Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - US Geothermal Inc. - Exhibit 10.31

REV A 

 

CONSTRUCTION CONTRACT 

Between 

Raft River Energy I LLC 

And 

Industrial Builders 

 

 

Dated as of May 22, 2006 

 

 

CONFIDENTIAL 

 

 

File: Pipeline Contract - 052206 FINAL 

REV A 

CONTENTS 

	ARTICLE 1 	DEFINITIONS, INTERPRETATION AND CONTRACT DOCUMENTS 	1 
	 	 	 	 
	 	1.1 	Definitions 	1 
	 	 	 	 
	 	1.2 	Interpretation 	7 
	 	 	 	 
	 	1.3 	Documents Included 	8 
	 	 	 	 
	ARTICLE 2 	CONTRACTOR RESPONSIBILITIES 	9 
	 	 	 	 
	 	2.1 	General Responsibilities 	9 
	 	 	 	 
	 	2.2 	Specific Responsibilities 	9 
	 	 	 	 
	 	2.3 	Contractor’s Personnel and Labor Relations 	10 
	 	 	 	 
	 	2.4 	Representations and Warranties of Contractor 	11 
	 	 	 	 
	ARTICLE 3 	COMPANY RESPONSIBILITIES 	11 
	 	 	 	 
	 	3.1 	General Responsibilities 	11 
	 	 	 	 
	 	3.2 	Company’s Representative 	12 
	 	 	 	 
	 	3.3 	Representations and Warranties of Company 	12 
	 	 	 	 
	ARTICLE 4 	COMMENCEMENT OF WORK 	13 
	 	 	 	 
	 	4.1 	Notice to Proceed 	13 
	 	 	 	 
	 	4.2 	Commencement 	13 
	 	 	 	 
	 	4.3 	Reserved 	13 
	 	 	 	 
	 	4.4 	Reserved 	13 
	 	 	 	 
	 	4.5 	Reserved 	13 
	 	 	 	 
	 	4.6 	Delay Liquidated Damages 	13 
	 	 	 	 
	 	4.7 	Final Completion 	14 
	 	 	 	 
	 	4.8 	Final Completion Certificate 	14 
	 	 	 	 
	 	4.9 	Punchlist 	15 
	 	 	 	 
	ARTICLE 5 	COMPENSATION AND PAYMENT 	15 
	 	 	 	 
	 	5.1 	Contract Price 	15 
	 	 	 	 
	 	5.2 	Payment Schedule 	16 
	 	 	 	 
	 	5.3 	Payment 	16 
	 	 	 	 
	 	5.4 	Final Completion Payment for the Facility 	17 

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	 	5.5 	Payments Not Acceptance
      of Work 	17 
	 	 	 	 
	 	5.6 	Payment of Subcontractor
      	17 
	 	 	 	 
	 	5.7 	Waiver of Liens 	17 
	 	 	 	 
	 	5.8 	Interest 	17 
	 	 	 	 
	ARTICLE 6 	TESTING 	18 
	 	 	 	 
	 	6.1 	General 	18 
	 	 	 	 
	 	6.2 	Test Procedures 	18 
	 	 	 	 
	 	6.3 	Notice of Testing 	18 
	 	 	 	 
	 	6.4 	Deficiencies 	18 
	 	 	 	 
	ARTICLE 7 	INTENTIONALLY OMITTED 	19 
	 	 	 	 
	ARTICLE 8 	CONSTRUCTION SUSPENSION
      AND ACCELERATION; CHANGE ORDER 	19
	 	  		 
	 	8.1 	Construction Suspension
      and Acceleration 	19 
	 	 	 	 
	 	8.2 	Change Orders 	19 
	 	 	 	 
	 	8.3 	Procedure for Change Orders
      	19 
	 	 	 	 
	 	8.4 	Change Orders Due to Contractor
      Error 	20 
	 	 	 	 
	 	8.5 	Change Orders Due to Changes
      in Law 	21 
	 	 	 	 
	 	8.6 	Effect of Force Majeure;
      Excused Performance 	21 
	 	 	 	 
	 	8.7 	Company-Caused Changes 	22 
	 	 	 	 
	 	8.8 	Price Change 	22 
	 	 		  
	 	8.9	Effectiveness; Continued Performance Pending Resolution
      of Disputes 	27 
	 	 	 	 
	 	8.10 	Documentation 	27 
	 	 	 	 
	 	8.11 	Continue Work 	28 
	 	 	 	 
	 	8.12 	Critical Path Schedule Updates
      	28 
	 	 	 	 
	 	8.13 	Change Order Constitutes
      Complete Relief 	28 
	 	 	 	 
	 	8.14 	Effect of Changes on Warranties
      and Safety 	28 
	 	 	 	 
	ARTICLE 9 	DESIGN AND DOCUMENTATION
      	29 
	 	 	 	 
	 	9.1 	Inspection of Work 	29 
	 	 	 	 
	 	9.2 	As-Built Drawings 	29 
	 	 	 	 
	 	9.3 	Equipment Manuals 	29 

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	ARTICLE 10 	WARRANTIES 	29 
	 	 	 	 
	 	10.1 	Warranty 	29 
	 	 	 	 
	 	10.2 	Warranty Period 	30 
	 	 	 	 
	 	10.3 	Defect Remedy Work 	30 
	 	 	 	 
	 	10.4 	Implementation of Warranty 	31 
	 	 	 	 
	 	10.5 	Disclaimer and Release 	31 
	 	 	 	 
	ARTICLE 11 	INTENTIONALLY OMITTED 	32 
	 	 	 	 
	ARTICLE 12 	TITLE; CARE OF THE WORK 	32 
	 	 	 	 
	 	12.1 	Passage of Title 	32 
	 	 	 	 
	 	12.2 	Risk of Loss 	32 
	 	 	 	 
	ARTICLE 13 	INSURANCE AND BONDING 	32 
	 	 	 	 
	 	13.1 	Contractor Provided Insurance 	32 
	 	 	 	 
	 	13.2 	Company Provided Insurance 	33 
	 	 	 	 
	 	13.3 	Policies 	33 
	 	 	 	 
	 	13.4 	Payment of Deductibles 	35 
	 	 	 	 
	 	13.5 	Evidence of Insurance 	35 
	 	 	 	 
	 	13.6 	Performance Payment and Other Bonds 	35 
	 	 	 	 
	ARTICLE 14 	DISPUTE RESOLUTION 	36 
	 	 	 	 
	 	14.1 	Settlement by Mutual Agreement 	36 
	 	 	 	 
	 	14.2 	Mediation 	36 
	 	 	 	 
	 	14.3 	Pending Disputes 	37 
	 	 	 	 
	ARTICLE 15 	INDEMNIFICATION 	37 
	 	 	 	 
	 	15.1 	General 	37 
	 	 	 	 
	 	15.2 	Indemnification for Bodily Injury or Property Damage 	37 
	 	 	 	 
	 	15.3 	Indemnity from Liens 	38 
	 	 	 	 
	 	15.4 	Reserved 	38 
	 	 	 	 
	 	15.5 	Company’s Indemnity 	38 
	 	 	 	 
	 	15.6 	Notice and Settlement of Claims 	38 
	 	 	 	 
	ARTICLE 16 	ASSIGNMENT 	39 
	 	 	 	 
	 	16.1 	Assignment by Company 	39 

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	 	16.2 	Assignment by Contractor 	39 
	 	 	 	 
	 	16.3 	Succession 	39 
	 	 	 	 
	ARTICLE 17 	SUBCONTRACTORS 	39 
	 	 	 	 
	 	17.1 	Subcontracts 	39 
	 	 	 	 
	 	17.2 	Subcontract Provisions 	39 
	 	 	 	 
	 	17.3 	Vendors 	40 
	 	 	 	 
	ARTICLE 18 	SUSPENSION 	40 
	 	 	 	 
	 	18.1 	Right of Company to Suspend Work 	40 
	 	 	 	 
	 	18.2 	Initial Payments to Contractor 	40 
	 	 	 	 
	 	18.3 	Extended Suspension 	40 
	 	 	 	 
	 	18.4 	Right of Contractor to Suspend 	40 
	 	 	 	 
	 	18.5 	Additional Changes Resulting From Suspensions 	40 
	 	 	 	 
	 	18.6 	Resumption of Work 	41 
	 	 	 	 
	ARTICLE 19 	TERMINATION 	41 
	 	 	 	 
	 	19.1 	Termination by Company 	41 
	 	 	 	 
	 	19.2 	Termination by Contractor 	42 
	 	 	 	 
	 	19.3 	Due to Force Majeure 	42 
	 	 	 	 
	 	19.4 	Due to Company’s Convenience 	43 
	 	 	 	 
	 	19.5 	Exclusive Remedy 	43 
	 	 	 	 
	 	19.6 	Actions Required Following Termination 	43 
	 	 	 	 
	 	19.7 	Termination and Transfer of Subcontracts and Other Rights
      	44 
	 	 	 	 
	 	19.8 	Surviving Obligations 	44 
	 	 	 	 
	ARTICLE 20 	INTENTIONALLY OMITTED 	44 
	 	 	 	 
	ARTICLE 21 	CONFIDENTIALITY 	44 
	 	 	 	 
	 	21.1 	Both Parties to Keep Information Confidential 	44 
	 	 	 	 
	 	21.2 	Use of Information 	45 
	 	 	 	 
	 	21.3 	Exclusions 	45 
	 	 	 	 
	 	21.4 	Contractor Logos 	45 
	 	 	 	 
	ARTICLE 22 	NOTICES 	45 
	 	 	 	 
	 	22.2 	  	46 

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	ARTICLE 23 	MISCELLANEOUS 	46 
	 	 	 	 
	 	23.1 	Governing Law 	46 
	 	 	 	 
	 	23.2 	Construction 	46 
	 	 	 	 
	 	23.3 	Nature of Agreement 	47 
	 	 	 	 
	 	23.4 	Severability 	47 
	 	 	 	 
	 	23.5 	Amendments and Waivers 	47 
	 	 	 	 
	 	23.6 	Survival 	47 
	 	 	 	 
	 	23.7 	Counterparts 	47 
	 	 	 	 
	 	23.8 	Entire Contract 	47 
	 	 	 	 
	 	23.9 	Waivers 	48 
	 	 	 	 
	 	23.10 	Counterparts; Transmitted Copies 	48 
	 	 	 	 
	 	23.11 	Further Assurances 	48 

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REV A 

LIST OF EXHIBITS: 

	 	Exhibit A 	Contract Price and Payment Schedule
      
	 	 	 
	 	Exhibit B 	Schedule (Gantt Chart) 
	 	 	 
	 	Exhibit C1 	Pipeline System Criteria and
      Project Scope 
	 	 	 
	 	Exhibit C2 	Drawings and General Notes 
	 	 	 
	 	Exhibit D 	Performance Test Protocols 
	 	 	 
	 	Exhibit E 	Warranty Claim Procedures 
	 	 	 
	 	Exhibit F 	Approved Vendors List 
	 	 	 
	 	Exhibit G 	Permits 
	 	 	 
	 	Exhibit H 	Reserved 
	 	 	 
	 	Exhibit I 	Certificate of Final Completion
      
	 	 	 
	 	Exhibit J 	Form of Final Lien Waiver 
	 	 	 
	 	Exhibit K 	Liquidated Damages 
	 	 	 
	 	Exhibit L 	Change Order Form 
	 	 	 
	 	Exhibit M 	Change Order Request Form 
	 	 	 
	 	Exhibit N 	Work Items Prior to Notice
      to Proceed 

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CONSTRUCTION CONTRACT 

          THIS
CONSTRUCTION CONTRACT (“Contract”) dated as of May 22, 2006, is made by
and between: 

	(1) 	
      Raft River Energy I LLC, a Delaware Limited Liability
      Company with its principal place of business at 1509 Tyrell Lane, Suite B,
      Boise, Idaho 83706 (“Company”); and

	 	 
	(2) 	
      IBI DBA Industrial Builders, an Idaho corporation, with
      its principal place of business at 20394 Pinto Lane, Caldwell Idaho 83605
      (“Contractor”).

RECITALS 

          A.     
Company is developing a nominal 13 MW geothermal power plant in the Raft River
Known Geothermal Resource Area in the State of Idaho and desires to retain
Contractor to provide certain procurement and construction related services to
provide pipelines to connect the geothermal power plant to production and
injection wells. 

          B.      Contractor
desires to be retained by Company to provide procurement and construction
related services to provide pipelines to connect the geothermal power plant to
production and injection wells.

AGREEMENT 

          THEREFORE,
Company and Contractor (each individually, a “Party” and together, the
“Parties”) agree as follows: 

ARTICLE
1      DEFINITIONS, INTERPRETATION AND
CONTRACT DOCUMENTS 

          1.1      Definitions

          In
addition to the terms defined elsewhere in this Contract, the definitions of
certain terms used in this Contract with initial letters capitalized are as set
forth herein. 

          “Affiliate”
means, with respect to any person or entity, any other person or entity
(including any officer, director, shareholder, partner, employee, agent or
representative of such person or entity) that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such first person or entity. For purposes of this definition,
“control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person or
entity, whether through the ownership of voting securities, partnership or other
ownership interests, by contract, by Law or otherwise. 

          “As-Built
Drawings” has the meaning given to it in Section 9.3. 

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“Certificate of Final Completion” means the certificate issued by
Contractor to Company under this Contract, pursuant to Section 4.8. 

          “Change
in the Work” means a change to the Work as provided in Article 8. 

          “Change
of Law” means any Law, official interpretation thereof or manner of
interpretation thereof, that is amended or modified, is enacted, adopted,
promulgated or otherwise becomes effective or is repealed, revoked, suspended or
not renewed after the Effective Date and which increases Contractor’s cost of
performing the Work, delays Contractor’s performance of the Work or otherwise
adversely affects Contractor’s performance of its obligations under this
Contract.

          “Change
Order” means a written change order based on the form set forth in Exhibit L
describing the Change in the Work and its effect, if any, on the Contract Price,
the Payment Schedule, the Schedule and any other provision of this Contract that
is affected. 

          “Commencement
Date” has the meaning given to it in Section 4.2. 

          “Company”
has the meaning set forth in the introductory paragraph to this
Contract. 

          “Company
Default” means the failure or delay of Company or its representatives,
agents, subcontractors or suppliers (other than Contractor and its
Subcontractors and their agents and employees) to meet Company’s material
obligations under this Contract, including the obligations identified in Section
3.1. 

          “Company
Indemnified Party” has the meaning set forth in Section 15.1. 

          “Company
Permits” means the Permits to be obtained by Company as described in
Exhibit G and, other than the Contractor Permits, any Permits otherwise
necessary for the construction, operation and maintenance of the Project. 

          “Company’s
Representative” has the meaning given to it in Section 3.2. 

          “Contract”
means this Construction Contract together with the Exhibits attached hereto, as
the same may be amended or otherwise modified from time-to-time as permitted
herein. 

          “Contract
Price” means the total aggregate price payable to Contractor by Company as
set forth in Exhibit A, and as adjusted pursuant to the provisions of this
Contract. 

          “Contractor”
has the meaning given to it in the Preamble. 

          “Contractor
Default” means the failure or delay of Contractor or its representatives,
agents, subcontractors or suppliers to meet Contractor’s material obligations
under this Contract, including obligations identified in Section 2.1. 

          “Contractor
Hazardous Materials” has the meaning given to it in Section 2.2(h) .

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          “Contractor
Permits” means the Permits to be obtained by Contractor as described
in Exhibit G. 

          “Contractor’s
Representative” has the meaning given to it in Section 2.3.2. 

          “Day”
means a twenty-four (24) hour period beginning and ending at 12:00
midnight. 

          “Defect”
or “Defective” means any Work, including any part or component
thereof, that: (i) contains improper or inferior workmanship; (ii) fails to
conform in any material respect with the relevant Drawings or Specifications,
including any Change in the Work; (iii) is not manufactured in any material
respect with the applicable Drawings and the Specifications; and (iv) is not
free from defects in material and workmanship. 

          “Defect
Remedy Work” means Contractor’s repair or replacement of any Defect or Work
that is Defective. 

          “Delay
Liquidated Damages” has the meaning given to it in Section 4.6. 

          “Delayed
Payment Rate” means a per annum rate of interest equal to the lesser of (i)
twelve percent (12%) and (ii) the maximum rate permitted by applicable Law.

          “Documents”
means any design, drawing (including the Drawings), certificate, specification
(including the Specifications), report, studies, model, program, record,
pattern, sample, written information and data and other document of whatever
nature (including a record thereof in software form). 

          “Dollars”
or “$” means the lawful currency of the United States of
America. 

          “Drawings”
means the Facility drawings set forth in Exhibit C2 or otherwise provided by
Contractor to Company pursuant to Article 9 or other terms of this Contract,
including the As-Built Drawings. 

          “Effective
  Date” means the date of this Contract.

          “Facility”
means the unit number one geothermal power plant’s geothermal and injection
pipelines to be located in the Raft River Known Geothermal Resource Area in
Cassia County in the State of Idaho to be constructed as part of the development
of the Project on the Site, all as more particularly described in exhibits C1
and C2, but for avoidance of doubt excludes the power plant, cooling tower
make-up water wells and their associated pipelines, wellhead equipment,
transmission lines, distribution lines and their associated transformers and
disconnects. 

          “Final
Completion” means the satisfaction or deemed satisfaction of each of the
following: (a)completion of the work required in exhibits C1 and C2; (b)
Contractor has delivered final lien waivers and releases from Contractor and
Contractor’s Subcontractors to Company; (b) all Documents which are to be
delivered to Company, by Contractor on or before the Final Completion Date
pursuant to this Contract have in-fact been delivered to Company; (c) all of
Contractor’s supplies, personnel, rubbish and Contractor Hazardous Materials
have been 

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removed from the Site; and (d) all Work other than Punch List
Items have been completed in accordance with this Agreement. 

          “Final
Completion Date” means the date upon which the Certificate of Final
Completion was issued by Contractor to Company pursuant to Section 4.7 (provided
that such Certificate of Final Completion has been subsequently countersigned by
Company pursuant to Section 4.8) . 

          “Financing
Parties” means (a) any and all lenders providing senior or subordinated
construction, interim or long-term debt financing or refinancing; and (b) any
and all equity investors providing leveraged lease-financing or refinancing, and
in each case any trustee or agent acting on their behalf, for the Facility.
Company shall provide written notice to Contractor of the names of all of the
Financing Parties.

          “Force
Majeure” means any war, declared or not, invasion, armed conflict or act of
public enemy, blockage, embargo, revolution, insurrection, riot, civil
commotion, act of terrorism, or sabotage provided that any such event occurs
within or directly involving the United States or any individual state, or any
other country from which machinery, equipment or material for the Facility are
procured or transported through, an act of God, including, but not limited to,
lightning, fire, earthquakes, volcanic activity, floods, storms or unusual
weather conditions, cyclones, typhoons, or tornadoes, labor disputes including
strikes, or slowdowns, or lockouts that extend beyond the Facility or are
widespread or nationwide, or any other event or circumstances or combination of
event(s) or circumstances beyond the reasonable control of a Party, that have a
real, quantifiable and adverse impact on cost or performance of the Work. 

          
“Governmental Authority” means any local, state, regional, central
or national government administrative, judicial or executive organs, but
excluding any similar foreign or multinational entity, that has or purports to
have or asserts or attempts to assert, jurisdiction to legislate, decree,
adjudicate or enforce any decision related to, or bearing on, the Facility or
the Work. 

          “Guaranteed
  Final Completion Date” means the Guaranteed Final Completion Date identified
  as on or before January 15, 2007, as the same may be amended from time-to-time
  in accordance with this Contract.

          
“Hazardous Materials” means any hazardous or toxic substances, materials
and wastes which are regulated or are classified as hazardous or toxic by any
Governmental Authority having jurisdiction over the Site, including, but not
limited to, those substances included in the definitions of “Hazardous
Substances,” “Hazardous Materials,” “Toxic Substances,” “Hazardous Waste,”
“Solid Waste,” “Pollutant,” or “Contaminant"” in any federal,
state, local or other Law pertaining to public or worker health, welfare or
safety or the environment, including, but not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §
9601 et seq., as amended by the Superfund Amendments and Reauthorization
Act of 1986; the Resource Conservation and Recovery Act of 1976, as amended, 42
U.S.C. § 6901 et seq.; the Federal Clean Air Act, 42 U.S.C. § 7401-7626;
the Federal Water Pollution Control Act and Federal Clean Water Act of 1977, as
amended, 33 U.S.C. § 1251 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. § 135 et seq.; the Federal 

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Environmental Pesticide Control Act, the Federal Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; the Federal Safe
Drinking Water Act, 42 U.S.C. § 300(f) et seq.; the Emergency Planning
and Community Right-To-Know Act of 1986, 42 U.S.C. § 11001 et seq.; and
the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq.
and in the regulations promulgated pursuant to those laws. 

          “Information”
means any Drawings, Specifications or other information furnished directly or
indirectly by the other Party hereto in connection with the Contract and the
Facility and the Project whether such Information has been furnished prior to,
during or following termination of the Contract in connection with the
performance of this Contract. 

          “Insolvency
Event” means the bankruptcy, insolvency, liquidation, administration or
other receivership or dissolution of a Party and any equivalent or analogous
Proceedings by whatever name known and in whatever jurisdiction and any step
taken (including the presentation of a petition or the passing of a resolution)
for or with a view to any of the foregoing. 

          “Law”
means any federal, state, commonwealth, local or other constitution, charter,
act statute, law, ordinance, treaty, resolution, directive (to the extent having
the force of law), code, rule, regulation, order, specified standards or
objective criteria contained in any applicable permit or approval, which
standards or criteria must be met in order for the Facility to be constructed
and operated lawfully, and other legislative or administrative action of any
Governmental Authority, or a final decree, judgment or order of a court, or any
applicable engineering, construction, safety or electrical generation code.

          
“Liability” or “Liabilities” means any fine, penalty, damage,
loss, cost, claim or expense or other liability (including any related fees,
expenses and disbursements of a Party’s counsel). 

          “Limited
Notice to Proceed” means the notice issued by Company to Contractor
authorizing Contractor to commence work under this Contract on items listed in
Exhibit N.

          “Liquidated
Damages” means Delay Liquidated Damages. 

          “Major
Vendor” means any vendor engaged directly by Contractor to provide equipment
for incorporation into the Work at the Site, who’s Work is valued in excess of
that provided in Section 17.3. 

          “Materials”
means all equipment, supplies, apparatus, instruments, machinery, parts, tools,
components, appliances, spare parts and appurtenances thereto to be supplied
under this Contract by Contractor as described in or required by the Scope of
Work. 

          “Month”
means a period beginning at 12:00 midnight on the last Day of the preceding
calendar month and ending at 12:00 midnight on the last Day of the calendar
month. 

          “MW”
means megawatts. 

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          “Notice
to Proceed” means the notice issued by Company to Contractor authorizing
Contractor to commence the Work under this Contract. 

          “Owner
Supplied Materials” means pipeline and other materials provided by the Owner
for incorporation into the Work, and more fully defined in Exhibit C1 

          “Party”
and “Parties” have the meanings given to them in the Preamble. 

          “Payment
Schedule” means the payment schedule for payment of the Contract Price as
set forth in Exhibit A.

          “Performance
Tests” means the tests as outlined in Article 6 to be carried out to
determine whether the Work satisfies the performance requirements set forth in
this Contract.

          “Permits”
means the permits, approvals and licenses required from Governmental Authorities
necessary for the construction, operation and maintenance of the Facility and
the performance of the Work.

          “PPA”
means the Firm Energy Sales Agreement in effect between Idaho Power Company and
US Geothermal Inc. under which the output from the Facility would be delivered
and bought. 

          “Proceeding”
means any claim, suit, demand, allegation, arbitration, dispute or other action
process, or proceeding whether actual or threatened. 

          “Project”
means the geothermal power generation project unit number one to be constructed
in the Raft River Known Geothermal Resource Area in Cassia County in the State
of Idaho, including the Facility and the related power plant, geothermal
production and re-injection wells, and the gathering system pipelines. 

          “Prudent
Industry Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time-to-time, as are commonly used in operations of privately-owned
geothermal electric power generation facilities similar to the Facility, which
in the exercise of reasonable judgment and in light of the facts known at the
time the decision was made, are considered good, safe and prudent practice in
connection with the operation and maintenance of geothermal electric power
generation facilities similar to the Facility. Prudent Industry Practices are
not intended to be limited to the optimal practices, methods, equipment,
specifications and standards, but rather to be the practices, methods,
equipment, specifications and standards generally accepted in the
privately-owned geothermal electric power industry. 

          “Punchlist
Items” means unfinished items of Work (such as Spare Parts, painting,
fine-finish grading or clean-up, updating of Drawings, manuals or other
Documents) the lack of which or the failure of which to complete (considered
individually or in the aggregate of all Punchlist Items) does not or will not
adversely affect the, safety or integrity of the Facility and does not impact
the performance of the Facility. 

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          “Safety
Plans” has the meaning given to it in Section 2.3.4. 

          “Safety
Report” has the meaning given to it in Section 2.3.4. 

          “Schedule”
means a Gantt Chart as provided in Exhibit B, as it may be amended from
time-to-time as set forth in this Contract, which sets forth the Work
performance milestone schedule for the Facility. 

          
“Scope of Work” means the specific delineation of items of Work to be
performed by Contractor as set forth in exhibits C1 and C2, which may be
modified pursuant to a Change Order pursuant to Article 8, and which shall
conform to the Drawings and the Specifications. 

