        at the Holder's address written above, a Notice of Acceleration in substantially
        the form attached as Appendix I hereto (the "Notice"). In the event the
        Company does accelerate the Exercise Period, Holder shall have until 5:00
        p.m. (Pacific time) on the date which is thirty (30) days from the date
        the Holder is deemed to receive the Notice within which to exercise this
        Warrant in the manner provided for in Section 2.3. If this Warrant is
        not exercised within said period, thereafter this Warrant and the right
        to purchase the Shares hereunder, to the extent not previously exercised,
        shall expire and become void.

	 	 
	2.3	 Manner of Exercise

	 	(a)
	Holder may exercise this Warrant at
        any time and from time to time during the Exercise Period, in whole or
        in part by delivering to the Company at its Corporate Office (i) a duly
        executed Notice of Exercise in substantially the form attached as Appendix
        II hereto and (ii) a bank cashier's or certified check for the aggregate
        Exercise Price of the Shares being purchased.

	 	 	 
	 	(b
	From time to time upon exercise of this
        Warrant, in whole or part, in accordance with its terms, the Company will
        cause its transfer agent to countersign and deliver stock certificates
        to the Holder representing the number of Shares being purchased pursuant
        to such exercise, subject to adjustment as described herein.

	 	 	 
	 	(c)
	Promptly following any exercise of this
        Warrant, if the Warrant has not been fully exercised and has not expired,
        the Company will deliver to the Holder a new Warrant for the balance of
        the Shares covered hereby.

	 	 	 
	2.4 	Termination

        All rights of the Holder in this Warrant, to the extent they have not
        previously expired or been exercised, shall terminate on the Expiration
        Date.









 - 43 - 

	2.5	 No Rights Prior to
        Exercise

        Prior to its exercise pursuant to Section 2.3 above, this Warrant shall
        not entitle the Holder to any voting or other rights as holder of Shares.

	 	 
	2.6	 Adjustments

        In case of any reclassification, capital reorganization, stock dividend,
        or other change of outstanding shares of Common Stock, or in case of any
        consolidation or merger of the Company with or into another corporation
        (other than a consolidation or merger in which the Company is the continuing
        corporation and which does not result in any reclassification, capital
        reorganization, stock dividend, or other change of outstanding shares
        of Common Stock), or in case of any sale or conveyance to another corporation
        of the property of the Company as, or substantially as, an entirety (other
        than a sale/leaseback, mortgage or other financing transaction), the Company
        shall cause effective provision to be made so that the Holder shall have
        the right thereafter, by exercising this Warrant, to purchase the kind
        and number of shares of stock or other securities or property (including
        cash) receivable upon such reclassification, capital reorganization, stock
        dividend, or other change, consolidation, merger, sale or conveyance as
        the Holder would have been entitled to receive had the Holder exercised
        this Warrant in full immediately before such reclassification, capital
        reorganization, stock dividend, or other change, consolidation, merger,
        sale or conveyance. Any such provision shall include provision for adjustments
        that shall be as nearly equivalent as may be practicable to the adjustments
        provided for in this Section 2.6. The foregoing provisions shall similarly
        apply to successive reclassifications, capital reorganizations, stock
        dividends, and other changes of outstanding shares of Common Stock and
        to successive consolidations, mergers, sales or conveyances. The Company
        shall have the exclusive authority to make all such adjustments.

	 	 
	2.7 	Fractional Shares

        No fractional Shares shall be issuable upon exercise or conversion of
        this Warrant and the number of Shares to be issued shall be rounded down
        to the nearest whole Share. If a fractional Share interest arises upon
        any exercise or conversion of the Warrant, the Company shall eliminate
        such fractional Share interest by paying Holder the amount computed by
        multiplying the fractional interest by the closing bid price of a full
        Share on the date of the Notice of Exercise.

	 	 
	ARTICLE 3.      REPRESENTATIONS
      AND COVENANTS OF THE COMPANY
	 	 
	3.1	Representations and
        Warranties

        The Company hereby represents and warrants to the Holder as follows:

	 	 	 
	 	(a)
	All Shares which may be issued upon
        the exercise of the purchase right represented by this Warrant shall,
        upon issuance, by duly authorized, validly issued, fully-paid and nonassessable,
        and free of any liens and encumbrances except for restrictions on transfer
        provided for herein or under applicable securities laws, and not subject
        to any pre-emptive rights.

	 	 	 
	 	(b)
	The Company is a corporation duly organized
        and validly existing under the laws of the State of Delaware and has the
        full power and authority to issue this Warrant and to comply with the
        terms hereof. The execution, delivery and performance by the Company of
        its obligations under this Warrant, including, without limitation, the
        issuance of the Shares upon any exercise of the Warrant, have been duly
        authorized by all necessary corporate action. This Warrant has been duly
        executed and delivered by the Company and is a valid and binding obligation
        of the Company, enforceable in accordance with its terms, except as enforcement
        may be limited by applicable bankruptcy, insolvency, reorganization or
        similar laws affecting enforceability of creditors' rights generally and
        except as the availability of the remedy of specific enforcement,









 - 44 - 

	 	 	injunctive relief or other equitable relief is subject
        to the discretion of the court before which any proceeding therefor may
        be brought.

