Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.23

U.S. GEOTHERMAL INC.

AMENDED AND RESTATED STOCK OPTION PLAN

SEPTEMBER 29, 2006

TABLE OF CONTENTS

	  	  	Page 
	  	  	  
	ARTICLE 1 DEFINITIONS AND
      INTERPRETATION 	  
	           
             1.1
      	Definitions
      	3
      
	       
                 1.2
      	Choice
      of Law 	6
      
	           
             1.3
      	Headings
      	6
      
	  	  	  
	ARTICLE 2 PURPOSE AND PARTICIPATION 	  
	       
                 2.1
      	Purpose
      	6
      
	           
             2.2
      	Participation
      	6
      
	       
                 2.3
      	Notification
      of Award 	7
      
	           
             2.4
      	Copy
      of Plan 	7
      
	       
                 2.5
      	Limitation
      	7
      
	  	  	  
	ARTICLE 3 TERMS AND CONDITIONS OF
      OPTIONS 	  
	           
             3.1
      	Board
      to Allot Shares 	7
      
	       
                 3.2
      	Number
      of Shares 	7
      
	           
             3.3
      	Limitations
      on Issue	 7
	       
                 3.4
      	Term
      of Option 	8
      
	           
             3.5
      	Acceleration
      by the Administrator 	9
      
	       
                 3.6
      	Impermissable
      Transfer of Option 	9
      
	           
             3.7
      	Termination
      of Option 	9
      
	       
                 3.8
      	Exercise
      Price 	9
      
	           
             3.9
      	Assignment
      of Options 	9
      
	       
                 3.10
      	Adjustments
      	9
      
	           
             3.11
      	Vesting
      	10
      
	       
                 3.12
      	Compliance
      with Rule 16b-3 	10
      
	  	  	  
	ARTICLE 4 EXERCISE OF OPTION 	  
	           
             4.1
      	Exercise
      of Option 	10
      
	       
                 4.2
      	Issue
      of Share Certificates 	11
      
	           
             4.3
      	Condition
      of Issue 	11
      
	  	  	  
	ARTICLE 5 ADMINISTRATION 	  
	       
                 5.1
      	Administration
      	11
      
	           
             5.2
      	Interpretation
      	11
      
	  	  	  
	ARTICLE 6 TERMS AND CONDITIONS OF OPTIONS GRANTED
      TO U.S. OPTION HOLDERS 	
	       
                 6.1
      	Definitions
      	12
      
	           
             6.2
      	Exchange
      Requirements 	13
      
	       
                 6.3
      	Maximum
      Number of Shares for Incentive Stock Options 	13
      
	           
             6.4
      	Designation
      of Options 	13
      
	       
                 6.5
      	Special
      Requirements for Incentive Stock Options 	13
      
	           
             6.6
      	Shareholder
      Approval 	15
      

	ARTICLE 7 AMENDMENT AND
      TERMINATION 	  
	           
             7.1
      	Prospective
      Amendment 	15
      
	       
                 7.2
      	Retrospective
      Amendment 	15
      
	           
             7.3
      	Terms
      or Amendments Requiring Disinterested Shareholder Approval 	15
      
	       
                 7.4
      	Termination
      	16
      
	           
             7.5
      	Agreement	16
      
	  	  	  
	ARTICLE 8 APPROVALS REQUIRED FOR PLAN 	  
	       
                 8.1
      	Approvals
      Required for Plan 	16
      
	           
             8.2
      	Substantive
      Amendments to Plan 	16
      

STOCK OPTION PLAN

ARTICLE 1

  DEFINITIONS AND INTERPRETATION

1.1 Definitions

As used herein, unless anything in the subject matter or
context is inconsistent therewith, the following terms shall have the meanings
set forth below:

	 	a) 	
      “Administrator” means, initially, the secretary of the
      Corporation and thereafter shall mean such director or other senior
      officer or employee of the Corporation as may be designated as
      Administrator by the Board from time to time;

	 	 	 	 
	 	b) 	
      “affiliate” has the meaning ascribed thereto in the
      Securities Act (British Columbia);

	 	 	 	 
	 	c) 	
      “associate” has the meaning ascribed thereto in the
      Securities Act (British Columbia);

	 	 	 	 
	 	d) 	
      “Award Date” means the date on which the Board grants and
      announces a particular Option;

	 	 	 	 
	 	e) 	
      “Board” means the board of directors of the Corporation
      or a duly appointed Committee thereof;

	 	 	 	 
	 	f) 	
      “Cause” means, with respect to any Participant, (a) any
      act of dishonesty, fraud or theft, (b) any improper use or disclosure of
      any confidential information or trade secret belonging to the Corporation
      or any Affiliate, (c) any material breach of the terms and conditions of
      an employment agreement or consulting agreement between such Participant
      and the Corporation or any Affiliate, (d) conviction of, or confession to,
      any felony or any gross misdemeanor involving moral turpitude, fraud or
      theft, or (e) any other act that has, or could be expected to have, an
      adverse effect on the reputation or business of the Corporation or any
      Affiliate, as determined by the Administrator;

	 	 	 	 
	 	g) 	
      “Committee” means a committee of directors of the
      Corporation appointed by the Board to administer this Plan. If, at any
      time, Rule 16b-3 under the Exchange Act applies to the Corporation, (a)
      the Committee must consist of at least the minimum number of directors of
      the Corporation necessary for Options to satisfy the requirements of Rule
      16b-3 and (b) each director of the Corporation appointed to the Committee
      must be a “non- employee director” (within the meaning of Rule
    16b-3);

	 	 	 	 
	 	h) 	
      “Consultant” means an individual or Consultant Company,
      other than an Employee or a Director of the Corporation,
  that:

	 	a. 	
      is engaged to provide on a ongoing bona fide basis
      consulting, technical, management or other services to the Corporation or
      to an affiliate of the Corporation, other than services provided in
      relation to a distribution;

	 		b.	
      provides the services under a written contract between
      the Corporation or the affiliate and the individual or the Consultant
      Company;

	 	 	 	 
	 		c. 	
      in the reasonable opinion of the Corporation, spends or
      will spend a significant amount of time and attention on the affairs and
      business of the Corporation or an affiliate of the Corporation;
  and

	 	 	 	 
	 		d. 	
      has a relationship with the Corporation or affiliate of
      the Corporation that enables the individual to be knowledgeable about the
      business and affairs of the Corporation.

	 	 	 	 
	 	i) 	
      “Consultant Company” means, for an individual consultant,
      a company or partnership of which the individual consultant is an
      employee, shareholder or partner;

	 	 	 	 
	 	j) 	
      “Continuous Service” means service without interruption
      or termination, for any reason, as an Employee, Director or Consultant of
      the Corporation or any subsidiary. Continuous Service will not be
      considered interrupted or terminated upon (a) sick leave, military leave
      or any other leave of absence approved by the Administrator that does not
      exceed 90 days in the aggregate, provided, however, that if reemployment
      upon the expiration of any such leave is guaranteed by contract or
      applicable law, such 90 day limitation will not apply, or (b) a transfer
      from one office of the Corporation or any subsidiary to another office of
      the Corporation or any subsidiary or a transfer between the Corporation
      and any subsidiary;

	 	 	 	 
	 	k) 	
      “Corporation” means U.S. Geothermal Inc.;

	 	 	 	 
	 	l) 	
      “Director” means any individual holding the office of
      director or senior officer of the Corporation or subsidiary of the
      Corporation;

	 	 	 	 
	 	m) 	
      “Disinterested Shareholder Approval” means approval by a
      majority of votes cast by all shareholders of the Corporation at a duly
      constituted shareholders’ meeting, excluding votes attached to shares
      beneficially owned by insiders to whom Options may be granted under the
      Plan and their associates;

	 	 	 	 
	 	n) 	
      “Employee” means an individual regularly employed on a
      full-time or part-time basis by the Corporation or a subsidiary of the
      Corporation or an individual who, on a regular basis and for a minimum
      amount of time per week, performs services for the Corporation or a
      subsidiary of the Corporation normally provided by an employee other than
      a Director, and for the purpose of the Plan includes a Management Company
      Employee;

	 	 	 	 
	 	o) 	
      “Exchange” means the TSX Venture Exchange or, if the
      Shares are no longer listed for trading on the TSX Venture Exchange, such
      other exchange or quotation system on which the Shares are listed or
      quoted for trading;

	 	 	 	 
	 	p) 	
      “Exchange Act” means the U.S. Securities Act of 1934, as
      amended;

	 	 	 	 
	 	q) 	
      “Exercise Notice” means the notice respecting the
      exercise of an Option in the form set out as Schedule “B” hereto, duly
      executed by the Option Holder;

	 	r) 	
      “Exercise Period” means the period during which a
      particular Option may be exercised and is the period from and including
      the Award Date through to and including the Expiry Date, subject to the
      provisions of the Plan relating to vesting of Options;

	 	 	 	 
	 	s) 	
      “Exercise Price” means the price at which an Option may
      be exercised as determined in accordance with paragraph 3.6;

	 	 	 	 
	 	t) 	
      “Expiry Date” means the date determined in accordance
      with paragraph 3.4 and after which a particular Option cannot be
      exercised;