          
“Site” means the area encompassed by the Facility, together with spaces,
roads, easements, privileges, access rights, rights-of-way and other rights and
interests in land that has been acquired or will be acquired by Company to
develop, engineer, build, own, operate and maintain the Project and appurtenant
facilities, including any associated working and laydown areas for Contractor.

          
“Specifications” means the Pipeline System Criteria and Project Scope
(Exhibit C1), and the Drawings and General Notes (Exhibit C2) for the Facility
as set forth in the referenced exhibits. 

          
“Subcontract” means an agreement between Contractor and a Subcontractor
for the performance of any portion of the Work. 

          “Subcontractor”
means any person or entity, other than Contractor’s employees, engaged by
Contractor to perform services relating to the Work. 

          
“Tax” means any present or future tax, charge, levy, impost or
duty of any kind whatsoever, or any amount payable on account of or as security
for any of the foregoing, imposed by any Governmental Authority together with
any penalties, additions, liens, surcharges and interest relating thereto. 

          “Warranty
Period” has the meaning given to it in Section 10.2. 

          “Work”
means all of the work, services and other duties, obligations and
responsibilities that are to be carried out by or under the direction of
Contractor pursuant to this Contract, including that work specifically described
as Contractor liabilities in the Scope of Work. 

          1.2      Interpretation

                    
1.2.1 Where the context requires, words importing the singular shall include the
plural and vice versa, and words importing persons shall include entities.

                     1.2.2
A reference in this Contract to any Article, Section, Exhibit, Clause or
Paragraph is, except where it is expressly stated to the contrary, a reference
to such article, section, exhibit, clause or paragraph in this Contract.

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  1.2.3 Headings are for convenience of reference only.

                     1.2.4
Each reference to this Contract shall include a reference to each agreed
variation of or supplement to this Contract as may be amended, varied or
supplemented from time-to-time. 

                     1.2.5
Where the context requires, any reference to a person, entity or Party shall
include such person’s, entity’s or Party’s successors and permitted assigns.

                     1.2.6
References to the word “include” or “including” are to be construed without
limitation. 

          1.3      Documents
Included 

                     This
Contract shall consist of this document and the following Exhibits, which are
specifically incorporated herein and made a part hereof by this reference. 

	 	Exhibit A 	Contract Price and Payment Schedule 
	 	 	 
	 	Exhibit B 	Schedule (Gantt Chart) 
	 	 	 
	 	Exhibit C1 	Pipeline System Criteria and Project Scope
  
	 	 	 
	 	Exhibit C2 	Drawings and General Notes. 
	 	 	 
	 	Exhibit D 	Performance Test Protocols 
	 	 	 
	 	Exhibit E 	Warranty Claim Procedures 
	 	 	 
	 	Exhibit F 	Approved Vendor List 
	 	 	 
	 	Exhibit G 	Permits 
	 	 	 
	 	Exhibit H 	Reserved 
	 	 	 
	 	Exhibit I 	Certificate of Final Completion 
	 	 	 
	 	Exhibit J 	Form of Final Lien Waiver 
	 	 	 
	 	Exhibit K 	Liquidated Damages 
	 	 	 
	 	Exhibit L 	Change Order Form 
	 	 	 
	 	Exhibit M 	Change Order Request Form 
	 	 	 
	 	Exhibit N 	Work Items Prior to Notice to Proceed
  

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ARTICLE
2      CONTRACTOR
RESPONSIBILITIES 

          2.1      General
Responsibilities 

                      2.1.1     
Except as otherwise expressly set forth in this Contract, Contractor, in
consideration of the Contract Price, shall provide, furnish and perform, or
cause to be provided, furnished or performed, Materials, supervision, labor and
services required for the development, procurement, manufacturing, transport to
Site, quality assurance, inspection, erection, construction, and commissioning
of the Facility as specified in the Scope of Work and in accordance with the
provisions of this Contract. The scope does not include design of the pipeline
system. 2.1.2 Contractor shall diligently prosecute the Work in a good and
workmanlike manner in accordance with the Schedule and in accordance with the
provisions of this Contract. 

          2.2      Specific
  Responsibilities

          Without
limiting the generality of Section 2.1.1 and subject to the terms and conditions
set forth in this Contract, Contractor shall at its own expense furnish,
undertake, provide or cause to be furnished, undertaken or provided the
following: 

                         (a)      obtain
  the Contractor Permits from the applicable Governmental Authorities as shown
  in Exhibit G;

                         (b)      coordinate
its activities pursuant to this Contract with those activities of Company’s
other contractors as requested by Company; provided, however, that such
coordination does not delay or otherwise unreasonably interfere with
Contractor’s performance of the Work in accordance with the Schedule;

                         (c)      coordinate
its activities with the Raft River Highway District for that part of the Work
that will involve crossing county roads. 

                         (d)     
clearing, excavation, backfilling, compaction, consolidation and removal or
importation of related materials required with respect to preparation of the
Site in accordance with the Scope of Work; 

                         (e)      procurement,
supply and transportation to the Site of all Materials, except Owner Supplied
Materials, necessary to complete the Facility; 

                         (f)      supervision
  and direction of construction and other Work activities on the Site, including
  construction by Subcontractors, and the coordination of the Work under this
  Contract; 

                         (g)      keep
the Site from waste materials or rubbish caused by Contractor’s activities and
in a reasonably presentable condition given the nature of the Work. Contractor
may store all rubbish and construction debris in an authorized disposal area
furnished by Company as provided in Section 3.1(f) . Contractor shall be
responsible for the containment of any such material within such area. All
rubbish and construction debris caused by Contractor’s activities shall be
disposed through a licensed waste hauler, or in a licensed waste disposal site,
to be paid for by the Contractor. 

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                         (h)     
  remediate and dispose of in accordance with applicable Law any Hazardous Materials
  generated, transported or released by Contractor or any Subcontractor on or
  about the Site (“Contractor Hazardous Materials”);

                         (i)      provide
periodic reports to Company, not less frequently than monthly, regarding the
progress of the Work, including a Gantt Chart in Microsoft Project format in
sufficient detail to allow a reasonably experienced engineer to evaluate the
progress of the Work;

                         (j)      provide
periodic reports to Company, not less frequently than monthly, regarding the
progress of the Work, including a Gantt Chart in MS Project format in sufficient
detail to allow a reasonably experienced engineer to evaluate the progress of
the Work; 

                         (k)     
test the Facility as detailed in Exhibit C1 using test protocols provided in
Exhibit D; and 

                         (l)      clearance
of the Site of temporary structures, surplus Materials and tools that were
delivered or created by Contractor through the course of the Work, upon
completion of field work; provided that Contractor shall offer to sell to
Company at cost any such temporary structures, surplus Materials and tools that
Contractor does not want to retain. 

                         (m)     
  Contractor will coordinate with Owner regarding crops and field access.

          2.3      Contractor’s
Personnel and Labor Relations 

                    2.3.1      Contractor
shall provide qualified and experienced personnel to perform the Work at the
Site. 

                    2.3.2      Contractor
shall designate, by written notice to Company, a representative who shall act as
a single point of contact with Company in all matters relating to the Work
(“Contractor’s Representative”). Contractor’s Representative shall have
full authority to act on behalf of Contractor for all purposes in connection
with this Contract. 

                    2.3.3      Company
shall be entitled by written notice to Contractor to object to any
representative or person employed by Contractor (including Contractor’s
Representative) or any Subcontractor in the execution of the Work who, in the
reasonable opinion of Company, is incompetent or negligent, or engaged in
misconduct, and Contractor shall promptly remove such person from the Work and
appoint a suitable replacement, or ensure that the relevant Subcontractor does
so. 

                    2.3.4      Contractor
shall develop, present to Company and implement a safety plan for its own
construction activities on the Site and for emergency situations prior to the
commencement of Work at the Site (“Safety Plans”). During performance of
the Work, Contractor shall publish work safety rules for the Site in compliance
with the Safety Plan, which safety rules shall apply to any and all visitors to
the Site, including representatives of Company. Each week (or other interval
mutually agreeable to Company and Contractor), Contractor shall prepare and
provide to Company a written report (“Safety Report”) listing (i) any
breaches or violations of the Safety Plan, (ii) a description of any incidents
resulting therefrom, (iii) incidents 

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related to safety issues at the Site, (iv) the cause of any
such incident, (v) the nature of such incident, (vi) the severity of such
incident, and (vii) the remedial actions planned to remedy such incident and
prevent such incident from occurring in the future. 

                    2.3.5     
Contractor shall be responsible for the security and protection (i) of its
equipment, supplies and tools used in connection with the Work through the Final
Completion Date, and (ii) for all of the other property owned or leased by
Contractor or any of its Subcontractors located at the Site at areas thereon
provided by Company or stored or warehoused off the Site through the Final
Completion Date. Contractor shall use due care to protect any of Company’s
property at any time in its possession or under its control while performing the
Work which shall not be less than the care exercised by Contractor with its own
property and Contractor shall be responsible for any damage to such property
resulting from its failure to use such care. 

                    2.3.6      Contractor,
its Subcontractors, agents and employees shall observe all pertinent and
reasonable regulations and rules issued by Company to Contractor which are in
effect at the Site, as the case may be, regarding passes, badges and proper
conduct on such Site. Company may issue reasonable modifications to such
regulations and rules from time-to-time. 

                    2.3.7     
Company and its agents, employees and other contractors shall observe all
pertinent and reasonable regulations and rules issued by Contractor, including
the Safety Plan, which are in effect at the Site, as the case may be, regarding
passes, badges and proper conduct on such Site. Contractor may issue reasonable
modifications to such regulations and rules from time-to-time. 

          2.4     
Representations and Warranties of Contractor 

          Contractor
represents and warrants to Company that: 

                         (a)      Contractor
  is a corporation duly organized, validly existing and in good standing under
  the Laws of the state of Idaho and has the requisite legal power and authority
  to execute, deliver and perform this Contract; 

                         (b)      the
  execution, delivery and performance by Contractor of this Contract has been
  duly authorized by all requisite action of Contractor, and there is no provision
  in its charter documents requiring further consent for such action by any other
  person or entity; and

                         (c)      this
Contract constitutes the legal, valid and binding obligation of Contractor,
enforceable against Contractor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

ARTICLE
3      COMPANY RESPONSIBILITIES

          3.1      General
Responsibilities 

          Company
  shall, at Company’s expense, furnish, undertake, provide or cause to be
  furnished, undertaken or provided the following: 

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                         (a)      make
  available to Contractor and its Subcontractors by the time specified in the
  Schedule, and continuing until the end of the Warranty Period, the Site, including
  space for all construction facilities, and laydown and storage areas;

                         (b)     
obtain and maintain in effect all Company Permits from the Governmental
Authorities in a timely manner as required to permit Contractor and its
Subcontractors to proceed with the Work in accordance with the Schedule;

                         (c)      prepare
  and/or obtain all environmental impact assessments, studies and statements and
  geotechnical reports required in connection with the ownership, financing, construction,
  operation and maintenance of the Facility and the performance of this Contract;

                         (d)      furnish
  to Contractor copies of any environmental impact assessment, studies and statements
  and geotechnical reports prepared or obtained as provided in Section 3.1(c)
  and any information, a power of attorney (if required) and any other items reasonably
  necessary for Contractor to obtain the Contractor Permits or perform the Work
  in a timely manner as required to permit Contractor and its Subcontractors to
  proceed with the Work in accordance with the Schedule;

                         (e)     
  provide or make arrangements to provide electrical distribution lines and electrical
  equipment (transformers, disconnects, etc.) to the tie-in point at the geothermal
  wells and branch connection; 

                         (f)      provide
to Contractor a rubbish and construction debris (but not for Contractor
Hazardous Materials) storage area on or adjacent to the Site. Disposal of such
Contractor materials stored therein shall be the responsibility of the
Contractor, pursuant to Section 2.2 (g). 

                         (g)      any
removal or disposal of the existing transite pipe on the Site exposed during the
Work; and, 

                         (h)      remediate
and dispose of in accordance with applicable Law any Hazardous Materials that
are found or are uncovered on or about the Site other than Contractor Hazardous
Materials that are the responsibility of Contractor as provided in Section
2.2(h) 

                         (i)      provide
to Contractor an area where cleared and grubbed materials can be disposed. 

          3.2      Company’s
Representative 

          Company
shall designate by written notice to Contractor a representative who shall act
as a single point of contact with Contractor in all matters relating to the Work
(“Company’s Representative”). Company’s Representative shall have full
authority to act on behalf of Company for all purposes in connection with this
Contract. 

          3.3      Representations
and Warranties of Company

          Company
represents and warrants that: 

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                         (a)     
  Company is a corporation duly organized and validly existing under the Laws
  of the State of Idaho and has all requisite legal power and authority to execute,
  deliver and perform this Contract;

                         (b)     
the execution, delivery and performance by Company of this Contract have been
duly authorized by all requisite corporate action of Company and there is no
provision in its charter documents requiring further consent for such action by
any other person or entity; and 

                         (c)      this
Contract constitutes the legal, valid and binding obligation of Company,
enforceable against Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

ARTICLE
4      COMMENCEMENT OF WORK

          4.1      Notice
to Proceed 

          Company
shall issue a Notice to Proceed to Contractor only at such time as Company has
arranged financing for Company to be able to meet its obligations under this
Contract and to develop the Project and pays to Contractor simultaneously with
the issuance of such Notice to Proceed the amount specified for the first
payment milestone set forth in the Schedule, if any. At the mutual agreement of
the Parties, Company shall have the option of issuing a Limited Notice to
Proceed to allow the Contractor to begin performing such work as agreed to
between the Parties in advance of the Notice to Proceed. The Company shall have
the right to terminate or suspend work prior to issuing a Notice to Proceed
without financial obligations beyond the amount agreed upon to cover the period
up to the Notice to Proceed. 

          4.2      Commencement

          Subject
to Section 4.1, Contractor shall commence performance of the Work promptly upon
receipt of a Notice to Proceed from Company (“Commencement Date”).
Contractor shall thereafter proceed diligently to perform the Work and furnish
sufficient forces and construction equipment to perform the Work in accordance
with the Schedule. The contract amount and Guaranteed Completion Date are based
upon the Contractor receiving a Notice to Proceed on or before June 1, 2006.

          4.3     
Reserved 

          4.4      Reserved

          4.5      Reserved

          4.6      Delay
Liquidated Damages

          The
Parties agree that it would be extremely difficult and impracticable under the
presently known and anticipated facts and circumstances to ascertain and fix the
actual damages that Company would incur should Contractor fail to achieve Final
Completion by the Guaranteed 

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Final Completion Date, and accordingly, the Parties hereby agree
  that if Contractor fails to so achieve Final Completion by the Guaranteed Final
  Completion Date, then Company shall be entitled to recover from Contractor as
  liquidated damages for such delay, and not as a penalty, the amounts set forth
  in Exhibit K (“Delay Liquidated Damages”). The Delay Liquidated
  Damages are, subject to Article 19, Company’s sole and exclusive remedy
  in the event Contractor fails to achieve any of the milestones for the Facility,
  including Final Completion, by the dates set forth in the Schedule. Company
  and Contractor further agree that the Delay Liquidated Damages are a good faith
  estimate of the damages Company would suffer.

          4.7      Final
Completion 

          When
all of the following conditions have been met with respect to the Facility,
Contractor shall issue to Company a Certificate of Final Completion in
substantially the same form as that set forth in Exhibit I: 

                         (a)      except
  for the Punchlist Items and As-Built Drawings, the Facility and Work has been
  completed and complies with exhibits C1 and C2, referenced specifications, and
  applicable Laws;

                         (b)     
the Facility has satisfied the checks and tests outlined in Article 6 ; 

                         (c)      any
  amount finally determined due for Delay Liquidated Damages has either been paid
  or agreed and shall be deducted from the final payment of the Contract Price;

                         (d)      the
list of Punchlist Items (if any) for the Facility have been identified by
Contractor and provided to Company as provided in Section 4.9; 

                         (e)      all
other deliverables identified in this Contract with respect to the Facility
(except for the As-Built Drawings or deliverables appearing in the Punchlist
Items provided by Contractor), including documents and materials described in
Article 9, have been completed in accordance with the provisions hereof and have
been provided to Company.; and 

                         (f)      all
  rubbish accumulated by Contractor in the Company-designated disposal area has
  been removed and disposed in accordance with Section 2.2(g) .

          4.8      Final
Completion Certificate 

          Within
fifteen (15) Days following the receipt of the Certificate of Final Completion,
Company shall inspect the Facility and review all Work and services performed by
Contractor with respect thereto, and shall either (i) deliver to Contractor the
Certificate of Final Completion countersigned and certifying that the Work
requirements of this Contract (other than the Punchlist Items identified by
Contractor and the As-Built Drawings) have been fully satisfied for the Facility
and Final Completion of the Facility has accordingly been achieved, or (ii) if
reasonable cause exists for doing so, notify Contractor in writing that Final
Completion of the Facility has not been achieved, stating in detail the reasons
therefore. In the event that Company determines that Final Completion has not
been achieved and Contractor has not disputed Company’s determination,
Contractor shall promptly take such corrective action or perform such 

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additional Work or other services as shall be necessary to
achieve Final Completion of the Facility and shall issue to Company another
Certificate of Final Completion. Such procedure shall be repeated until Final
Completion of the Facility has been achieved; provided, however, that Company
shall respond to any such subsequent Certificate of Final Completion within ten
(10) Days following the receipt thereof. If Company fails to provide the
Certificate of Final Completion or as contemplated in (ii) above within the
aforementioned period, Final Completion of the Facility shall be deemed to have
been achieved. 

          4.9      Punchlist
  

          Contractor
shall provide to Company a list of all Punchlist Items and the estimated cost
thereof prior to the issuance of the Certificate of Final Completion. Within
fifteen (15) Days following the receipt of this list of Punchlist Items, Company
shall notify Contractor in writing whether Company has any objections to that
list or the estimates thereof. If Company has any objections, including
additions, the Parties shall use good faith efforts to resolve such objections.
If no agreement can be reached, the provisions of Article 14 shall be invoked to
resolve the dispute. Two hundred percent (200%) of the estimated value of such
Work, as reasonably decided by Company, shall be retained or deducted from the
Contract Price by Company or, at Contractor’s option, paid to Company by
Contractor pending satisfactory rectification and/or completion. Contractor
shall rectify or complete to the reasonable satisfaction of Company within the
time stated in the Certificate of Final Completion any such Punchlist Items
listed. In the event Contractor fails to rectify or complete any Punchlist Items
listed, Company may arrange for the outstanding work to be done and the cost
thereof shall be certified by Company and deducted from the Contract Price or,
at Contractor’s option, paid to Company by Contractor. Upon satisfactory
rectification and/or completion of such Work, the money retained, deducted or
paid under this Section 4.9 in relation thereto shall be reimbursed to
Contractor by Company. During the period after Final Completion, Contractor and
Company shall cooperate to ensure that the performance of the Work does not
unreasonably interfere with the commercial operation of the Facility and at the
same time allowing the remaining Work to be performed in a prompt and efficient
manner. As soon as practicable after the completion of all Punchlist Items,
Contractor shall remove all of its equipment and Materials and complete the
removal of all Work-related waste material and rubbish from and around the Site.

ARTICLE
5      COMPENSATION AND PAYMENT

          5.1      Contract
Price 

                    5.1.1      As
compensation for the performance of the Work, Company shall pay Contractor, in
the manner and at the times hereinafter specified, the Contract Price, which
amount may be subject to adjustment in accordance with the terms of this
Contract. 

                    5.1.2      The
Contract Price includes any and all Taxes imposed directly or indirectly by any
Governmental Authority including export taxes, importation duties and income
Taxes imposed on Contractor. 

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                    5.1.3      Contractor
shall be responsible for paying all State of Idaho sales and use taxes due as a
result of the Work in the construction of the Facility to the State of
Idaho.

                    5.1.4      Upon
request of Company, Contractor shall:

                         (a)      promptly
provide to Company evidence of its remittance to the applicable Governmental
Authority of all state and local sales and use taxes that Contractor collects
from Company under this Contract; and 

                         (b)      provide
Company with sufficient level of detail such that Company is able to claim any
State of Idaho sales and use tax refund for geothermal energy projects for which
it may be eligible under State of Idaho law. 

          5.2      Payment
Schedule 

          Exhibit
A sets forth the payment installments payable by Company in respect of Work
performed by Contractor. The Schedule shall be used as the basis for preparation
of invoices and for payments. Any cumulative acceleration of the Payment
Schedule of more than fourteen (14) Days must reflect a reciprocal acceleration
in the Guaranteed Final Completion Date. 

          5.3      Payment

                    5.3.1     
Contractor shall present monthly invoices based on progress completion and
completion of milestones as provided in the Payment Schedule. Except as provided
below in this Section 5.3, invoices that are presented for payment shall be paid
within thirty (30) Days of Company’s receipt of such invoice. 

                    5.3.2      Within
fifteen (15) Days of its receipt of an invoice and such Documents, Company’s
Representative shall give written notice to Contractor of any objections that
Company’s Representative has with regard to the accomplishment of such progress
amounts or milestones. If Company’s Representative fails to provide such notice
within such fifteen (15) Day period, the progress amount or milestone shall be
deemed accomplished and Contractor shall be entitled to payment. If Company’s
Representative provides written notice of objection to the accomplishment of
such progress amount or milestone and said Documentation within the period
described above, and the contents of Company’s Representative’s notice is not in
dispute, Contractor shall resubmit the corrected invoice and/or Documentation,
and the above-described approval process shall reapply except that the response
time shall be ten (10) Days rather than fifteen (15) Days. 

                    5.3.3     
If pursuant to Section 5.3.2, Company’s Representative disputes any amounts
invoiced by Contractor within the specified time period, Company shall promptly
pay to Contractor the undisputed amount of such invoice in the manner provided
in Section 5.3.1, and any disputed amount that is ultimately determined to have
been payable shall be paid with interest from the date the item was payable to
and including the date of payment, in accordance with the provisions of Section
5.8. The Parties shall resolve their differences regarding the disputed amount
in accordance with the dispute resolution procedures set forth in Article 14.

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                    5.3.4      The
Owner and Contractor will enter into a Joint Checking Agreement whereby
Subcontractors and suppliers will be issued joint checks from the Owner.
Contractor will be required to obtain and provide to Owner lien releases from
Subcontractors and suppliers for progress and final payment for materials and
services.

          5.4      Final
Completion Payment for the Facility 

          No
  later than thirty (30) Days after the Final Completion Date, Contractor shall
  submit to Company a statement summarizing and reconciling all previous invoices,
  payments and Changes in the Work, with respect to the Work, and a waiver of
  liens as provided in Section 5.7 from Contractor for the Facility and such other
  data as Company may reasonably request establishing payment of or surety for
  payment of such unpaid Contractor obligations. Within thirty (30) Days
  of the receipt of such statements and lien waiver, Company shall pay Contractor
  the remaining portion of the Contract Price (except with respect to amounts
  remaining to be paid by Company under the Contract for retainage and Punchlist
  Items less any unpaid Liquidated Damages owing by Contractor). Any disputes
  regarding a final payment shall be handled in accordance with the procedure
  set forth in Article 14. 

          5.5     
Payments Not Acceptance of Work 

          No
payment made by Company to Contractor shall be considered or deemed to represent
that Company has inspected the Work or checked the quality or quantity of the
Work and shall not be deemed or construed as an approval or acceptance of any
Work or as a waiver of any claim or right Company may have hereunder. 

          5.6      Payment
of Subcontractor 

          Contractor
shall promptly pay, in accordance with the terms and conditions set forth in the
respective Subcontract, each Subcontractor the amount to which said
Subcontractor is entitled. Contractor shall, by an appropriate agreement with
each Subcontractor, require each Subcontractor to make timely payments to its
laborers, suppliers and subcontractors in a similar manner.

          5.7      Waiver
of Liens 

          As
a condition precedent to the making of the final Payment Schedule payment by
Company hereunder, Contractor shall be required, upon request by Company, to
supply Company with a waiver and release of liens and security interests to the
extent of such payment in the form attached as Exhibit J, duly executed by
Contractor. 

          5.8      Interest

          Amounts
not paid by either Party to the other when due under any provision of this
Contract, including the provisions of this Article 5, shall bear interest, from
the date payment was due to and including the date of payment, at the Delayed
Payment Rate. 

          5.9      Retainage

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          Company
shall make progress payments on account of the Contract Price on the basis of
the Payment Schedule contained in Exhibit A as may be modified. 

          Prior
to Final Completion, each progress payment will be made in an amount equal to 90
percent of the Work completed, with the balance being retainage, less such
amounts Company may withhold, including but not limited to liquidated damages.
Upon payment of 50 percent of the Contract Price as amended due to Change
Orders, and provided the Owner is satisfied with the performance and progress of
Work, the Owner may reduce or eliminate further withholding of retainage.

Upon completion to the satisfaction of the Company’s Representative
  of all punchlist items per Section 4.9, Company shall within 30 days pay all
  amounts retained in accordance with this section and Section 4.9. Reimbursement
  for retainage will include a payment for interest on retained money that will
  be based on an annual interest rate of 4 percent. 