	 	 	 
	 	(c)
	The Company is not subject to or bound by any provision
        of any certificate or articles of incorporation or by-laws, mortgage,
        deed of trust, lease, note, bond, indenture, other instrument or agreement,
        license, permit, trust, custodianship, other restriction or any applicable
        provision of any law, statute, any court, governmental body, administrative
        agency or arbitrator which could prevent or be violated by or under which
        there would be a default (or right of termination) as a result of the
        execution, delivery and performance by the Company of this Warrant.

	 	 	 
	ARTICLE 4.      MISCELLANEOUS
	 	 	 
	4.1 	Restrictions on Transfer

        This Warrant may not be transferred or assigned, in whole or in part,
        at any time.

	 	 
	4.2 	Loss, Theft, Destruction
        or Mutilation

        If this Warrant shall become mutilated or defaced or be destroyed, lost
        or stolen, the Company shall execute and deliver a new Warrant in exchange
        for and upon surrender and cancellation of such mutilated or defaced Warrant
        or, in lieu of and in substitution for such Warrants so destroyed, lost
        or stolen, upon the Holder filing with the Company evidence satisfactory
        to it that such Warrant has been so mutilated, defaced, destroyed, lost
        or stolen. However, the Company shall be entitled, as a condition to the
        execution and delivery of such new Warrant, to demand indemnity satisfactory
        to it and payment of the expenses and charges incurred in connection with
        the delivery of such new Warrant. Any Warrant so surrendered to the Company
        shall be canceled.

	 	 
	4.3 	Notices

        All notices and other communications from the Company to the Holder or
        vice versa shall be deemed delivered and effective when given personally
        (including by recognized courier delivery), by facsimile transmission
        and confirmed in writing, or three (3) days after being mailed by first-class
        United States Postal Service mail, postage prepaid, at such address and/or
        facsimile number as may have been furnished to the Company or the Holder,
        as the case may be, in writing by the Company or the Holder from time
        to time; provided, however, that the Notice of Exercise may not be delivered
        by facsimile transmission.

	 	 
	4.4 	Waiver

        This Warrant and any term hereof may be changed, waived, or terminated
        only by an instrument in writing signed by the party against which enforcement
        of such change, waiver, discharge or termination is sought.

	 	 
	4.5 	Governing Law

        This Warrant shall be governed by and construed in accordance with the
        laws of the State of Delaware, without giving effect to
        its principles regarding conflicts of law.

	 	 
	4.6 	Restrictions on Shares

        This Warrant and any Shares issuable on its exercise are subject to resale
        restrictions under applicable securities laws. If the Shares underlying
        the Warrants are not the subject of an effective registration statement
        under the Act upon issuance by the Company, legends stating that such
        Shares have not been registered and referring to restrictions on transferability
        and sale of the Shares may be placed upon all certificates or other documents
        evidencing ownership, and stop-order instructions prohibiting transfer
        of the Shares or similar notations may be made on the Company's records
        to prevent the disposition of Shares other than in accordance with applicable
        law.









 - 45 - 

 Dated: _____________________________________ 

	   	U. S. Geothermal Inc., a Delaware corporation
	 	 
	 	By: ____________________________________________
	 	             Douglas
      J. Glaspey, President








 - 46 - 

 APPENDIX I  

 NOTICE OF ACCELERATION  

 Dated: _____________________________________ 

 U.S. Geothermal Inc. (the "Company") does hereby notify you
  of its election to exercise its right, pursuant to Section 2.2 of the Warrant
  issued to you by the Company on _________________ (the "Warrant"), to accelerate
  the exercise period of such Warrant with respect to all unexercised Shares for
  which the Warrant may be exercised. Please be advised that you have thirty (30)
  days from the date you are deemed to receive this Notice of Acceleration (the
  "Notice Period") to exercise your Warrant in the manner provided for in the
  Warrant. You will be deemed to have received this Notice of Acceleration three
  (3) days after the date when this Notice of Acceleration was first deposited
  in the United States mail, if mailed, or upon receipt if delivered personally
  or by facsimile. 

 You will automatically forfeit your right to purchase any
  shares of common stock issuable upon exercise of such Warrant, unless the Warrant
  is exercised with respect to such Shares before the end of the Notice Period.
   

	 	U.S. Geothermal Inc., a Delaware corporation
	   	 	   	 
	 	 	 	 
	 	 	By:	 
	 	 	 	 
	 	 	Name:	 
	 	 	 	 
	 	 	Title:	 








 - 47 - 

 APPENDIX II  

 NOTICE OF EXERCISE  

	1.	The undersigned hereby elects to purchase
        ________ shares of the Common Stock of U.S. Geothermal Inc. pursuant to
        the terms of the attached Warrant, and tenders herewith payment of the
        purchase price of such shares in full.

	 	 
	2.	Please issue a certificate or certificates
        representing said shares and reissue a Warrant for the balance of the
        shares remaining in the name of the undersigned holder as specified below.

	 	 
	4.	The undersigned represents it is acquiring
        the shares solely for its own account and not as a nominee for any other
        party and not with a view toward the resale or distribution thereof except
        in compliance with applicable securities laws.