	 	 	 	 
	 	u) 	
      “insider” has the meaning ascribed thereto in the
      Securities Act (British Columbia);

	 	 	 	 
	 	v) 	
      “Investor Relations Activities” has the meaning assigned
      by Policy 1.1 of the TSX Venture Exchange Policies, and generally means
      any activities or communications that can be reasonably be seen to be
      intended to or be primarily intended to promote the merits or awareness of
      or the purchase or sale of securities of the Corporation;

	 	 	 	 
	 	w) 	
      “Management Company Employee” means an individual
      employed by a person providing management services to the Corporation,
      which are required for the ongoing successful operation of the business
      enterprise of the Corporation, but excluding a person involved in Investor
      Relations Activities;

	 	 	 	 
	 	x) 	
      “Option” means an option to acquire Shares, awarded to a
      Director, Employee or Consultant pursuant to the Plan;

	 	 	 	 
	 	y) 	
      “Option Certificate” means the certificate, substantially
      in the form set out as Schedule “A” hereto, evidencing an
Option;

	 	 	 	 
	 	z) 	
      “Option Holder” means a Director, Employee or Consultant,
      or a former Director, Employee or Consultant, who holds an unexercised and
      unexpired Option;

	 	 	 	 
	 	aa) 	
      “Plan” means this U.S. Geothermal Inc. stock option
      plan;

	 	 	 	 
	 	bb) 	
      “Personal Representative” means:

	 	 	 	 
	 		a. 	
      in the case of a deceased Option Holder, the executor or
      administrator of the deceased duly appointed by a court or public
      authority having jurisdiction to do so; and

	 	 	 	 
	 		b. 	
      in the case of an Option Holder who for any reason is
      unable to manage his or her affairs, the person entitled by law to act on
      behalf of such Option Holder;

	 	 	 	 
	 	cc) 	
      “Reporting Person” means an officer of the Corporation, a
      director of the Corporation or any person who owns more than ten percent
      (10%) of the outstanding stock of the Corporation (within the meaning of
      Rule 16a-2 promulgated under the Exchange Act) and who is required to file
      reports pursuant to Rule 16a-3 promulgated under the Exchange
  Act;

	 	dd) 	
      “Rule 16b-3” means Rule 16b-3 promulgated under the
      Exchange Act, as amended; and

	 	 	 
	 	ee) 	
      “Share” or “Shares” means, as the case may be, one or
      more common shares in the capital of the
Corporation.

1.2 Choice of Law

The Plan is established under and the provisions of the Plan
shall be interpreted and construed in accordance with the laws of the State of
Delaware.

1.3 Headings

The headings used herein are for convenience only and are not
to affect the interpretation of the Plan.

ARTICLE 2

  PURPOSE AND PARTICIPATION

2.1 Purpose

The purpose of the Plan is to provide the Corporation with a
share-related mechanism to attract, retain and motivate qualified Directors,
Employees and Consultants, to reward such of those Directors, Employees and
Consultants as may be awarded Options under the Plan by the Board from time to
time for their contributions toward the long term goals of the Corporation and
to enable and encourage such Directors, Employees and Consultants to acquire
Shares as long term investments.

2.2 Participation

The Board shall, from time to time, in its sole discretion
determine those Directors, Employees and Consultants, if any, to whom Options
are to be awarded. If the Board elects to award an Option to a Director, the
Board shall, in its sole discretion but subject to paragraph 3.2, determine the
number of Shares to be acquired on the exercise of such Option. If the Board
elects to award an Option to an Employee or Consultant, the number of Shares to
be acquired on the exercise of such Option shall be determined by the Board in
its sole discretion, and in so doing the Board may take into account the
following criteria:

	 	(a) 	
      the remuneration paid to the Employee or Consultant as at
      the Award Date in relation to the total remuneration payable by the
      Corporation to all of its Employees and Consultants as at the Award
      Date;

	 	 	 
	 	(b) 	
      the length of time that the Employee or Consultant has
      been employed or engaged by the Corporation; and

	 	 	 
	 	(c) 	
      the quality of work performed by the Employee or
      Consultant.

Option Holders that are corporate entities will be required to
undertake in writing not to effect or permit any transfer of ownership or option
of its shares, nor issue more of its shares as long as such Option remains
outstanding, unless the written permission of the Exchange and the Corporation
is obtained.

2.3 Notification of Award

Following the approval by the Board of the awarding of an
Option, the Administrator shall notify the Option Holder in writing of the award
and shall enclose with such notice the Option Certificate representing the
Option so awarded.

2.4 Copy of Plan

Each Option Holder, concurrently with the notice of the award
of the Option, shall be provided with a copy of the Plan. A copy of any
amendment to the Plan shall be promptly provided by the Administrator to each
Option Holder.

2.5 Limitation

The Plan does not give any Option Holder that is a Director the
right to serve or continue to serve as a Director of the Corporation nor does it
give any Option Holder that is an Employee or Consultant the right to be or to
continue to be employed or engaged by the Corporation.

ARTICLE 3

  TERMS AND CONDITIONS OF OPTIONS

3.1 Board to Allot Shares

The Shares to be issued to Option Holders upon the exercise of
Options shall be allotted and authorized for issuance by the Board prior to the
exercise thereof.

3.2 Number of Shares

The aggregate maximum number of Shares which may be at any time
be subject to issuance under the Plan, together with the number of Shares
issuable under outstanding options granted otherwise than under the Plan, shall
not exceed ten percent (10%) of the issue and outstanding Shares of the
Corporation at the time the Option is granted.

3.3 Limitation on Issue

The following restrictions on issuances of Options are
applicable under the Plan:

	 	a) 	
      the aggregate number of Shares that may be issued to any
      one Option Holder in a 12 month period under the Plan shall not exceed
      five percent (5%) of the issued and

	 		
      outstanding Shares of the Corporation, unless the
      Corporation is classified as a Tier 1 Issuer by the TSX Venture Exchange
      and has obtained Disinterested Shareholder Approval;

	 	 	 
	 	b) 	
      the aggregate number of Options granted to any Consultant
      in a 12 month period shall not exceed two percent (2%) of the issued and
      outstanding Shares of the Corporation, calculated at the date the Option
      is granted;

	 	 	 
	 	c) 	
      the aggregate number of Options granted to persons
      employed to provide Investor Relations Activities shall not exceed two
      percent (2%) of the issued and outstanding shares of the Corporation in
      any 12 month period, calculated at the date the Option is granted;
    and

	 	 	 
	 	d) 	
      Options issued to Consultants performing Investor
      Relations Activities must vest in stages over 12 months with no more than
      25% of the Options vesting in any three month
period.

If any Option expires or otherwise terminates for any reason
without having been exercised in full, the number of Shares in respect of which
the Option expired or terminated shall again be available for the purposes of
the Plan.

3.4 Term of Option

Subject to paragraph 3.5, the Expiry Date of an Option shall be
the date so fixed by the Board at the time the particular Option is awarded,
provided that such date shall not be later than:

	 	(a) 	
      for so long as the Corporation is classified as a Tier 2
      Issuer or equivalent designation of the Exchange, the fifth anniversary of
      the later of the date the Shares are listed on the Exchange and the Award
      Date of the Option; or

	 	 	 
	 	(b) 	
      for so long as the Corporation is classified as a Tier 1
      Issuer on the Exchange, or the Shares are no longer listed on the
      Exchange, the tenth anniversary of the Award Date of the
  Option.

3.5 Termination of Option

	 	(a) 	
      Termination of Continuous Service upon
  Death

	 	 	 
	 		
      If the Continuous Service of the Option Holder is
      terminated due to the death of such Option Holder, the Option may be
      exercised (to the extent such Option was exercisable on the date of death)
      for a period of one year after the date of death (but in no event beyond
      the term of such Option).

	 	 	 
	 	(b) 	
      Termination of Continuous Service for
  Cause

If the Continuous Service of the Option
Holder is terminated for Cause, the Option will terminate and become null and
void (unless otherwise determined by the Administrator).

	 	(c) 	 Termination of Continuous Service for Other Reasons

If the continuous Service of the Option
Holder is terminated for any reason other than the death or termination for
Cause, the Option may be exercised (to the extent such Option was exercisable on
the date of termination) for a period of 90 days after the date of
termination.

Notwithstanding the foregoing, for so long as the Corporation
is classified as a Tier 2 Issuer, the Expiry Date for Options granted to any
Option Holder engaged in Investor Relations Activities shall be the
30th day following the date that the Option Holder ceases to be
employed in such capacity.

3.6 Acceleration by the Administrator

Subject to the rules and policies of the Exchange, the Board
may accelerate the date on which any Option may be exercised.

3.7 Impermissible Transfer of Option

If the Option Holder attempts to transfer, assign, pledge,
hypothecate or otherwise dispose of the Option in a manner that is not permitted
by Section 3.9, such Option will terminate and become null and void (unless
otherwise determined by the Administrator).