ARTICLE
6      TESTING 

          6.1      General

          A
general listing of the required tests is provided in Exhibit C1. Development and
implementation of test procedures and protocols shall be the responsibility of
Contractor. These procedures and protocols, as developed by the Contractor, and
agreed to by the Company, shall be provided in Exhibit D prior to Contract
signature. Contractor shall be responsible for providing all supplies required
for carrying out such tests in accordance with this Contract. Company may, at
its expense, require independent calibration of any and all instruments used by
Contractor and/or supply Company’s own instruments to be used in addition to
those of Contractor. 

          6.2     
Test Procedures 

          The
Performance Tests shall be performed under normal operating conditions as
described in Exhibit D hereto and in accordance with all applicable Laws in
effect on the date thereof. 

          6.3      Notice
of Testing 

          Contractor
shall notify Company at least fourteen (14) Days in advance of the actual date
that Contractor shall start conducting tests. Company’s Representative shall be
entitled to attend at the time and place appointed in connection with the
performance of the tests. If Company’s Representative fails to attend at the
time and place appointed for the tests, Contractor shall be entitled to proceed
with the tests in their absence. The tests shall then be deemed to have been
made in the presence of Company’s Representative. 

          6.4      Deficiencies

          If
deficiencies are found, the Contractor shall take whatever actions are necessary
to achieve compliance with the Contract provisions, at no additional cost to the
Owner.

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Corrections shall be made within a reasonable period of time as
agreed to by both the Contractor and Owner, but under no circumstances shall
extend beyond sixty (60) days. 

ARTICLE
7      INTENTIONALLY OMITTED

ARTICLE
8      CONSTRUCTION SUSPENSION
AND ACCELERATION; CHANGE ORDER 

          8.1      Construction
Suspension and Acceleration 

                    8.1.1      Company
may order Contractor to suspend the Work, or any part thereof, for such a time
and in such a manner as Company may consider necessary or desirable. Contractor,
during such a suspension, shall properly protect and secure the Work, or such
part thereof, so far as is necessary in the opinion of Company. In the event of
such order to suspend the Work, or any part thereof, and such suspension is not
the result of a Contractor default, Contractor shall be entitled to a Change
Order for adjustments pursuant to this Article 8 in the Contract Price and the
Schedule (including the Guaranteed Final Completion Date) as may be affected by
such suspension. 

                    8.1.2      Company
  may order Contractor to accelerate the progress of the Work, or any part thereof,
  for such a time and in such a manner as Company may consider necessary or desirable
  provided that such acceleration is reasonably practicable. In the event of such
  order to accelerate the Work, or any part thereof, and such acceleration is
  not the result of Contractor’s default, Contractor shall be entitled to
  a Change Order for adjustments pursuant to this Article 8 in the Contract Price
  as may be affected by such acceleration.

          8.2      Change
Orders 

          Company,
without invalidating this Contract, may order Changes in the Work that are
reasonably related to and do not materially reduce or increase the Scope of
Work, in which event one or more of the Contract Price, the Schedule (including
the Guaranteed Final Completion Date) and other such parts of the Contract as
may be affected by such Change in the Work shall be adjusted as necessary. If
Company decides not to issue a Change Order after having requested a Change in
the Work, unless such Change Order request is issued in response to a Contractor
Change Order notice as set forth in Section 8.3.2, Contractor shall be entitled
to reasonable compensation for providing engineering services necessary to
respond to Company’s Change Order request. Such reasonable compensation is
defined to mean Contractor’s actual direct cost of providing such engineering
services plus a fifteen percent (15%) mark-up for overhead and profit. All
Changes in the Work shall be authorized by a Change Order and only Company or
Company’s Representative may issue Change Orders. 

          8.3     
Procedure for Change Orders. 

                     8.3.1
  As soon as reasonably possible, but in no event later than fourteen (14) Days
  after Contractor becomes aware, through the exercise of reasonable diligence,
  of any circumstances which Contractor has reason to believe may constitute a
  Change in the Work, Contractor shall issue to Company a Change Order notice
  using the Change Order Request form 

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set forth in Exhibit M. All Change Order notices shall include
preliminary documentation sufficient to enable Company to determine (i) the
factors necessitating the possibility of a Change Order; (ii) the impact which
the Change Order is likely to have on the Contract Price; and (iii) the impact
which the Change Order is likely to have on the Schedule (including the
Guaranteed Final Completion Date). Failure to give such proper and timely Change
Order notice shall, to the extent Company is prejudiced by such failure,
constitute a waiver of Contractors right to an adjustment.

                    8.3.2     
If Company desires to make a Change Order in response to a Change Order notice,
it shall submit a Change Order request to Contractor using the Change Order
Request form set forth in Exhibit M. Contractor shall promptly review the Change
Order request and notify Company promptly in writing of the options for
implementing the proposed Change Order (including, if possible, any option that
does not involve an extension of time) and the effect, if any, each such option
would have on the Contract Price, the Schedule (including the Guaranteed Final
Completion Date), or any other such part of the Contract as may be affected. The
preparation and provision of information to Company in response to a Change
Order request shall be at Contractor’s expense if such Change Order request is
issued in response to a Change Order notice issued by Contractor pursuant to
this Section 8.3.2 and otherwise Contractor shall be reimbursed for such expense
as provided in Section 8.2. 

                    8.3.3      If
Company agrees that a Change Order is in order and accepts Contractor’s
statement of the effect of such Change Order on any one or more of the Contract
Price, the Schedule (including the Guaranteed Final Completion Date), or any
other such part of the Contract as may be affected, Company shall issue a Change
Order. In the event Company disagrees with Contractor’s statement of the effect
of such Change Order on any one or more of the Contract Price, the Schedule
(including the Guaranteed Final Completion Date), or any other such part of the
Contract as may be affected, Company may proceed to issue the Change Order in
accordance with Section 8.8.

          8.4      Change
Orders Due to Contractor Error 

          Except
as provided in Sections 8.5, 8.6 or 8.7, no Change Order shall be issued and no
adjustment of any one or more of the Contract Price or the Schedule (including
the Guaranteed Final Completion Date) shall be made to the extent resulting from
any delay, failure of performance, correction of errors, and flaws or errors in
design, omissions, deficiencies or improper or defective Work, machinery,
equipment, materials, systems, supplies or other items on the part of Contractor
or any Subcontractor in the performance of the Work or provisions of, or delay
in provisions of Materials or other items of the Work where such delay was
within the reasonable control of Contractor or any Subcontractor, or any failure
of Contractor or any Subcontractor to comply with the Contract. To the extent
any delay or failure of performance was concurrently caused by Company and
Contractor, Contractor shall be entitled to an adjustment of the Schedule
(including the Guaranteed Final Completion Date) for that portion of the delay
or failure of performance that was concurrently caused, but Contractor shall not
be entitled to any adjustment of Contract Price for such concurrent delay. 

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          8.5      Change
Orders Due to Changes in Law 

          Any
Change in the Work necessitated by any Change of Law enacted after the Effective
Date (excluding therefrom any change in applicable Law relating to taxation of
Contractor’s income) shall be treated as a Change Order under Section 8.3. 

          8.6      Effect
of Force Majeure; Excused Performance 

          If
Contractor’s performance hereunder is wholly or partially prevented due to the
occurrence of a Force Majeure affecting Contractor and such Force Majeure has
caused an extension of the Guaranteed Final Completion Date or any other date
under the Schedule, Contractor shall provide to Company a written description of
Contractor’s plan to make-up Days lost under the Schedule due to the occurrence
of such Force Majeure, including an estimate of the costs of such plan. In the
event of the occurrence of a Force Majeure, Contractor shall be entitled to a
Change Order for adjustments pursuant to this Article 8 in the Schedule
(including the Guaranteed Final Completion Date) and other such parts of the
Contract as may be affected by such Force Majeure; provided, however, that there
shall be no adjustment in the Contract Price for events of Force Majeure
declared by a Party. To the extent that Company desires to pay for the costs of
acceleration of the Work or change to the Schedule (including the Guaranteed
Final Completion Date) set forth in Contractor’s proposal in order to compensate
for delays in the work caused by such Force Majeure, Company shall authorize a
Change Order increasing the Contract Price and adjusting the Schedule (in
addition to any automatic adjustments of the Guaranteed Final Completion Date).
Except for the obligations of either Party to make any required payment then due
and owing under this Contract, if either Party is rendered wholly or partially
unable to perform its obligations under this Contract because of a Force
Majeure, then such Party’s obligations that are so affected shall be excused and
suspended to the extent and during the continuance of the Force Majeure. If a
Force Majeure affecting the Contractor continues for two (2) consecutive months
or more, or if a Force Majeure affecting the Company continues for six (6)
consecutive months or more, this Contract may be terminated by either Party
pursuant to Section 19.3. This Section 8.6 is subject to and conditioned upon
the following:

                         (a)     
the non-performing Party, by exercise of due foresight, could not reasonably
have been expected to avoid, or that by the exercise of reasonable due diligence
could not have been able to overcome, such Force Majeure; 

                         (b)     
the non-performing Party gives the other Party notice describing the particulars
of the occurrence, with notice given promptly after the occurrence of the Force
Majeure, and in no event more than fifteen (15) Days after the affected Party
becomes aware of such occurrence; within fifteen (15) Days after such
occurrence, the non-performing Party shall give the other Party written notice
estimating the expected duration and probable impact on the performance of such
Party’s obligations hereunder, and continues to furnish timely regular reports
with respect thereto during the continuation of the Force Majeure; 

                         (c)     
the non-performing Party shall forecast the duration of its non-performance,
provided that it shall be no more than is reasonably required by the Force
Majeure; 

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                         (d)     
the non-performing Party shall exercise all reasonable efforts to mitigate or
limit damages to the other Party; 

                         (e)     
the non-performing Party shall exercise all reasonable efforts to continue to
perform its obligations hereunder and to correct or cure the event or condition
excusing performance; and 

                         (f)      when
the non-performing Party is able to resume performance of its obligations under
this Contract, that Party shall give the other Party written notice to that
effect and shall promptly resume performance hereunder. 

          8.7      Company-Caused
Changes 

          In
the event and to the extent (a) a failure of Company to perform, or cause
performance of, its obligations in accordance with the Contract; or (b) damage
to or destruction of any Work caused by Company cause a delay in Contractor’s
performance of the Work which impairs Contractor’s ability to meet the Schedule,
or impacts Contractor’s cost of performance of the Work, an equitable adjustment
in the Schedule (including the Guaranteed Final Completion Date) or the Contract
Price or any other such part of this Contract as may be affected shall be made
pursuant to this Article 8. To the extent Contractor cannot reasonably redeploy
labor or equipment, reasonable standby and mobilization/remobilization costs
incurred by Contractor resulting from any such delay shall be reimbursed to
Contractor monthly as such costs are incurred. 

          8.8      Price
Change 

                      8.8.1      An
  increase or decrease in Contract Price, if any, required pursuant to this Article
  8 as a result of a Change Order shall be determined by the mutual agreement
  of the Parties, and shall be paid (or reimbursed) in one or more payments in
  accordance with the following: 

                         
(a)      as a fixed price lump-sum, in an amount
proposed by Contractor (properly itemized and supported by sufficient
substantiating data to permit evaluation) and accepted by Company; or 

                      
    (b)      by unit pricing;
or 

                         
(c)      if neither of the methods set forth in
Section 8.1(a) or 8.8(b) is agreed upon by the Parties, after good faith
negotiation by the Parties, Contractor shall perform the Work on a time and
material basis. 

                      8.8.2     
  Change Order Pricing – Fixed Price. When the fixed price method
  is used to determine the value of any Work covered by a Change Order, or of
  a request for an equitable adjustment in the Contract Price, the following procedures
  shall apply: 

          1.      Contractor’s
Change Order proposal, or request for adjustment in the Contract Price, shall be
accompanied by a breakdown of the costs, including labor, material, equipment,
subcontractor costs, overhead and profit. The costs 

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shall be itemized in the manner set
forth below, and shall be submitted on breakdown sheets in a form approved by
Company. 

          2.      All
costs shall be calculated based upon appropriate industry standard methods of
calculating labor, material quantities and equipment costs. 

          3.     
If any of Contractor’s pricing assumptions are contingent upon anticipated
actions of Company, Contractor shall clearly state them in the proposal or
request for an equitable adjustment. 

          4.      The
cost of any additive or deductive changes in the Work shall be calculated as set
forth below, except that overhead and profit shall not be included on deductive
changes in the Work. Where a change in the Work involves additive and deductive
work by the same Contractor or Subcontractor, small tools, overhead, profit,
bond and insurance markups shall apply to the net difference. 

          5.     
If the total cost of the change in the Work or request for equitable adjustment
does not exceed One Dollars ($1,000)], Contractor shall not be required to
submit a breakdown of the description of the change in the Work or request for
equitable adjustment, unless change in the Work is sufficiently definitive for
Company to determine fair value. 

          6.      If
the total cost of the change in the Work or request for equitable adjustment is
Ten Thousand Dollars ($10,000) or more, Contractor shall submit a breakdown in
the following level of detail if the description of the change in the Work or if
the request for equitable adjustment is sufficiently definitive to permit the
Company to determine fair value: 

          a.      lump
sum labor; 

          b.     
lump sum equipment and material; 

          c.      lump
sum equipment usage; 

          d.      overhead
and profit as set forth below; 

          e.      insurance
and bond costs as set forth below; and 

          f.      construction-related
indirect costs and home office personnel tasks dedicated specifically to the
Facility. 

          7.      Any
request for adjustment of Contract Price based upon the fixed price method shall
include only the following items: 

          a.     
Craft Labor Costs: These are the labor costs determined by multiplying
the estimated additional number of craft hours needed to perform the change in
the Work by the hourly labor costs. Craft hours 

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should cover all direct labor. The
hourly costs shall be based on the following: 

          (1)     
Basic Wages and Benefits: Hourly rates and benefits (general foreman and
below) as set forth in Exhibit L.

          (2)     
Worker’s Insurance: Direct contributions for industrial insurance. 

          (3)     
Federal Insurance: Direct contributions required by the Federal Insurance
Compensation Act; Federal Unemployment Tax Act; and the State Unemployment
Compensation Act, if any. 

          (4)      Travel
Allowance: Travel allowance and/or subsistence, if applicable, not exceeding
those allowances prevailing in the region, which are itemized and identified
separately. 

          b.     
Equipment and Material Costs: This is an itemization of the quantity and
cost of equipment and materials needed to perform the change in the Work. Such
costs shall be developed from actual known costs, supplier quotations or
standard industry pricing guides. Equipment and material costs shall consider
all available discounts. Freight costs, express charges, or special delivery
charges, shall be itemized. 

          c.     
Construction Equipment Costs: This is an itemization of the type of
equipment and the estimated or actual length of time the construction equipment
appropriate for the Work is or shall be used on the change in the Work. Costs
shall be allowed for construction equipment to the extent used for the changed
Work, or for additional rental costs and other costs (including but not limited
to fuel, oil, minor maintenance, service, cleaning and repair of construction
equipment) actually incurred by the Contractor. Equipment charges shall be
developed from Contractor’s rate sheet or actual invoice rental costs plus costs
for fuel and oil established by using the Data Quest Rental Rate (Blue Book).
The maximum rate for standby Contractor-owned equipment shall not exceed fifty
percent (50%) of the applicable rate. 

          d.      Allowance
for Small Tools, Expendables and Consumable Supplies: Small tools
consist of tools which cost Seven Hundred Fifty Dollars ($750) or less and are
normally furnished by the performing contractor. The maximum rate for small
tools, expendables and consumables shall not exceed the following: 

          (1)     
for Contractor, eight percent (8%) of direct labor costs; and 

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          (2)      for
Subcontractors, eight percent (8%) of direct labor costs. 

          Expendables
and consumable supplies directly associated with the change in Work must be
itemized. 

          e.      Subcontractor
Costs: This is defined as payments Contractor makes to Subcontractors for
changed Work performed by Subcontractors of any tier. The Subcontractors’ cost
of Work shall be calculated and itemized in the same manner as prescribed herein
for Contractor. 

          f.      Indirect
Costs: This is defined as costs of any kind attributable to direct and
indirect delay, acceleration, or impact, added to the total cost to Company of
any Change Order, or any request for additional Work or extra payment of any
kind on the Facility. This allowance shall compensate Contractor for all
non-craft labor, including field manager and superintendent, temporary
construction facilities, field engineering, schedule updating, as-built
drawings, home office cost, office engineering, estimating costs, additional
overhead because of extended time, and any other cost incidental to the change
in the Work. 

          g.      Contingency
and Profits: The cost to which contingency and profit is to be applied shall
be determined in accordance with subparagraphs a-f above. Contingency and profit
shall be calculated as [fifteen percent (15%)] of the sum of subparagraphs a-f
above. 

          h.      Cost
of Change in Insurance or Bond Premium: This is defined as: 

          (1)      Contractor’s
Liability Insurance: The cost of any changes in Contractor’s liability
insurance arising directly from execution of the Change Order; and 

         (2)     
Performance Bond(s): The cost of the additional premium for Contractor’s
performance bond, if any, arising directly from the changed Work. 

          The
costs of any change in insurance or bond premium shall be added after
contingency and profit are calculated in accordance with subparagraph g above.

               8.8.3      Change
Order Pricing – Unit Prices. 

          1.      Whenever
  Company authorizes Contractor to perform Work on a unit-price basis, Company’s
  authorization shall clearly state: 

          a.      scope
  of work to be performed; 

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          b.      type
of reimbursement including pre-agreed rates for material quantities; and 

          c.      a
maximum not-to-exceed limit. 

          2.      Contractor
shall: 

          a.      cooperate
with Company and assist in monitoring the Work being performed; 

          b.      leave
access as appropriate for quantity measurement; and 

          c.      not
be required to perform unit-cost work past the established not to exceed limit
without Company’s prior written approval. 

          3.      Unit
prices shall include reimbursement for all direct and indirect costs of the
Work, plus contingency overhead and profit, and bond and insurance costs, and
quantities must be supported by field measurement statements signed by Company.

                    8.8.4      Change
  Order Pricing – Time and Material Prices. 

          (a)      Whenever
Company authorizes Contractor to perform Work contemplated under a Change Order
on a time and material basis, Company’s authorization shall clearly state: 

          (i).      scope
of Work to be performed; and 

          (ii).      type
of reimbursement including pre-agreed rates, if any, for material quantities or
labor. 

          (b)      Contractor
shall: 

          (i).      cooperate
with Company and assist in monitoring the Work being performed. As requested by
Company, identify workers assigned to the Work and areas in which they are
working; 

          (ii).     
identify on daily time sheets all labor, equipment and materials furnished in
accordance with this authorization. Submit copies of daily time sheets within
two (2) Days for Company’s review; 

          (iii).      leave
access as appropriate for quantity measurement; 

         (iv).      efficiently
perform all Work in accordance with this Section 8.8.2; 

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          (v).     
not be required to perform time and material work past the established not to
exceed limit(s) without Company’s prior written approval. 

          (vi).      Submit
costs in accordance with Section 8.8.1, plus profit and overhead of fifteen
percent (15%) on the sum of such costs and additional verification supported by:

          (1)      labor
priced at Contractor’s then current burdened direct labor rates, detailed on
daily time sheets; 

          (2)      invoices
for equipment and material; and 

          (3)      invoices
for construction equipment rental costs. 

          8.9      Effectiveness;
Continued Performance Pending Resolution of Disputes 

          If
a Change in the Work is initiated under this Article 8, then the Change Order
and the modifications made pursuant to such Change Order shall be effective upon
Company’s issuance of a Change Order with respect thereto. Notwithstanding a
dispute regarding any proposed or requested Change Order, or any adjustment of
one or more of the Contract Price, the Schedule (including the Guaranteed Final
Completion Date), or any other such part of this Contract as may be affected
with respect to a Change Order, Contractor shall proceed with the performance of
such Change Order promptly following Company’s execution of the corresponding
Change Order. 

          8.10      Documentation

          All
claims by Contractor for adjustments pursuant to a Change Order to one or more
of the Contract Price, the Schedule (including the Guaranteed Final Completion
Date), or any other such part of this Contract as may be affected as a result of
Change Orders under this Article 8 shall be supported by such documentation as
is reasonably sufficient for Company to determine the accuracy thereof. Within
thirty (30) Days of Contractor’s knowledge of Contractor’s need to provide
additional supporting data for the Change Order notice, unless Company agrees in
writing to allow an additional period of time to ascertain more accurate data,
Contractor shall supplement the Change Order notice with additional supporting
data. Such additional data shall include, to the extent known, or through the
exercise of reasonable diligence should be known at the time, at a minimum (a)
the amount of compensation or delay claimed, itemized in accordance with
procedures set forth herein; (b) specific facts, circumstances; (c) analysis
that confirms not only that Contractor suffered the damages or delay claimed,
but that the damages or delay claimed were actually a result of the act, event,
or condition complained of, and that the Contract provides entitlement to an
equitable adjustment in Contract Price or Schedule (including the Guaranteed
Final Completion Date) for such act, event or condition; and (d) supporting
documentation sufficiently detailed to permit an informed analysis of the
request by Company. Failure to provide such additional information and
documentation, to the extent such information and documentation was reasonably
available to Contractor, within the time allowed or within the 

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format required shall, to the extent Company’s interests
  are prejudiced, constitute a waiver of Contractor’s right to an adjustment.

          8.11      Continue
Work 

          Pending
final resolution of any request in accordance with this Article 8, unless
otherwise agreed in writing, Contractor shall proceed diligently with
performance of the Work. 

          8.12      Critical
Path Schedule Updates 

          If
there is any change in the Schedule covered by a Change Order, or based on a
Change Order notice, Contractor shall provide Company with an updated version of
Contractor’s Exhibit B Schedule showing the critical path schedule reflecting
the change attributable to the Change Order or event(s) giving rise to the
request for adjustment. 

          8.13      Change
Order Constitutes Complete Relief 

          Except
for aggregate impacts which are either unknown, or despite the exercise of
reasonable diligence would not be known at the time of execution of a Change
Order, any Change Order signed by Company and Contractor shall constitute full
compensation to Contractor for all claims for cost for direct, indirect, labor,
temporary construction failures, job site, or home office overhead, stacking of
trades, inefficiencies, impacts or any other cost of any kind or nature; and in
the event the Change Order adjusts the Schedule, the Change Order signed by
Company and Contractor constitutes complete relief to Contractor for schedule
impacts for all events giving rise to the Change Order. 

          8.14      Effect
of Changes on Warranties and Safety 

                         8.14.1      If
Contractor reasonably believes that a proposed Change in the Work may negatively
affect any warranty or performance commitments with regard to any Work,
Contractor shall serve Company notice within fourteen (14) Days of Contractor’s
receipt of such proposal of its belief and the believed effect. If Company
insists, despite Contractor’s notice, upon requiring the execution of such
proposal and Contractor acquiesces to Company’s request and executes the
proposal, the affected warranties or performance commitments shall be adjusted
to the extent agreed between the Parties or as already determined in accordance
with the provisions of Article 14, but only to the extent related to or derived
from Company’s proposal. 

                         8.14.2     
If Contractor reasonably believes that a proposed Change in the Work may
negatively affect safety of the Work or persons in its vicinity or would violate
any applicable Laws, Contractor shall serve Company notice within fourteen (14)
Days of Contractor’s receipt of such proposal of Contractor’s belief and the
believed effect, and Contractor shall not be required to perform such
proposal. 

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ARTICLE
9      DESIGN AND DOCUMENTATION

          9.1      Inspection
of Work 

          At
Company’s sole expense, Company and Company’s Representative shall have
the right to inspect any item of the Work to be provided hereunder. Company and
Company’s Representative shall have access to those portions of the Site then
under Contractor’s control, at all times and without notice. While at the Site,
Company and the Company’s Representative shall comply with all of Contractor’s
safety rules and other job site rules and regulations. 

          9.2      As-Built
Drawings 

          Within
two (2) months following the Final Completion Date, Contractor shall furnish to
Company one set of redline drawings of the Facility on which are marked any and
all material deviations from those Drawings that were issued for construction or
updated by change orders (“As-Built Drawings”).

          9.3      Equipment
Manuals 

          Contractor
shall supply operations and maintenance manuals in accordance with Section 10.1
of Exhibit C1.

ARTICLE
10      WARRANTIES 

          10.1     
Warranty 

     Contractor warrants to Company
that: 

                    (a)      the
Work shall conform in all material respects to the Drawings, the Specifications
and the other requirements set forth in this Contract; 

                    (b)      the
Work shall be of good quality, free from any Defect and shall be performed in a
workmanlike and skilful manner; 

                    (c)     the
equipment and all Materials and other items incorporated in the Work shall: 

(i)      be new and shall be of a
suitable grade of its respective kind for its intended use, unless otherwise
authorized in writing by the Company;

(ii)      be free from any Defect in
the case of new materials, and as warranted by the supplier in the case of used
materials; 

(iii)      meet the requirements of
this Contract; 

(iv)      be free from any charge,
encumbrance, lien or other security interest; and 

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(v)      comply with current
applicable Laws. 

                         (d)      title
  and ownership to the Work shall pass to and vest in Company, as described in
  Section 12.1, free and clear of any and all liens, claims, charges, security
  interests, encumbrances and rights of other persons arising as a result of any
  actions or failure to act of Contractor, its Subcontractors, or their employees
  or representatives; and

                         (e)     
the Work has been and shall be designed and engineered with all the skill, care
and diligence to be expected of appropriately qualified and experienced
professional designers and engineers with experience in carrying out works of a
similar, type, nature and complexity to the Work. 