	Holder: ________________________________________	 	 
	 	 	 
	 	 	 
	 	 	 
	(Signature)	 	(Date)
	 	 	 
	 	 	 
	 	 	 
	Address: ________________________________________	 	 
	 	 	 
	                  ________________________________________	 	 








 - 48 - 

 SCHEDULE E  

 DEFINED TERMS 

 For purposes of this First Amendment, capitalized terms shall
  have the meanings assigned to them below. 

              “Acquisition”
  is defined in the Information Circular. 

              “Acquisition
  Proposals” is defined in Section 6.2 of this First Amendment. 

              “Additional
  Agreements” shall mean the Escrow Agreement(s) and all other agreements
  and documents contemplated by this First Amendment. 

              “Agreement”
  is defined in Recital E of this First Amendment. 

              “Affiliate”
  shall mean (i) a Person that directly or indirectly, through one or more intermediaries,
  controls, is controlled by, or is under common control with, another Person
  and (ii) any parent, spouse, lineal descendant or adopted child of a Person
  specified in clause (i), any spouse or adopted child of any such descendant
  or any child of such spouse, the executors, administrators, conservators or
  personal representatives of any Person referred to in this clause (ii) and any
  Person which, directly or indirectly, is owned or controlled by one or more
  of the Persons referred to in this clause (ii). 

              “Affiliated
  Group” means any affiliated group as defined in Section 1504 of the
  Code (or any analogous combined, consolidated or unitary group under state,
  local or foreign income Tax law) of which Geo or any of its Affiliates is or
  has been a member. 

              “Business”
  is defined in Recital A of this First Amendment. 

              “Claims”
  shall mean all pending and threatened claims, actions, causes of action, demands,
  orders, notices, suits, grievances, proceedings, disputes, arbitrations and
  investigations. 

              “Closing”
  is defined in Section 9.1 of this First Amendment, and refers only to the
  closing of the Merger. 

              “Closing
  Date” is defined in Section 9.1 of this First Amendment. 

             “Code”
  is defined in Recital D of this First Amendment. 

             “Company”
  has the meaning assigned to it in the preamble. 

              “Company
  Common Stock”  means shares of the common stock of the Company, par
  value $.001 per share, after giving effect to the Consolidation. 

              “Company
  Indemnified Parties” is defined in Section 11.2 of this First Amendment.

             “Company
  Shareholder Approval” is defined in Section 8.2(g) of this First Amendment.


             “Consolidation”
  is defined in the Information Circular. 

             “Constituent
  Corporations” is defined in the preamble. 





 - 49 - 

              “Contracts”
  is defined in Section 3.14 of this First Amendment. 

             “Damages”
  is defined in Section 11.2 of this First Amendment. 

             “Dissenting
  Shares” is defined in Section 2.2 of this First Amendment. 

             “Effective
  Time” is defined in the Information Circular. 

              “Environmental
  Claim” shall mean any Claim (written or oral) by any Person or any
  Governmental Authority alleging potential Liability or obligations (including
  potential Liability or obligations for or requirement to incur investigatory
  costs, cleanup costs, governmental response costs, natural resources damages,
  property damages, personal injuries, or penalties) arising out of, based on
  or resulting from (i) the presence, release or threatened release into the environment,
  of any Materials of Environmental Concern at any location, whether or not owned
  or operated by Geo, or (ii) circumstances forming the basis of any violation,
  potential violation or alleged violation, or Liability, potential Liability
  or alleged Liability, under any Environmental Law. 

              “Environmental
  Laws” shall mean all Rules and permit conditions relating to pollution
  or protection of human health or the environment (including ambient air, indoor
  air, surface water, ground water, land surface or subsurface strata), including
  Rules relating to emissions, discharges, releases or threatened releases of
  Materials of Environmental Concern, or otherwise relating to the manufacture,
  processing, distribution, use, treatment, storage, disposal, transport or handling
  of Materials of Environmental Concern. 

              “ERISA
  Affiliate” shall mean any corporation or other Person which is a member
  of the same controlled group (within the meaning of Section 414(b) of the Code)
  of corporations or other Persons as Geo, or which is under common control (within
  the meaning of Section 414(c) of the Code) with Geo, or any corporation or other
  Person which is a member of an affiliated service group (within the meaning
  of Section 414(m) of the Code) with Geo, or any corporation or other Person
  which is required to be aggregated with Geo pursuant to Section 414(o) of the
  Code or the regulations promulgated under Sections 414(b), (c), (m) or (o) of
  the Code. 

              “Escrow”
  is defined in Section 2.1(e) of this First Amendment. 

              “Escrow
  Agent” means Pacific Corporate Trust Company. 

              “Escrow
  Agreement(s)” is defined in Section 2.1(e) of this First Amendment.


             “Escrow
  Securities” is defined in Section 2.1(e) of this First Amendment. 

             “Exchange”
  is defined in the Information Circular. 

