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






Exhibit 10.1

Subscription Agreement 

U.S. Geothermal Inc. 
1505 Tyrell Lane 
Boise, Idaho
83706 

Gentlemen: 

The undersigned (the “‘Investor”) hereby confirms its
agreement with U.S. Geothermal Inc., a Delaware corporation (the
“Company”), as follows: 

1. 

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

2. 

The Company has authorized the sale and issuance to certain
investors of up to an aggregate of 5,000,000 units of the Company (the
“Units”), subject to adjustment by the Company’s Board of Directors, or a
committee thereof, with each Unit consisting of (i) one share of common stock of
the Company, par value US$0.001 per share (the “Common Shares”), and (ii)
one-half of one common share purchase warrant (a “Warrant” and,
collectively, the “Warrants”). Each whole Warrant will entitle the holder
to purchase one (1) Common Share at an exercise price of US$1.075 per Common
Share (subject to adjustment) and is exercisable for a period of twelve (12)
months from the Closing Date (as defined in Annex 1). The certificate
representing the Warrants shall be in substantially the form of Exhibit B
attached hereto (the “Warrant Certificate”). The aggregate of up to
5,000,000 Common Shares so proposed to be sold is hereinafter referred to as the
“Shares.” The Units will not be issued or certificated. The Shares and
the Warrants are immediately separable and will be issued separately. The Common
Shares issuable upon exercise of the Warrants are referred to herein as the
“Warrant Shares” and, together with the Units, the Shares and the
Warrants, are referred to herein as the “Securities”). 

3. 

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




4. 

The Company and the Investor agree that the Investor will
purchase from the Company and the Company will issue and sell to the Investor
the Units set forth below for the aggregate purchase price set forth below. The
Units shall be purchased pursuant to the Terms and Conditions for Purchase of
Units attached hereto as Annex I and incorporated herein by this
reference as if fully set forth herein. The Investor acknowledges that the
Offering is not being underwritten by the placement agent (the “Placement
Agent”) named in the Prospectus Supplement and that there is no minimum
offering amount. 

5. 

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

	[_] 	
      A. 

      Delivery by crediting the account of the Investor’s
      prime broker (as specified by such Investor on Exhibit A annexed hereto)
      with the Depository Trust Company (“DTC”) through its
      Deposit/Withdrawal At Custodian (“DWAC”) system, whereby the
      Investor’s prime broker shall initiate a DWAC transaction on the Closing
      Date using its DTC participant identification number, and released by
      Computershare, the Company’s transfer agent (the “Transfer Agent”),
      to the Investor at the Company’s direction. NO LATER THAN ONE (1)
      BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE
      COMPANY, THE INVESTOR SHALL: 




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

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



N.B. Wire instructions to Dorsey &
Whitney (or such other funds recipient as may be agreed upon by the Company, the
Placement Agent and the Investors, subject to the satisfaction of all regulatory
requirements) will be provided separately. 

	[_] 	
      B. 

      Delivery by the Transfer Agent of a stock certificate
      evidencing the Shares registered in the name of the registered holder
      specified by the Investor on Exhibit A attached hereto to the address
      specified by the Investor on Exhibit A attached hereto, at the Company’s
      direction. NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF
      THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL REMIT
      THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE UNITS
      BEING PURCHASED BY THE INVESTOR BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE
      FUNDS TO THE FOLLOWING ACCOUNT: 



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N.B. Wire instructions to Dorsey &
Whitney (or such other funds recipient as may be agreed upon by the Company, the
Placement Agent and the Investor, subject to the satisfaction of all regulatory
requirements) will be provided separately. 

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE
NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER ACCOUNT
BALANCE IN A TIMELY MANNER AND (B) UNLESS BOX 5.B. IS
CHECKED, ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY
MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE
PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER
ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES
AND WARRANTS MAY NOT BE DELIVERED AT CLOSING TO THE
INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER. 

6. 

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

7.  

The Investor represents that, except as set forth below, (a)
it has had no position, office or other material relationship within the past
three years with the Company or persons known to it to be affiliates of the
Company, (b) it is not a member of the Financial Industry Regulatory Authority,
Inc. (“FINRA”) or an Associated Person (as such term is defined under the
FINRA’s NASD Membership and Registration Rules Section 1011) as of the Closing,
and (c) neither the Investor nor any group of Investors (as identified in a
public filing made with the Commission) of which the Investor is a part in
connection with the Offering, acquired, or obtained the right to acquire, twenty
percent (20%) or more of the Common Shares (or securities convertible into or
exercisable for Common Shares) or the voting power of the Company on a
post-transaction basis. Exceptions:

____________________________________________________________________


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

8.  

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

-3- 




9. 

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

[Remainder of Page Intentionally Left Blank; Signature Page
Follows] 

-4- 




Number of Units: _________________________
Purchase Price
Per Unit:
US$1.00                               

Aggregate Purchase Price: US$__________________________
Number of
Warrant Shares (equal to number of Units multiplied by 0.5 and rounded down to
the nearest whole number): _______________________________________

Please confirm that the foregoing correctly sets forth the
agreement between us by signing in the space provided below for that purpose.



	Dated as of: February _____, 2011 
	  
	 
	INVESTOR 
	 
	By: 
	 
	Print Name: 
	 
	Title: 
	 
	Address: 
	 
	 
	 
	 





	Agreed and Accepted 
	this ___ day of _____________, 2011: 
	  
	U.S. GEOTHERMAL INC. 
	 