          10.2      Warranty
Period

          The
warranties set forth in Section 10.1 shall extend for a period of twelve (12)
Months from the Final Completion Date; provided, however, that such period with
respect to any item of the Work that is repaired, replaced, modified, or
otherwise altered by Contractor pursuant to Section 10.3 shall be extended for
twelve (12) Months from the date of completion of such repair, replacement,
modification or alteration (for such item, the “Warranty Period”). Upon
the expiration of the Warranty Period, Contractor will assign to Company, to the
extent assignable, the warranties relating to the Work from any Subcontractors
or vendors that extend beyond the Warranty Period, if any. 

          10.3
Defect Remedy Work 

                    10.3.1      Company
shall notify Contractor promptly (but not longer than forty-eight (48) hours)
upon discovery of any Defect. A written “failure report,” which includes
available technical and logistic information to assist Contractor to assess the
damage to the equipment and to evaluate appropriate corrective action, shall be
provided to Contractor as soon as reasonably practicable upon discovery of the
Defect. 

                    10.3.2      Contractor’s
responsibility for any such warranty claim shall be limited to Contractor’s
performance of Defect Remedy Work on the Defect and Contractor shall perform
such Defect Remedy Work as soon as reasonably possible following Contractor’s
receipt of notice and the relevant failure report from Company
applicable to such Work. Only direct costs and expenses of Defect Remedy Work
shall be borne by Contractor. Contractor shall have the obligation in connection
with the performance of any Defect Remedy Work to provide any special rigging,
cranes or heavy equipment or any labor required in connection with operating
such equipment, except where such items or labor are readily available at the
Site, in which case such items or labor shall be provided by Company or
Company’s operator, at Contractor’s request, and Contractor shall pay reasonable
compensation therefore. 

                    10.3.3      All
costs associated with the performance of any repair and maintenance work which
is not Defect Remedy Work, including the costs of the replacement of any parts
or other portions of the Work which are not defective but which are replaced in
conjunction with Defect Remedy Work at the request of Company, shall be the
responsibility of Company. Company shall provide Contractor with access to the
Facility and to utilities, tools and 

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equipment available at the Site for Contractor’s performance
  of any Defect Remedy Work. If Contractor elects not to carry out such Defect
  Remedy Work and requests Company to perform the same under this Article 10 instead
  of Contractor, Company may cause the Defect Remedy Work to be effected and Contractor
  shall reimburse Company the costs Company has reasonably incurred as a result.

                         10.3.4      The
  warranty and the liabilities and obligations of Contractor under this Contract
  shall not extend to replacement of normal consumables or apply to any failure
  to comply with the warranty that has been caused by (i) any erosion or de-erosion
  or normal wear and tear in operation of the subject Work; (ii) any failure of
  Company or a third party, other than Contractor or Subcontractor, to properly
  store, install, operate and/or maintain the subject Work in accordance with
  good industry practices and the O&M Manual; (iii) any modifications made
  to the subject Work by any person other than personnel of Contractor or Subcontractor
  without Contractor’s express written consent prior to such modifications;
  (iv) any neglect, abuse, malicious mischief, vandalism or event of Force Majeure
  (other than a warranty failure) affecting the subject Work; (v) any other negligent
  act of Company or Company’s operator; (vi) operation of the Facilities
  under conditions (including composition of the geothermal fluid) outside of
  the range specified in the Design Conditions; or (vii) operation of the Facility,
  other than by personnel of Contractor or Subcontractor, without Contractor’s
  prior express written consent, outside the Facility’s defined operation
  range. 

          10.4      Implementation
of Warranty 

          The
warranty claims and related Work shall be implemented in accordance with the
Warranty Claim Procedures in Exhibit E.

          10.5      Disclaimer
and Release 

          THE
WARRANTIES, CONDITIONS, OBLIGATION AND LIABILITIES OF CONTRACTOR AND RIGHTS AND
REMEDIES OF COMPANY SET FORTH IN THIS CONTRACT ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND COMPANY HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER PRESENT AND
FUTURE WARRANTIES, CONDITIONS, OBLIGATIONS, REPRESENTATIONS AND LIABILITIES OF
CONTRACTOR, TOGETHER WITH ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF COMPANY
AGAINST CONTRACTOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO, (A) ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE; (B) ANY IMPLIED WARRANTY OR CONDITION
ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (C) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING
FROM THE NEGLIGENCE OF CONTRACTOR OR ITS SUBCONTRACTORS, ACTUAL, PASSIVE OR
IMPUTED; OR (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR
DAMAGE TO THE FACILITY, WORK OR ANY PORTION THEREOF OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES. 

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ARTICLE 11      INTENTIONALLY
  OMITTED 

ARTICLE 12     TITLE; CARE OF THE
  WORK 

          12.1      Passage
of Title 

          Legal
title to and ownership of all Work and Materials provided hereunder shall pass
to and vest in the Raft River Energy I LLC at the later of (i) delivery to the
Site; or (ii) upon payment of the respective payment pursuant to the Payment
Schedule. 

          12.2      Risk
of Loss 

          Contractor
shall be responsible to assure safe delivery of all Materials to the Site.
Except to the extent caused by the negligence or willful misconduct of Company,
Contractor shall bear the risk of physical loss or destruction of or damage to
the Materials and the Work, whether or not incorporated in the Facility at the
Site or located on or off the Site, until the Final Completion Date.
Notwithstanding the passage of title as provided in Section 12.1, Contractor
assumes the risk of loss with respect to, and shall be obligated to replace,
repair or reconstruct, any portion or all of the Materials or the Work that is
lost, damaged or destroyed prior to turning over care, custody and control of
such Material or Work to Company as provided in this Contract, irrespective of
how such loss, damage or destruction shall have occurred. In the event of a
termination of this Contract in accordance with the provisions hereof prior to
such turnover, the risk of loss with respect to such Materials and Work shall
pass to Company upon the effective date of termination, whether by Company or by
Contractor. 

ARTICLE
13      INSURANCE AND BONDING

          13.1      Contractor
Provided Insurance 

          Contractor
shall: 

                         
   (a)      obtain and maintain in full force
  and effect from the Commencement Date through Final Completion, at its own cost,
  the following policies of insurance: 

          (i)      Builders
All Risk insurance in an amount equal to cover the replacement cost of the
Facility, including transit coverage for purchased pipe and materials; 

          (ii)      Public
Liability insurance with bodily injury and property damage combined single
limits of at least One Million Dollars ($1,000,000) per occurrence and Two
Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
liability for bodily injury to third parties or damage to property to third
parties arising in connection with the performance of the Work; 

          (iii)     
Excess Liability insurance with a single limit of at least Five Million Dollars
($5,000,000) per occurrence in excess of the limits of the insurance provided in
paragraph (ii) above;

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          (iv)     
Workers Compensation insurance providing statutory limits of liability, and
Employers Liability limits of One Million Dollars ($1,000,000) per
disease/accident/ employee, covering Contractor;

          (v)      Marine
transit insurance for Materials and/or Equipment procured and to be delivered
pursuant to this Contract and to provide that Company is named as the additional
named insured; and 

                         
  (b)      procure and maintain such further coverage’s
  as Contractor is required to have by any applicable Law.

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

          13.2      Company
Provided Insurance 

          Company
shall: 

                         (a)      obtain
and maintain in full force and effect, at its own cost, the following policies
of insurance: 

          (i)      All
risks property insurance with a limit in an amount not less than the replacement
cost of the Facility pipeline and equipment the care, custody and control of
which has been turned over to Company by Contractor pursuant to this Contract;

          (ii)      Public
Liability insurance with bodily injury and property damage combined single
limits of at least One Million Dollars ($1,000,000) per occurrence and Two
Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
liability for bodily injury to third parties or damage to property to third
parties arising in connection with the Site or the Facility; and 

         (iii)      Excess
  Liability insurance with a single limit of at least Ten Million Dollars ($10,000,000)
  per occurrence in excess of the limits of the insurance provided in paragraph
  (ii) above; and

                         (b)      procure
and maintain such further coverages as Company is required to have by any
applicable Law. 

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

          13.3      Policies

                         13.3.1      Contractor’s
insurance shall: 

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                         (a)
name Company and its directors, officers, representatives, employees and agents
and any identified Financing Parties as additional insured’s;

                         (b)     
include the following cross-liability clause: 

                                   “Where
  more than one party comprises the “Insured,” each of the parties shall,
  for the purpose of such insurance, be considered as a separate and distinct
  unit/entity, and the words “the Insured” shall be considered as applying
  to each party in the same manner as if a separate policy has been issued to
  each of the said parties. The insurer shall provide indemnity to each in the
  same manner and to the same extent as if a separate policy has been issued to
  each, provided that the total amount payable in respect of compensation shall
  not exceed the limits of indemnity”; 

                         (c)      provide
that such Contractor’s insurance may not be cancelled, non-renewed or materially
changed by the insurer without giving thirty (30) Days’ prior written notice to
Company; 

                         (d)      waive
any and all rights of subrogation against Company and its respective directors,
officers, representatives, agents and employees, and waive any other right of
the insurers to any offset or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any Liability of Company or its
directors, officers, representatives, agents and employees; and 

                         (e)      provide
  that any other insurance maintained by Company and its respective directors,
  officers, representatives, agents and employees is in excess of such Contractor’s
  insurance and not contributory with it.

                    13.3.2      Company’s
insurance shall: 

                         (a)      name
Contractor, Subcontractors and their respective directors, officers,
representatives, employees and agents and any identified Financing Parties as
additional insured’s; 

                         (b)      include
  the following cross-liability clause:

                                   “Where
  more than one party comprises the “Insured,” each of the parties shall,
  for the purpose of such insurance, be considered as a separate and distinct
  unit/entity, and the words “the Insured” shall be considered as applying
  to each party in the same manner as if a separate policy has been issued to
  each of the said parties. The insurer shall provide indemnity to each in the
  same manner and to the same extent as if a separate policy has been issued to
  each, provided that the total amount payable in respect of compensation shall
  not exceed the limits of indemnity”; 

                         (c)      provide
  that such Company’s insurance may not be cancelled, non-renewed or materially
  changed by the insurer without giving sixty (60) Days’ prior written notice
  to the Contractor; 

                         (d)      waive
any and all rights of subrogation against Contractor, Subcontractors and their
respective directors, officers, representatives, agents and employees, and waive
any 

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other right of the insurers to any offset or counterclaim or
  any other deduction, whether by attachment or otherwise, in respect of any Liability
  of Contractor, Subcontractors or their respective directors, officers, representatives,
  agents and employees; and

                         (e)      provide
that any other insurance maintained by Contractor, any Subcontractors and their
respective directors, officers, representatives, agents and employees is in
excess of such Company’s insurance and not contributory with it. 

          13.4      Payment
of Deductibles 

          If
any of the insurance described above shall have any deductibles, the Party
obligated to procure such insurance shall be solely responsible for payment of
all such deductible amounts associated with such insurance. 

          13.5      Evidence
of Insurance 

          Within
thirty (30) Days of the Commencement Date (or with regard to the Builders All
Risk coverage described in Section 13.1(a)(i), prior to the commencement of Work
at the Site), each Party shall cause its insurers or agents to provide to the
other Party for the other Party’s review and approval certificates of insurance
evidencing the policies and terms specified in this Article 13. Notwithstanding
the foregoing, Contractor shall be entitled to cause its insurers or agents to
provide to Company the certificates of insurance evidencing its builders all
risk policy only when the relevant risk arises. Failure by a Party to obtain the
insurance coverage or certificates of insurance required by this Article 13
shall not in any way relieve or limit such Party’s obligations and liabilities
under this Contract, nor shall the failure of any insurance company for any
reason to pay claims accruing with respect to such Party’s insurance, affect,
negate or release such Party from any of the provisions of this Contract,
including such Party’s indemnity obligations. The insurance coverage to be
provided by each Party pursuant to this Article 13 are not intended to, and
shall not in any manner, limit or modify such Party’s obligations under this
Contract, except to the extent any proceeds of such insurance are applied in
satisfaction of such Party’s obligations. If a Party shall fail to procure or
maintain its insurances, then the other Party shall have the right (but shall
not be obligated) to provide and maintain such insurance at the defaulting
Party’s expense and to deduct the cost thereof from any amount or amounts due to
the other Party or in the event there are no such amounts due and payable, the
defaulting Party shall reimburse the other Party for such costs on demand.

          13.6      Performance
Payment and Other Bonds 

          Contractor
shall furnish bond(s) for performance and payment in an amount at least equal to
50% of the Contract Price, or as agreed to by both Parties, as security for the
faithful performance and payment of contractor’s obligations under the Contract
Documents. These bonds shall remain in effect until 30 days after the date when
final payment becomes due, except as provided otherwise by Laws or Regulations.

          All
bonds shall be in the form prescribed herein, except as provided by Laws or
Regulations, and shall be executed by such sureties as are named in the current
list of “Companies Holding Certificates of Authority as Acceptable Sureties on
Federal Bonds and as 

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Acceptable Reinsuring Companies” as published in Circular 570
(amended) by the Financial Management Service, Surety Bond Branch, U.S.
Department of the Treasury. All bonds signed by an agent must be accompanied by
a certified copy of the agent’s authority to act. 

               If
the surety on any bond furnished by Contractor is declared bankrupt or becomes
insolvent or its right to do business is terminated in any state where any part
of the Project is located or it ceases to meet the requirements of this
paragraph, Contractor shall promptly notify Client and Client’s Representative
and shall, within 20 days after the event giving rise to such notification,
provide another bond and surety, both of which shall comply with the
requirements of this paragraph and succeeding paragraph. 

               The
Contractor will be required to obtain performance and payment bonds for the
insulation subcontractor for the full amount of the insulation contract, which
will be an amount of approximately $400,000. 

ARTICLE
14      DISPUTE RESOLUTION

          14.1      Settlement
by Mutual Agreement 

          Company
and Contractor desire that this Contract operate between them fairly and
reasonably. If during the term of this Contract a dispute arises between Company
and Contractor, or one Party perceives the other as acting unfairly or
unreasonably, or a question of interpretation arises hereunder, then the Parties
shall cause the Company’s Representative and Contractor’s Representative to
promptly confer and exert their good faith efforts to reach a reasonable and
equitable resolution of the issue. If Company’s Representative and Contractor’s
Representative are unable to resolve the issue within fourteen (14) Days, the
matter shall be referred within five (5) Days of the lapse of such period to the
Parties’ responsible officers for resolution. Neither Party shall seek
resolution by mediation or arbitration of any dispute arising in connection with
this Contract until both Parties’ responsible officers, who shall be identified
by each Party from time-to-time, have had at least fourteen (14) Days to resolve
the dispute following referral of the dispute to such responsible officers. If
the Parties fail to settle such dispute within such period (including a
failure to identify their respective responsible officers and make necessary
referrals within such period), the provisions of Section 14.2 shall apply unless
the Parties agree that the dispute is to be resolved according to the provisions
of Section 14.3. 

          14.2     
Mediation 

          If
a dispute under this Contract is not resolved by the Parties pursuant to Section
14.1, upon the request of either Party the Parties shall try in good faith to
settle the dispute by nonbinding mediation administered by the American
Arbitration Association under its Commercial Mediation Rules before resorting to
arbitration. Unless otherwise agreed upon by the Parties, the mediation shall be
held in Ada County, Idaho. Each Party shall bear the cost and expense of
preparing and presenting its own case (including, but not limited to, its own
attorneys’ fees and costs of witnesses). Payment of the mediator and other costs
and expenses of the mediation shall be divided equally among the Parties.

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          14.3     
Pending Disputes 

          Notwithstanding
any provision of this Article 14 to the contrary, either Party may commence
litigation within thirty (30) Days prior to the date after which the
commencement of litigation could be barred by any applicable statute of
limitations or other law, rule, regulation, or order of similar import or in
order to request injunctive or other equitable relief in connection with any
bankruptcy or insolvency proceeding or otherwise necessary to prevent
irreparable harm. In such event, the Parties shall (except as may be prohibited
by judicial order) nevertheless continue to follow the procedures set forth
herein. While any disputes under this Contract are pending, including the
commencement and pendency of any of the dispute resolution procedures set forth
in this Article 14, the Parties shall abide by all their obligations under this
Contract without prejudice to a final determination in accordance with the
foregoing provisions of this Article 14. 

ARTICLE
15      INDEMNIFICATION

          15.1     
General 

          Contractor
shall defend, indemnify and hold harmless Company, the Financing Parties, each
of their parent company and affiliates, and the directors, officers, members,
agents, employees, successors and assigns of each of them (each, a “Company
Indemnified Party”), from and against any and all claims, demands, and
causes of action asserted by any Governmental Authority or other third party
against any Company Indemnified Party (other than as a result of a breach of
this Contract by such person) and any Liabilities, including reasonable
attorneys’ fees, incurred by such Company Indemnified Party in connection
therewith to the extent and as a result of Contractor’s performance (or that of
its Subcontractors, agents, employees or consultants) under this Contract,
including, but not limited to (a) on account of any violation of any Law or
Permit to be complied with by Contractor hereunder; and (b) in respect of any
Taxes imposed on or attributable to performance of Contractor other than to the
extent caused by or arising from the negligence or willful misconduct of such
Company Indemnified Party not attributable to Contractor or any affiliate or
Subcontractor of Contractor. 

          15.2     
Indemnification for Bodily Injury or Property Damage 

          Company,
as one Party, and Contractor, as the other Party, shall defend, indemnify and
hold each other, and each other’s lenders, Financing Parties, parent company,
affiliates, officers, directors, members, agents and employees, owners of the
real property comprising the Site, harmless from and against any loss, damage or
liability (including, but not limited to, reasonable attorneys’ fees and other
costs but excluding consequential damages) on account of any claim by a third
party for bodily injury or property damage against the indemnified party caused
by the negligent act or omission of the indemnifying party or the indemnifying
party’s employees, contractors, subcontractors or agents, in connection with the
performance of their respective undertakings under this Contract. 

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          15.3     
Indemnity from Liens 

          Contractor
shall defend, indemnify and hold each of the Company Indemnified Parties
harmless from and against (i) all liens arising from the performance of the Work
by Contractor or otherwise caused by any Subcontractor or any employee, agent or
Affiliate of Contractor or any of its Subcontractors or anyone else entitled to
file a lien under Law; and (ii) any loss, damage or liability (including, but
not limited to, reasonable attorneys’ fees and other costs) in connection with
any and all mechanics’ liens filed in connection with Contractor’s Work
hereunder. This Section 15.3 shall not apply to Liens of Contractor which result
from non-payment by Company. 

          15.4      Reserved

          15.5      Company’s
Indemnity 

          Company
shall defend, indemnify and hold harmless Contractor and its Subcontractors and
their respective joint venture partners, directors, officers, agents, employees,
shareholders and affiliates from any and all Liability or Proceedings arising
out of: 

                         (a)      any
  actual or alleged injury or death of persons or damage to property arising out
  of the negligence, willful misconduct or default of Company (except only to
  the extent that the same have been caused by the negligence or default of Contractor
  or its Subcontractors); 

                         (b)      any
and all environmental related liability or cost arising from or related to the
Site, including any actual or alleged injury to persons or property related
thereto or any remedial activity (except to the extent the same was caused by
the negligence or default of Contractor or its Subcontractors in connection with
their performance of the Work); or 

                         (c)      on
account of any violation of any Law or Permit to be complied with by Company
hereunder. 

          15.6      Notice
and Settlement of Claims 

          A
Party seeking the benefit of an indemnity under this Article 15 shall give the
other Party written notice of any claim giving rise to the indemnity promptly
after such Party learns of the same. The indemnifying Party may, at its own
cost, conduct negotiations for the settlement of such claim and any litigation
that may arise therefrom. The Party claiming the benefit of the indemnity shall
not make any admission that might be prejudicial to the indemnifying Party
unless the indemnifying Party fails to take over the conduct of the negotiations
or litigation within a reasonable time after having been so requested. The
indemnifying Party shall not settle any indemnified claim without the
indemnified Party’s prior written approval (not to be unreasonably withheld or
delayed). The Party claiming the benefit of the indemnity shall, at the request
of the other Party, provide reasonable assistance for the purpose of contesting
any such claim or action, and shall be paid all reasonable costs incurred in
doing so and shall have the right to have its own counsel, at its expense,
participate in the defense and negotiation of the claim or action.

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ARTICLE
16      ASSIGNMENT 

          16.1      Assignment
by Company 

          Company
may not assign any or all of its obligations, rights, title and/or interest in
and to or arising out of or in connection with the Contract without the prior
written approval of Contractor, which approval shall not be arbitrarily or
unreasonably withheld or delayed. Notwithstanding the foregoing, Company may,
without written approval, assign its obligations, rights, title and/or interest
in and to or arising out of or in connection with the Contract for the purpose
of securing financing.

          16.2      Assignment
by Contractor 

          Contractor
may not assign any or all of its obligations, rights, title and/or interest in
and to or arising out of or in connection with the Contract without the prior
written approval of Company, which approval shall not be arbitrarily or
unreasonably withheld or delayed. No assignment of Contractor’s obligations,
rights, title and/or interest in and to or arising out of or in connection with
the Contract shall relieve Contractor of any obligation hereunder. 

          16.3     
Succession 

          This
Contract shall inure to the benefit of and be binding upon the successors and
permitted assigns (as provided for by Sections 16.1 and 16.2) of the
Parties.

ARTICLE
17      SUBCONTRACTORS

          17.1      Subcontracts

          Subject
to Section 17.2, Contractor may enter into Subcontracts for the performance of
the Work and shall be solely responsible for the satisfactory performance of the
Work and the acts, defaults and omissions of any Subcontractor notwithstanding
any review, approval or other action taken by Company with regard to the
selection of a Subcontractor hereunder. Contractor shall be responsible for the
actions of the Subcontractors in their performance of the Work as if such
actions were those of Contractor. The issuance of any Subcontract shall not
relieve Contractor of any of its obligations under this Contract. All
Subcontracts shall be consistent with and in no way contrary to or inconsistent
with any of the terms or provisions of this Contract. No contractual
relationship shall exist between Company and any Subcontractor with respect to
the Work to be performed hereunder, and no Subcontractor is intended to be or
shall be deemed a third-party beneficiary of this Contract. Except as expressly
set forth in Section 17.2, nothing contained herein shall (a) create any
contractual relationship between any Subcontractor and Company or (b) obligate
Company to pay or arrange for the payment of any Subcontractor. 

          17.2      Subcontract
Provisions 

          Contractor
shall ensure that Subcontracts made with Subcontractors having a value of Two
Hundred Thousand Dollars or more are made in writing. Contractor shall make
reasonable efforts to require that each such Subcontract shall provide that the
rights and obligations of 

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Contractor under each such Subcontract are assignable to Company,
  its successors and assigns upon Company’s written request accompanied by
  proof of source of payment to such Subcontractor’s satisfaction, following
  any termination of this Contract.

          17.3      Vendors

          Contractor
shall not subcontract the supply of any equipment for a price of in excess of
Fifty Thousand Dollars ($50,000), except to vendors approved by Company, which
approval shall not be arbitrarily or unreasonably withheld.

ARTICLE
18      SUSPENSION 

          18.1      Right
of Company to Suspend Work 

          Company
may suspend performance of the Work by Contractor hereunder as provided in
Section 8.1.1. 

          18.2      Initial
Payments to Contractor 

          Contractor
shall be entitled to payment for Work that has been completed as of the
effective date of such suspension or concerning which delivery has been
suspended if such suspension has not ceased within ten (10) Days of the
effective date of such suspension within thirty (30) Days of the issuance of an
invoice therefore by Contractor. 

          18.3      Extended
Suspension 

          In
the event that the duration of the suspensions by Company exceed ninety (90)
Days in the aggregate, then Contractor may give notice to the Company’s
Representative requesting permission to proceed. If permission is not granted
within twenty (20) Days of the delivery of such notice, Contractor may terminate
its obligations under the Contract by so notifying Company in writing, and
Contractor shall be entitled to payments as described in Section 19.2.2.

          18.4      Right
of Contractor to Suspend 

          Contractor
may suspend performance of the Work hereunder, in whole or in part, upon thirty
(30) Days’ prior written notice to Company of Contractor’s intention to
suspend for reasons of (i) the aggregate amount of the payments withheld by
Company as a result of a billing dispute(s) equals one hundred thousand dollars
($100,000); or (ii) Company breaches or is in default under any financing
obligations with any Financing Parties. Such suspension shall continue for the
period specified in the suspension notice. 

          18.5      Additional
Changes Resulting From Suspensions 

          Provided
that suspension is not necessary by reason of a default on the part of
Contractor that has not been corrected, in the event of suspension pursuant to
this Article 18 the Contract Price shall be increased by the amount equal to the
additional costs reasonably incurred by Contractor as a result of the suspension
(including costs for the purpose of safeguarding, storage, personnel,
Subcontractors or rented equipment costs, demobilization and re-mobilization
costs 

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and increased costs or charges incurred for rescheduling) and
  the scheduled dates specified in this Contract, the Schedule, and all other
  dates and milestones herein by which Contractor’s responsibilities are
  measured shall be adjusted to reflect any delays resulting from such suspension
  (including a period equal to the suspension period, a period for demobilization
  and re-mobilization plus any additional period required). If Contractor shall,
  solely in consequence of such suspension, be required to perform any obligations
  under its warranty at a time which exceeds the original schedule for warranty
  obligations that would have been applied if there were no suspension, the additional
  cost of complying with the warranty obligations shall be added to the Contract
  Price.