              “Exchange
  Warrants” means the warrants to purchase 2,420,217 shares of the Company
  Common Stock to be issued in consideration for the acquisition by Geo of the
  1,612,000 outstanding Geo Warrants pursuant to the Merger. Each Exchange Warrant
  will entitle the holder to purchase one share of Company Common Stock (after
  giving effect to the Consolidation) at a price of $0.75 per share on or before
  24 months after Closing, substantially in the form attached as Exhibit B. 

              “Financial
  Statements” is defined in Section 3.9 of this First Amendment. 





 - 50 - 

              “First
  Associates” is defined in the Information Circular. 

             “Forecasts”
  is defined in Section 3.27 of this First Amendment. 

             “GAAP”
  is defined in Section 3.3 of this First Amendment. 

             “Geo”
  is defined in the preamble. 

             “Geo
  Common Stock” is defined in Recital B of this First Amendment. 

             “Geo
  Securities” is defined in Section 2.1(b) of this First Amendment. 

             “Geo
  Shareholder Approval” is defined in Section 3.3 of this First Amendment.


             “Geo
  Warrants” is defined in the Information Circular. 

              “Geothermal
  Agreements” shall mean the Crank Lease, the Jensen Lease, the Jensen
  Investments Lease and the Vulcan Agreement, each of which is defined in the
  Information Circular. 

              “Geothermal
  Properties” shall mean the real properties which are the subjects of
  the Geothermal Agreements and the Vulcan Property, which is defined in the Information
  Circular. 

              “Governmental
  Authority” shall mean any court (federal, state, local, foreign or
  otherwise), any arbitration or other alternative dispute mechanism, any federal,
  state, local, foreign or other government or governmental department, agency,
  board, commission, bureau or instrumentality and any other regulatory authority.


              “Idaho
  Authority” is defined in Section 1.6 of this First Amendment. 

             “Idaho
  Code” is defined in Section 1.1 of this First Amendment. 

             “Indemnifying
  Party” is defined in Section 11.4 of this First Amendment. 

              “Information
  Circular” means the Information Circular dated as of February 28, 2003,
  prepared by the Company in connection with seeking Company Shareholder Approval
  of, inter alia, the Merger, a copy of which is included in the Merger
  Materials. 

              “Intervening
  Event” is defined in Section 10.2 of this First Amendment. 

              “Investments”
  is defined in Section 3.22 of this First Amendment. 

              “Knowledge”
  (or any form of such term, such as “Knows”, “Known”, etc.)
  as used in this First Amendment with respect to a party’s awareness of
  the presence or absence of a fact, event or condition shall mean (i) the actual
  knowledge of such Person after due inquiry, and in the case of any Person other
  than an individual, any director, officer, shareholder (beneficial or of record),
  managing director, partner, trustee or similar individual of such Person plus
  (ii) the knowledge that should be obtained by a party conducting itself reasonably
  and with sound discretion in the management of its own affairs. 

              “Know-how”
  shall mean laboratory journals, specialized knowledge (including product knowledge
  and use and application knowledge), trade secrets, formulae, product formulations,
  recipes, processes, product designs, specifications, quality control, procedures,
  manufacturing, engineering and other 





 - 51 - 

 drawings, computer data bases and software, technology, other
  intangibles, technical information, safety information, engineering data and
  design and engineering specifications, research records, market surveys and
  all promotional literature, customer and supplier lists and similar data. 

              “Liability”
  means any liability (whether known or unknown, whether asserted or unasserted,
  whether absolute or contingent, whether accrued or unaccrued, whether liquidated
  or unliquidated, and whether due or to become due and regardless of when or
  by whom asserted), including any liability for Taxes. 

              “Licenses”
  is defined in Section 3.17 of this First Amendment. 

              “Liens”
  shall mean all title defects, charges, claims, restrictions, liens, pledges,
  security interests, mortgages, tenancies and other possessory interests, conditional
  sale or other title retention agreements, assessments, easements, rights of
  way, covenants, restrictions, rights of first refusal, encroachments and other
  burdens, options, restrictions or encumbrances of any kind. 

              “Material
  Adverse Effect” is defined in Section 3.11 of this First Amendment.


              “Materials
  of Environmental Concern” shall mean chemicals or other substances
  subject to regulation pursuant to Environmental Laws, including pollutants,
  contaminants, wastes, by products, toxic substances, radionuclides, polychlorinated
  biphenyls, asbestos, petroleum (including crude oil or any fraction thereof)
  and petroleum products. 

              “Merger
  Consideration” is defined in Section 2.1(g) of this First Amendment.


             “Merger
  Materials” is defined in Section 6.8(b) of this First Amendment. 

             “Most
  Recent Balance Sheet” is defined in Section 3.9 of this First Amendment.


             “Name
  Change” is defined in the Information Circular. 

             “Notice
  of Claim” is defined in Section 11.4 of this First Amendment. 

               “Patents”
  shall mean patents (including all reissues, reexaminations, divisions, continuations,
  continuations in part and extensions thereof), utility models, patent applications
  and patent disclosures docketed. 

              “Person”
  shall mean an individual, corporation, limited liability Geo, partnership, joint
  venture, association, trust, unincorporated organization or, as applicable,
  any other entity. 