	By:                                                             
        
	 
	Title:                                                           
        



[Signature Page to Subscription Agreement] 




ANNEX 1 

TERMS AND CONDITIONS FOR PURCHASE OF UNITS 

1. 

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

2. 

Agreement to Sell and Purchase the Units;
Placement Agent. 

2.1 

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

2.2 

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

2.3 

The Investor acknowledges that the Company intends to pay Prosdocimi Limited (the “Placement Agent”) a fee payable in Units equal
to 2.5% of that portion of the offering outside of the Unites States and certain
expenses in respect of the sale of the Units. 

2.4 

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

3. 

Closings and Delivery of the Units and
Funds. 

3.1 

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

A1-1 




3.2 

 Conditions to the Obligations of the Parties.

(a) 

 Conditions to the Company’s Obligations. The
Company’s obligation to issue and sell the Units to the Investor shall be
subject to: (i) the receipt by the Company of the purchase price for the Units
being purchased hereunder as set forth on the Signature Page; and (ii) the
accuracy of the representations and warranties made by the Investor and the
fulfillment of those undertakings of the Investor to be fulfilled prior to the
Closing Date. 

(b) 

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

3.3 

 Delivery of Funds. Delivery by Wire Transfer.
No later than one (1) business day after the
execution of this Agreement by the Investor and the Company, the
Investor shall remit by wire transfer the amount of funds equal to the aggregate
purchase price for the Units being purchased by the Investor to the following
account designated by the Company: 

N.B. Wire instructions for Dorsey
& Whitney (or such other funds recipient as may be agreed upon by the
Company, the Placement Agent and the Investors, subject to the satisfaction of
all regulatory requirements) will be provided separately. 

3.4 

 Delivery of Shares. Delivery by Electronic
Book-Entry at The Depository Trust Company. Unless the Investor has
checked Box 5.B. of the Subscription Agreement, no later
than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall direct
the broker-dealer at which the account or accounts to be credited with the
Shares being purchased by such Investor are maintained, which broker/dealer
shall be a DTC participant, to set up a DWAC instructing the Transfer Agent to
credit such account or accounts with the Shares. Such DWAC instruction shall
indicate the settlement date for the deposit of the Shares, which date shall be
provided to the Investor by the Placement Agent. Upon the closing of the
Offering, the Company shall direct the Transfer Agent to credit the Investor’s
account or accounts with the Shares pursuant to the information contained in the
DWAC. 

4. 

Representations, Warranties and Covenants
of the Investor. 

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

4.1 

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

A1-2 




4.2


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


4.3 

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

4.4 

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

4.5 

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

A1-3 




4.6 

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

4.7 

The Investor represents and warrants that it is a resident
of the jurisdiction set out on the execution page of this Agreement, which
address is the residence, registered office or place of business of the
Investor, and that such Investor (i) is not a resident of Canada nor is it
purchasing the Units for the account or benefit of a Canadian resident; (ii) was
not offered the Units in Canada, and (iii) did not execute or deliver this
Agreement in Canada. 

4.8  

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

5. 

Representations, Warranties and Covenants
of the Company. 

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

5.1 

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

5.2 

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

A1-4 




5.3 

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

5.4 

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

5.5 

The Shares are duly authorized and, when issued and
paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable, free and clear of all liens. The Company has
reserved from its duly authorized capital the maximum number of Common Shares
issuable pursuant to this Agreement. The Registration Statement conforms with
the requirements of the Securities Act of 1933, as amended (the “Securities
Act”), including the Base Prospectus, and such amendments and supplements
thereto as may have been required as of the date of this Agreement. The
Registration Statement is effective in respect of the Shares under the
Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Prospectus
has been issued by the Commission and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, are threatened by the
Commission. The Company has filed or will file the Prospectus Supplement with
the Commission on the date hereof. At the time the Registration Statement and
any amendments thereto became effective and at the date of this Agreement, the
Registration Statement (including documents incorporated by reference therein)
and any amendments thereto filed as of the applicable time, conformed and will
conform in all material respects to the requirements of the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus (including any documents incorporated by
reference therein) and any amendments or supplements thereto, at the time the
Prospectus or any amendment or supplement thereto was issued and at the Closing
Date, conformed and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain any untrue statement of any
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. 

A1-5 




5.6 

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

5.7 

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

5.8 

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

5.9 

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

A1-6 




5.10 

The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Shares,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Shares, or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company. 

6.  

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

7.  

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

if to the Company, to: 

U.S. Geothermal Inc. 
1505 Tyrell
Lane 
Boise, Idaho 83706
Attention: Daniel J Kunz, Chief Executive Officer

Facsimile: (208) 424-1030 

with copies to: 

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

Attention: Christopher J. Barry 

A1-7 




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

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

8.  

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

9.  

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

10.  

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

11.  

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

12.  

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

13.  

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

14. 


Press Release. The Company and the
Investor agree that the Company shall (a) prior to the opening of the financial
markets in New York City on February 22, 2011 or as soon thereafter as possible
issue a press release announcing the Offering and disclosing all material
information regarding the Offering and (b) as promptly as practicable
thereafter, file a Current Report on Form 8-K with the Commission including, but
not limited to, a form of this Agreement and a form of the Warrant Certificate.


A1-8 




EXHIBIT A

U.S. GEOTHERMAL INC. 

INVESTOR QUESTIONNAIRE 

Pursuant to Section 3 of Annex I to the
Agreement, please provide us with the following information: 

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






EXHIBIT B

U.S. GEOTHERMAL INC. 

FORM OF WARRANT 
(attached)