3.8 Exercise Price

The Exercise Price shall be that price per share, as determined
by the Board in its sole discretion and announced as of the Award Date, at which
an Option Holder may purchase a Share upon the exercise of an Option, and shall
not be less than the closing price of the Corporation’s Shares traded through
the facilities of the Exchange (or, if the Shares are no longer listed for
trading on the Exchange, then such other exchange or quotation system on which
the Shares are listed or quoted for trading) on the day preceding the Award
Date, less any discount permitted by the Exchange, or such other price as may be
required by the Exchange.

3.9 Assignment of Options

Options may not be assigned or transferred, provided however
that the Personal Representative of an Option Holder may, to the extent
permitted by paragraph 4.1, exercise the Option within the Exercise Period.

3.10 Adjustments

If prior to the complete exercise of any Option the Shares are
consolidated, subdivided, converted, exchanged or reclassified or in any way
substituted for (collectively the “Event”), an 

Option, to the extent that it has not been exercised, shall be
increased or decreased proportionally by the Board, in accordance with such
Event as the case may be, and the Option Price will be adjusted accordingly. The
number of Shares resulting from the Options will be determined as if the Option
had been fully exercised prior to the effective date of the Event.

No fractional shares shall be issued upon the exercise of any
Option and accordingly, if as a result of the Event, an Option Holder would
become entitled to a fractional Share, such Option Holder shall have the right
to purchase only the next lowest whole number of Shares and no payment or other
adjustment will be made with respect to the fractional interest so disregarded.
Additionally, no lot of Shares in an amount less than 500 shares shall be issued
upon the exercise of the Option unless such amount of Shares represents the
balance left to be exercised under the Option. 

3.11 Vesting

All Options granted pursuant to the Plan will be subject to
such vesting requirements as may be prescribed by the Exchange, if applicable,
or as may be imposed by the Board. Unless otherwise approved by the Board, and
subject to the rules and policies of the Exchange, all Options granted pursuant
to the Plan must contain conditions relating to the vesting of the right to
exercise an Option granted to any Option Holder, which will provide that the
right to purchase Shares under the Option may not be exercised any earlier than
the following times (although the Board may impose longer vesting periods):

	Number of Shares 	Date After Which the Shares may be
      Purchased 
	One Quarter 	Award Date 
	One Quarter 	Six Months Following Award Date 
	One Quarter 	One Year Following Award Date
    
	One Quarter 	Eighteen Months Following Award Date
  

The Option Certificate representing any such Option will
disclose any vesting conditions.

3.12 Compliance with Rule 16b-3

Options granted to Reporting Persons must meet the requirements
of Rule 16b-3 and must contain such additional terms and conditions as are
required by Rule 16b-3 in order to qualify for the maximum exemption for plan
transactions.

ARTICLE 4 
EXERCISE OF OPTION

4.1 Exercise of Option

An Option may be exercised only by the Option Holder or the
Personal Representative of any Option Holder in the event of the death or
inability to manage the affairs of the Option Holder. An 

Option Holder or the Personal Representative of any Option
Holder may exercise an Option in whole or in part at any time or from time to
time during the Exercise Period up to 5:00 p.m. local time in Vancouver, British
Columbia on the Expiry Date by delivering to the Administrator an Exercise
Notice, the applicable Option Certificate and a certified cheque or bank draft
payable to the Corporation in an amount equal to the aggregate Exercise Price of
the Shares to be purchased pursuant to the exercise of the Option.

4.2 Issue of Share Certificates

As soon as practicable following the receipt of the Exercise
Notice, the Administrator shall cause to be delivered to the Option Holder a
certificate for the Shares purchased pursuant to the exercise of the Option. If
the number of Shares purchased is less than the number of Shares subject to the
Option Certificate surrendered, the Administrator shall forward a new Option
Certificate to the Option Holder concurrently with delivery of the aforesaid
share certificate for the balance of Shares available under the Option. Further,
if the Corporation is a Tier 2 Issuer, or the Exercise Price of the Option is
below the current market price of the Shares, the certificate for the shares
will bear a legend stipulating the Shares are subject to a four-month Exchange
hold period commencing on the date the Options were granted.

4.3 Condition of Issue

The issue of Shares by the Corporation pursuant to the exercise
of an Option is subject to this Plan and compliance with the laws, rules and
regulations of all regulatory bodies applicable to the issuance and distribution
of such Shares and to the listing requirements of any stock exchange or
exchanges on which the Shares may be listed. The Option Holder agrees to comply
with all such laws, rules and regulations and agrees to furnish to the
Corporation any information, report and/or undertakings required to comply with
and to fully co-operate with the Corporation in complying with such laws, rules
and regulations. 

ARTICLE 5
ADMINISTRATION

5.1 Administration

The Plan shall be administered by the Administrator on the
instructions of the Board. The Board may make, amend and repeal at any time and
from time to time such regulations not inconsistent with the Plan as it may deem
necessary or advisable for the proper administration and operation of the Plan
and such regulations shall form part of the Plan. The Board may delegate to the
Administrator or any Director, officer or employee of the Corporation such
administrative duties and powers as it may see fit.

5.2 Interpretation

The interpretation by the Board of any of the provisions of the
Plan and any determination by it pursuant thereto shall be final and conclusive
and shall not be subject to any dispute by any Option Holder. No member of the
Board or any person acting pursuant to authority delegated by it hereunder shall
be liable for any action or determination in connection with the Plan made or
taken 

in good faith and each member of the Board and each such person
shall be entitled to indemnification with respect to any such action or
determination in the manner provided for by the Corporation.

ARTICLE 6
TERMS AND CONDITIONS OF OPTIONS GRANTED
TO U.S. OPTION HOLDERS

6.1 Definitions

For the purpose of this Article 6, the following terms shall
have the meanings set forth below:

	 	a) 	
      “Code” means the Internal Revenue Code of 1986, as
      amended;

	 	 	 
	 	b) 	
      “Fair Market Value” means, with respect to any Share, the
      fair market value, as of a given date, of such Share, determined by such
      methods and procedures as are established from time to time by the Board.
      Unless otherwise determined by the Board, the fair market value of a Share
      as of a given date will be the closing price of the Corporation’s Shares
      traded through the facilities of the Exchange (or, if the Shares are no
      longer listed for trading on the Exchange, then such other exchange or
      quotation system on which the Shares listed or quoted for trading) on the
      day preceding the Award Date;

	 	 	 
	 	c) 	
      “Incentive Stock Option” means an Option that is intended
      to qualify as an “incentive stock option” pursuant to section 422 of the
      Code;

	 	 	 
	 	d) 	
      “Nonqualified Stock Option” means an Option that is not
      an Incentive Stock Option;

	 	 	 
	 	e) 	
      “Parent” means any corporation (other than the
      Corporation) in an unbroken chain of corporations ending with the
      Corporation, if each corporation in such chain (other than the
      Corporation) owns stock possessing fifty percent (50%) or more of the
      total combined voting power of all classes of stock in one of the other
      corporations in the chain. The preceding definition of the term “Parent”
      is intended to comply with, and will be interpreted consistently with,
      section 424(e) of the Code;

	 	 	 
	 	f) 	
      “Subsidiary” means any corporation (other than the
      Corporation) in an unbroken chain of corporations beginning with the
      Corporation, if each corporation (other than the last corporation) in such
      chain owns stock possessing fifty percent (50%)or more of the total
      combined voting power of all classes of stock in one of the other
      corporations in such chain. The preceding definition of the term
      “Subsidiary” is intended to comply with, and will be interpreted
      consistently with, section 424(f) of the Code;

	 	 	 
	 	g) 	
      “U.S. Option Holder” means an Option Holder who is a
      citizen of the United States or a resident of the United States, in each
      case as defined in section 7701(a)(30)(A) and section 7701(b)(1) of the
      Code; and

	 	 	 
	 	h) 	
      “10% Shareholder” means any person who owns, taking into
      account the constructive ownership rules set forth in section 424(d) of
      the Code, more than ten percent (10%) of the total combined voting power
      of all classes of stock of the Corporation (or any
Parent

or Subsidiary).

6.2 Exchange Requirements

This Article 6 shall be subject to the rules and policies of
the Exchange.

6.3 Maximum Number of Shares for Incentive Stock
Options

Notwithstanding any provision of this Plan to the contrary, the
aggregate number of Shares available for Incentive Stock Options is 2,500,000,
subject to adjustment pursuant to section 3.10 of this Plan and subject to the
provisions of section 422 and 424 of the Code.

6.4 Designation of Options

Each option agreement with respect to an Option granted to a
U.S. Option Holder shall specify whether the related Option is an Incentive
Stock Option or a Nonqualified Stock Option. If no such specification is made in
the applicable option agreement, the related Option will be (a) an Incentive
Stock Option if all of the requirements under the Code that must be satisfied in
order for such Option to qualify as a Incentive Stock Option are satisfied, or
(b) in all other cases, a Nonqualified Stock Option.