              “Plan”
  shall mean each bonus, pension, stock option, stock purchase, stock bonus, benefit,
  welfare, profit sharing, retirement, disability, vacation, severance, hospitalization,
  insurance, incentive, deferred compensation and other similar fringe or employee
  benefit plans, funds, programs or arrangements, all employment contracts or
  executive compensation agreements, written or oral, and all collective bargaining
  agreements and each other “employee benefit plan” (within the meaning
  of Section 3(3) of ERISA), in each of the foregoing cases which cover, are maintained
  for the benefit of, or relate to any or all employees (regardless whether such
  employees’ regular place of employment is within or without the United
  States) or terminated employees of Geo or ERISA Affiliate. 





 - 52 - 

              “Principal
  Geo Shareholders” means Daniel Kunz, Douglas Glaspey, Paul Larkin,
  Ronald Bourgeois and Vulcan. 

              “Private
  Placement” means the private placement by the Company of up to 3,322,222
  Units to raise gross proceeds of $1,494,999, to be closed immediately after
  the Closing under this First Amendment. 

              “Proprietary
  Rights” shall mean (i) Patents, (ii) Trademarks, (iii) Trade Names,
  (iv) Know-how, (v) rights in trade dress and packaging and (vi) shop rights,
  copyrights, inventions, trade secrets, service marks and all other intellectual
  property rights, in each case whether registered or not and in each case wherever
  such rights exist throughout the world, and including the right to recover for
  any past infringement. 

              “Proposed
  Transactions” shall mean the Name Change, the Consolidation, the Merger
  and the Private Placement. 

              “Protected
  Information” is defined in Section 7.5 of this First Amendment. 

             “Regulatory
  Authority” is defined in Section 8.2(h) of this First Amendment. 

             “Related
  Party” is defined in Section 3.25 of this First Amendment. 

             “Returns”
  is defined in Section 3.16(a) of this First Amendment. 

               “Rules”
  shall mean any federal, state, local or foreign statute, law, code, ordinance,
  rule, regulation, judgment, writ, decree, injunction, order, concession, grant,
  franchise, permit or license or other governmental or regulatory authorization
  or approval applicable to Geo, or any of the Principal Geo Shareholders or any
  of their respective assets, properties, operations or any Plan. 

              “Securities
  Act” is defined in Section 2.5 of this First Amendment. 

              “Sub”
  is defined in the preamble, and is referred to in the Information Circular as
  USC Subco. 

             “Sub
  Common Stock” is defined in Section 2.1(a) of this First Amendment.


             “Surviving
  Corporation” is defined in Section 1.1 of this First Amendment. 

             “Tax”
  is defined in Section 3.16 of this First Amendment. 

             “Third
  Party” is defined in Section 6.2 of this First Amendment. 

             “Third
  Party Claim” is defined in Section 11.4 of this First Amendment. 

             “Toll
  Cross” means Toll Cross Securities Inc. 

              “Trademarks”
  shall mean trademarks, service marks, brand marks, registrations thereof, pending
  applications for registration thereof, and such unregistered rights which are
  used in the business of Geo. 

              “Trade
  Names” shall mean (i) trade names and other identifying names, (ii)
  brand names, and (iii) logos and all other names and slogans used in the business
  of Geo. 





 - 53 - 

              “Transaction
  Agreements” is defined in Section 12.10 of this First Amendment. 

              “Unit”
  means a unit to be sold in the Private Placement comprised of one share of Company
  Common Stock (after giving effect to the Consolidation) and one-half warrant
  entitling the holder to purchase one share (with a full warrant) of Company
  Common Stock (after giving effect to the Consolidation) at a price of $0.75
  for 24 months after Closing, substantially in the form attached as Exhibit C.


              “Vulcan”
  is defined in the Information Circular. 

              “Vulcan
  Agreement” is defined in the Information Circular. 





 - 54 - 

 SCHEDULE 1.5  

  DIRECTORS AND OFFICERS OF SURVIVING CORPORATION  

	(a)	Directors:	 
	 	 	 	 
	 	 	Douglas Glaspey	 
	 	 	Daniel Kunz	 
	 	 	Paul Larkin	 
	 	 	Ronald Bourgeois	 
	 	 	 	 
	(b)	Officers:	 
	 	 	 	 
	 	 	Chief Executive Officer:	Douglas Glaspey
	 	 	 	 
	 	 	President:	Daniel Kunz
	 	 	 	 
	 	 	Secretary-Treasurer:	Paul Larkin








 - 55 - 

 SCHEDULE 2.1(C)  

