Document:

Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of November     , 2013 (the “Effective Date”), by and between Egalet Corporation, a Delaware corporation (the “Company”) and Stanley J. Musial (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, each upon the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and intending to be legally bound hereby, the Company and the Executive agree as follows.

 

1.                                      Employment.  The Company hereby agrees to employ the Executive, and the Executive hereby accepts employment by the Company, for the period and upon the terms and conditions contained in this Agreement.

 

2.                                      Term.  The Executive’s term of employment with the Company under this Agreement shall begin on the Effective Date and shall continue on an at-will basis until that employment ceases in accordance with Section 6 for any reason (the “Term”).

 

3.                                      Office and Duties.

 

(a)                                 During the Term, the Executive shall serve as the Chief Financial Officer of the Company, as well as in any other position to which the Executive is appointed by the Company’s Board of Directors (the “Board”).  The Executive shall report to the Board and the Company’s Chief Executive Officer or his designee(s) and shall perform such duties and have such responsibilities as the Board or the Company’s Chief Executive Officer or his designee(s) may determine from time to time and which are consistent with Executive’s then current position with the Company.

 

(b)                                 During the Term, the Executive shall devote all of his working time, energy, skill and best efforts to the performance of his duties hereunder in a manner that will faithfully and diligently further the business and interests of the Company.

 

(c)                                  During the Term, the Executive shall not be engaged in any business activity which, in the reasonable judgment of the Board, conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for pecuniary advantage.  Should the Executive wish to provide any services to any other person or entity other than the Company or to serve on the board of directors of any other entity or organization, the Executive shall submit a written request to the Board for consideration and approval by the Board in its sole discretion.

 

 

4.                                      Compensation.

 

(a)                                 For all of the services rendered by the Executive hereunder during the Term, the Executive shall receive an annual base salary of $300,000 (the “Base Salary”), payable in accordance with the Company’s regular payroll practices in effect from time to time.  The Base Salary will be reviewed on or about December 1, 2014 and annually thereafter by the Board to determine if any increase is appropriate, and if Executive’s Base Salary is increased, then the term “Base Salary” as used in this Agreement shall mean the amount of the Executive’s Base Salary then in effect at the applicable time.

 

(b)                                 During the Term, the Executive shall be eligible to receive an annual bonus (pro-rated for the first fiscal year of the Term) with a target amount equal to 30% of the Base Salary (the “Annual Bonus”), in accordance with the terms and conditions of the Annual Incentive Bonus Plan attached hereto as Exhibit A, as amended from time to time.  Subject to the Executive’s continued employment through the payment date (except as otherwise provided in this Agreement), the Annual Bonus, if any, shall be paid to the Executive on the date the Company pays bonuses to its executives generally for the year to which such Annual Bonus relates.

 

(c)                                  During the Term, the Executive shall be entitled to participate in the Company’s employee benefit plans, including without limitation, any health, dental, vision and 401(k) plans maintained by the Company, on the same terms and conditions as may from time to time be applicable to the Company’s other executive officers, as such employee benefit plans may be in place from time to time.

 

(d)                                 The Executive shall be entitled to a minimum of twenty (20) days of vacation per year (prorated for any partial year worked), in accordance with Company’s policy as in effect from time to time.  The Executive shall also be entitled to sick days and paid holidays in accordance with the Company’s policy as in effect from time to time.

 

(e)                                  During the Term, the Executive shall be reimbursed by the Company for all necessary and reasonable expenses, professional dues, continuing education fees including without limitation any fees and expenses related to the maintenance of professional licenses, and membership dues incurred by him in connection with the performance of his duties hereunder.  The Executive shall keep an itemized account of such expenses, together with vouchers and/or receipts verifying the same.  Any such expense reimbursement will be made in accordance with the Company’s policies governing reimbursement of expenses as are in effect from time to time.

 

(f)                                   All payments and benefits made pursuant to this Agreement shall be subject to such withholding as the Company reasonably believes is required by any applicable federal, state, local or foreign law.

 

5.                                      Representations of Executive.  The Executive represents to the Company that (i) there are no restrictions, agreements or understandings whatsoever to which the Executive is a party that would prevent, or make unlawful, his execution of this Agreement and his employment hereunder; (ii) his execution of this Agreement and his employment hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which he is a party, or by which he is bound, and (iii) he is of full capacity and free and able to execute this Agreement and to enter into employment with the Company.

 

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6.                                      Termination.  The Term shall continue until the termination of the Executive’s employment with the Company as provided below.

 

(a)                                 Death or Disability.  If the Executive dies or becomes Disabled, the Term and the Executive’s employment with the Company shall immediately terminate.  Upon such a termination of employment, the Company shall

 

(i) pay to the Executive (or his estate, beneficiary or legal representative, as the case may be), within thirty (30) days following such termination of employment, all accrued but unpaid Base Salary and all accrued but unused vacation;

 

(ii) reimburse the Executive (or his estate, beneficiary or legal representative, as the case may be) for all reimbursable expenses that have not been reimbursed as of such termination of employment, with such reimbursement to occur in accordance with the procedures set forth in Section 4(e); and

 

(iii) pay the Executive any earned but unpaid annual bonus for the year immediately preceding the year of termination at the time the Company pays bonuses with respect to such year to its executives generally.