          18.6     
Resumption of Work 

          Upon
receipt of notice to resume the Work in accordance with this Contract,
Contractor shall examine the Facility and the Work affected by the suspension.
Contractor shall make good any deterioration or defect in or loss of such
Facility or Work that may have occurred during suspension, and costs incurred in
making such examinations and making good and resuming Work shall be added to the
Contract Price, all of which Work shall be at Company’s expense unless such
suspension occurred by reason of a default on the part of Contractor that was
not corrected within the time period specified in Section 19.1. 

ARTICLE
19      TERMINATION 

          19.1      Termination
by Company 

                         19.1.1     
Company may terminate the Work and this Contract after the occurrence of one or
more of the following events of default and if, following a written notice from
Company to cure such event of default, said event of default continues to exist
for ten (10) Days in the circumstances described in (a) below, and twenty (20)
Days in the circumstances described in (b) below: 

          (a)     
the occurrence of an Insolvency Event involving Contractor; or 

          (b)      Contractor
defaults in its performance under a material provision of this Contract;
provided, however, that Company may not terminate this Contract if, after notice
of such default and prior to expiration of the twenty (20) Day period set forth
above, Contractor has commenced and is diligently pursuing efforts to cure such
breach. 

                         19.1.2      In
the event of termination as provided in Section 19.1.1, Company shall compensate
Contractor for all payment amounts or milestones achieved plus a pro rata
portion of the payment amounts for Work partially achieved as of termination,
but Company shall not compensate Contractor for any other costs associated with
the termination of the Work. Upon termination and such payment, Contractor shall
deliver to Company possession of the Work in its then condition, including
Drawings and Specifications and contracts with Subcontractors, and construction
supplies dedicated solely to construction of the Facility. 

                         19.1.3     
In the event of termination as provided in Section 19.1.1: (a) Company shall
have the right, at its sole option, to assume and become liable for any
reasonable written 

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obligations and commitments that Contractor may have in good
  faith undertaken with third parties in connection with the Work, which obligations
  and commitments are by Law or by their terms assumable by Company and are not
  covered by the payments made to Contractor under Section 19.1.2. If Company
  elects to assume any obligation of Contractor as described in this Section 19.1.3,
  then as a condition precedent to Company’s compliance with any subsection
  of this Article 19, Contractor shall execute all papers and take all other reasonable
  steps requested by Company that may be required to vest in Company all rights,
  set-offs, benefits and titles necessary to such assumption by Company of such
  obligations. Company agrees to indemnify and hold Contractor harmless against
  any Liability under any obligations assumed by Company pursuant hereto.

          19.2      Termination
by Contractor 

                         19.2.1     
Contractor may terminate the Work and this Contract after the occurrence of one
or more of the following events of default and if, following a written notice
from Contractor to Company to cure such event of default, said event of default
continues to exist for ten (10) Days in the event of a payment default, and
thirty (30) Days in the event of any of the other defaults described below:

          (a)     
the occurrence of an Insolvency Event involving Company; 

          (b)      Company
defaults in its performance under a material provision of this Contract;
provided, however, that Contractor may not terminate this Contract if, for all
cases except for the obligation to make or complete any payment, after notice of
such default and prior to expiration of the thirty (30) Day period set forth
above, Company has commenced and is diligently pursuing efforts to cure such
breach; or 

          (c)      Company
breaches or is in default under any financing obligations with any Financing
Parties and fails to cure such breach or default within the cure or other period
provided in the applicable agreement or instrument. 

                         19.2.2      In
the event of termination as provided in Section 19.2.1, Company shall pay to
Contractor the greater of (a) that portion of the Contract Price associated with
all payment amount or milestones achieved, including any amount in the Letter of
Credit which amount Contractor may draw down, plus a pro rata portion of the
payment amount or milestone amounts for partially achieved Work up to the date
of Contractor’s receipt of notice of termination plus any costs attributable to
and incurred in terminating the Work, including cancellation charges owed to
third parties, but in no event shall the total amount exceed the Contract
Price, or (b) the termination amount payable
by Company to Contractor as specified in Section 19.4. 

          19.3      Due
to Force Majeure 

          If
(a) Company wholly suspends the Work on the Facility for six (6) consecutive
months due to the occurrence of a Force Majeure suffered by Company; or (b)
Contractor is prevented from performing the Work for a period of six (6)
consecutive months as a result of the occurrence of a Force Majeure suffered by
Contractor, then the affected Party may terminate this Contract at no cost or
penalty, other than the payment of all accrued payment obligations due 

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	Raft River Pipeline Contract 	05/22/06 

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and payable pursuant to this Contract (excluding loss of
anticipated profits for the Work not yet performed by Contractor) upon not less
than fifteen (15) Days prior written notice to the other Party; provided,
however, that nothing in this Section 19.3 shall relieve or excuse either Party
from its obligations under Sections 19.5 and 19.6.

          19.4      Due
to Company’s Convenience 

          If
Company determines it is in its best interest to terminate this Contract for its
convenience, then Company may terminate this Contract at no cost or penalty if
such notice is given prior to Company issuing Contractor a Notice to Proceed
pursuant to Section 4.1. Company may also terminate this Contract for
convenience after issuing Contractor a Notice to Proceed at no cost or penalty,
other than the payment by Company to Contractor of the sum of (a) all accrued
payment obligations due and payable pursuant to this Contract plus a pro rata
portion of the payment amounts for partially achieved Work up to the date of
Contractor’s receipt of notice of termination (excluding loss of anticipated
profits for the Work not yet performed by Contractor), (b) any costs
attributable to and incurred in terminating the Work, including cancellation
charges owed to third parties, and (c) One Hundred Thousand Dollars ($100,000)
for miscellaneous expenses and/or loss of anticipated profit for the Work not
yet performed by Contractor. Such payment shall be made by Company to Contractor
not less than fifteen (15) Days after Contractor has provided Company written
notice of the amounts due. Nothing in this Section 19.4 shall relieve or excuse
either Party from its obligations under Sections 19.6 and 19.7. It is understood
and agreed by the Parties that Contractor shall be damaged by Company’s
termination of this Contract for convenience and that (i) it would be
impracticable or extremely difficult to fix the actual damages resulting
therefrom; (ii) the termination fee described in clause (c) above is in the
nature of liquidated damages, and not a penalty, and is fair and reasonable; and
(iii) such payments represent a reasonable estimate of fair compensation to
Contractor for the losses that may reasonably be anticipated from such
termination. 

          19.5     
Exclusive Remedy 

          Company’s
payment to Contractor pursuant to either Section 19.3 or 19.4, shall be
Contractor’s exclusive remedy against Company in the event of such termination.

          19.6      Actions
Required Following Termination 

          Upon
  early termination of the Work, each Party shall be immediately released from
  any and all obligations to the other Party (except for the obligation of each
  Party to pay any amount then accrued or due hereunder, or otherwise due under
  this Article 19), Contractor immediately shall discontinue the Work and remove
  its personnel and construction equipment from the Site, and except for termination
  due to Company’s default Company shall be entitled to take exclusive possession
  of the Materials and all or any part of the Materials delivered or en route
  to the Site, to the extent that Company has paid Contractor all undisputed amounts
  hereunder then due and payable from Company to Contractor. Contractor shall
  immediately take such steps as are reasonably necessary to preserve and protect
  Work completed and in progress. 

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          19.7     
Termination and Transfer of Subcontracts and Other Rights 

          Upon
the early termination of the Work pursuant to this Article 19, including
pursuant to Section 19.4, if requested by the Company, Contractor shall make
reasonable efforts to cancel existing contracts with Subcontractors performing
Work at the Site. If early termination of the Work occurs due to the default by
Contractor, Contractor shall also, upon request by Company (a) deliver and
assign to Company, pursuant to a document produced by Contractor and reasonably
acceptable to Company, any and all Subcontracts, purchase orders, bonds and
options made by Contractor for Work to be performed at the Site (but in no event
shall Company be liable for any action or default of Contractor occurring prior
to such delivery and assignment (except to the extent such action or default was
caused by Company) and Contractor shall defend and hold harmless Company against
any such liability); and (b) deliver to Company originals of all Subcontracts
and all papers and documents relating to Contractor Permits, orders placed,
bills and invoices, lien releases related to the Work. All deliveries hereunder
shall be made free and clear of any liens, security interests or encumbrances,
except as may arise hereunder, be created by Company or may arise in favor of
Contractor due to non-payment by Company. Except as provided herein, no action
taken by Company or Contractor after the termination of the Work and/or this
Contract shall prejudice any other rights or remedies of Company or Contractor
provided by Law, this Contract or otherwise upon such termination. 

          19.8      Surviving
Obligations 

          Termination
or expiration of this Contract (a) shall not relieve either Party of its
obligations with respect to the confidentiality of the other Party’s information
as set forth in Article 21; (b) shall not relieve either Party of any
obligations hereunder which expressly or by implication survive termination
hereof; and (c) except as otherwise provided in any provision of this Contract
expressly limiting the liability of either Party, shall not relieve either
Company or Contractor of any obligations or liabilities for loss or damage to
the other Party arising out of or caused by acts or omissions of such Party
prior to the effectiveness of such termination or arising out of such
termination, and shall not relieve Contractor of its obligations as to portions
of the Work or other services already performed or of obligations assumed by
Contractor prior to the date of termination. This Section 19.8 shall survive the
termination or expiration of this Contract. 

ARTICLE
20      INTENTIONALLY OMITTED

ARTICLE
21      CONFIDENTIALITY 

          21.1     
Both Parties to Keep Information Confidential 

          Company
and Contractor shall keep confidential and shall not, without the written
consent of the other Party, divulge to any third party Information of the other
Party. 

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          21.2      Use
of Information 

          Contractor
shall not use any Information received from Company for any purpose other than
the procurement and construction of the Facility, or such other Work as required
for the performance of the Contract. 

          21.3      Exclusions

          The
obligations of any Party under Sections 21.1 and 21.2 shall not apply to
Information of the other Party that: 

                         (a)      now
or hereafter enters the public domain through no fault of the receiving
Party; 

                         (b)      can
be proved to have been in the possession of the receiving Party at the time of
disclosure and which was not previously obtained, directly or indirectly, from
the other Party hereto; 

                         (c)      otherwise
lawfully becomes available to the receiving Party from a third party under no
obligation of confidentiality; or 

                         (d)      the
receiving Party is required by law or any relevant stock exchange or other
competent regulatory authority to publish or otherwise disclose but only to the
extent that it is necessary to publish or disclose the same. 

          21.4      Contractor
Logos 

          Contractor
shall apply no names, logos, or other markings to the Facility without the
written permission of the Company. 

ARTICLE
22      NOTICES 

          22.1      All
notices and other communications required or permitted by this Contract shall be
in writing and delivered by hand (including by messenger or courier) or by
airmail post or special courier or by telecopier or facsimile (receipt
confirmed), at the addresses or numbers set forth below or at such other
addresses or numbers as the Party receiving notice shall subsequently designate
by way of replacement by giving ten (10) Days’ written notice to the other Party
pursuant to this Section: 

	 	If to Company: 	Raft River Energy I LLC 
	 	  	1509 Tyrell Lane, Suite B 
	 	  	Boise, Idaho 83706 
	 	  	Attention: Daniel Kunz 
	 	  	Fax: (208) 424-1030 
	 	  	  
	 	with a copy for 	  
	 	any notice of 	  
	 	claim or dispute 	  

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	 	to: 	Stoel Rives LLP 
	 	  	600 University Street 
	 	  	Seattle, WA 98101 
	 	  	Attention: John F. Pierce 
	 	  	Fax: (206) 386-5700 
	 	  	  
	 	If to Contractor: 	Industrial Builders 
	 	  	20394 Pinto Lane 
	 	  	Caldwell, ID 83605 
	 	  	  
	 	  	Attention: Dave Erlebach 
	 	  	Fax: (541) 889-7755 

          22.2      Any
notice sent by telecopier or facsimile transmission shall be confirmed within
two (2) Days after dispatch by notice sent by airmail or special courier. 

          22.3     
  Any notice or confirmation of notice sent by airmail or special courier shall
  be deemed (in the absence of evidence of earlier receipt) to have been delivered
  ten (10) Days after dispatch and in proving the fact of dispatch, it shall be
  sufficient to show that the envelope containing such notice was properly addressed,
  stamped and conveyed to the postal authorities or courier service for transmission
  by airmail or special courier.

          22.4      Any
notice delivered by hand, facsimile, telecopier or telegram shall be deemed to
have been delivered on the date of its dispatch. 

          22.5      In
this Article 22, notices shall include any approvals, consents, instructions,
orders, and certificates to be given under the Contract. 

ARTICLE
23      MISCELLANEOUS

          23.1      Governing
Law 

          This
Contract and the Exhibits hereto shall in all respects be governed by and
construed under the laws of the State of Idaho, without regard to the principles
of conflict of laws. The selection of Idaho law shall conclusively be presumed
to be a significant, material and reasonable relationship with the State of
Idaho and shall be enforced whether or not there are other relationships with
the State of Idaho. Any dispute arising under or related to this Agreement shall
be resolved by a court of competent jurisdiction in Ada County, Idaho, and each
party hereby irrevocably and unconditionally submits to such exclusive
jurisdiction and venue. 

          23.2      Construction

          This
Contract and any documents or instruments delivered pursuant hereto shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Contract and such other
documents and instruments shall be construed as though the parties participated
equally in the drafting of the same. Consequently, the parties acknowledge and
agree that any rule of construction that a document is 

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to be construed against the drafting party shall not be applicable
  to this Contract or such other documents or instruments.

          23.3      Nature
of Agreement 

          Contractor
and its Subcontractors shall be independent contractors with respect to the
Work, irrespective of whether such Subcontractors are selected or approved by
Company, and neither Contractor nor its Subcontractors, nor the employees of
either, shall be deemed to be the servants, employees, representatives or agents
of Company. This Contract does not create any agency, partnership, joint venture
or other joint relationship between Company and Contractor. Nothing contained in
this Contract shall be construed (a) to authorize either Party hereto to act as
agent for the other Party or to permit a Party hereto to undertake any contract
or other obligation for the other Party or (b) to create any agency,
partnership, joint venture or other joint relationship between the Parties.

          23.4      Severability

          In
the event that any of the provisions or portions, or applications thereof, of
this Contract become invalid, illegal or unenforceable in any respect under the
Law of any jurisdiction, Company and Contractor shall negotiate an equitable
adjustment in the provisions of this Contract with a view toward effecting the
purpose of this Contract, and the validity and enforceability of the remaining
provisions or portions, or applications thereof, shall not be affected
thereby. 

          23.5      Amendments
and Waivers 

          This
Contract may not be changed or amended orally, and no waiver hereunder may be
oral. Any change or amendment or any waiver of any term or provision of, or
consent granted under, this Contract shall only be effective if given in writing
and signed by the waiving or consenting Party (or both Parties in the case of a
change or amendment). 

          23.6     
Survival 

          The
provisions of Sections 2.4, 3.3, 5, 9.4, 9.5, , and all of Articles 5, 14, 15,
19, 21, 22 and 23 shall survive termination or expiration of the Contract for
whatever reason. 

          23.7      Counterparts

          This
Contract may be executed in separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute but one and the same
instrument. 

          23.8      Entire
Contract 

          This
Contract and the Exhibits sets forth the full and complete understanding of the
Parties relating to the subject matter hereof as of the Effective Date and
supersedes any and all negotiations, agreements, understandings and
representations made or dated prior thereto with respect to such subject matter.
Contractor shall not be bound by, and specifically objects to, any term,
condition or other provision that is different from or in addition to the
provisions of this 

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Contract (whether or not it would materially alter this
Contract), which is proffered by Company in any purchase order, receipt,
acceptance, confirmation, correspondence or otherwise, unless Contractor
specifically agrees to such provision in a written instrument signed by
Contractor. 

          23.9     
Waivers 

          Subject
to Section 23.5, no relaxation, forbearance, delay, indulgence or failure by
either Party to enforce any of the terms, covenants, conditions or other
provisions of this Contract at any time shall in any way prejudice, affect,
limit, modify or waive that Party’s right thereafter to enforce or compel strict
compliance with every term, covenant, condition or other provision hereof, any
course of dealing or custom of the trade notwithstanding. No delay or omission
on the part of a Party shall operate as a waiver thereof, nor shall any waiver
by either Party of any breach of the Contract operate as a waiver of any
subsequent or continuing breach of the Contract. 

          23.10      Counterparts;
Transmitted Copies 

          This
Contract may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument. To expedite the process of entering into this Contract, the
parties acknowledge that Transmitted Copies of this Contract shall be equivalent
to original documents until such time (if any) as original documents are
completely executed and delivered. “Transmitted Copies” mean copies that
are reproduced or transmitted via facsimile or another process of complete and
accurate reproduction and transmission. 

          23.11      Further
Assurances 

          Company
and Contractor shall use reasonable endeavors to implement the provisions of
this Contract, and for such purpose each, at the request and expense of the
other, shall, without further consideration, promptly execute and deliver or
cause to be executed and delivered to the other such, consents, documents or
other instruments in addition to those required by this Contract as the other
may reasonably require to implement any provision of this Contract. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Parties have caused this Contract
  to be executed on the date first above written.

		Company: 	 		Contractor: 
	 	 	 	 	 
		Raft River Energy I LLC 	 		IBI DBA Industrial Builders 
	 	 	 	 	 
	By: 	/s/
      Daniel Kunz 	 	By: 	/s/
      Dave Erlebach 
	 	 	 	 	 
	Name: 	Daniel
      Kunz 	 	Name: 	Dave
      Erlebach 
	 	 	 	 	 
	Title: 	President 	 	Title: 	Manager 

49 

REV A 

EXHIBIT A 

CONTRACT PRICE AND PAYMENT SCHEDULE 

Contract Price: 

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	Raft River Pipeline Contract 	05/22/06 

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Contract Allowances: 

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	Raft River Pipeline Contract 	05/22/06 

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Payment Schedule: 

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Payment Schedule (Continued): 

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	Raft River Pipeline Contract 	05/22/06 

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EXHIBIT B 
GANTT CHART 

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	Raft River Pipeline Contract 	05/22/06 

EXHIBIT C1 

PIPELINE SYSTEM CRITERIA AND PROJECT SCOPE 

	1.0 	INTRODUCTION 	56
	 	 	 
	2.0 	BASIS OF PLANT OPERATION
      	56
	 	 	 
	3.0 	DESIGN CONDITIONS 	56
	 	 	 
	4.0 	CODES AND STANDARDS 	58
	 	 	 
	5.0 	GENERAL PROJECT SCOPE REQUIREMENTS
      	60
	 	 	 
	6.0 	MECHANICAL DESIGN AND CONSTRUCTION
      	62
	 	 	 
	7.0 	CIVIL AND STRUCTURAL DESIGN
      	74
	 	 	 
	8.0 	SUBMITTALS 	75
	 	 	 
	9.0 	PERFORMANCE TESTING AND
      ACCEPTANCE 	76
	 	 	 
	10.0 	PLANT OPERATIONS AND MAINTENANCE
      MANUALS 	77

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	Raft River Pipeline Contract 	05/22/06 

1.0 INTRODUCTION 

	 	1.1 	 This document provides the Project Scope and specifications
        to be used by the Contractor in performing the Work under the Contract.

	 	 	 
	 	1.2 	 The Project Scope does not include design of pipeline
        systems, or guarantying the performance of the system related to the pipeline
        design.

	 	 	 
	 	1.3 	 The Contractor shall furnish materials, equipment and
        services required to procure, construct, precommission and test a geothermal
        pipeline system with a 30 year design life (the Project Scope).

	 	 	 
	 	1.4 	 The Project Scope is necessary to support a nominal
        13.3 MW power plant provided by others.

	 	 	 
	 	1.5 	 The following definitions are applicable to this document.

	 	 	 
	 	 		
          Project Scope – the work of the Contractor described in this
            document, comprising the pipelines and equipment systems that together
            will deliver geothermal fluid from the production wellheads to the
            power plant and from the power plant to the injection wellheads. 

        
	
          Supplier – refers to a vendor or manufacturer that supplies
            material to the project under contract to the Contractor or Company.
          

        

2.0 BASIS OF PLANT OPERATION 

	 	2.1 	
      The power plant will be designed for an annual average
      availability of 97% (8,497 hours per year). Scheduled overhauls shall
      occur once every 2-years for up to 7 days per occurrence. Unscheduled
      outages during the year are anticipated not exceed 15 days during each two
      year period. The Project Scope shall be constructed to exceed this
      reliability standard so as not to reduce the power plant
    availability.

3.0 DESIGN CONDITIONS 

	 	3.1 	
      The Raft River Geothermal Power Plant, Unit 1, is located
      approximately 40 miles southeast of Burley, Idaho, which is the county
      seat. Existing assets at the project location include geothermal
      production wells, injection wells, and monitoring wells. The project
      location involves an area of approximately two square miles, out of the
      six square miles of U.S. Geothermal owned and leased land. The entire
      project is located in Township 15 South, Range 26 East, Boise Meridian,
      Cassia County, Idaho. Facilities by section numbers are provided in the
      following table

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	Raft River Pipeline Contract 	05/22/06 

	Facility 	Section 
	Standby well RRG-5 	22 
	Production wells RRG-1, RRG-2 and RRG-4 	23 
	Power plant unit #1 	23 
	Production well RRG-3 

Injection wells RRG-6 and
      RRG-7 	
25 

	 	3.2 	
      The elevation of the power plant and well sites vary from
      4818 to 4890 feet above mean sea level.

	 	 	 
	 	3.3 	
      The site is located in Seismic Zone C, as defined by the
      International Building Code. Seismic design for all new buildings and
      structures that are regularly occupied shall be in accordance with the IBC
      for earthquake with an importance factor of 1.0.

	 	 	 
	 	3.4 	
      Weather data is as follows:

	Ambient Weather Conditions – Based on Malta
      
Agrimet data 	Drybulb Temperatures 

	Annual average temperature 	48oF 
	Average temperature, coldest month in year 	29oF 
	Minimum winter temperature 	-30oF 
	Temperature, warmest 
month in year 

	
Average 71oF 
1st SD 85oF
      
2nd SD 99oF 
	Maximum summer temperature 	111oF 
	Precipitation and Storms 	2.0 in. per 24 hours 
	Maximum monthly average rainfall 	1.64 in. (May) 
	Maximum rainfall in one hour 	1.0 in. 
	Design rainfall 
	100 year storm event having a 24-hour
      
duration (2.6 inches) per NOAA data 

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	Raft River Pipeline Contract 	05/22/06 

	Lightning storms 	Common in summer 
	Average annual rainfall 	11 inches 
	Wind 	Approximately 10 mph 
	Maximum wind velocity (gusts) 	90 mph per IBC 
	Design wind pressure 	IBC, 90 mph, Exposure C, 
	Snow 	29 pounds per square foot per IBC 
	Frost Depth per IBC 	24 inches 
	Climate Zone per IBC 	14B 

4.0 CODES AND STANDARDS 

	 	4.1 	
      The design, manufacture and erection of pipeline and
      equipment systems shall be in accordance with governing Codes and
      Standards current at the time of contract award.

	 	 	 
	 	4.2 	
      The Contactor shall comply with all applicable local,
      state and federal requirements.

	 	 	 
	 	4.3 	
      The detailed design of each system and equipment
      specification shall contain reference to the specific code or standard to
      which the item is designed. In general, the following Codes and Standards
      should apply.

	 	 	 
	 	4.4 	
      Any conflict between codes shall be referred to Company’s
      Representative for resolution.

	 	Standard 	Description 
	 	  	  
		AASHTO 	American Association of State Highway and Transportation Officials
    
	 	  	American Concrete Institute 
		 	 
		ACI 	Building Code Requirements for Reinforced Concrete (ACI 318)
      Building Code Requirements for Concrete Masonry Structures (ACI 531-79)
    

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	Raft River Pipeline Contract 	05/22/06 

	

      

	AISC 	American Institute of Steel Construction 

      Specification for the design, fabrication and erection of
      

      structural steel for buildings. 
	 	 	 
	 	ANSI 	American National Standards Institute 
	 	 	 
	 	API 	American Petroleum Institute 
	 	 	 
	 	ASCE 	American Society of Civil Engineers 
	 	 	 
	

      

	ASME 	American Society of Mechanical Engineers 

      Boiler and Pressure Vessel Code, Sections II, VIII, IX 
Power Test
      Codes, as applicable 
Power Piping Code B31.1 
	 	  	
		ASTM 	American Society of Testing & Materials 

      Material Specifications as applicable 
Sampling and Testing
      Standards as applicable 
	 	 	 
	 	AWS 	American Welding Society 
	 	 	 
	 	AWWA 	American Water Works Association 
	 	 	 
		EPA 	Environmental Protection Agency 
	 	 	 
		FM 	Factory Mutual System 

      Handbook of Industrial Loss Prevention 

      Factory Mutual Approval Guide 
Loss Prevention Data 
	 	 	 
	 	IBC 	International Building Code 
	 	 	 
	 	MSS 	Manufacturers Standardization Society 
	 	 	 
	 	OSHA 	Occupational Safety and Health Act, (Latest Edition) 
	 	 	 
	 	SSPC 	Structural Steel Painting Council 
	 	 	 
	 	TEMA 	Tubular Exchanger Manufacturers Association 
	 	 	 
	 	TIMA 	Thermal Institute Manufacturers Association 
	 	 	 
		UBC 	Uniform Building Code 

      NOTE: See also “IBC”
    
	 	 	 
		UL 	Underwriters Laboratories, Inc. 