 DISTRIBUTION OF MERGER CONSIDERATION  

	Name	Exchange Shares Issuable	Exchange Warrants Issuable
	 	 	 
	1. Douglas J. Glaspey	1,014,649	 
	 	 	 
	2. Daniel Kunz	1,254,769	 
	 	 	 
	3. Paul Larkin	863,187	 
	 	 	 
	4. Ron Bourgeois	821,425	 
	 	 	 
	5. Vulcan Power Company	1,775,156	2,420,217
	 	 	 
	6. Gerald L. Sneddon	80,000	 
	 	 	 
	7. Sneddon Family Trust	50,000	 
	 	 	 
	8. Steven Y Chi	36,667	 
	 	 	 
	9. Roscoe & Joyce Ward	5,000	 
	 	 	 
	10. Robert Falls	24,000	 
	 	 	 
	11. Tom Menning	183,333	 
	 	 	 
	12. Burton Egger	40,000	 
	 	 	 
	13. John Beaulieu	20,000	 
	 	 	 
	14. Veritable Quandary LLC	10,000	 
	 	 	 
	15. Dr. John Swartley	36,667	 
	 	 	 
	16. Grim Estates Ltd.	180,000	 
	 	 	 
	17. Edwin T Cryer	10,000	 
	 	 	 
	18. Steve R. Smith	45,000	 
	 	 	 
	19. Steven Jensen	21,000	 
	 	 	 
	20. John W. Leonard	35,000	 
	 	 	 
	21. Ross Beaty	85,000	 








 - 56 - 

	22. William Brock 	33,333	 
	 	 	 
	23. Barry Marcus 	15,000	 
	 	 	 
	24. Hartzell Cobbs 	4,000	 
	 	 	 
	25. Leland Mink 	10,000	 
	 	 	 
	26. Donald Nelson 	108,000	 
	 	 	 
	27. Ronald C. Yanke 	108,000	 
	 	 	 
	28. John H. Walker 	73,807	 
	 	 	 
	 29. William David Batiuk 	17,000	 
	 	 	 
	Total Geo Exchange 	 	 
	Securities Shares:	6,939,992	Warrants: 2,420,217








 - 57 - 

 SCHEDULE 3.5 (a)  

	Geo Shares	 	 
	 	 	 
	Name	Shares	 
	 	 	 
	1. Douglas J. Glaspey	728,929	 
	 	 	 
	2. Daniel Kunz	940,479	 
	 	 	 
	3. Paul Larkin	691,762	 
	 	 	 
	4. Ron Bourgeois	650,000	 
	 	 	 
	5. Vulcan Power Company	1,895,000	 
	 	 	 
	6. Gerald L. Sneddon	80,000	 
	 	 	 
	7. Sneddon Family Trust	50,000	 
	 	 	 
	8. Steven Y Chi	36,667	 
	 	 	 
	9. Roscoe & Joyce Ward	5,000	 
	 	 	 
	10. Robert Falls	24,000	 
	 	 	 
	11. Tom Menning	183,333	 
	 	 	 
	12. Burton Egger	40,000	 
	 	 	 
	13. John Beaulieu	20,000	 
	 	 	 
	14. Veritable Quandary LLC	10,000	 
	 	 	 
	15. Dr. John Swartley	36,667	 
	 	 	 
	16. Grim Estates Ltd.	180,000	 
	 	 	 
	17. Edwin T Cryer	10,000	 
	 	 	 
	18. Steve R. Smith	45,000	 
	 	 	 
	19. Steven Jensen	21,000	 
	 	 	 
	20. John W. Leonard	35,000	 








 - 58 - 

	21. Ross Beaty	85,000	 
	 	 	 
	22. William Brock	33,333	 
	 	 	 
	23. Barry Marcus	15,000	 
	 	 	 
	24. Hartzell Cobbs	4,000	 
	 	 	 
	25. Leland Mink	10,000	 
	 	 	 
	26. Donald Nelson	108,000	 
	 	 	 
	27. Ronald C. Yanke	108,000	 
	 	 	 
	28. John H. Walker	16,667	 
	 	 	 
	29. William David Batiuk	17,000	 
	 	 	 
	Total GEO shares issued	6,079,836	 




 SCHEDULE 3.5 (b)  

 Geo Warrants 

 1,612,000 warrants issued 3-15-02 to Vulcan Power Company
  at an exercise price of $0.75, for an exercise period of 2 years following Closing






 - 59 - 

 SCHEDULE 3.11  

 Geo has loaned $55,000 to Vulcan for use in its operations
  pending the completion of the Proposed Transactions. It acquired the loaned
  funds through loans from shareholders. See Schedules 3.14 and 3.25. 





 - 60 - 

 SCHEDULE 3.14  

 Contracts 

	1.	US Cobalt agreement dated March 28,
        2002

	 	 
	2.	Vulcan Agreement dated December 2, 2002

	 	 
	3.	Crank Lease dated June 28, 2002

	 	 
	4.	Jensen Lease dated July 11, 2002

	 	 
	5.	Jensen Investments Lease dated July
        12, 2002

	 	 
	6.	Loan to Vulcan dated July 18, 2003,
        as amended from time to time.

	 	 
	7.	Loan to Vulcan dated September 16, 2003,
        as amended from time to time.

	 	 
	8.	Kunz Loans to Geo dated July 20 and
        September 16, 2003, as amended from time to time.

	 	 
	9.	Kitz Loan to Geo dated September 16,
        2003, as amended from time to time.

	 	 
	10.	Glaspey Loan to Geo dated September
        16, 2003, as amended from time to time.

	 	 
	11.	Larkin Loan to Geo dated September 16,
        2003, as amended from time to time.

	 	 
	12.	Bourgeois Loan to Geo dated September
        16, 2003, as amended from time to time.



 Other Agreements 

 US Department of Energy Geothermal Resource Exploration and
  Development (GREDII) Grant. Instrument Number: DE-FC04-2002AL68299 Awarded September
  29, 2002 

 First Associates Investment Inc. letter of engagement for
  financing dated November 21, 2002, which has been terminated 

 First Associates Investments Inc. sponsorship agreement dated
  February 21, 2003 





 - 61 - 

 SCHEDULE 3.19  

 Geo Labor Matters 

 Douglas J. Glaspey is paid a monthly Management Fee of $3,000.00
  under a verbal agreement, on a month-to-month basis. No set term. 





