Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - US Geothermal Inc. - Kevin Kitz Employment Agreement

 EMPLOYMENT AGREEMENT 

  
    
        THIS AGREEMENT made as of the 1st day of October 2004 

    

  

BETWEEN: 

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

        (the "Company") 

    

  

AND: 

  
    
        Kevin Kitz of 1509 Tyrell Lane, Suite B, Boise, Idaho 83706
        (the "Employee") 

    

  

WHEREAS: 

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

 (B)                          the
  Company wishes to engage the Employee as Vice President – Project Development;
  and 

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

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

 1.                            Employment
  

                                  The
  Company hereby engages the Employee as Vice President – Project Development
  of the Company, and the Employee hereby accepts such employment, upon the terms
  and conditions hereinafter set out. 

 2.                             Term
  

                                 This
  Agreement will be effective from October 1, 2004 and will remain in full force
  and effect for 2 years or until terminated as hereinafter provided. Employee
  will be subject to a right by the Company to extend this employment agreement
  one additional year for a total of 3 years.

 - 2 - 

 3.                             Responsibility
  

                                 The
  Employee will devote one hundred percent of his working time to his Employment
  hereunder, and while engaged in his employment will have the authority and duty
  to perform and carry out such duties and responsibilities as are customarily
  carried out by persons holding similar positions in other geothermal companies
  comparable in size to the Company and such additional and related duties as
  may from time to time be assigned, delegated, limited or determined by the President.

 4.                             Other
  Business Activities 

                                 It
  is agreed that the Employee's employment hereunder shall constitute one hundred
  percent of his working time which shall be devoted exclusively for the benefit
  of the Company, and therefore, the Employee may not engage in any other business
  activities, that would interfere with, or impede, in any significant manner
  the performance of his duties as Vice President - Project Development. 

 5.                             Compensation
  

                                 In
  consideration of the performance by the Employee of his responsibilities and
  duties as Vice President – Project Development hereunder: 

	 	 (a)      	 the Company will pay Employee the sum of US$84,000
        per annum, payable in monthly installments. The Employee may elect to
        have any compensation payable hereunder paid into any jurisdiction of
        his choice, but the Company may decline to pay such compensation to the
        Employee at the place specified if the Company determines that such payment
        in such jurisdiction would violate the laws of the jurisdiction of the
        place of payment specified by the Employee or the laws of any other country
        or if the Company otherwise determines that payment to the Employee or
        for his account in such place would be prejudicial to the Company; 

	 
	 	 (b)      	 In addition to the 50,000 options already granted
        to Employee, the Company will, subject to TSX Venture Exchange approval,
        grant Employee 166,667 incentive stock options at 80% of market price
        on the execution date of this agreement; 

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

	 
	 	 (d)      	 The Company will grant 200,000 Performance Shares
        to Employee to be allocated from the existing pool of Performance Shares
        already established and granted to the founder and executive management
        group. Exhibit A, attached, shows the Performance Share distribution from
        the founder and executive 

 - 3 - 

	 	 	 management group to the Employee. Distribution is subject to achievement
      of established performance objectives; and, 
	 
	 	 (e)      	 Upon execution of this agreement, the Company shall
        grant Employee a signing bonus of 120,000 shares of stock. The shares
        will be subject to the TSX Venture Exchange approval and will be held
        in escrow subject to the following vesting events: 80,000 shares on signing
        employment agreement; 40,000 shares upon closing of the project financing
        agreement for the first phase of the Raft River project, or 6 months from
        the effective date of this agreement, whichever occurs first. 

 6.                             Death
  or Disability 

                                 For
  purposes hereof “total and permanent disability” means inability
  to perform the services required hereunder due to physical or mental disability.
  Evidence of such disability shall be certified by a physician acceptable to
  both the Company and Employee. All signing bonus shares will become fully vested
  and payable to Employee, or to his beneficiaries, if Employee suffers death
  or total and permanent disability on or before April 1, 2006. 

 7.                          Expenses
  

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

 8.                          Vacation
  

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

 9.                          Termination
  

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

 - 4 - 

	 	 (a)      	 the Employee’s failure to carry out his duties
        hereunder in a competent and professional manner; 

	 
	 	 (b)      	 the Employee’s appropriation of corporate
        opportunities for the Employee’s direct or indirect benefit or his
        failure to disclose any material conflict of interest; 

	 
	 	 (c)      	 the Employee’s plea of guilty to, or conviction
        of, an indictable offence once all appeals (if any) have been completed
        without such conviction having been reversed; 

	 
	 	 (d)      	 the existence of cause for termination of the Employee
        at common law including but not limited to cause related to fraud, dishonesty,
        illegality, breach of statute or regulation, or gross incompetence; 

	 
	 	 (e)      	 failure on the part of the Employee to disclose
        material facts concerning his business interests or employment outside
        of his employment by the Company, provided such facts relate to the Employee’s
        duties hereunder; 

	 
	 	 (f)      	 refusal on the part of the Employee to follow the
        reasonable and lawful directions of the Company; 

	 
	 	 (g)      	 breach of fiduciary duty to the Company on the part
        of the Employee; 

	 
	 	 (h)      	 material breach of this Agreement or gross negligence
        on the part of the Employee in carrying out his duties under this Agreement;
        or 

	 
	 	 (i)      	 a declaration of bankruptcy on the part of the Employee
        by a court of competent jurisdiction. 

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

 9.2                           This
  Agreement and the Employee's employment may be terminated on notice by the Company
  to the Employee for any reason other than for the reasons set out in Section
  8 above of this Agreement upon one month notice to the Employee. In such event,
  the Employee will be entitled to payment of salary and expenses until the date
  one month after which notice was given. 