      UL Product
      Lists (where not FM listed) 
	 	 	 
	 	UMC 	Uniform Mechanical Code 

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	Raft River Pipeline Contract 	05/22/06 

5.0 GENERAL PROJECT SCOPE REQUIREMENTS 

	 	5.1 	
      Introduction

	 	 	 
	 		
      The criteria presented herein shall apply to the Project
      Scope for a pipeline system having a design life of 30 years. The work
      shall include all labor, supervision, material and equipment necessary to
      provide and install a system of pipelines in accordance with this document
      and the Drawings and General Notes included in the Contract. Generally,
      the Project Scope consists of providing a complete pipeline system to
      deliver geothermal fluid from four production wells to the power plant,
      and to provide a complete pipeline system to deliver cooled geothermal
      water from the power plant to two injection wells.

	 	 	 
	 		
      In general, Project Scope under this work shall include
      but not be limited to providing the following:

	 	 	•	Pipeline work; 
	 	 	  	  
			o 	
      Providing and installing all pipe supports, including
      surveying, earthwork, concrete, and support pipe and steel; 

			o 	
      Hauling Company supplied pipe from Company’s onsite
      storage yard to the point of use along the pipeline routes; 

			o 	
      Installing all Company supplied 24-inch insulated pipe,
      or in the event the 24- inch pipe is not supplied by Company, providing
      and installing all Contractor supplied 24-inch pipe; 

			o 	
      Installing all Company provided 10 and 12-inch production
      pipe, or in the event the pipe is not supplied by Company, providing and
      installing Contractor supplied 10 and 12-inch production pipelines from
      wells RRG-1, RRG-2, RRG-3 and RRG-4 to the power plant site 

			o 	
      Installing all Company provided 16-inch injection pipe,
      or in the event the pipe is not supplied by Company, providing and
      installing Contractor supplied 16-inch injection pipes from the branch
      connection to injection wells RRG-6 and RRG-7; 

			o 	
      Providing and installing all 10, 12, 16 and 24-inch
      diameter pipe fittings for both new and used pipe including elbows, Tee’s,
      reducers and other fittings as needed; 

			o 	
      Providing and installing all insulation for all
      contractor supplied pipe and fittings; 

			o 	
      Providing all insulation and materials needed to patch or
      repair Company supplied 24-inch pipe; 

			o 	
      Providing all materials and constructing roadway
      crossings at all locations identified by the Company in the drawings, or
      thereafter; 

			o 	
      Providing materials and constructing a bridge structure
      crossing the Raft River; and, 

	 	 	o 	
      Providing and installing drain pipes and valves

	 	 	o 	
      Providing and installing block valves 

	 	 	o 	
      Providing and installing drain, vent and instrumentation
      isolation valves 

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	Raft River Pipeline Contract 	05/22/06 

	 	 	o 	Proving and installing pressure relief valves and pipe 
	 	 	o 	Providing and installing bypass piping and valves 
	 	 	o 	Providing and installing all fittings to ensure a complete
      system 

5.2      Work
by Others 

	 	5.2.1 	
      Preparation of “Drawings and General Notes” for the
      pipeline, and preparation of “Issued for Construction” pipeline
      drawings;

	 	 	 
	 	5.2.2 	
      Topographic map of site with two foot contours;

	 	 	 
	 	5.2.3 	
      Identification of buried transite pipeline
  routes

	 	 	 
	 	5.2.4 	
      The design and construction of the power plant including
      the power plant substation;

	 	 	 
	 	5.2.5 	
      Wellhead work, including flow control valves,
      instrumentation, wiring, lube oil system, seal/cooling water system,
      nitrogen bubbler system, electrical equipment and connections, well sheds,
      grounding system and freeze protection will be provided by
  Company.

	 	 	 
	 	5.2.6 	
      Pipeline lowpoint drain ponds;

	 	 	 
	 	5.2.7 	
      Operating and environmental permits;

	 	 	 
	 	5.2.8 	
      Flushing, and cleaning of the pipeline after mechanical
      completion, per Owner specified procedures. Water for the hydrostatic
      testing will be provided by the Company, and is assumed to come from local
      irrigation wells;

	 	 	 
	 	5.2.9 	
      Company will pay for or provide all construction and
      startup water;

	 	 	 
	 	5.2.10 	
      Design and construction of the transmission line from
      Bridge Substation to the power plant, including work within the Bridge
      Substation;

	 	 	 
	 	5.2.11 	
      Design and construction of the distribution line from the
      power plant to the well sites, including installation of pole mounted
      34.5/4.16 kV transformers and disconnects, and 34.5kV/240V/120V pole
      mounted transformers at well sites;

	 	 	 
	 	5.2.12 	
      Installation of production pumps at wells RRG-1, RRG-2,
      RRG-3 and RRG-4;

	 	 	 
	 	5.2.13 	
      Installation of fire water pipeline from DOE water tank
      to power plant; and,

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	Raft River Pipeline Contract 	05/22/06 

	 		5.2.14 	
      Installation of the raw water supply system.

	 	 	 	 	 
	 	5.3 	
      Project Scope Tie-In Points

	 	 	 	 	 
	 		5.3.1 	
      Production wells

	 	 	 	 	 
	 			5.3.1.1 	
      12-inch 400 series API flange on discharge of pump flow
      tee

	 	 	 	 	 
	 			5.3.1.2 	
      3-inch 2000 API valves

	 	 	 	 	 
	 		5.3.2 	
      Injection well and well pad tie-ins

	 	 	 	 	 
	 			5.3.2.1 	
      12-inch 400 series API flange at the top of the injection
      wellhead valve

	 	 	 	 	 
	 		5.3.3 	
      The power plant site

	 	 	 	 	 
	 			5.3.3.1 	
      Production pipeline to the power plant, ending with a
      blind flange.

	 	 	 	 	 
	 			5.3.3.2 	
      Injection pipeline from the power plant, beginning with a
      blind flange.

	6.0 	
      MECHANICAL DESIGN AND CONSTRUCTION

	 	 	 	 
		
      Reasonable provisions for performance of routine and
      nonscheduled maintenance and for expected upset conditions will be
      included in the design prepared by Owner’s Engineer. The design of the
      equipment and the pipeline system will anticipate and accommodate planned
      and unplanned shutdowns and trips of portions of the well and pipeline
      system, or of the entire system.

	 	 	 	 
		6.1 	
      Piping Design and Construction

	 	 	 	 
			6.1.1 	
      Design Standards

	 	 	 	 
				
      All brine piping design and construction will be
      conducted in accordance with the standards set forth in ASME
  B31.1

	 	 	 	 
				
      Other services shall be designed according to the
      appropriate code.

	 	 	 	 
				
      All brine piping shall be designed and constructed to
      minimize water hammer such as installing a minimum flow
      recirculation/startup bypass at each production pump discharge. Operating
      procedures, including startup, must address operating without creating
      water hammer.

	 	 	 	 
			6.1.2 	
      Design Conditions

	 	 	 	 
				
      The design conditions for the pipelines are provided in
      Table 6.1-1:

62 

	Raft River Pipeline Contract 	05/22/06 

	Description
    

	Normal
      
Temperature 

	Temperature 
Max
      
(for <5% of 
operation life) 

	Normal
      
Operating 
Pressure 

	Design 
Pressure
      

	Pressure 
Max
      
(for <5% 
of 
operation 
life) 
	ANSI 600 
Wellhead to FCV 	300oF 
	310oF 
	150 psig 
	1000 psig 
	1200 psig 

	ANSI 300 

All other pipe except
      
24” injection line 	300oF 

	310oF 

	150 psig 

	120% of 
24” line 

(420 psig) 	120% of 
des. Press 

(500 psig)

	ANSI 300 

24” injection line 
	170oF 

	310oF 

	250 psig 

	350 psig 

	120% of 
des. Press 

(500 psig)
  

	 	6.1.3 	
      Pressure Relief

	 	 	 
	 		
      Over-pressure protection shall be supplied by rupture
      discs and/or relief valves. Any relief valve in brine service must be
      installed with a rupture disk below the relief valve to protect the valve
      from scaling. A “witness” method, such as a 1⁄2” vent pipe with a ball
      valve, must be provided to allow a failed rupture disc to be detected.
      Pressure relief devices must be piped to a sump or a safe
  location.

	 	 	 
	 		
      All piping upstream of the power plant inlet valve shall
      be protected by relief valves on the individual production
    pipelines.

	 	 	 
	 		
      Piping downstream of the power plant shall be protected
      by relief valves set to the design pressure of the pipeline to be
      determined by the Owner’s Engineer. If the injection pumps are not
      operating, the production pipeline relief valves can be included in the
      pressure relief design of the injection pipeline.

	 	 	 
	 	6.1.4 	
      Pipeline sizes

	 	 	 
	 		
      Line sizes and wall thicknesses for the principal system
      piping is indicated Table 6.1-2.

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	Raft River Pipeline Contract 	05/22/06 

Table 6.1 -2: Pipeline Size and Support
  Requirements

  	

        
Pipe Class 
and
      
Flanges 	

        

Designation
      and Uses 	
Design 
Pressure
      

(psig) 	

Nominal Pipe
      
Diameter & 
Grade 1 	
B31.1 
Minimum
      
Wall 
Thickness 	

Corrosion
      
Allowance 	

Nominal Wall
      
Thickness & 
Schedule 2 	Minimum Wall
      
Thickness 3 

(pipe and
      
fittings) 
	

        

ANSI 600 

	

        
Wellhead Pipe 

        • Pump to FCV 
	

1000 psig 

	
12.75” 

A-106
      Grade B, 
Seamless 	

0.4140” 

	

1/16” 

	

0.562” 

Schedule
      60 
	

0.492”
  

	

        

	

        

	

	

10.75” 
A-106 Grade
      B, 
Seamless 	

0.3490” 
	

1/16” 
	

0.500” 

Schedule
      60 	

0.438” 

	

        

	

        

	

All 

	
3.00” 

A-53 Grade B
      ERW, 

	

0.1331” 

	

1/16” 

	

0.300” 

Schedule
      80 
	

0.263”
  

	

        A 
NSI 300 	

        Standard Line Pipe 

        • FCV to power plant 	
42 
0 psig 	

24.00” 	

0.3079” 	

1/32” 	

0.3750” 	

0.3392”

_______________________________________

1 Where A-53 Grade B ERW is specified, A-106 Grade B
may be substituted. 

2 Nominal Wall Thickness based on a plus or minus
12.5% mill tolerance. 

3 Minimum Wall Thickness to be calculated after
subtraction of mill tolerances (if any). 

64 

	Raft River Pipeline Contract 	05/22/06 

  	

        

	• Injection line, except 

        Special Thin Wall 24” 

        • Injection line supplied by 

        Contractor
      in lieu of 
Company supplied pipe 	

        (20% 
Occasional 
Load Case)

	
API 5L B, DSAW
    

	

        

	

        

	

        Std. Wall 

	

        

	

        

	

        

	

        
Design 
Case 
	

18.00” 

A-53
      Grade B ERW 	

        

0.2926” 
	

        
1/32” 

	

        
0.375” 

Std. Wall 	

        

0.328” 

	

        

	

        

	

        
Design 
	
16.00” 

A-53 Grade B
      ERW 	

        
0.2601” 
	

        
1/16” 
	

        0.375” 

Std. Wall 	

        
0.328” 

	

        

	

        

	

        

	
12.750” 

A-53 Grade
      B ERW 	

        
0.2073” 
	

        
1/16” 
	

        0.375” 

Std. Wall 	

        
0.328” 

	

        

	

        

	

        

	
10.750” 

A-53 Grade
      B ERW 	

        
0.1748” 
	

        
1/16” 
	

        0.365” 

Std. Wall 	

        
0.319” 

	

        

	

        

	

        

	

6.625” 

A-53
      Grade B ERW 
	

        

0.1077” 

	

        

1/16” 

	

        0.280” 

(6” Nom. Pipe)
      

Std. Wall 	

        

0.245” 

	

        

	

        

	

        

	

4.500” 

A-53
      Grade B ERW 
	

        

0.0732” 

	

        

1/16” 

	

        0.237” 

(4” Nom. Pipe)
      

Std. Wall 	

        

0.207” 

	

        

	

        

	

        

	

3.500” 

A-53
      Grade 
B ERW 	

        

0.0 
569” 
	

        

1/ 
16” 
	

        
0.216” 

(3” Nom. Pipe) 
	

        

0.189”

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	Raft River Pipeline Contract 	05/22/06 

  	  	  	 	  	  	  	Std. Wall 	  
	

        

	

        

	 	

        2.375” 

A-53 Grade B ERW
      

Seamless 	

        

0.0386” 

	

        

1/16” 

	
0.218” 

(2” Nom.
      Pipe) 

Schedule 80 	

        
0.191” 

	

        
ANSI 300 
	

        Special Heavy Wall 

        • Stress reducer at key 

        fittings 	420 psig 	

        24.00” 

        

        A-53 Grade B ERW
    	

        
0.438” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.438” 

	

        

	

        

	 	

        18.00” 

A-53 Grade B ERW 	

        
0.438” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.438” 

	

        

	

        

	 	

        16.00” 

A-53 Grade B ERW 	

        
0.438” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.438” 

	

        

	

        

	 	

        12.75” 

A-53 Grade B ERW 	

        
0.438” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.438” 

	

        

	

        

	 	

        10.75” 

A-53 Grade B ERW 	

        
0.438” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.438” 

	

        

	

        

	 	

        6.625” 

A-53 Grade B ERW 	

        
0.3780” 
	

        
1/16” 
	
0.500” 

Extra Strong
    	

        
0.3780” 

	

        

	

        

	 	

        4.500” 

A-53 Grade B ERW 	

        
0.337” 
	

        
1/16” 
	
0.337” 

Extra Strong
    	

        
0.295” 

	
	
	 	

        3.500” 	

        0.262” 	

        1/16” 	
0.300” 	

        0.262” 

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	Raft River Pipeline Contract 	05/22/06 

  	 	  	  	A-53 Grade B ERW 	  	  	Extra Strong 	  
	
 
	
 
	

        
	2.375” 

        A-53 Grade B ERW 
	

        0.0386” 
	

        1/16” 
	0.218” 

        (2” Nom. Pipe) 

        Schedule 80 	

        0.191” 

	
 ANSI 300 
	Special Thin Wall 
 

        by Company 	provided 

        350 psig 
	24.00” 

        

        API 5L B, DSAW 	

        0.3079” 
	

        1/32” 
	0.3750” 

        

        Std. Wall 	

        0.3392” 

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	Raft River Pipeline Contract 	05/22/06 

	 	6.1.5 	 Routing 

	 	  	 	  

			 Routing of the principal piping
        is indicated in the drawings included in Exhibit C2 of the contract. Any
        deviation from the indicated route shall be submitted for approval to
        the Company. 

	 	  	 	  

	 	6.1.6 	 Pipe Support 

	 	  	 	  

			 Any deviations from this requirement
        must be submitted to Company for approval prior to final design documents
        being issued for construction. 

	 	  	 	  

			6.1.6.1 	 Above-ground pipe will be supported in pipe
        racks or “T” supports or other permanent support designs. “Sleeper”
        supports set on the ground shall not be used. 

	 	  	 	  

			6.1.6.2 	 Pipe supports shall be designed and installed
        to prevent the accumulation of standing water that could lead to corrosion
        and thinning of the structural steel. This includes the accumulation of
        water inside pipe supports. 

	 	  	 	  

	 	  	6.1.6.3	 Pipe support designs are depicted in drawing
        5021-33-01. 

	 	  	 	  

	 	6.1.7 	 Stress Analysis 

	 	  	 	  

			 Stress analysis shall be performed
        by the Owner’s Engineer per ASME B31.1. Stress will be reduced via
        horizontal expansion loops, offsets or expansion joints. Vertical expansion
        loops are not allowed. Use of expansion joints is allowed, upon approval
        of design and specification details by Company. 

	 	  	 	  

	 	  	 It is not the Contractors responsibility
        to perform a stress analysis. 

	 	  	 	  

	 	6.1.8 	 Insulation and Freeze Protection
      

	 	  	 	  

			6.1.8.1 	 General: Contractor shall provide thermal
        insulation for all pipelines 4” and larger, and all valves installed
        in pipelines. 

	 	 	 	 
			6.1.8.2 	 Production pipelines: The insulation system
        shall provide the equivalent insulation to the R-value provided by at
        least 3 inches of fiberglass with an aluminum jacket. 

	 	 	 	 
			6.1.8.3 	 Injection pipeline: The insulation system
        shall provide the equivalent insulation to the R-value provided by at
        least 1 inch of fiberglass with an aluminum jacket 

	 	 	 	 
			6.1.8.4 	 Pipeline Flanges: Fixed insulation shall
        be brought to within eighteen inches (18”) of any pipeline flange.
        A removable insulation jacket shall be provided for all flanged connections
        and/or in-line valves. 

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	Raft River Pipeline Contract 	05/22/06 

	 	6.1.8.5 	
      One inch of insulation shall be provided for all lines 2"
      and under which are exposed to winter temperatures below freezing and
      which cannot be drained during shutdowns or are stagnant during normal
      operations. Exposed dead legs over 2” are not allowed.

	 	 	 
	 	6.1.8.6 	
      Materials of Construction for
  Insulation:

			•	
      Fiberglass, mineral wool, calcium silicate, polyurethane
      foam, and other materials suitable for the design temperatures are
      allowed. Asbestos shall not be used. 

	 	 	•	
      Fiberglass and mineral wool shall be 4 lb/ft^3 density.
      

			•	
      Backing paper shall high temperature resistant, and shall
      be non-bleach, chloride free. 

			•	
      Insulation shall be secured to the pipeline with
      galvanized or stainless steel wire, with a minimum of two sets of tie-
      down wires per insulation material width. 

			•	
      All insulation from the production pump to 3’ downstream
      of the flow control valve shall be calcium silicate to prevent damage from
      maintenance and operation activities over the life of the project.
  

			•	
      Jacketing shall provide the necessary moisture and
      weather protection for the particular insulation. If no jacket is required
      for long-term protection of the insulation, then it is not required by
      this specification. Paint may be used if the only weather protection
      required is UV blocking. 

			•	
      Alumimum jacketing shall be 0.016” min. thickness for 16”
      diameter and under piping. 

			•	
      Aluminum jacketing shall be 0.020” min. thickness for
      piping greater than 16” diameter. 

			•	
      Jacketing shall be secured with stainless steel screws
      and sealed with high temperature silicon chalking of insulation industry
      grade. All jacketing edges shall be sealed, including gores sections for
      fittings. 

			•	
      Should banding be used over the jacketing, bands shall be
      304L stainless steel, spaced on 18” centers, and shall be 1⁄2” in width.
      Bands shall match the external color of the jacketing.

	 	6.1.9 	
      Isolation Requirements

	 	 	 
	 		
      The piping system shall be designed by the Owner’s
      Engineer to be appropriately isolated for maintenance from all sources of
      energy such as the main geofluid line and the well. Acceptable isolation
      methods are double block and bleed or an isolation valve with a dropout
      spool. Drop out spools must be accessible from ground level or a working
      platform.

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	Raft River Pipeline Contract 	05/22/06 

	 	6.1.10 	
      Metering runs

	 	 	 
	 		
      Wherever a flow meter is required, the piping shall be
      laid out to meet ASME and ISA meter run requirements. Per these
      specifications, there shall be sufficient straight pipe upstream and
      downstream of the meter based on the elbow configuration at the inlet and
      outlet of the meter run.

	 	 	 
	 		
      The inside diameter of the pipe shall be measured to
      0.001 inches prior to construction of the meter run.

	 	 	 
	 	6.1.11 	
      Materials of Construction

	 	6.1.11.1 	
      General:

	 	 	 
	 		
      Piping materials shall be suitable for geothermal service
      and conform to ASME B31.1. No copper or copper bearing alloys shall be
      allowed to contact geothermal fluids. Pipelines carrying geofluids shall
      have corrosion allowances as specified in Table 6.1-2 (Pipeline Size and
      Support Requirements).

	 	 	 
	 	6.1.11.2 	
      Pipe:

		•	
      Pipe materials shall be as specified in Table 6.1-2
      (Pipeline Size and Support Requirements). 

		•	
      Used pipe may be substituted for new pipe, upon written
      approval of Company. 

	 	6.1.11.3 	 Pipe Fittings: Carbon steel, ASTM A-234 Gr WPB
        butt welded. Miter joints are not allowed. 5D radius (minimum) bends are
        permitted. Small bore fittings shall be socket weld, 3000 pound, ASTM
        A-105.

	 	 	 
	 	6.1.11.4 	 Gate Valves: Flanged, raised face, wedge, ASTM
        A-216 Gr WCB cast steel bodies, OS&Y and bolted bonnets. Valve trim
        shall have a proven 10 year service life in similar geothermal service,
        for example stellite or 316 sealing surfaces and 17-4 PH valve stem. Valve
        specifications shall be submitted to Company for approval and verification
        prior to order by Contractor.

	 	 	 
	 	6.1.11.5 	 Check Valves: Carbon steel, ASTM A-216 Gr WCB,
        swing type with bolted bonnet.

	 	 	 
	 	6.1.11.6 	 Pressure Relief Valves: Valve specifications
        shall be submitted to Company for approval and verification prior to order
        by Contractor.

	 	 	 
	 	6.1.11.7 	 Flanges: Raised faced, ASTM-105. Small bore flanges
        shall be socket weld.

	 	 	 
	 	6.1.11.8 	 Gaskets: Spiral wound, 304 stainless steel with
        grafoil filler.

	 	 	 
	 	6.1.11.9 	 Stud Bolts: ASTM A-193 Gr B7 with heavy hex nuts
        (ASTM A-194 Gr 2H).

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	Raft River Pipeline Contract 	05/22/06 

	 	6.1.11.10 	
      Drain Valves: Shall be a minimum of 2 inches,
      unless otherwise specified.

	 	 	 
	 	6.1.11.11 	
      Expansion Joints: If used shall be high-alloy or
      annealed austenitic stainless and designed to withstand or protected
      against infrequent water-hammer events.

	 	 	 
	 	6.1.11.12 	
      Pipe Supports: New pipe or used pipe may be used.
      Pipe shall be ASTM A-53 Grade B or API 5L Grade B or equivalent as
      approved by Company.

	 	6.1.12 	
      Preoperational System Cleaning

	 	 	 
	 		
      Prior to placing in operation, the piping system shall be
      cleaned by the Company according to the Contractor’s specification.
      Contractor shall submit cleaning procedure to Company for approval prior
      to starting construction. Cleaning procedure shall use any of a
      combination of air, water, geothermal brine or geothermal steam. Cleaning
      energy shall be equivalent to a liquid flow velocity of 20 feet per
      second. The pipeline flush will be conducted by the Company as described
      in Section 9.2.

	 	6.2 	
      Layout Requirements

	 	6.2.1 	
      All pipe shall be sloped to drain to the following
      locations:

	 	•	Unit 1 power plant drain sump 
	 	•	Crook well drain sump 

The pipeline will be installed with a
nominal top of pipe support elevation to be between 18” and 36” in height. Pipe
support height can vary to provide a constant slope between horizontal changes
in direction (PI’s) and avoid vertical breaks (VPI’s) in the slope as much as
practical. Pipeline PI’s are shown on the drawings. VPI’s will be determined in
the following sequence: 

	 	1. 	
      Contractor to provide surveyed elevation of ground
      profile at 200-foot intervals and at grade breaks

	 	2. 	
      Owner’s Engineer will determine vertical alignment using
      contractor data.

field Pipe support heights taller than
48” must be submitted to the owner for engineering review related to the piping
loads on these supports prior to installation. 

Drain sumps will be provided by the
Company at the Unit 1 power plant site, Crook well drain sumps located along the
northern edge of Section 26 on each side of the Raft River, and along the
production pipe from RRG-2 south of the county road crossing.

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	Raft River Pipeline Contract 	05/22/06 

	 		
      Except as otherwise noted on the drawings, all drain
      pipes and valves shall be 2-inch.

	 	 	 
	 	6.2.2 	
      Maintenance and operation access must be maintained to
      the wellhead pipeline valves, instruments, and the wellhead sheds.
      Maintenance access includes:

	 	•	
      The ability to drive a service vehicle next to the
      equipment 

		•	
      Ability to remove any at grade pump or control valve with
      a 5-ton crane. 

	 	6.3 	
      Not used

	 	 	 	 
	 	6.4 	
      Not used

	 	 	 	 
	 	6.5 	
      Utility Systems

	 	 	 	 
	 		6.5.1 	
      Waste Disposal

	 	 	 	 
	 			
      Toxic or hazardous waste discovered at the site must be
      immediately reported to the Company so that it may arrange for proper
      removal and disposal. Contractor shall handle all toxic or hazardous
      wastes generated in the course of construction in accordance with
      applicable laws and regulations. There is existing buried transite pipe in
      the well field. To facilitate the Contractor’s work under this Work, prior
      to the start of construction, the Company shall located transite pipe
      crossing locations.

	 	 	 	 
	 		6.5.2 	
      Painting and Coatings

	 	 	 	 
	 			
      Manufactured equipment and valves supplied under this
      contract shall be painted in accordance with Supplier's standard practice
      with due consideration for the operating environment and temperature.
      Factory applied painting is required with repair of construction damage
      prior to mechanical completion.