6.5 Special Requirements for Incentive Stock Options

In addition to the other terms and conditions of this Plan, the
following limitations and requirements will apply to an Incentive Stock
Option:

	 	a) 	
      An Incentive Stock Option may be granted only to an
      Employee. For purposes solely of this section 6.3, “Employee” means a
      person who is an employee of the Corporation (or of any Parent or
      Subsidiary) for purposes of section 422 of the Code.

	 	 	 
	 	b) 	
      The aggregate Fair Market Value of the Shares (determined
      as of the applicable date the Option is granted (the “Grant Date”) with
      respect to which Incentive Stock Options are exercisable for the first
      time by any U.S. Option Holder during any calendar year (pursuant to this
      Plan and all other plans of the corporation and of any Parent or
      Subsidiary) will not exceed one hundred thousand dollars (U.S. $100,000)
      or any other limitation subsequently set forth in section 422(d) of the
      Code.

	 	 	 
	 	c) 	
      The exercise price per Share payable upon exercise of an
      Incentive Stock Option will be not less than one hundred percent (100%) of
      the Fair Market Value of a Share on the applicable Grant Date; provided,
      however, that the exercise price per Share payable upon exercise of an
      Incentive Stock Option granted to a U.S. Option Holder who is a 10%
      Shareholder on the applicable Grant Date will be not less than one hundred
      ten percent (110%) of the Fair Market Value of a Share on the applicable
      Grant Date.

	 	 	 
	 	d) 	
      No Incentive Stock Option may be granted more than ten
      (10) years after the earlier of (i) the date on which this Plan is adopted
      by the Board or (ii) the date on which this Plan
is

	 		
      approved by the shareholders of the
Corporation.

	 	 	 
	 	e) 	
      An Incentive Stock Option will terminate and no longer be
      exercisable no later than ten (10) years after the applicable Grant Date;
      provided, however, that an Incentive Stock Option granted to a U.S. Option
      Holder who is a 10% Shareholder on the applicable Grant Date will
      terminate and no longer be exercisable no later than five (5) years after
      the applicable Grant Date.

	 	 	 
	 	f) 	
      If a U.S. Option Holder who has been granted an Incentive
      Stock Option ceases to be an Employee, such Incentive Stock Option will be
      exercisable as follows:

	 	(i) 	
      If a U.S. Option Holder who has been granted an Incentive
      Stock Option ceases to be an Employee due to the death of such U.S. Option
      Holder, such Incentive Stock Option may be exercised (to the extent such
      Incentive Stock Option was exercisable on the date of death) by the estate
      of such U.S. Option Holder, or by any person to whom such Incentive Stock
      Option was transferred in accordance with Section 6.5(h), for a period of
      one (1) year after the date of death (but in no event beyond the Expiry
      Date of such Incentive Stock Option),

	 	 	 
	 	(ii) 	
      If a U.S. Option Holder who has been granted an Incentive
      Stock Option ceases to be an Employee for any reason other than the death
      of such U.S.

	 	 	 
	 		
      Option Holder or termination for Cause, such Incentive
      Stock Option may be exercised (to the extent such Incentive Stock Option
      was exercisable on the date of termination) by such U.S. Option Holder for
      a period of three (3) months after the date of termination (but in no
      event beyond the Expiry Date of such Incentive Stock
  Option).

	 		
      For the purposes of this Section 6.5(f), the employment
      of a U.S. Option Holder who has been granted an Incentive Stock Option
      will not be considered interrupted or terminated upon (a) sick leave,
      military leave or any other leave of absence approved by the Administrator
      that does not exceed ninety (90) days in the aggregate; provided, however,
      that if reemployment upon the expiration of any such leave is guaranteed
      by contract or applicable law, such ninety (90) day limitation will not
      apply, or (b) a transfer from one office of the Corporation (or any Parent
      or Subsidiary) to another office of the Corporation (or any Parent or
      Subsidiary) or a transfer between the Corporation and any Parent or
      Subsidiary.

	 	 	 
	 	g) 	
      An Incentive Stock Option granted to a U.S. Option Holder
      may be exercised during such U.S. Option Holder’s lifetime only by such
      U.S. Option Holder.

	 	 	 
	 	h) 	
      An Incentive Stock Option to a U.S. Option Holder may not
      be transferred, assigned, pledged, hypothecated or otherwise disposed of
      by such U.S. Option Holder, except by will or by the laws of descent and
      distribution.

6.6 Shareholder Approval

In the event that this Plan is not approved by the shareholders
of the Corporation within twelve (12) months before or after the date on which
this Plan is adopted by the Board, any Incentive Stock Option granted under this
Plan will automatically be deemed to be a Nonqualified Stock Option.

ARTICLE 7
AMENDMENT AND TERMINATION

7.1 Prospective Amendment

Subject to applicable regulatory and, if required by any
relevant law, rule or regulation applicable to the Plan, to shareholder
approval, the Board may from time to time amend the Plan and the terms and
conditions of any Option thereafter to be granted and, without limiting the
generality of the foregoing, may make such amendment for the purpose of meeting
any changes in any relevant law, rule or regulation applicable to the Plan, any
Option or the Shares or for any other purpose which may be permitted by all
relevant laws, rules and regulations provided always that any such amendment
shall not alter the terms or conditions of any Option or impair any right of any
Option Holder pursuant to any Option awarded prior to such amendment.
Notwithstanding the foregoing, the Board may, subject to section 3.9 hereof,
amend the terms upon which each Option shall become vested with respect to
Shares without further approval of the Exchange, other regulatory bodies having
authority over the Corporation or the Plan or the shareholders.

7.2 Retrospective Amendment

Subject to applicable regulatory approval and, if required by
any relevant law, rule or regulation applicable to the Plan, to shareholder
approval, the Board may from time to time retrospectively amend the Plan and,
with the consent of the affected Option Holders, retrospectively amend the terms
and conditions of any Options which have been previously granted. 

7.3 Terms or Amendments Requiring Disinterested Shareholder
Approval

The Corporation will be required to obtain Disinterested
Shareholder Approval prior to any of the following actions becoming
effective:

	 	(a) 	
      the Plan, together with all of the Corporation’s
      previously established and outstanding stock option plans or grants, could
      result at any time in:

	 	 	 	 
	 		(i) 	
      the aggregate number of shares reserved for issuance
      under Options granted to insiders exceeding 10% of the issued and
      outstanding Shares of the Corporation;

	 	 	 	 
	 		(ii) 	
      the grant of Options to insiders, within a 12 month
      period, exceeding 10% of the issued and outstanding Shares of the
      Corporation;

	 	 	(iii) 	 in the case of a Tier 1 Issuer only, the issuance to
        any Option Holder, within a 12 month period, of a number of shares exceeding
        5% of the issued and outstanding Shares of the Corporation; or

	 	 	 	 
	 	 	(iv) 	 any reduction in the Exercise Price of an Option previously
        granted to an insider.

7.4 Termination

The Board may terminate the Plan at any time provided that such
termination shall not alter the terms or conditions of any Option or impair any
right of any Option Holder pursuant to any Option awarded prior to the date of
such termination. Notwithstanding the termination of the Plan, the Corporation,
Options awarded under the Plan, Option Holders and Shares issuable under Options
awarded under the Plan shall continue to be governed by the provisions of the
Plan.

7.5 Agreement

The Corporation and every person to whom an Option is awarded
hereunder shall be bound by and subject to the terms and conditions of the
Plan.

ARTICLE 8
APPROVALS REQUIRED FOR PLAN

8.1 Approvals Required for Plan

Prior to its implementation by the Corporation, the Plan is
subject to approval by the Exchange.

8.2 Substantive Amendments to Plan

Any substantive amendments to the Plan shall be subject to the
Corporation first obtaining the approvals of:

	 	(a) 	
      the shareholders of the Corporation, including
      Disinterested Shareholder Approval, if necessary, at a general meeting
      where required by the rules and policies of any stock exchange on which
      the Shares may be listed for trading; and

	 	 	 
	 	(b) 	
      any stock exchange on which the Shares may be listed for
      trading.

SCHEDULE “A”

U.S. GEOTHERMAL INC.
STOCK OPTION PLAN OPTION
CERTIFICATE

This Certificate is issued pursuant to the provisions of U.S.
Geothermal Inc. (the “Corporation”) Stock Option Plan (the “Plan”) and evidences
that _______________ (the “Holder”) is the holder of an option (the “Option”) to
purchase up to _______________ common shares (the “Shares”) in the capital stock
of the Corporation at a purchase price of $_______________ per Share. Subject to
the provisions of the Plan:

	 	(a) 	
      the Award Date of this Option is _______________;
    and

	 	 	 
	 	(b) 	
      the Expiry Date of this Option is
  _______________.

This Option may be exercised in accordance with its terms at
any time and from time to time from and including the Award Date through to and
including up to 5:00 P.M. local time in Vancouver, British Columbia on the
Expiry Date, by delivery to the Administrator of the Plan an Exercise Notice, in
the form provided in the Plan, together with this Certificate and a certified
cheque or bank draft payable to “U.S. Geothermal Inc.” in an amount equal to the
aggregate of the Exercise Price of the Shares in respect of which the Option is
being exercised.

This Certificate and the Option evidenced hereby is not
assignable, transferable or negotiable and is subject to the detailed terms and
conditions contained in the Plan. This Certificate is issued for convenience
only and in the case of any dispute with regard to any matter in respect hereof,
the provisions of the Plan and the records of the Corporation shall prevail.

The Corporation and the Holder represent that the Holder under
the terms and conditions of the Plan is a bona fide __________________________
of the Corporation, entitled to receive Options under TSX Venture Exchange
Policies.