 - 62 - 

 SCHEDULE 3.22  

	Bank Accounts	 	 
	 	 	 
	Wells Fargo Bank	Business Checking Account	Acct.#8902377269
	818 E. Boise Ave.	 	 
	Boise, Idaho 83706	 	 


 Signature Authority: Douglas J. Glaspey, Daniel Kunz 

 No other accounts, certificates of deposit, debt, equity securities or other
  investments. 





 - 63 - 

 SCHEDULE 3.24  

 Agreements 

 1.           The
  Vulcan Property  

 On March 5, 2002, Geo entered into a letter agreement with
  Vulcan, pursuant to which Geo agreed to acquire from Vulcan all of the real
  property, personal property and permits that comprised Vulcan’s interest
  in the Raft River Project. On December 3, 2002, the letter agreement was replaced
  by the Vulcan Agreement which provides for the acquisition of 100% interest
  in the Vulcan Property by Geo on the following basis: 

	1.	To earn a 20% interest in the Vulcan
        Property, Geo must pay to or for the benefit of Vulcan US$250,000. As
        at December 31, 2002, this amount has been paid and Geo has acquired the
        20% interest.

	 	 
	2.	The issue to Vulcan of 1,895,000 Geo
        Shares and 1,612,000 Geo Warrants. These securities have been issued.

	 	 
	3.	Geo must cause a publicly traded company
        to acquire all of the Geo Shares and Geo Warrants, including those issued
        to Vulcan, in exchange for securities of the public company which will
        result in Vulcan owning 14% of the issued shares and, through the exercise
        of warrants, having the right to acquire, an additional 11% of the shares
        for a total of 25% of the fully diluted issued and outstanding shares
        of the public company as of the date of acquisition of the Geo Shares
        and Geo Warrants by the publicly traded company.

       The completion of the Acquisition and Consolidation
        will satisfy this requirement. Upon completion of the Proposed Transactions
        Vulcan will hold 1,755,156 Consolidated USC Shares (approximately 11%
        of the outstanding Consolidated USC Shares) and 2,420,217 Exchange Warrants,
        which if exercised, would result in Vulcan owing 25% of the common stock
        of the Resulting Issuer. The securities to be issued to Vulcan will be
        subject to escrow. See “The Resulting Issuer - Securities of the
        Resulting Issuer held in Escrow, in Pool or Subject to Hold Restrictions”.

	 	 
	4.	Geo must complete a US$200,000 work
        program on the Vulcan Property within 12 months of the Closing.

	 	 
	5.	Geo was to pay to Vulcan US$100,000 on
        the Closing. As at April 28, 2003, $50,000 has been paid and Geo will
        pay the balance of $50,000 on Closing.

       Once all of the foregoing have been satisfied, Geo will
        own a 49% interest in the Vulcan Property.

	 	 
	6.	In order to acquire the remaining 51%
        of the Vulcan Property, Geo must pay to Vulcan US$250,000 on or before
        receipt of project financing for completion of a power plant.



All of the issued and outstanding Geo Shares as at March 5,
  2002, other than those held by Vulcan, have been pledged to Vulcan as security
  for Geo’s obligations to Vulcan under the Vulcan Agreement. The pledge
  will be released on Closing.







 - 64 - 

 Prior to entering into the Vulcan Agreement Vulcan was at
  arm’s length to Geo. The consideration payable to Vulcan under the Vulcan
  Agreement was determined through arm’s length negotiations. 

 Under the Vulcan Agreement, Geo has agreed to acquire 100%
  of the 560 acres of fee land comprising the Vulcan Property. The Vulcan Property
  includes both surface and geothermal rights and consists of two units. The first
  unit has a total area of 240 acres and is comprised of the E half of the SE
  quarter of Section 22, plus the SW quarter of Section 23 (Township 15 South,
  Range 26 East). Three geothermal wells (RRGE-1, RRGP-4 and RRGP-5) are located
  on this parcel. The second unit has a total area of 320 acres, and is comprised
  of the S half of the NW quarter, the S half of the NE quarter, and the entire
  SE quarter of Section 25 (Township 15 South, Range 26 East). Three additional
  geothermal wells (RRGE-3, RRGI-6 and RRGI-7) are located on this parcel. 

 As the Vulcan Property is fee land that would be owned by
  the project developer, there is no royalty burden. A preliminary title report
  was prepared in March 2002 for the Vulcan Property by Land Title and Escrow,
  Inc. of Burley, Idaho, which includes a Commitment For Title Insurance from
  the Commonwealth Land Title Insurance Company. 