	 	 	 	 
	 			
      A two coat paint system (one prime and one finish coat)
      per Company approved paint supplier shall be applied to pipe supports in
      irrigated fields and adjacent to roads. Surface preparation prior to
      primer application shall be to near white blast per
SSPC.

	7.0 	
      CIVIL AND STRUCTURAL DESIGN

	 	 	 
	 	7.1	 Geotechnical Report

72 

	Raft River Pipeline Contract 	05/22/06 

A geotechnical soils investigation and
analysis has been conducted to establish foundation design parameters. The
report, prepared by CH2M Hill, dated October 2005, and entitled Geotechnical
Report, consists of summary information from drill 17 borings. Twelve of the
borings were along the pipeline routes and five were in the power plant
area.

	 	7.2 	
      Civil Work Criteria

	 	 	 	 
	 		7.2.1 	
      Clearing and Grubbing

	 	 	 	 
	 			
      Areas through sagebrush shall be cleared and grubbed only
      as necessary for the performance of work and subsequent operation and
      maintenance. Removed organic materials shall be removed from the work
      area.

	 	 	 	 
	 		7.2.2 	
      Earthwork

	 	 	 	 
	 			
      Excavation along pipeline routes shall be to the
      dimensions and limits as indicated on the Drawings and General Notes.
      Excavation for all other work shall conform to good engineering and
      construction practice.

	 	 	 	 
	 			
      Backfill shall be compacted in accordance with good
      engineering and construction practices. Compaction under or adjacent to
      load bearing structures shall be to a minimum of 95% of the maximum
      laboratory dry density. All other areas shall be compacted to a minimum of
      90% dry density.

	 	 	 	 
	 		7.2.3 	
      Site Preparation

	 	 	 	 
	 			
      Areas not required for plant operation and construction
      shall remain natural. Efforts shall be made to minimize damage to natural
      areas and especially farmland. Excessive or unnecessary damage to farmland
      may be charged to Contractor at applicable lease rates. Erosion control
      for storm drainage during the construction phase shall be implemented in
      accordance with the Storm Water Pollution Prevention Plan. An area within
      the project site will be provided for construction trailers and
      activities. After completion, these areas shall be regraded, and made free
      and clear of debris and unused construction material.

	 	 	 	 
	 			
      Buried irrigation pipelines shall be identified and
      protected. The direct and indirect costs to repair damages to such
      pipelines shall be the responsibility of the Contractor.

	 	 	 	 
	 		7.2.4 	
      Roads

	 	 	 	 
	 			
      The Contractor shall provide permanent access roads along
      pipeline routes in sagebrush areas. The roads shall be graded after
      construction and

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	Raft River Pipeline Contract 	05/22/06 

	 		
      cleared of debris to 10’ from edge of pipeline supports.
      Surfacing of the roads is not required.

	 	 	 
	 		
      Access roads through farmland are for construction only
      and shall be graded to conform with farm contours in order for the land to
      be returned to farm use at the end of construction.

	 	 	 
	 		
      Loading over culverts and pipes shall be in accordance
      with AASHTO- HS20-44.

	 	 	 
	 	7.2.5 	
      Storm Water Control

	 	 	 
	 		
      Runoff control from storm water shall conform to the
      approved Storm Water Pollution Prevention Plan, which shall be the
      responsibility of the Contractor to obtain, if
required.

	 	7.3 	
      Civil/Structural Materials and Design 7.3.1
    Concrete

  		•	Unless specified to the contrary in the Drawings, concrete
        design compressive strengths shall be as follows: 

	Use 	f’c 
	All structural concrete 	4,000 psi 
	Pipe support concrete 	2,900 psi 
	Electrical duct encasement and 	2,000 psi 
	lean concrete backfill 	 

	 	•	Compressive strength (f’c) refers to strength
      at 3 days. 

	 	7.3.2 	
      Reinforcing Steel

	 	 	 
	 		
      Bar sizes No. 3 through No. 18 shall be deformed billet
      steel, conforming to ASTM Designation A615, Grade 60.

	 	 	 
	 		
      Spirals shall be deformed bars conforming to ASTM A82.
      Welded wire fabric shall conform to ASTM A185.

	 	 	 
	 	7.3.3 	
      Anchor Bolts

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	Raft River Pipeline Contract 	05/22/06 

	 		
      Anchor bolt steel, washers, and nuts, shall conform to
      ASTM A307, A-36 or A-193. Allowable stress on anchor bolts shall be 20,000
      psi based on net tensile stress area of bolts. Headed stud anchor bolts
      shall conform to ASTM A-108.

	 	 	 
	 	7.3.4 	
      Structural Steel

	 	 	 
	 		
      Structural steel shall be designed in accordance with
      latest edition of AISC and IBC. All bolted connections shall have a
      minimum of two 3/4 inch diameter high strength bolts. All high strength
      bolt connections shall be bearing type connections.

	 	 	 
	 		
      Structural steel shapes and plates shall conform to ASTM
      A36 or A572, Grade 50.

	 	 	 
	 		
      Structural pipe members shall conform to ASTM A53, Types
      E or S, Grade B or ASTM A106, Grade A.

	 	 	 
	 		
      Allowable stresses in structural steel shall be
      determined in accordance with the AISC code, 9th Edition.

	 	 	 
	 		
      All high strength bolts, nuts and washers shall conform
      to ASTM A325. All other bolts and nuts shall conform to ASTM A307, Grade
      B. All filler metal shall conform to AWS D1.1.

	8.0 	
      SUBMITTALS

	 	 
		
      The Contractor shall submit to the Company and the
      Company's Engineer information describing the equipment and pipeline
      materials in a timely manner, such that the schedule for design and
      construction of the facility shall not be delayed. The Contractor shall,
      as a minimum, submit to the Company the following
  information:

	 	8.1 	
      The Company shall have the right to review and comment on
      the following documents in addition to those referenced in other parts of
      the contract.

	 	•	Contractor Quality Control Procedures 
	 	•	Contractor's Site Safety and Security Program
    
	 	•	Mechanical Completion, Inspection and Test
      Procedures and Results 
	 	•	Operation and Maintenance Manuals

	 	8.2 	
      The Company shall be provided with the
  following:

	 	•	Vendor Submittals including Shop Drawings, Catalog
      Cuts, Construction Procedures and Scheduling Information 
	 	•	Vendor Guarantees

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	Raft River Pipeline Contract 	05/22/06 

	 	•	System Test and Start-up Procedures, Test
      Packages 

	 	8.3 	
      The sequence of submission of all submittals shall be
      such that all information is available for checking each submittal when it
      is received. Within seven (7) days after receipt, unless as otherwise
      agreed upon for critical items, the Company will return two copies of the
      submittals with comments.

	 	 	 	 
	 	8.4 	
      The submittals shall be accompanied by a letter of
      transmittal identifying the documents submitted.

	 	 	 	 
	 	8.5 	
      Drawings.

	 	 	 	 
	 		8.5.1 	
      General

	 	 	 	 
	 			
      All drawings, and Instruction Books shall be in the
      English language and all dimensions and units of measurements shall be in
      the United States standard units.

	 	 	 	 
	 		8.5.2 	
      Drawing Quality

	 	 	 	 
	 			
      The submittal shall have every line, character, and
      letter or symbol clearly legible.

	 	 	 	 
	 		8.5.3 	
      Scale Required

	 	 	 	 
	 			
      All drawings shall be drawn accurately to a scale
      sufficiently large to show all pertinent features. Dimensions shown on all
      drawings shall be in feet and inches.

	9.0 	
      PERFORMANCE TESTING AND ACCEPTANCE

	 	 	 
		9.1 	
      General

	 	 	 
			
      Prior to final acceptance, the pipeline system shall be
      inspected and tested for completion, conformance to the contract,
      specifications and design documents. This testing shall be conducted per
      governing codes and by protocols and procedures described in this document
      or agreed to between the Parties. Completion is achieved when all
      pipelines and support systems have been installed, all insulation has been
      installed, and the Contractor tests outlined below have been successfully
      completed, and the system is ready for operations.

	 	 	 
			
      Contractor Tests - As a minimum the following tests shall
      be successfully completed by the Contractor:

	 	•	Pipeline hydrostatic test 

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	Raft River Pipeline Contract 	05/22/06 

		•	
      Visual weld inspection by a Certified Weld Inspector
      (CWI) of all pressure containing welds as required by ASME B31.1 visual
      inspection requirements. 

		•	
      Pipeline radiography will be provided by the Contractor
      whenever radiographic results of tests paid for by the Owner fail. For
      each failed test the Contractor shall pay for two additional tests of
      welds from the same welder. 

Owner Tests – The Owner shall have the
right to check any Contractor welds using radiography to be paid for by the
Owner. Owner testing will be limited to no more than 10% of all Contractor
circumferential butt welds. Tests will include: 

		•	
      Each welder shall have their first (4) welds
      radiographed. These will be included as part of the 10% radiography
      requirement. 

	 	•	
      Interpretation of the radiography will be per ASME B31.1,
      by a CWI. 

	 	9.2 	
      Company’s Scope for Completion

	 	 	 
	 		
      The following work will be conducted by the
    Company:

		•	 Pipeline flush and cleaning 

10.0  PLANT OPERATIONS AND MAINTENANCE MANUALS

	 	10.1 	
      Operations and Maintenance Manuals

	 	 	 
	 		
      Contractor shall provide detailed system and equipment
      instructions from the Contractor’s equipment suppliers.

	 	 	 
	 		
      The contractor shall supply five (5) copies of the
      instruction books for all equipment incorporated in the work specified
      herein to the Company. These shall give complete and detailed installation
      and operation instructions, with particular emphasis on sequence and
      methods to be used in future maintenance, disassembly, and reassembly.
      Special precautions, sequence of work, recommendations on methods of
      assembly, and adjustment of all parts requiring adjustment shall be
      covered in detail. Parts catalogs and other data shall be included for
      easy identification of parts for ordering replacements.

	 	 	 
	 		
      The above requirements shall be assembled together with
      three sets of all major drawings reduced to or copied onto 11 inch by 17
      inches paper and bound in a permanent, strong, and serviceable cover
      without folding the drawings.

	 	 	 
	 		
      Instruction books as a minimum shall include as required
      the following:

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	Raft River Pipeline Contract 	05/22/06 

	 	10.1.1 	
      Recommended methods for assembly and adjustment of all
      parts requiring assembly or adjustment, including bearings.

	 	 	 
	 	10.1.2 	
      Recommendation on equipment installation, including
      special precautions and sequences of work.

	 	 	 
	 	10.1.3 	
      Detailed operating instructions consistent with the
      operation and maintenance provisions provided or required by the various
      equipment suppliers as a condition of their warranty
obligations.

	 	 	 
	 	10.1.4 	
      Recommended maintenance procedures including required
      test and calibration intervals.

	 	 	 
	 	10.1.5 	
      Test and calibration procedures for all devices including
      test equipment connection drawings.

	 	 	 
	 	10.1.6 	
      Equipment storage and hydrostatic testing details shall
      be provided by the Contractor.

	 	 	 
	 	10.1.7 	
      Complete weld maps for the project
  depicting:

	 	•	Welder/Fitter ID for fit up. 
	 	  	- 	Supervisor ID for fit up approval. 
	 	  	- 	Date for fit up of the joint. 
	 	•	Welder ID for hot and root pass. 
	 	  	- 	Supervisor ID and Inspector ID for approval. 
	 	  	- 	Weld procedure employed. 
	 	  	- 	NDE methods and approval. 
	 	  	- 	Date for root and hot pass. 
	 	•	Welder ID for fill and cap. 
	 	  	- 	Supervisor ID and Inspector ID for approval. 
	 	  	- 	Weld procedure employed. 
	 	  	- 	NDE methods and approval. 
	 	  	- 	Date for root and hot pass. 

The above can be submitted in notebook
form. The above data must refer to the specific weld ID as shown on the weld map
drawings submitted by the Contractor. 

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EXHIBIT C2 

DRAWINGS AND GENERAL NOTES 

Drawings and general notes provided as separate documents. 

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EXHIBIT D 

PERFORMANCE TEST PROTOCOLS 

Protocols to be agreed to between Parties prior to hydrostatic
testing. 

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EXHIBIT E 

WARRANTY CLAIM PROCEDURES 

          1.      Where
Company has agreed in accordance with the terms of the Contract to take
corrective action, and upon notifying Contractor as set forth in Section 10.3.1
of the Contract, Company may undertake corrective action, but Contractor
reserves the right to investigate and determine the eligibility of such warranty
claim. 

          2.      Company
shall notify Contractor in accordance with Section 10.3.1 of the Contract and
provide documents per paragraph 3 below together with a written cost estimate of
the corrective action required. As soon as reasonably possible following the
receipt of said documents and cost estimate, Contractor shall investigate the
defect and shall issue written instructions to Company on the corrective action
to be undertaken, or Contractor shall undertake corrective action by its own
employees or agents. 

          3.      The
following procedures shall be observed in all Contractor warranty claims for the
Facility in connection with which Company taken corrective action at
Contractor’s request as identified in paragraph 1 above: 

                    (a)      A
failure report, which shall contain technical and logistic information
sufficiently detailed to enable Contractor to assess the damage to the Work and
to evaluate appropriate corrective action in the form as agreed to by Company
and Contractor, shall be provided by Company as soon as reasonably practicable
after the occurrence of any event giving rise to a warranty claim. 

                    (b)      Warranty
claims shall be submitted in accordance with paragraph (d) below, and shall
include, as a required minimum, the following documents: 

          (i)      Applicable
failure report; 

          (ii)      List
of equipment and materials purchased or used in accomplishing the repair,
schedule of operations and subcontractors hours applicable to each claim, and a
copy of any internal work orders or purchase orders prepared in connection with
each such claim; 

          (iii)      Company’s
maintenance and repair records with respect to the equipment for which the claim
is being made (Company shall include with such maintenance and repair records
the manufacturer/vendor part number and serial number and the identification by
part number and serial number of the next major assembly call-out (such as, but
not limited to, turbine, generator, electrical cabinet)); and 

          (iv)      copies
of invoices received or prepared for costs and expenses claimed. 

The documentation to be provided pursuant to paragraphs (b)(ii)
and (b)(iii) above, shall be in a form reasonably acceptable to Contractor. 

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                    (c)     
All warranty claims pertaining to failure of the equipment for which Company has
independently undertaken corrective action during any calendar month shall be
submitted to Contractor on or before the last day of the following calendar
month. Claims shall be paid by Contractor on a net 30 basis. Work performed by
Company under a warranty claim shall be billed on a “time and material” basis as
defined below: 

                    (d)     
“Time and Material” in connection with a warranty claim is defined as follows:

          (i)      With
respect to “Time”, the product of one hundred fifteen percent (115%) of the
normal hourly wage (including fringe benefits, insurance and taxes) Company pays
with respect to its particular employee (not including overhead) multiplied by
the number of hours each employee performed the particular Work. 

          (ii)      With
respect to “Material”, one hundred ten percent (110%) of the actual purchase
price paid by Company or an affiliate to a third party for the materials
incorporated or consumed in connection with the Work; and 

          (iii)     
With respect to Work performed by a subcontractor (other than an entity which
directly or indirectly controls, is controlled by, or is under common control
with, Company, Work done by any such entity being deemed Work done by Company
through its own employees for purposes of this definition), one hundred ten
percent (110%) of the actual amount paid by Company to the subcontractor for
such Work. 

                    (e)      Accounting
settlement between Company and Contractor due to warranty claims shall occur on
a quarterly basis. 

                    (f)      Company
shall maintain adequate records to support all warranty claims and allow
Contractor to audit warranty claims upon no less than ten (10) Days period
notice. 

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EXHIBIT F 

APPROVED VENDOR LIST 

  	Equipment Item 	Name of Supplier/Vendor 
	Geothermal Pipe 

        (Used or Limited 

        Service) 	Mill Man Steel, Inc 
 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

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EXHIBIT G 

PERMITS 

          This
Exhibit G defines the current scope and allocation of permitting and contracting
work for the Project. Contractor is responsible for only the permits expressly
designated below as being the responsibility of Contractor; Company is
responsible for obtaining all other Project related permits. 

	PERMITS & CONTRACTS 
	Prepare by and
      
responsibility party 
	Conditional Use Permit 	Company 
	  	  
	Pipeline road crossing easements (from
      highway district) 	Company/RRREC 
	Private land lease & easements 	Company 
	County Building Permit 	Contractor 
	Storm Water Pollution Prevention Plan
      
(containment plan during construction) 	Contractor 

	Storm Water Pollution Prevention Plan
      
(containment plan during operation) 	Company 

	Idaho Power Certifications 	Company 

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EXHIBIT I 

CERTIFICATE OF FINAL COMPLETION 

US Geothermal, Inc. 
1509 Tyrell Lane, Suite B 
Boise, ID
83706 
Attn: Daniel Kunz 

          With
reference to the CONSTRUCTION CONTRACT (the “Contract”) dated as of
_________________ between RAFT RIVER ENERGY I LLC (“Company”), and
_____________________________(“Contractor”) for construction of the unit number
one Raft River Geothermal Project pipeline and equipment in Cassia County,
Idaho, Company hereby confirms and certifies that the requirements of the
Contract for Final Completion set forth in the Section 4.7 of the Contract have
been achieved as of _____________, 200_. Attached hereto is a list of the
Punchlist Items submitted by Contractor for approval by Company pursuant to
Section 4.9 of the Contract. 

          Terms
defined in the Contract shall have the same meaning when used herein. 

          Executed
this ____ day of ________________, 200__. 

______________ 

By:_________________________________

Name:______________________________

Title:_______________________________

AGREED: 

US Geothermal, Inc. 

By:_________________________________

Name:______________________________

Title:_______________________________

Date Signed: ________________________

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EXHIBIT J 

FORM OF FINAL LIEN WAIVER 

WAIVER OF LIENS/RELEASE 
AND CERTIFICATE OF FINAL PAYMENT

     

          With
reference to the Construction Contract (“Contract”) dated as of
________________between the undersigned, ____________________________ ,
(“Contractor”) and RAFT RIVER ENERGY I LLC. (“Company”) for construction of the
unit number one Raft River Geothermal Power Project pipelines and equipment in
Cassia County, Idaho, Contractor hereby certifies and represents that it has
made, or will make, when due, full payment of all costs, charges and expenses
incurred by it or on its behalf for work, labor, services, materials and
equipment supplied to the foregoing premises and/or used in connection with its
work under the Contract with respect to the Facility, other than any thereof for
which payment has been requested in the invoice of even date herewith.

          Contractor
hereby covenants that it will require each of its subcontractors and material
suppliers to make full payment of all costs, charges and expenses incurred by
them or on their behalf for work, labor, services, materials and equipment
supplied to the foregoing premises and/or used by them in connection with the
undersigned’s work under the Contract with respect to the Facility, other than
any thereof for which payment has been requested in the invoice of even date
herewith.

          In
consideration of ____________________Dollars ($__________) as final payment
under the Contract for work performed by Contractor as of _________, 200_,
Contractor, upon receipt of such final payment hereby unconditionally releases
and forever discharges Company and Company’s premises and property from all
claims, liens and obligations of every nature arising out of or in connection
with the payment of the aforesaid final payment except as set forth below: 

          (Note:
If none, write “NONE” in space above. Any claims excepted must be described and
the specific amount claimed must be set forth.) 

          As
additional consideration for the aforesaid final payment, Contractor, upon
receipt of such payment agrees to indemnify and hold harmless Company from and
against all costs, losses, claims, causes of action, judgments and expenses,
including attorney’s fees arising out of or in connection with claims against
Company, which claims arise out of the performance of the work under the
Contract with respect to the Facility and which may be asserted by Contractor or
any of its Subcontractors or any of their representatives, officers, agents or
employees except for those claims listed above. 

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	Raft River Pipeline Contract 	05/22/06 

          The
foregoing shall not relieve Contractor of its obligations under the provisions
of the Contract, which by their nature survive completion of the work including,
without limitation, warranties, guarantees and indemnities. 

Executed this __________________day of
________________________, _____. 

_________________ 

By:_________________________________

NAME:______________________________

TITLE:_______________________________

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	Raft River Pipeline Contract 	05/22/06 

EXHIBIT K 

LIQUIDATED DAMAGES

Delay Liquidated Damages 

          Delay
Liquidated Damages shall be paid by Contractor to Company, based on the number
of days between the Final Completion Date and the Guaranteed Final Completion
Date, as set forth in the following table.

          .If
the Final Completion Date does not occur on or before the Guaranteed Final
Completion Date, then Contractor shall pay to Company liquidated damages
calculated as the sum of the amount set forth below for each Day that the Final
Completion Date is after the Guaranteed Final Completion Date during the
period between the Guaranteed Final Completion Date and the Final Completion
Date: 

	DESCRIPTION 
	DELAY LIQUIDATED 
DAMAGES 
	Final Completion Date prior to Guaranteed 
Final
      Completion Date 	No Delay Liquidated Damages 

	Final Completion Date 
0 to 15 Days 
after
      Guaranteed Final Completion Date 	Delay Liquidated Damages 
payment waived
      by Company 

	Final Completion Date 
16 to 45 Days 
after
      Guaranteed Final Completion Date 	$1000 per day 

	Final Completion Date 
from 46 days 
after
      Guaranteed Final Completion Date 
until April 30, 2007 	The total damages from above plus 
$1,200
      per day after day 45. 

	Final Completion Date from 
May 1, 2007 to September
      30, 2007 
Final Completion Date after 
October 1, 2007 
	The total damages from above plus 
$4,300
      per day after May 1, 2007 
The total damages from above plus 
$7,100
      per day after October 1, 
2007 

The cap on liquidated damages shall be limited to One Million
Dollars ($1,000,000). 

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	Raft River Pipeline Contract 	05/22/06 

EXHIBIT L 

CHANGE ORDER FORM

 

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Contract Labor Rates: 

 

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EXHIBIT M 

CHANGE ORDER REQUEST FORM 

  	Prepared By: 
	
	Change Request Order Form 
	Rev. # 
	Date 

	 
	Description of Requested Change 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Change Requested By: 	Date: 	Basis of Change: 
	 	
       

       

       
	 

	Price of this Change: 	 
	Additional time required for Change: 	 

	APPROVALS 
	  	Name/Title/Company
      & Signature 	Date 
	Submitted By: 

	

	

	Approved and Accepted By: 

	

	

	
      Other: 

       
	 	 

Attachments to this change
Proposal: 

  	
	 
	 
	 
	 

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EXHIBIT N 

WORK ITEMS PRIOR TO NOTICE TO PROCEED 

          Initiation
of following list of contractor work items was requested by the Contractor to be
commenced upon signing the contract. The purpose is to allow the Contractor to
get started with work prior to issuance of the Notice to Proceed, which is
anticipated on or before June 1, 2006. As agreed by the Parties, commencement of
the following items of work is allowed per issuance of a Limited Notice to
Proceed. As further agreed, funding in the amount of $50,000 will be made
available for work under this exhibit to compensate Contractor for expenses from
the Limited Notice to Proceed until issuance of the Notice to Proceed. 

	 	1. 	
      We need CAD files for our surveyor. Can we get from the
      Engineer so he can begin his layout?

	 	 	 
	 	2. 	
      Get surveyor started. Write P. O. and get time slot. He
      is currently 2 to 3 weeks behind. We can forward elevations to Engineers
      to establish elevations of supports.

	 	 	 
	 	3. 	
      Get storm water prevention permit started and applied
      for.

	 	 	 
	 	4. 	
      According to Thorton if we can get the line staked he
      will start clearing and grubbing in his spare time and then be ready when
      we get on site

	 	 	 
	 	5. 	
      Industrial Builders to Mobilize on site. Set up trailers
      and utilities as needed. Set up laydown area where we will not interfere
      with future construction of Plant.

	 	 	 
	 	6. 	
      Set up living accommodations. Try to get set up with
      motel in Malta or trailer spaces for RV’s.

	 	 	 
	 	7. 	
      Establish and finalize schedule- Sequence of pipe line
      construction

	 	 	 
	 	8. 	
      Put down payment on production auger to hold.

	 	 	 
	 	9. 	
      Set up jig and mock up supports and mock up shoes
    etc.

	 	 	 
	 	10. 	
      Paint color for supports- (Tan-?)

	 	 	 
	 	11. 	
      Set up weld charts for project and establish Q.C.
      procedures with MTI

	 	 	 
	 	12. 	
      Establish Safety procedures

	 	 	 
	 	13. 	
      Establish RFI procedures

	 	 	 
	 	14. 	
      Establish monthly meeting dates

	 	 	 
	 	15. 	
      Establish schedule of values

93 

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EXHIBIT 10.1

LICENSE AND ROYALTY AGREEMENT

THIS LICENSE AND ROYALTY AGREEMENT is made and entered into this  1st day of
June, 2006 (the "Effective Date") by and among RPM TECHNOLOGIES, INC.
(hereinafter referred to as "RPM"), a corporation incorporated in the State of
Delaware, having its place of business at 24001 S. Western Avenue, Park Forest,
Illinois 60466 and GERALD EDSON, an individual ("EDSON"). RPM and EDSON are
individually referred to in this Agreement as a "Party" and collectively as
"Parties."

WHEREAS, RPM is in the business of creating and marketing plastic technology
for pallets and other related products; and desires to license certain plastic
roofing technology as defined below; and

WHEREAS, EDSON and RPM wish to work together on a continuing basis in licensing
technologies to RPM, which the Parties expect will result in amendments to this
Agreement and/or additional license and royalty agreements, it being the intent
of the Parties that, subject to the terms of such amendments and/or agreements,
if, as and when executed, all future technology development by either of the
Parties in the areas described in the first "WHEREAS" clause above shall be
done through RPM..