The foregoing Option has been awarded this ____ day of
_______________.

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

U.S. GEOTHERMAL INC.

Per: ____________________

SCHEDULE “B”

EXERCISE NOTICE

	TO: 	The Administrator, Stock Option Plan 
		U.S. Geothermal
    Inc.  

Exercise of Option

The undersigned hereby irrevocably gives notice, pursuant to
the U.S. Geothermal Inc. (the “Corporation”) Stock Option Plan (the “Plan”), of
the exercise of the Option to acquire and hereby subscribes for (cross out
inapplicable item):

	 	(a) 	
      all of the Shares; or

	 	 	 
	 	(b) 	
      ____________ of the Shares which are the subject of the
      option certificate attached hereto.

Calculation of total Exercise Price:

	 	(a) 	number of Shares to be acquired on exercise: 	_________________ shares 
	 	 	 	 
	 	(b) 	times the Exercise Price per Share: 	$  _________________ 
	 	 	 	 
	 	  	Total Exercise Price, as enclosed herewith: 	$  _________________ 

The undersigned tenders herewith a cheque or bank draft (circle
one) in the amount of $___________, payable to “U.S. Geothermal Inc.” in an
amount equal to the total Exercise Price of the Shares, as calculated above, and
directs the Corporation to issue the share certificate evidencing the Shares in
the name of the undersigned to be mailed to the undersigned at the following
address:

________________________________________

________________________________________

________________________________________

DATED the _____ day of _______________.

	 	 	 
	Witness 	 	Signature of Option Holder 
	 	 	 
	 	 	 
	Name of Witness (Print) 	 	Name of Option Holder (Print)Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.28

RENEWABLE ENERGY CREDIT 
PURCHASE AND SALE
AGREEMENT

This Renewable Energy Credit Purchase and Sale Agreement
(“Agreement”), dated as of ___July 29__, 2006, is entered into 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 (“Seller”); and

	 	 	 
		2. 	
      Holy Cross Energy, a Colorado cooperative electric
      association, with its principal place of business at 3799 Highway 82,
      Glenwood Springs, Colorado 81601 (“Buyer”).

Buyer and Seller may be referred to individually herein
as “Party” and collectively as “Parties.”

ARTICLE I: RECITALS

WHEREAS Seller is developing the Unit 1 geothermal power
plant (the “Specified Resource”) in the Raft River Known Geothermal Resource
Area in the State of Idaho and has the right to sell up to 10 megawatts (“MW”)
average per month of electrical output under a Firm Energy Sales Agreement with
Idaho Power Company (the “IPC Contract”) under which Seller contractually
retains the “Environmental Attributes” and “Renewable Energy Credits” or “RECs”
that are associated with the generation of renewable electric energy; and

WHEREAS the State of Colorado passed a Renewable Energy
Standard (the “CO-RES”) that requires Buyer to meet certain escalating
thresholds for its future retail electric energy sales though either the
generation of electricity by means of eligible renewable energy facilities
(including biomass, geothermal, hydropower, solar, and wind) or via the purchase
of renewable energy credits associated with the aforementioned eligible energy
facilities; and 

WHEREAS, to adhere to the intent and spirit of the
CO-RES which includes the development of new renewable energy facilities, Buyer
responded to a solicitation of Seller to purchase RECs, wherein such sales
proceeds received from Buyer would support Seller in its financing for the
construction of the Specified Resource; and 

WHEREAS Seller desires to deliver and sell and Buyer
desires to accept and buy RECs for a period of 10 years commencing in 2008; and

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WHEREAS Buyer and Seller are in agreement that under any
contract or contracts for the electrical output of the Specified Resource that
have been or may be entered into by Seller with Idaho Power Company or others,
Buyer will retain a senior position relative to any other entity for the
purchase and delivery of up to 87,600 RECs per year.

NOW, THEREFORE, in consideration of the foregoing and of
the mutual promises hereinafter set forth, the Parties, intending to be legally
bound, agree as follows:

ARTICLE II: DEFINITIONS

“Agreement” means this Renewable Energy Credit Purchase and
Sale Agreement executed between the Parties, including Exhibit A and any such
revisions as may be agreed to in writing and signed by both Parties.

“Buyer’s Reserve” means a volume of RECs that are owned and
held by Seller, but controlled by Buyer, as more fully described in paragraph
III.H below.

“CO-RES” means the electric resource standard for eligible
renewable energy resources specified in § 40-2-124, C.R.S., and in the
implementing regulations promulgated by the Colorado Public Utilities Commission
at 4 CCR 723-3, effective July 2, 2006.

"Environmental Attributes" a) include, but are not limited to,
green tags, green certificates, renewable energy credits and tradable renewable
certificates directly associated with the Specified Energy from the Seller’s
Specified Resource. b) means the full set of non-energy attributes, including
any and all credits, benefits, emissions reductions, environmental air quality
credits, and emissions reduction credits, offsets and allowances, howsoever
described or entitled, resulting from the avoidance of the emission of any gas
(including, but not limited to mercury, CO2, NOX, and SO2), chemical, or other
substance, directly attributable to the generation of the Specified Energy by
the Specified Resource. c) does not mean (i) any energy, capacity, reliability
or other power attributes from the Specified Resource; or (ii) tax credits,
deductions, refunds, loans or other financial incentives associated with the
construction and operation of the Specified Resource that are applicable to
federal or state or local property, sales or income tax obligations. 

“Events of Default” mean and are limited to those events set
forth in Article VI. 

“Full Output Contract” means a new or revised contract or
contracts between Seller and Idaho Power or others for the electrical power
generated by the Specified Resource that is not limited to 10 MW per month. 

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“Green-e Certified” or “Green-e Certification” means RECs
possessing Tradable Renewable Certificate Certification by the Green-e Renewable
Electricity Certification Program administered by the Center for Resource
Solutions, or another certification authority accepted by the Parties, agreement
as to which shall not be unreasonably withheld.

“IPC Contract” means the Firm Energy Sales Agreement between US
Geothermal and Idaho Power entered into on December 29, 2004, Project Number
31765155, and approved by the Idaho Public Utilities Commission, as such
contract may be amended, modified or supplemented from time to time.

“REC” means Renewable Energy Credit. 

"REC Reporting Rights" means the exclusive right to report to
or register with any agency, authority or other party, including, without
limitation under Section 1605(b) of the Energy Policy Act of 1992, or under any
present or future Federal, state or local law, regulation or bill, and
international or foreign emissions trading program, exclusive ownership of the
RECs.

"Renewable Energy Credit" (REC) means all rights, title and
interest in and to the Environmental Attributes, plus the REC Reporting Rights.
For purposes of this Agreement, one REC (a) represents the Environmental
Attributes associated with the generation and delivery of 1 MWh of Specified
Energy by the Specified Resource to Idaho Power or another entity, after
excluding any Specified Energy produced using fossil fuel, except to the extent,
if any, that fossil fuel use is authorized by CO-RES, and (b) is Green-e
Certified.

“Revenue Meter” means the meter used to measure and calculate
the net generation of the Specified Resource delivered to the
transmission/distribution grid.

“Specified Energy” means the electrical energy produced by the
Specified Resource and metered at the Revenue Meter of the Specified Resource.

“Specified Resource” means the Raft River Geothermal Power
Plant Unit 1 near Malta, Idaho that will produce the Specified Energy under the
terms of the IPC Contract or if executed, the Full Output Contract.

ARTICLE III: TRANSACTION

A. Term. This Agreement shall take effect upon execution
by both Parties and will end on December 31, 2017, unless both parties in
writing mutually agree to a time extension 

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exceeding December 31, 2017. If this occurs, a Purchase Price
will be negotiated as part of the extension.

B. Sale and Purchase. In accordance with the terms of
this Agreement, Seller will be obligated to sell to Buyer, and Buyer will be
obligated to accept and buy from Seller, RECs as more fully set forth below.

C. Quantity. Commencing on the later of (i) January 1,
2008, or (ii) the first date when Specified Energy is delivered under the IPC
Contract or the Full Output Contract, Seller shall sell and deliver, and Buyer
shall accept and buy, RECs as follows:

	1. 	
      IPC Contract: In every calendar month,
      Seller shall sell and deliver and Buyer shall accept and buy, RECs
      corresponding to 100% of Seller’s total production of Specified Energy, up
      to a maximum of 87,600 RECs per calendar year.

	 	 
	2. 	
      Full Output Contract: Subject to the
      limitation in paragraph III.C.4 below, in every calendar month, Seller
      shall sell and deliver and Buyer shall accept and buy, RECs corresponding
      to the total of a) the first 7,300 RECs, plus b) 25% of the remaining
      monthly output of RECs.

	 	 
	3. 	
      Minimum Quantity: Seller does not warrant
      or guarantee that it will generate any minimum amount of Specified Energy
      or associated RECs on a monthly or annual basis.

	 	 
	4. 	
      Annual Quantity: Seller shall not be
      obligated to deliver and Buyer shall not be obligated to buy more than
      87,600 RECs per calendar year.