 2.           Crank
  Lease  

 The Crank Lease covers 160 acres of geothermal rights, with
  right of ingress and egress. The lease is comprised of the NE quarter of Section
  23 (Township 15 South, Range 26 East) and includes the use of an existing geothermal
  well RRGE-2. The lease has a primary term of 5 years and is extended indefinitely
  so long as production from the well or from the geothermal field is maintained.
  Geo does not control access to the surface lands related to the Crank Lease
  except for ingress and egress for removal of the geothermal resource. Advanced
  production royalties are payable as follows: 

	• 	On signing: US$5,000 (paid)
		 
	• 	Year 2: US$10,000
		 
	• 	Year 3: US$10,000
		 
	• 	Year 4: US$15,000
		 
	• 	Year 5: US$15,000


 The advanced production royalties can be credited toward production
  royalties owed. During commercial production, there is a minimum annual production
  royalty of US$18,000. 

 Janice Crank is at arm’s length to Geo. The consideration
  payable by Geo under the Crank Lease was determined through arm’s length
  negotiation. 





 - 65 - 

 3.           Jensen
  Lease  

 The Jensen Lease covers 2,954.75 acres of geothermal rights
  only. It is contiguous with the Vulcan Property and the Crank Lease with land
  parcels located in Sections 24, 25, 26, 27, 33, and 34 (Township 15 South, Range
  26 East), and in Sections 18, 19, 20, 29, and 30 (Township 15 South, Range 27
  East). Geo does not control surface access to all lands covered by the Jensen
  Lease. 

 The lease has a primary term of 10 years and is extended indefinitely
  so long as production from the geothermal field is maintained. Lease payments
  are as follows: 

	• 	Years 1-5: US$2.50 per acre (Year 1 paid on signing)
	 	 
	• 	Years 6-10: US$3.00 per acre


Sergene Jensen is at arm’s length to Geo. The consideration
  payable by Geo under the Jensen Lease was determined through arm’s length
  negotiation. 

 4.           Jensen
  Investments Lease  

 The Jensen Investments Lease covers 44.5 acres of surface
  and geothermal rights in Section 35, Township 15 South, Range 26 East, and is
  contiguous with the Jensen Lease. The lease has a primary term of 10 years and
  is extended indefinitely so long as production from the geothermal field is
  maintained. Lease payments are as follows: 

	• 	Years 1-5: US$2.50 per acre (Year 1 paid on signing)
	 	 
	• 	Years 6-10: US$3.00 per acre


The three leased parcels, (Crank Lease, Jensen Lease and Jensen
  Investments Lease) have production royalties payable under the following terms:


	(a)	Energy produced, saved and used for
        the generation of electric power, which is then sold by lessee, has a
        royalty of ten percent (10%) of the net proceeds.

	 	 
	(b)	Energy produced, saved and sold by lessee,
        then used by the purchaser for generation of electric power, has a royalty
        of ten percent (10%) of the market value.

	 	 
	(c)	Energy produced, which is used for any
        purpose other than the generation of electricity has a royalty of five
        percent (5%) of the gross proceeds.



 Jensen Investments Inc. is at arm’s length to Geo. The
  consideration payable by Geo under the Jensen Investment Lease was determined
  through arm’s length negotiation. 

 Geo has not determined whether any wetlands exist on these
  properties nor whether any of the properties are in a flood plain. All buildings,
  infrastructure, and geothermal wells located on the properties are offered in
  an “as is” condition and no warranty or representation is made as
  to their ultimate use. 

 Additional lease agreements are under negotiation with Reid
  Stewart. 





 - 66 - 

 SCHEDULE 3.25  

 Related Party Transactions 

 Vulcan Power Company (shareholder) – Vulcan Agreement
  dated December 3, 2002 

 Douglas J. Glaspey, Daniel Kunz, and Paul Larkin (shareholders,
  directors and officers) are also shareholders, directors, and officers of US
  Cobalt Inc. 

 Douglas J. Glaspey is paid a monthly management fee of $3,000.00
  on a month-to-month basis. 

Daniel Kunz loaned $35,000 to Geo to fund Geo’s loans
  to Vulcan on July 20 and September 16, 2003. 

Kevin Kitz loaned $8,000 to Geo to fund Geo’s loans to
  Vulcan on September 16, 2003. 

 Doug Glaspey loaned $5,000 to Geo to fund Geo’s loans
  to Vulcan on September 16, 2003. 

Paul Larkin loaned $5,000 to Geo to fund Geo’s loans to
  Vulcan on September 16, 2003. 

Ron Bourgeois loaned $2,000 to Geo to fund Geo’s loans
  to Vulcan on September 16, 2003. 





 - 67 - 

 SCHEDULE 4.5  

 Environmental Matters 

 There are currently no permits or government authorization
  held by Geo pursuant to the Environmental Laws. 

 No environmental audits or similar reports. 

 To our knowledge, there are no Environmental Claims pending.


 There are two known underground diesel storage tanks on the
  property installed by the US Department of Energy. The size and condition of
  these tanks are not known. 

 There may be Transite (a cement-asbestos composite) pipe buried
  on the properties which was installed by the US Department of Energy.