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Parties hereto agree as follows:

SECTION I DEFINITIONS

1.1 "Affiliate" shall mean any corporation, partnership, joint venture, or
other entity (i) in which either Party own or controls, or is owned or
controlled by or in common ownership or control with either Party to the extent
of holding directly or indirectly, stock or interest representing more than
fifty percent (50%) of the aggregate stock or other interest entitled to vote
on general decisions reserved to stockholders, partners, or other owners of
such entity; or (ii) if a partnership, as to which a Party (and/or any of its
Affiliates) is a general partner.

1.2 "Confidential Information" shall mean all information not known or
generally available without restrictions on use, including, without limitation,
employees' names and qualifications, know-how, trade secrets, intellectual
property, operational methods, marketing plans or strategies, product
development techniques or plans, processes, designs and design projects,
inventions and research projects and other business affairs, including the
terms and conditions of this Agreement and the negotiations between the Parties
with respect to this Agreement. All Licensed Technology shall constitute
Confidential Information of EDSON. Notwithstanding the foregoing, information
subject to any of the following exceptions shall not be considered Confidential
Information:

(a) information which is or becomes generally available other than as a result
of the breach of this Agreement by either Party;

(b) information, the release of which is expressly authorized in writing by the
Party having the legal right to disclose such information; or

(c) information, which is already lawfully known to or independently developed
by either Party or their Affiliates without the use of any Confidential
Information disclosed hereunder; or

(d) information, which is lawfully obtained from any Third Party.

1.3 "Know-How" shall mean all knowledge and tangible information whether
patentable or not and physical objects related to the technology embodied in
the Licensed Patents, including but not limited to formulations, materials,
data, schematics. designs, configurations, computer programs, drawings and
sketches, testing and test results, regulatory information, whether or not
capable of precise, separate description prior to its publication, owned by
EDSON which EDSON has the right to disclose and license to RPM.

1.4 "Licensed Patents" shall mean those patents or patent applications set
forth in Exhibit A, regardless as to whether any patent applications may
subsequently be withdrawn, opposed or otherwise not prosecuted through to the
grant of a patent, and any additional patent applications which may
subsequently he added to Exhibit A by a written modification of this Agreement,
signed by both Parties.

1.5 "Licensed Product and Licensed Process" shall mean, in the case of a
Licensed Product, an item sold or intended for sale consisting of or
incorporating the Licensed Technology and, in the case of a Licensed Process, a
process which uses or incorporates the Licensed Technology.

1.6 "Licensed Technology" shall mean Licensed Patents and Know-How relating to
the Licensed Patents, collectively.

1.7 "Third Party shall mean any party, except Affiliates of either Party, who
is not a party to this Agreement.

1.8 "Third Party Provider" shall mean any Third Party providing intellectual
property which, by design of the product, RPM elects to incorporate into the
Licensed Technology or into a Licensed Product or Licensed Process.

SECTION 2

LICENSE  GRANT

2.1 In accordance with the terms and conditions of this agreement, EDSON hereby
grants to RPM, as of the Effective Date and until terminated according to the
terms hereof, a non-transferable, irrevocable (except to the extent provided in
Section 8.2), right and license to use the Licensed Technology (a) to develop,
manufacture, use, sell, and otherwise distribute the Licensed Products and to
perform Licensed Processes and (b) to sublicense without the right to further
sublicense, the use of the Licensed Technology to third parties to manufacture
Licensed Products. All sublicenses shall be executed pursuant to an agreement
approved by both Parties. RPM's rights and licenses hereunder shall extend to
the benefit of its Affiliates, provided that each Affiliate assumes and agrees
in writing to abide by the obligations, including the obligation to pay
royalties under Article 3 herein, and to permit EDSON to audit its records as
provided herein in accordance with Section 8.1 and restrictions established
hereunder. RPM shall be responsible for any breach of the terms and conditions
of this Agreement by its Affiliates.

2.2 The license grant provided in Section 2.1 shall be exclusive except for a
previously approved License Agreement to Titian Manufacturing owned and
operated by Alan Meyer and Malcolm Wright, if said License Agreement (attached
hereto as Exhibit B) is executed within 30 days of the execution of this
License Agreement with RPM. Otherwise, no such License shall be granted to
Titian Manufacturing without the expressed and written consent of RPM.

2.3 In conjunction with the license of the Licensed Technology provided in this
Agreement, EDSON covenants and agrees to fully disclose all Licensed Technology
to RPM and all Know-How and background information in EDSON's possession that
is reasonably necessary for RPM to utilize the Licensed Technology.

2.4 EDSON agrees to make a good faith and reasonable effort to perfect legal
ownership and clear title to his roofing technology and the technology being
licensed to RPM under this License Agreement. This shall include filing a legal
action with 30 days of the execution of this Agreement if G. E. Composites, L.
L. C., an Indiana limited liability company (hereinafter "GE Composites") which
is a wholly owned subsidiary of Environmental Recycled Products, L. L. C., an
Indiana limited liability company (hereinafter "Environmental") and all its
owners and/or members, individually, do not agree in writing to return the
technology to EDSON. Additionally EDSON shall continue to improve and develop
alternative technologies and blends for the manufacturer of plastic roofing
material as part of his on going obligations under this License Agreement. All
new technologies and blends shall be included and covered by this License
Agreement.

2.5   RPM agrees as part of this License Agreement to purchase all production
line equipment necessary for the manufacture of the roofing tiles through Honey
Creek Machinery and Turn Key Plastic Systems as long as the price per line is
within the fair market price.

SECTION 3

IMPROVEMENTS AND TECHNICAL SUPPORT

3.1 During the term of this Agreement, EDSON shall promptly disclose in writing
to RPM any updates, improvements, enhancements, amendments or modifications to
the Licensed Technology and such updates, improvements, enhancements,
amendments and modifications shall be deemed to be included in the definition
of Licensed Technology and included in the scope of the license grant provided
herein.

3.2 If. during the term of this Agreement, EDSON develops technology related to
any plastic roofing technology that is not covered by Section 3.1 above and not
included in the scope of the Licensed Technology, EDSON agrees to (a) offer RPM
a 30 day option to negotiate a license to such technology on mutually agreeable
terms and conditions; and (b) provide RPM an option to negotiate a license
prior to EDSON's entering into any licensing agreement for any such technology
or intellectual property owned or controlled by EDSON.

3.3 Upon the request of RPM, EDSON shall provide RPM with technical assistance
and support associated with RPM's application, use, development, manufacture,
sale and distribution of the Licensed Technology, including explanations and
demonstrations of Know-How ("Technical Support"). RPM shall reimburse EDSON for
reasonable out-of-pocket expenses, approved by RPM in writing. In addition to
Technical Support, upon the written request of RPM, EDSON shall provide RPM
personnel with training in the use and application of the Licensed Technology,
including all related Know-How. Training provided pursuant to this clause may
be performed at either RPM's or EDSON's business premises, as agreed by the
Parties, or at a different location upon the agreement of the Parties. RPM
shall be responsible for travel, accommodation and out-of-pocket expenses
associated with its personnel and the personnel of EDSON in the performance of
the above activities. All RPM personnel participating in the training provided
for herein shall execute a confidentiality agreement consistent with the
confidentiality provisions of this Agreement.

SECTION 4 ROYALTIES

4.1 For the rights, privileges and licenses granted hereunder, RPM shall pay to
EDSON a licensing fee of Five Hundred Thousand Dollars (US $500,000.00) (the
"Licensing Fee") to be paid within 30 days of the execution of this Agreement.

4.2 RPM shall issue EDSON 500,000 shares of restricted common stock as further
consideration for the issuance of this License to RPM.

4.3 In addition to the Licensing Fee set forth in Section 4.1 above, RPM shall
pay to EDSON royalties for the sale, use, lease or other disposition of
Licensed Products and Licensed Processes, including the use of any Licensed
Product or Licensed Process by RPM for their own purposes. RPM shall pay to
EDSON the following royalties per Licensed Product shipped or Licensed Process
performed:

(a) Royalties in the amount of Ten Dollars ($10.00) per square of roofing tile
or pro rata per shingle for sales of less than a square of roofing tile and
$0.10 per piece of accessory parts from sales of Licensed Products by or
through RPM. Royalties are due Edson monthly and shall be paid no later than
thirty (30) days after the end of each month.

SECTION 5

OWNERSHIP OF INTELLECTUAL PROPERTY

5.1 Ownership of Independently Developed Intellectual Property. The Licensed
Technology defined in Exhibit A shall remain the exclusive property of EDSON.

5.2 Ownership of Jointly Developed Intellectual Property. The Parties shall
have joint ownership rights in and to all intellectual property developed as a
result of the engineering work performed jointly by the Parties pursuant to
this Agreement or any updates, improvements, enhancements, amendments or
modifications made by RPM to the Licensed Technology (the "Jointly Owned
Intellectual Property"). The Parties shall have the right to jointly obtain and
hold in their joint names, copyrights, registrations, patents, or such other
protection as may be appropriate to the subject matter and any extensions and
renewals thereof, relative to the Jointly Owned Intellectual Property.
Notwithstanding the foregoing, the Licensed Technology shall remain the
exclusive property of EDSON.

SECTION 6 CONFIDENTIALITY

6.1 Each Party acknowledges that the Confidential Information constitutes and
shall constitute valuable assets and trade secrets. Accordingly, when a Party
(the "Receiving Party") receives confidential information from the other Party
(the "Owning Party") the Receiving Party shall, both during the term of this
Agreement and for three (3) years following the termination thereof, (i) keep
secret and retain in strict confidence any Confidential Information received
from the Owning Party, (ii) not disclose to any Third Party any Confidential
Information received from the Owning Party for any reason whatsoever, (iii) not
disclose any Confidential Information received from the Owning Party to the
Receiving Party's (and/or any of its Affiliates') employees, except on a need-
o-know basis and only after instructing each such employee not to disclose or
otherwise make available any Confidential Information to any Third Party unless
having received a signed Confidentiality Statement acknowledging the
obligations set forth in this Section from each such Third Party, and provided
each such employee is bound by confidentiality obligations under the employment
policies, Code of Conduct, and employee relationship requirements with the
employer and (iv) not make use of any Confidential Information received from
the Owning Party for its own purposes or for the benefit of any Third Party
except as authorized by this Agreement.

6.2 In the event of any legal action or proceeding or asserted requirement
under applicable law or government regulations requesting or demanding the
Receiving Party disclose any Confidential Information, the Receiving Party
shall immediately notify the Owning Party in writing of such request or demand
so that the Owning Party may seek an appropriate protective order or take other
protective measures. The Receiving Party shall, upon the request of the Owing
Party, cooperate reasonably with the Owning Party in contesting such request or
demand at the expense of the Owning Party including, without limitation,
consulting with the Owning Party as to the advisability of taking legally
available steps to resist or narrow such request or demand. If in the absence
of a protective order or a waiver hereunder from the Owning Party, the
Receiving Party, in the reasonable written opinion of the Receiving Party's
legal counsel, is legally compelled to disclose any Confidential Information,
the Receiving Party may disclose such Confidential Information without
liability hereunder; provided, however, the Receiving Party (a) shall furnish
only that portion of the Confidential Information which is legally required,
and (b) shall use commercially reasonable efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to such
portions of the Confidential Information to be disclosed as the Owning Party
designates.

6.3 In the event the Receiving Party becomes aware that any person or entity
(including, but not limited to, any Affiliate or employee of the Receiving
Party) is taking, threatens to take or has taken any action which would violate
any of the foregoing provisions of this Agreement, the Receiving Party shall
promptly and fully advise the Owning Party (with written confirmation as soon
as practicable thereafter) of all facts known to the Receiving Party concerning
such action or threatened action. The Receiving

Party shall not in any way aid, abet or encourage any such action or threatened
action, and the Receiving Party agrees to use commercially reasonable non-
monetary efforts to prevent such action or threatened action, including, but
not limited to, assigning any cause of action it may have relating to the
violation of the foregoing provisions to the Owning Party, and the Receiving
Party agrees to do all reasonable things and cooperate in all reasonable ways
as may be requested by the Owning Party to protect the trade secrets and
proprietary rights of the Owning Party in and to the Confidential Information.

6.4 The terms and conditions of this Agreement will not be disclosed by either
Party, except with the prior written consent of the other Party, or as may be
required by law or necessary to establish its rights hereunder. Notwithstanding
the foregoing, (i) each Party shall have the right to disclose the terms and
conditions of this Agreement, if necessary, to any legal counsel of such Party
as may be required to establish its rights hereunder, and (ii) subsequent to
the execution of this Agreement, the Parties may jointly or  individually issue
press releases or otherwise publicly disclose the Parties' relationship,
provided (a) such Party has obtained the prior written approval of the content
of such disclosure from the other Party and (b) that such disclosure does not
include information which would be prohibited from disclosure by either Party
pursuant to this Agreement. The approval of such press release or other
disclosure of the Parties' relationship shall be given by a Party within five
(5) business days following the request by the other Party, or in the event the
approval is not given, the disapproving Party shall provide commercially
reasonable objections.

SECTION 7

REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS

7.1 Except as specifically set forth in this agreement, EDSON, makes no
representations or warranties, expressed or implied as to Merchantability,
fitness for a particular purpose or otherwise with respect to the licensed
technology or know-how provided pursuant to this agreement.

7.2.  Under no circumstances shall either party be liable for any indirect,
consequential, incidental, exemplary or punitive damages, loss of earnings,
profit or goodwill suffered by any person or entity, including the other party,
caused directly or indirectly as a result of this agreement, by any License or
sublicense granted hereunder, or by each party's performance or Non-performance
of this agreement, even if such party is notified by the other party or any
third party of the possibility of such damages.

7.3 EDSON represents and warrants to RPM as follows:

(a) To the best of his knowledge, EDSON owns or possesses title and ownership
to all Licensed Technology without any conflict with, or infringement of, the
rights of others EXCEPT that RPM is aware and has been informed of a potential
conflict with G. E. Composites which is a wholly owned subsidiary of
Environmental or its or their members regarding the default in the monthly
royalty payments asserted by EDSON to be due from GE Composites and EDSON'S
position and stance that the "technology and technical" information" covered by
said Royalty Agreement has reverted to EDSON by such default, PROVIDED HOWEVER,
NOTWITHSTANDING THIS KNOWLEDGE, RPM shall not be liable for any indirect,
consequential, incidental, exemplary or punitive damages, loss of earnings,
profit or goodwill suffered by any person or entity, including the other party,
caused directly or indirectly as a result of this Agreement, by any License or
sublicense granted hereunder, or by each party's performance or non-performance
of this Agreement, even if such party is notified by the other party or any
third party of the possibility of such damages as specified in 7.2 above.
Without limiting the generality of the foregoing, there are currently no
assignments of, or security interests in force with respect to, the Licensed
Technology to the best knowledge, belief and information of EDSON, AND PROVIDED
FUTHER HOWEVER, EDSON shall not be liable to RPM, it successors and assigns for
any indirect, consequential, incidental, exemplary or punitive damages, loss of
earnings, profit or goodwill suffered by RPM if the EDSON'S ownership of the
licensed technology and/or technical information is voided by a court of law on
the application of GE Composites, its successors or assigns.

(b) There are no outstanding options, licenses, or agreements by EDSON of any
kind relating to the Licensed Technology, nor is EDSON bound by or a party to
any options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity
other than as described in 7.3 (a) above.

(c) EDSON has not received any communications alleging that the Licensed
Technology or EDSON has violated or, by conducting its business, would violate
any of the patents, trademarks, service marks, trade names, copyrights, trade
secrets or other proprietary rights or processes of any other person or entity
other than as described in 7.3 (a) above.

(d) EDSON is not aware that any of his employees is obligated under any
contract (including license, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such employee's
best efforts to promote the interest of EDSON or that would conflict with
EDSON'S business other than as described in 7.3 (a) above.

(e) Neither the execution or delivery of this Agreement, nor the carrying on of
EDSON'S business by the employees of EDSON nor the conduct of EDSON'S business
as proposed, will, to EDSON'S knowledge, conflict with or result in a breach of
the terms, conditions, or provisions of, or constitute a default under, any
contract, covenant or instrument under which any such employee is now obligated
to the best knowledge, belief and information of EDSON.

(f) EDSON does not believe that, in connection with RPM's use of the Licensed
Technology pursuant to this Agreement, it is or will be necessary to use any
inventions of any of his employees (or persons he currently intends to hire)
made prior to their employment by EDSON.

7.4 During the term of this Agreement, EDSON shall not assign or grant any
security interest, ownership or other rights in any of the Licensed Technology
without the prior consent of RPM, such consent not to be withheld unreasonably.

7.5 EDSON shall indemnify and hold RPM harmless from any and all claims, costs,
damages and expenses arising out of a breach of any of EDSON's representations
contained in Section 7.3 or based on any allegation that the Licensed
Technology infringes the rights of a Third Party. EDSON's indemnity obligations
contained in this Section 7.4 shall be limited to the dollar amount of
royalties that have been received, or are to be received, by EDSON from RPM
pursuant to this Agreement. For the avoidance of doubt, any future royalties
may be set off and withheld by RPM until all claims, costs, damages and
expenses have been compensated.

SECTION 8

TERM AND TERMINATION

8.1 This Agreement shall become effective upon execution by both Parties hereto
and remain in full force and effect until terminated pursuant to Section 9.2.

8.2 This Agreement shall terminate thirty (30) days after receipt of written
notice upon the occurrence of any of the following:

(a) RPM fails to pay EDSON royalties as provided in Section 4.2 within thirty
(30) days after receipt of written notice from EDSON; provided. however, that
if any amount is contested, such amount, if not paid, shall be placed into a
court registry or similar unrelated third party escrow pending resolution of
the dispute, and provided further, that no such termination shall be effective
until a final resolution of such matter in favor of EDSON; or

(b) Upon any material breach or default of this Agreement by any Party (the
"Breaching Party"), the non-breaching Party shall have the right to terminate
this Agreement and the rights, privileges and license granted hereunder unless
the Breaching Party cures any such breach or default within thirty (30) days
after receipt of written notice from the non-breaching Party; provided,
however, that if such breach or default is disputed by the Breaching Party, no
purported termination of this Agreement shall be valid until such matter has
been finally resolved; and provided, further. if the Breaching Party shall be
in breach or default of the same provision twice within any six (6) month
period, the non-breaching Party shall have the right to terminate this
Agreement immediately upon notice to the Breaching Party of such second
occurrence without providing the Breaching Party the thirty 30) days notice and
cure period.

8.3 Upon termination of this Agreement for any reason, nothing herein shall be
construed to release either Party from any obligation arising prior to the
effective date of such termination. RPM may, however, after the effective date
of such termination, sell all Licensed Products then in its possession, and
complete Licensed Products in the process of manufacture at the time of such
termination and sell the same, provided that RPM shall pay to EDSON the
royalties thereon as required by Section 4 of this Agreement and shall submit
the reports required by Section 10 hereof.

8.6 Upon termination of this Agreement for any reason, each Party shall, at the
option of the other Party, return or destroy all Confidential Information,
including but not limited to Licensed Technology, in its possession owned by
the other Party, and RPM shall cease to use any part of the Licensed Technology
for any purpose whatsoever, except as specifically allowed under Section 8.5
above.

8.8 Sections 4, 5, 6, 7, 8, 9 and 10 shall survive termination of this
Agreement.

8.9 Upon termination of this Agreement for any reason the Licensed Technology
shall revert back to EDSON, or in the case of a material breach of this
Agreement if the breach is not cured with the time periods allowed or if not
specified herein, then within a reasonable time not exceeding thirty (30) days.

SECTION 9

REPORTS AND RECORDS

9.1 RPM shall keep complete and accurate records of the manufacture, sale and
distribution of Licensed Products and Licensed Processes including use and
manufacture by any sub RPM's, (collectively, "Sales and Use Records"). Sales
and Use Records shall be kept at RPM' principal place of business. Upon prior
written notice to RPM, EDSON shall have the right, one (1) time each year
during normal business hours, without unreasonable interference with RPM'
business operations, and at EDSON's expense, to have a reputable and
internationally recognized independent certified auditor, subject to an
appropriate confidentiality agreement, review and audit records in relation to
the royalties and compensation under this Agreement for the preceding (3) three
years. Any adjustments due to overpayment or underpayment of royalties shall be
made at the next date when royalty payments to EDSON are due. If the
underpayment of royalties due to EDSON is greater than ten percent (10%). RPNI
agrees to reimburse EDSON for its review and audit expenses, unless such
underpayment of royalties occurs due to a mistake made by RPM in good faith or
situations beyond Rona's reasonable control.

SECTION 10

GENERAL PROVISIONS

10.1. Notices. All notices, demands or other communications given under this
Agreement shall be in writing and shall be mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
hand delivery (including delivery by courier), telegram. telex, or facsimile
transmission, addressed as follows:

a) If to EDSON:

1137 N. Elm Street,
West Liberty, Iowa 52776
(319) 631-4931

b) If to RPM:

24001 S. Western Avenue
Park Forest, Illinois 60466
(815) 293-1190

or to such other address which each Party may designate by notice in writing.
Each such notice, demand or other communication which shall be mailed,
delivered or transmitted in the manner described above shall be deemed given
for all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a telex) the answer back being deemed conclusive (but not exclusive)
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.

10.2. Governing Law. The construction and interpretation of this Agreement and
the rights of the Parties shall be governed by the laws of the State of
Illinois, USA, without regard to its conflicts of laws provisions. The state
and federal courts located in Illinois shall have exclusive jurisdiction over
any dispute arising from or in connection with this Agreement not otherwise
submitted to arbitration. Each Party hereby consents to the personal
jurisdiction of the state and federal courts in Illinois in any such dispute
arising from or relating to this Agreement. Each Party further agrees that
services of process may be made, in addition to any other method permitted by
law, by certified mail, return receipt requested, sent to the applicable
address set forth herein. Any award or injunctive relief granted in any dispute
may be enforced by either Party in either the courts of the State of Illinois
or in the United States District Courts located in Northern "District of
Illinois. The Parties hereby expressly waive their rights to trial by jury.

10.3 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the Parties hereto is or
shall be entitled to bring any action to enforce any provision of this
Agreement against any of the Parties hereto, and the covenants and agreements
set forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by the Parties hereto or their respective successors and
assigns as permitted hereunder. Except for assignment to an Affiliate, neither
this Agreement nor any rights hereunder shall be assignable by any Party
without the prior written consent of the other Party hereto. Except as provided
in Section 11.12, in the event of any assignment to an Affiliate, the
transferring Party shall remain responsible for the performance off such
affiliate under this Agreement.

10.4 Entire Agreement: Amendment. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the Parties with respect to such matters. No amendment to this
Agreement shall be made except by an instrument in writing signed on behalf
each Party.

10.5 Severability. If any court or arbiter of applicable jurisdiction
determines that any of the agreements, covenants and undertakings set forth
herein, or any part thereof, is invalid or unenforceable, the provision shall,
to the extent possible, be restated to reflect the original intention of the
Parties, and the remainder of this Agreement shall be given full effect,
without regard to the invalid or restated portions.

10.6 Waiver. The failure of either Party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other Party.

10.7 Taxes. Each Party shall be liable for any and all taxes, duties or levies,
however designated or computed assessed against such Party in conjunction with
any payments made pursuant to this Agreement.

10.8 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same agreement.

10.9 Compliance with Laws. In performing under this Agreement, both Parties
agree to comply with all applicable laws, rules, and regulations of any
governmental entity.

10.10 Force Majeure. Neither party shall be liable to the other party for and
loss or damage due to delays or failure to perform resulting from an went of
"force majeure," including without limitation, acts of God; accident; war;
fire; lockout; strike or labor dispute; riot or civil commotion; act of the
public enemy: enactment, rule, order or act of civil or military authority;
acts or omissions of the other Party; judicial action; inability to secure
adequate materials, labor, or facilities; defaults of subcontractors or
suppliers as a result of "force majeure"; the inability of carriers to make
scheduled deliveries; or any other event beyond the reasonable control of
either Part%.

IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement as of the date first set forth above.

RPM TECHNOLOGIES, INC.

By: /S/ Randy Zych
-------------------------
Randy Zych,  CEO

GERALD EDSON

By: /S/ Gerald Edson
----------------------
Gerald Edson, Individually

EXHIBIT A

LICENSED TECHNOLOGY

Licensed Patents shall be defined as:

"Technology" is defined as the intellectual property rights, proprietary
formulas, patents and patents pending and developed and any patents, granted,
developed, owned or in possession of Gerald Edson together with any and all
current and future rubber, plastic or combination of rubber, plastic and filler
products for simulated slate roofing, simulated cedar roofing, simulated tile
roofing and roofing products. compression molded pallets, mats and other molded
products through use of any one or a combination of the

following, to wit:
GE-1020, = Ethyl Vinyl Acetate (EVA) or Metallocene or Ultra
Low Density Polyethylene (ULDPE) and Low Density Polyethylene (LDPE);
GE-1030 = High Density Polyethylene (HDPE)

GE-1060 = Low Density Polyethylene and Linear Low Density Polyethylene (LLDPE}
as co-polymers

GE-1050 = Low Density Polyethylene (LDPE)
GE-1070 =Linear Low Density Polyethylene (LLDPE)

any and all of these materials being either virgin, wide specification,
reproduction, post industrial or post consumer material or a combination of any
of the above.

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