	 	 
	5. 	
      Additional Quantities:

	 	 
		
      In the event that Seller delivers less than 87,600 RECs
      to Seller in respect of any calendar year, Seller shall deliver to Buyer
      any RECs, other than the Buyer’s Reserve, owned by Seller and not required
      to be delivered to any other party by Seller in order to comply with its
      minimum delivery obligations under any agreement with any other party, so
      as to make up such shortfall in the annual quantity of RECs.

	 	 
	6. 	
      Buyer’s Reserve Quantity: Those RECs that
      under paragraph III.H are either obligated to be used to create the
      Buyer’s Reserve, or to be delivered from the Buyer’s Reserve, shall be
      excluded from the monthly or annual delivery requirements of this
      paragraph III.C.

D. Excess RECs. Seller may (but is not required to)
offer to sell to Buyer, and Buyer may (but is not required to) purchase from
Seller, RECs corresponding to generation of Specified Energy in excess of the
monthly or annual maximum delivery levels set forth in paragraphs 1 and 2 of
paragraph II.C above. The price for such excess RECs shall be the
then-applicable price per REC under paragraph III.G, below.

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E. Senior Right. Seller shall be obligated to fulfill
the Buyer’s REC delivery requirements of this Agreement prior to the retention
or delivery of RECs with any other party, up to the monthly and annual limits
set forth in paragraph III.C.

	 	1. 	
      Seller shall take all reasonable steps to defend and
      support Buyer's right to RECs under this Agreement, at Seller's sole cost
      and expense, if such right is contested or challenged by Idaho Power
      Company or any alternative or replacement purchaser from Buyer of the
      Specified Energy.

	 	 	 
	 	2. 	
      The Parties shall cooperate to defend or support of
      Buyer's rights under this Agreement before any Idaho or Colorado
      governmental entity.

	 	 	 
	 	3. 	
      Notwithstanding any other provision of this paragraph
      III.E, (i) Seller shall not be responsible for any costs of implementing
      paragraph III.E.1 that exceed a maximum of 20% of the annual revenues per
      contract year, provided the costs do not arise as a result of Seller's
      willful breach of this Agreement; and (ii) Seller's obligations under this
      paragraph III.E. shall not be enforceable against Seller with respect to
      any RECs that Buyer sells or transfers to third
parties.

F. Forecasting. By January 30th of every year
of the Term, Seller shall provide to Buyer a good faith written forecast of
Seller’s expected production for that year and the remainder of the Term. Seller
does not warrant the delivery of RECs as a result of the forecast.

G. Price.

If Seller is delivering Specified Energy under the IPC
Contract, then the price per REC shall be as given in Table 1.

Table 1: REC Prices - IPC Contract

	Year 
	Price 
($/MWh) 	Year 
	Price 
($/MWh) 
	2008 	$7.50 	2013 	$5.00 
	2009 	$7.00 	2014 	$4.50 
	2010 	$6.50 	2015 	$4.00 
	2011 	$6.00 	2016 	$3.50 
	2012 	$5.50 	2017 	$3.00 

If Seller is delivering Specified Energy under a Full Output
Contract, then the price per REC shall be as given in Table 2.

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Table 2: REC Prices - Full Output Contract

	Year 
	Price 
($/MWh) 	Year 
	Price 
($/MWh) 
	2008 	$7.50 	2013 	$5.00 
	2009 	$7.00 	2014 	$4.75 
	2010 	$6.50 	2015 	$4.75 
	2011 	$6.00 	2016 	$4.75 
	2012 	$5.50 	2017 	$4.75 

Under either contract scenario, the price per REC will be based
on the calendar month in which the RECs are billed to Buyer.

H. Buyer’s Reserve. Not later than December 31, 2008,
Seller shall establish and thereafter administer on behalf of Buyer a reserve
account from RECs generated in 2007 or 2008 which shall be delivered to Buyer at
the Buyer’s discretion. The Buyer’s Reserve shall be administered as
follows:

	 	1. 	
      Reserve Quantity. Seller shall initially
      establish the Buyer’s Reserve with 8,760 RECs.

	 	 	 
	 	2 	
      Vintage: The Seller shall implement all
      necessary internal accounting procedures to ensure that the RECs in the
      Buyer’s Reserve shall be Green- e Certified when delivered.

	 	 	 
	 	3. 	
      Ownership. Buyer’s Reserve RECs shall be
      owned and held by Seller, for the exclusive benefit of Buyer, until
      delivery thereof to Buyer.

	 	 	 
	 	4. 	
      Delivery. At any time during the term,
      Buyer shall have the right to require Seller to deliver to Buyer all or
      any portion of the RECs then remaining in the Reserve. Seller shall be
      under no obligation to replace RECs from the Buyer’s Reserve delivered at
      the request of the Buyer.

	 	 	 
	 	5. 	
      Payment. Buyer, upon receipt of RECs
      delivered from the Reserve, shall pay Seller for such RECs in a manner
      consistent with the applicable terms and conditions of this
    Agreement.

	 	 	 
	 	6. 	
      Termination. Upon termination of this
      Agreement, any and all RECs remaining in the Reserve that have not been
      delivered to Buyer shall become the sole property of
  Seller.

I. Certification. All RECs delivered from Seller to
Buyer under the terms of this Agreement shall be Green-e Certified RECs. 

J. Delivery. Seller shall deliver RECs to Buyer in
Colorado on a monthly basis. Seller shall effect delivery by delivering on or
about the 10th of every month, an invoice and a “Renewable Energy
Credit Attestation and Bill of Sale” (in substantially the form attached hereto
as Exhibit A) to Buyer.

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K. True-Up. If, as a result of a meter inspection,
billing error, or audit under Article IV, it is determined that the quantity of
Specified Energy does not correlate or coincide with deliveries of RECs to
Buyer, then each party shall promptly, upon the other party’s request, provide
the requesting party with all necessary documentation and cooperate with the
other Party as reasonably required. Buyer and Seller shall act in a timely
manner to resolve any under/over payments or deliveries associated with the sale
and purchase of RECs that may result if a true-up obligation arises.

L. Payment. Buyer shall make payment to Seller for the
RECs delivered by Buyer to Seller within ten business days after receipt of an
invoice. Any amount not paid when due under this Agreement shall accrue interest
at the lesser of 12% per annum or the highest rate permitted under applicable
law until paid.

M. Taxes. Seller is responsible for all taxes arising
prior to delivery. Buyer is responsible for all taxes after delivery. Neither
party is responsible for income or ad valorem taxes of the other party. Seller
shall not be responsible for any Colorado sales or use tax arising or resulting
from RECs delivered under this Agreement, and should any such tax be due, it
shall be paid by Buyer.

If a Party is required to remit or pay taxes that are the other
Party’s responsibility hereunder, such responsible Party shall reimburse the
other for such taxes upon request. Both Parties shall use reasonable efforts to
administer this Agreement and implement its provisions so as to minimize taxes.
In the event any of the sales of RECs hereunder are to be exempted from or not
subject to any particular taxes, Buyer shall, promptly upon Seller’s request,
provide Seller with all necessary documentation to evidence such exemption.

N. Title. Ownership of RECs shall transfer from Seller
to Buyer upon delivery of the Renewable Energy Credit Attestation and Bill of
Sale, and contingent on Buyer’s payment in-full for such delivered RECs. Upon
transfer of ownership by Seller to Buyer, Buyer shall have absolute and
exclusive ownership of the RECs. Attestations may be disclosed by either party
to others to substantiate and verify Seller’s representations.

O. Further Assurances. At Buyer’s request and expense,
the Parties shall execute all documents and instruments necessary and desirable
to evidence the RECs or to effect or evidence transfer of RECs to Buyer or its
designee beyond that of the Renewable Energy Credit Attestation and Bill of
Sale. At Buyer’s expense, in the event that Buyer requests, or the States of
Idaho or Colorado require, participation by Seller in a registry or tracking
system, such as the Western Renewable Energy Generation Information System
(“WREGIS”), then Seller will promptly register with that system and participate
as reasonably necessary to effect participation with the tracking system. At
Seller’s expense, Seller will obtain Green-e Certification of all RECs sold to
Buyer under this 

7 of 15

Agreement. Each Party shall promptly give to the other Party
copies of all documents it submits to such registry, tracking or certification
bodies to document, record, or effectuate these obligations. 

P. Retail/Marketing Claims. Seller grants to Buyer all
REC Reporting Rights to RECs sold under this Agreement. Seller further allows
Buyer to advertise, market, and promote to its customers and the general public
the benefits of the REC purchases.

ARTICLE IV: BUYER’S RIGHT TO AUDIT

A. Audit of Books and Records. Upon five business days
advance written notice from Buyer, Seller shall make its records and accounts
relating to the Agreement and the production of Specified Energy from the
Specified Resource and RECs transferred to Buyer pursuant to the Agreement
available for audit at Seller’s offices during Seller’s normal office hours, but
Seller shall not be required to make such documents available more than twice
each year during the Term. 