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

 - 5 - 

 if the termination is within 12 months of effective date of
  this agreement then Employee will forfeit 75% of the Performance Shares that
  may be payable to the Employee under Section 5(d); if the termination is after
  12 months from the effective date of this agreement but before 24 months then
  Employee will forfeit 25% of the Performance Shares that may be payable to Employee;
  and, if the termination is after 24 months from effective date of this agreement
  then Employee will not forfeit any of the Performance Shares that may be payable
  to the Employee under Section 5 (d).. 

 10.                          Confidential
  Information 

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

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

 - 6 - 

 11.                            Non-Competition

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

 12.                          Acknowledgement
  

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

 13.                          Representations
  and Warranties 

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

 14.                          Governing
  Law 

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

 15.                          Entire
  Agreement 

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

 16.                          Amendments
  

                                  No
  amendment to or variation of the terms of this Agreement will be effective or

 - 7 - 

 binding upon the parties hereto unless made in writing and signed by both
  of the parties hereto. 

 17.                          Assignment
  

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

 18.                          Severability
  

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

 19.                          Headings
  

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

 20.                          Time
  of Essence 

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

 21.                          Independent
  Legal Advice 

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

 22.                          Notice
  

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

                                 in
  the case of Company: 

 - 8 - 

	 	 US Geothermal Inc.  	  
	 	 1509 Tyrell Lane, Suite B  	  
	 	 Boise, Idaho 83706  	  
	 	 Attention: Corporate Secretary  	  
	 	 Fax No.: 208 424 1030  	  
	 	  	 
	 	  	 
	 	  	 
	 	 in the case of Employee:  	 Or if no longer an Employee:  
	 	  	 
	 	 Kevin Kitz  	 Kevin Kitz  
	 	 1509 Tyrell Lane, Suite B  	 PO Box 170240  
	 	 Boise, Idaho 83706  	 Boise, Idaho 83717  
	 	 Fax No.: 208 424 1030  	 Phone No: 208 336 6065  

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

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

US GEOTHERMAL INC. 

	 By:  	  	 
	  	 Authorized Signatory  	 

SIGNED by the Employee in the presence of: 

	 	 	 
	 Witness  	 	 Kevin Kitz  
	 	 	 
	 	 	 
	Printed Name of Witness 	 	 

 - 9 - 

 EXHIBIT A

PERFORMANCE SHARE DISTRIBUTION 

	 Original  	 First  	 Second  	 Total  
	 Daniel Kunz  	 235,750  	 78,540  	 314,290  
	 Doug Glaspey  	 214,300  	 71,420  	  285,720  
	 Paul Larkin  	 128,560  	 42,865  	 171,425  
	 Ron Bourgeois  	 128,560  	 42,865  	  171,425  
	 John Walker  	 42,830  	 14,310  	 57,140  
	Total 	 750,000  	 250,000  	 1,000,000  
	  	 	 	 
	 New Distribution  	  	  	  
	 Daniel Kunz  	 172,000  	 59,970  	 231,970  
	 Doug Glaspey  	 178,050  	 57,136  	  235,186  
	 Paul Larkin  	 103,560  	 34,292  	 137,852  
	 Ron Bourgeois  	 103,560  	 34,292  	  137,852  
	 John Walker  	 42,830  	 14,310  	 57,140  
	 Kevin Kitz  	 150,000  	 50,000  	 200,000  
	Total 	 750,000  	 250,000  	 1,000,000Filed by Automated Filing Services Inc. (604) 609-0244 - US Geothermal Inc. - Amended Hawkley Employment Agreement

 EMPLOYMENT AGREEMENT 

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

      

    

  

BETWEEN: 

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

          (the "Company") 

      

    

  

AND: 

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

          (the "Employee") 

      

    

  

WHEREAS: 

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

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

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

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

 1.                                        Employment
  

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

 2.                                        Term
  

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

 3.                                        Responsibility
  

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

 - 2 - 

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

 4.                                        Other
  Business Activities 

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

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

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

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

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

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

 - 3 - 

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

 5.                                        Compensation
  

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

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

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

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

 6.                                        Expenses
  

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

 7.                                        Vacation
  

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

 - 4 - 

 8.                                        Termination
  

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

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

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

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

 - 5 - 

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

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

 9.                                        Confidential
  Information 

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

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

 - 6 - 

 surrendered to the Company when requested by the Company.

 10.                                     Non-Competition
  

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

 11.                                     Acknowledgement
  

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

 12.                                     Representations
  and Warranties 

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

 13.                                     Governing
  Law 

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

 14.                                     Entire
  Agreement 

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

 - 7 - 

 15.                                     Amendments
  

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

 16.                                     Assignment
  

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

 17.                                     Severability
  

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

 18.                                     Headings
  

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

 19.                                     Time
  of Essence 

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

 20.                                     Independent
  Legal Advice 

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

 21.                                     Notice
  

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

 - 8 - 

  

US Geothermal Inc.

  1509 Tyrell Lane, Suite B 

  Boise, Idaho 83706 

  Attention: Corporate Secretary 

Fax No.: 208 424 1030 

in the case of Employee: 

Kerry D. Hawkley 

  11917 W Fiddler 

  Boise, Idaho 83713 

  Fax No.: 208 939 8369

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

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

US GEOTHERMAL INC. 

	 By:  	  	 
	  	
      Authorized Signatory  	 

SIGNED by the Employee in the presence of:  

	 	 	 
	
      Witness  	 	
      Kerry D. Hawkley  
	 	 	 
	 	 	 
	 	 	 
	Printed
      Name of Witness

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