B. Meter Audit. Seller shall provide Buyer with a
reasonable opportunity to periodically inspect and read Seller's Revenue Meters
used to determine the quantity of Specified Energy delivered to Idaho Power or
others, at Buyer's request, but not more frequently than once per month. Seller
shall notify Buyer and providing Buyer with an opportunity to attend any Revenue
Meter calibration or tests conducted by Seller or by Idaho Power or others, and
to review results of meter readings that may be furnished by Idaho Power or
others to Seller, subject to the confidentiality provisions or requirements for
consent of Idaho Power or others, if any, applicable under the IPC Contract or
any Full Output Contract as the case may be.

ARTICLE V: REPRESENTATIONS AND WARRANTIES

A. Mutual Representations and Warranties. Each Party
represents and warrants to the other that: (i) it is duly organized and validly
existing under the laws of the jurisdiction of its incorporation or
organization; (ii) it has the corporate, governmental or other legal capacity
and authority to execute this Agreement and to perform its obligations
hereunder, and all acts necessary to the valid execution, delivery and
performance of this Agreement, have or will be taken and performed by each
Party, or by its board of directors, shareholders, managing members, members or
partners, as appropriate; (iii) such execution and performance do not violate or
conflict with any law or regulation applicable to it, any provision of its
constitutional documents, any order or judgment of any court or government
agency applicable to it or any of its assets or any contract or contractual
restriction by which it is bound or affecting it or any of its assets; (iv) all
governmental and other authorizations that are required to have been obtained or

8 of 15

submitted by it with respect to this Agreement have been
obtained or submitted and are in full force and effect and all conditions of any
such authorizations, approvals, consents, notices and filings have been complied
with; (v) it is not relying upon any representations of the other Party other
than those expressly set forth in this Agreement; (vi) it has executed this
Agreement based upon its own judgment and upon such advice from such advisors as
it has deemed necessary and not in reliance upon any view expressed by the other
Party; and (vii) all persons executing this Agreement on behalf of each Party is
duly authorized by such Party to do so. 

B. Warranties of Seller. Seller hereby warrants to Buyer
that with respect to all RECs sold and delivered by Seller to Buyer under this
Agreement, as set forth in a “Renewable Energy Credit Attestation and Bill of
Sale” (the form of which is attached as Exhibit A), as of the date of delivery
of such RECs: 

	 	1. 	
      Seller has and will maintain, and transfer to buyer, good
      and merchantable title to such RECs, and such RECs are free and clear of
      any liens, taxes, claims, security interests or other encumbrances or any
      right or interest therein or thereto by any entity of any kind
      whatsoever.

	 	 	 
	 	2. 	
      Seller has not claimed ownership of the RECs or sold or
      exchanged the RECs to any other person or entity (whether separately or
      with RECs included as part of any blended energy product), such sale being
      the first and only sale of RECs by Seller.

	 	 	 
	 	3. 	
      The RECs are Green-e Certified.

	 	 	 
	 	4. 	
      The Specified Resource from which RECs are sourced was
      not built in order to comply with a renewable portfolio standard or other
      renewable energy requirement of a local, state or federal government
      entity, or to comply with any mandate by a public utilities commission
      ruling or as a quid pro quo component of a legal
  settlement.

	 	 	 
	 	5. 	
      As of the date of the Agreement, the Specified Resource
      is an "Eligible Renewable Energy Resource" pursuant to Rule 3650(f) of the
      CO-RES.

	 	 	 
	 	6. 	
      Seller is not required under any Idaho program, rule, law
      or regulation to sell the same RECs that are to be sold to Buyer under
      this Agreement to Idaho Power Company or to other purchasers of Specified
      Energy.

C. LIMITATION OF WARRANTIES. EXCEPT AS EXPRESSLY SET
FORTH IN PARAGRAPH V.B. ABOVE, SELLER EXPRESSLY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES WHETHER WRITTEN OR ORAL, AND WHETHER EXPRESS OR
IMPLIED WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE RECS. IN
PARTICULAR, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH V.B. ABOVE, BUT WITHOUT
OTHERWISE LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES NO WARRANTY
THAT THE RECS WILL COMPLY WITH THE RENEWABLE 

9 of 15

ENERGY STANDARD OR RENEWABLE PORTFOLIO STANDARD OF ANY NATION,
STATE, AGENCY, COOPERATIVE OR POLITICAL SUBDIVISION THEREOF OR THAT THE RECS
HAVE ANY MARKET VALUE OTHER THAN THAT ESTABLISHED THROUGH THIS AGREEMENT.

ARTICLE VI: EVENTS OF DEFAULT; REMEDIES

A. Event of Default. “Event of Default” shall mean, with
respect to a Party (the “Defaulting Party”): (1) the failure to make when due
any payment under this Agreement if such failure is not remedied within fifteen
days after written notice of such failure is given; (2) any such Party's
representation or warranty proves to have been incorrect or misleading in any
material respect when made; (3) the failure to perform any other covenant set
forth in this Agreement if such failure is not remedied within fifteen days
after written notice of such failure is given; or (4) its bankruptcy.

B. Remedies Upon Event of Default. In the Event of
Default by a Party and for so long as the Event of Default is continuing, the
non-defaulting Party (the “Performing Party”) shall have the right to do any or
all of the following: (1) obtain damages from the defaulting Party (including in
the case of Buyer's default, as applicable, the price per REC for any RECs
delivered to Buyer for which Seller has not been paid, and in the case of
Seller's default, as applicable, the costs incurred by Buyer to purchase that
quantity of RECs associated with Specified Energy that Seller is obligated to
deliver but fails to deliver); (2) withhold any payments or deliveries due in
respect of this Agreement; (3) upon 20 business days’ written notice to the
Defaulting Party, terminate this Agreement and obtain the damages set forth in
paragraph VI.C below; or (4) exercise such other remedies as may be available at
law or in equity or as otherwise provided for in this Agreement, including in
the case of Buyer, injunctive or declaratory relief. Each Party shall use
commercially reasonable efforts to mitigate any damages it may incur under this
Agreement as a result of an Event of Default.

C. Termination Liabilities.

	 	1. 	
      Buyer’s Liability. If an Event of Default occurs
      with respect to Buyer and Seller elects to terminate this
      Agreement, or receive damages under this paragraph
      VI.C.1, then Buyer shall be obligated to pay Seller termination damages
      equal to the sum of (a) the Purchase Price for any RECs delivered to Buyer
      for which Seller has not been paid, if any, plus (b) the positive
      difference, if any, between (i) the Purchase Price set forth in this
      Agreement for all RECs remaining to be delivered to Buyer, if any, minus
      the forward market price as of the date of termination by Seller, to be
      determined based upon the average of prices quoted by two independent
      brokers reasonably selected by Seller, for all such RECs remaining to
      be

10 of 15

	 		
      delivered to Buyer, if any, plus any brokerage fees and
      other costs reasonably incurred by Seller either in terminating any
      arrangement pursuant to which it hedged its obligations or entering into
      any replacement transactions.

	 	 	 
	 	2. 	
      Seller’s Liability. If an Event of Default occurs
      with respect to Seller and Buyer elects to terminate this Agreement or
      receive damages under this Paragraph VI.C.2, then Seller shall be
      obligated to pay Buyer termination damages equal to the sum of (a) the
      positive difference, if any, between (i) the forward market price as of
      the date of termination by Buyer, to be determined based upon the average
      of prices quoted by two independent brokers reasonably selected by Buyer,
      for all RECs that Seller is obligated to deliver to Buyer but which remain
      undelivered minus (ii) the Purchase Price Buyer would have had to pay
      Seller for the same number of RECs, plus (b) any brokerage fees and other
      costs reasonably incurred by Buyer either in terminating any arrangement
      pursuant to which it hedged its obligations or entering into any
      replacement transactions. Notwithstanding any Event of Default with
      respect to Seller, Buyer shall pay Seller the Purchase Price for any RECs
      delivered to Buyer for which Seller has not been paid, provided, however,
      Buyer may first set-off from such amount any amounts due to Buyer from
      Seller under this provision or any other provision in this
    Agreement.

	 	 	 
	 	3. 	
      One-Way Termination. Seller shall not owe Buyer
      any amounts under this paragraph VI.C if Buyer is the Defaulting Party,
      and Buyer shall not owe Seller termination damages under this paragraph
      VI.C if Seller is the Defaulting Party.

D. Setoff. If the Agreement is terminated, the
Performing Party may, at its election, set off any or all amounts that the
Defaulting Party owes to it (whether under this Agreement or otherwise and
whether or not then due) against any or all amounts which it owes to the
Defaulting Party (whether under this Agreement or otherwise and whether or not
then due).

E. Payment of Damages. Any termination damages due
hereunder shall be paid by the close of business within five business days
following the Defaulting Party’s receipt of the Performing Party’s written
termination notice setting forth the termination payment due. 

F. Limitation of Liability. THE PARTIES AGREE THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED HEREIN SATISFY THE ESSENTIAL
PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR
MEASURE OF DAMAGE IS PROVIDED, SUCH REMEDY OR 

11 of 15

MEASURE SHALL BE THE SOLE AND EXCLUSIVE REMEDY. IF NO REMEDY OR
MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE OBLIGOR’S LIABILITY SHALL BE
LIMITED TO DIRECT ACTUAL DAMAGES ONLY AS THE SOLE AND EXCLUSIVE REMEDY. EXCEPT
AS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE PARTIES AGREE THAT NO
PARTY SHALL BE REQUIRED TO PAY OR BE LIABLE FOR SPECIAL, CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFIT OR BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT, CONTRACT OR OTHERWISE. TO THE EXTENT
ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE DEEMED LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE
OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE LIQUIDATED DAMAGES
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

G. Survival. This Article V shall survive the expiration
or termination of this Agreement, but only until such time as the remedies
provided are exercised.

H. Force Majeure. To the extent either Party is
prevented by Force Majeure from carrying out, in whole or in part, its
obligations under this Agreement, and such Party (the “Claiming Party”) gives
notice and details of the Force Majeure to the other Party as soon as
practicable, then, unless otherwise specified, the Claiming Party shall be
excused from the performance of its obligations in this Agreement (other than
the obligation to make payments then due or becoming due with respect to
performances prior to the Force Majeure). The non-Claiming Party shall not be
required to perform or resumes performance of its obligations to the Claiming
Party corresponding to the obligations of the Claiming Party excused by Force
Majeure. Force Majeure means any event or circumstance not anticipated as of the
date of execution of this Agreement that (a) in whole or in part, delays a
Claiming Party’s performance under this Agreement, causes a Claiming Party to be
unable to perform its obligations, or prevents a Claiming Party from complying
with or satisfying the conditions of this Agreement; (b) is not within the
reasonable control of that Party; and (c) the Claiming Party has been unable to
overcome by the exercise of due diligence. Force Majeure may include, but is not
limited to, acts of God, labor disturbance, acts of the public enemy, war,
insurrection, riot, fire, storm or flood, explosion, breakage or accident to
machinery or equipment, or a curtailment, order, regulation or restriction
imposed by governmental, military, or lawfully established civilian authorities.
Neither Party will be considered to be in default for failure to comply with a
term of this Agreement to the extent and during such period of time that such
failure to comply is caused by an event of Force Majeure.

I. Government Action.

12 of 15

	 	1. 	
      Buyer shall not be relieved of its obligations under this
      Agreement to purchase RECs delivered by Seller at the price and on the
      terms set forth in this Agreement, notwithstanding any change in the
      CO-RES or in any other Colorado program, rule, law or
regulation.

	 	 	 
	 	2. 	
      Seller shall not be relieved of its obligations under
      this Agreement to deliver RECs that it is obligated to sell at the price
      and on the terms set forth in this Agreement, notwithstanding any change
      in any Idaho program, rule, law or regulation.

ARTICLE VII: MISCELLANEOUS

A. Notices. Notices, which may be given by facsimile
with an original to follow via regular mail, shall be given as follows or to
such other address as may be provided by a Party from time to time in writing.
All notices are effective upon receipt.

	To Seller: 	To Buyer: 
	         Raft River Energy I LLC.
    	Holy Cross Energy 
	         Attn: Dan Kunz, President
    	Attn: Kent Benham, CEO 
	         1509 Tyrell Lane, Suite B
    	PO Box 2150 
	         Boise, ID 83706 	Glenwood Springs, CO 81602 
	  	 
	         Phone: 208-424-1027 	Phone: 970-945-5491 
	         FAX: 208-424-1030 	FAX: 970-945-4081 

B. Entire Agreement; Counterparts. This Agreement
constitutes the entire agreement between the Parties with respect to the subject
matter hereof. This Agreement may not be amended, changed, modified, or altered
unless such amendment, change, modification, or alteration is in writing and
signed by both Parties. This Agreement may be executed in counterparts,
including by a facsimile transmission thereof, each of which is an original and
all of which constitute one and the same instrument.

C. Assignment. Neither Party shall transfer or assign
all or any part of this Agreement or its rights or obligations hereunder or
otherwise dispose of any right, title or interest herein without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed; provided, however, either Party may, without the consent of
the other Party (i) transfer or assign this Agreement to a subsidiary, parent or
affiliate of such Party which affiliate’s creditworthiness is equal to or higher
than that of such Party, or (ii) transfer or assign this Agreement to any person
or entity succeeding to all or substantially all of the assets whose
creditworthiness is equal to or higher than that of such Party; provided,
however, that in each case, any such assignee shall agree in writing to be bound
by the terms and conditions hereof.

13 of 15

D. Successors and Assigns. This Agreement inures to the
benefit of and is binding upon the Parties and their respective successors and
permitted assigns.

E. Severability. If any provision of this Agreement is
determined to be invalid, void or unenforceable by any court of competent
jurisdiction, such determination shall not invalidate, void, or make
unenforceable any other provision, agreement or covenant of this Agreement,
provided the basic purposes of this Agreement and the benefits to the Parties
are not substantially impaired.

F. No Prior Agreements. This Agreement completely and
fully supersedes all other prior understandings or agreements, both written and
oral, between the Parties relating to the subject matter hereof.

G. No Waiver. Waiver by a Party of any default by the
other Party shall not be construed as a waiver of any other default, nor shall
any delay by a Party in the exercise of any right under this Agreement be
considered as a waiver or relinquishment thereof.

H. Headings. The headings used herein are for
convenience and reference purposes only.

I. Rules of Construction. "Hereof," "herein,"
"hereunder" and similar words refer to this Agreement in its entirety. All
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with generally accepted accounting
principles consistently applied ("GAAP"). "Or" is not necessarily
exclusive.

J. No Third Party Beneficiaries. This Agreement confers
no rights whatsoever upon any person other than the Parties and shall not
create, or be interpreted as creating, any standard of care, duty or liability
to any person not a Party hereto.

K. Negotiated Agreement. This Agreement shall be
considered for all purposes as prepared through the joint efforts of the
Parties. Therefore, doubtful or ambiguous provisions, if any, contained in this
Agreement shall not be construed against the Party who physically drafted and
prepared it.

L. Venue and Controlling Law. This Agreement and its
construction and enforcement shall be governed in all respects by the laws of
the State of Idaho, except provisions dealing with conflicts of laws. Any
proceedings to enforce this Agreement, declare the parties’ rights and
obligations under it, or in any way relating to it shall be brought in Idaho
state district court, Fourth District, Ada County, or in the United States
District Court for the District of Idaho. Each of the parties expressly consents
to the jurisdiction 

14 of 15

of either court over them personally for such purpose, and
waives any objection to personal jurisdiction and venue in either court for such
purpose.

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

	Raft River Energy I LLC 	Holy Cross Energy 
	 	 
	BY: Daniel Kunz (July 29) 	BY: Kent Benham (July 29) 
	 	 
	NAME: Daniel Kunz 	NAME: Kent Benham 
	 	 
	TITLE: President 	TITLE: CEO 

15 of 15

EXHIBIT A 
Raft River Energy I LLC
Renewable
Energy Credit Attestation and Bill of Sale

Raft River Energy I LLC (“Seller”) hereby sells,
transfers and delivers to Holy Cross Energy (“Buyer”) the RECs (described below)
associated with the generation of the Specified Energy by the Specified Resource
(as such term(s) are defined in the Renewable Energy Credit Purchase and Sale
Agreement (the “Agreement”), dated ____________, 2006, between Seller and
Buyer).

	Facility name and location: 	The Raft River Unit 1 Geothermal Power Plant
  
	Energy Source: 	Geothermal 
	Generator Capacity (MVA): 	22.5 MVA 
	Operational Date: 	September 2007 
	Identification Number: 	(e.g. DOE EIA #)
  

Specified Energy delivered from Specified Resource:

	 	Dates 	MWh generated 
	 	_____________	_____________

RECs Delivered to Buyer from Seller:

	 	Dates 	RECs Delivered to Buyer 
	 	_____________	_____________

Seller further attests, warrants and represents as follows:

	 	i) 	
      To the best of its knowledge, the information provided
      herein is true and correct;

	 	 	 
	 	ii) 	
      Seller has good and merchantable title to such RECs, and
      such RECs are free and clear of any liens, taxes, claims, security
      interests or other encumbrances or any right or interest therein or
      thereto by any entity of any kind whatsoever;

	 	 	 
	 	iii) 	
      Seller has not claimed ownership of the RECs or sold or
      exchanged the RECs with, any other person or entity (whether separately or
      with RECs included as part of any blended energy product), such sale being
      the first and only sale of RECs by Seller.

	 	 	 
	 	iv) 	
      The Specified Resource generated and delivered to the
      grid the Specified Energy during the period 
_______
to
      
________
in the amount indicated, as undifferentiated energy, as
      measured at the Revenue Meter.

	 	 	 
	 	v) 	
      The RECs are Green-e Certified.

Pursuant to this Renewable Energy Credit Attestation and
Bill of Sale, Seller transfers to Buyer all of Seller’s right, title and
interest in and to the RECs and Environmental Attributes associated with the
generation of the Specified Energy by the Specified Resource for delivery to the
grid.

	Contact Person: 	Tel: 	Fax: 

	WITNESS MY HAND, 	  
	 	 
	Raft River Energy I LLC 	Attest: 
	 	 
	By: _________________________________	By: _________________________________
	 	 
	Name: _________________________________	Name: _________________________________
	 	 
	Date: _________________________________	Date:
  _________________________________

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