 

For purposes of this Agreement, “Disabled” means that in the opinion of a qualified physician, mutually acceptable to the Company and the Executive, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, the Executive (x) is unable to engage in any substantial gainful activity or (y) has been receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.  The termination of employment described herein shall not affect the Executive’s right to continued eligibility to disability benefits under the Company’s long-term disability coverage or plan.

 

(b)                                 For Cause.  During the Term, the Company may terminate the Executive’s employment for Cause upon written notice.  Upon such a termination of employment, the Executive shall be entitled to only those benefits described in clauses (i) and (ii) of Section 6(a).  For purposes of this Agreement, “Cause” means

 

(i)                               a material breach of this Agreement by the Executive that is not susceptible to remedy or cure, or if susceptible to remedy or cure, is not remedied or cured to the satisfaction of the Board within ten (10) business days following written notice from the Board to the Executive specifying the manner in which the Executive has breached this Agreement and, if applicable, the specific remedy or cure sought;

 

(ii)                            the commission by the Executive of a felony or a crime involving moral turpitude (whether or not related to the Executive’s employment), or any other act or omission involving dishonesty or fraud with respect to the Company or any of its affiliates or causing material harm to the standing or reputation of the Company, or the Executive’s drug abuse or repeated intoxication; or

 

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(iii)                         the Executive’s failure to perform his duties hereunder other than by reason of death or Disability, after written notice from the Board specifying the manner in which the Executive has failed to perform his duties and, if such failure is susceptible to cure, the failure of the Executive to cure such non-performance to the satisfaction of the Board within ten (10) business days following such written notice, including, if applicable, the specific remedy or cure sought.

 

(c)                                  Without Cause.  During the Term, the Company may terminate the Executive’s employment with the Company at any time without Cause upon thirty (30) days’ prior written notice; provided, however, that during such notice period, the Board, in its sole discretion, may relieve the Executive of all of his duties, responsibilities and authority with respect to the Company and may restrict Executive’s access to Company property; provided, further, that the Board’s exercise of such discretion shall not constitute Good Reason (as defined below).  Upon such a termination of employment, the Company shall

 

(i)                                      provide the Executive with those benefits described in clauses (i) and (ii) of Section 6(a);

 

(ii)                                  pay the Executive any earned but unpaid annual bonus for the year immediately preceding the year of termination at the time the Company pays bonuses with respect to such year to its executives generally;

 

(iii)                               continue providing the Executive with Base Salary for a period of 12 months following the date of such termination of employment (the “Severance Period”), with such Base Salary to be paid in accordance with the Company’s regular payroll practice as if no such termination of employment had occurred; provided, however, that the Executive’s right to receive the payments set forth in this clause (ii) of Section 6(c) shall be conditioned on the Executive’s continued compliance with Sections 8 and 9 hereof and such payments shall not begin until the Executive signs and does not subsequently revoke a release of claims within sixty (60) days following such termination of employment, in substantially the form attached hereto as Exhibit B; provided, further, that if such sixty (60) day period spans two calendar years, any payment set forth in this Section 6(c)(ii) that, but for this proviso, would have been paid prior to the Company’s first payroll date in such second calendar year, shall not be paid until such payroll date (but only to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”));

 

(iv)                              during the portion of the Severance Period during which the Executive and the Executive’s eligible dependents are eligible for COBRA coverage, reimburse the Executive and the Executive’s eligible dependents for their COBRA premiums less any amounts that the Executive would have been required to contribute for coverage under the Company’s health plans had the Executive remained employed by the Company, with such reimbursement to occur in accordance with the procedures set forth in Section 4(e); provided, however, that if, at any time during the Severance Period, the Executive and the Executive’s eligible dependents cease to be eligible for COBRA coverage (except as a result of Executive’s becoming eligible for coverage under the medical plans of a subsequent employer), the Company shall reimburse the Executive all reasonable premium costs incurred by the Executive to provide private health insurance coverage for the Executive and the Executive’s eligible dependents that

 

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is substantially equivalent to the health insurance by which the Executive and the Executive’s eligible dependents were covered on the date of the Executive’s termination less any amounts that the Executive would have been required to contribute for such coverage had the Executive remained employed by the Company, until the earlier of (x) the termination of the Severance Period and (y) the date on which the Executive becomes eligible for coverage under the medical plans of a subsequent employer; and

 

(v)                                 provide any stock-based compensation due to the Executive pursuant to any written agreement between the Executive and the Company, on the terms and conditions set forth therein.

 

(d)                                 Termination by Executive for Good Reason.  During the Term, the Executive may resign his employment for Good Reason.  Upon such a termination, the Executive shall be entitled to those benefits described in Section 6(c) as though the Executive had been terminated by the Company without Cause.  For purposes of this Agreement, “Good Reason” means the occurrence of any of the following circumstances:

 

(i)                                     a material diminution of the Executive’s authorities, duties, responsibilities or status (including offices, titles or reporting relationships) as an employee of the Company from those then in effect or the assignment to the Executive of duties or responsibilities inconsistent with his then current position;

 

(ii)                                  the Company’s relocation of the Executive’s principal job location or office that increases the Executive’s one-way commute by more than fifty (50) miles; or

 

(iii)                               a reduction in the Executive’s Base Salary or benefits (other than a reduction in benefits that applies to the Executive and all other similarly positioned employees);

 

provided, that the events set forth in items (i), (ii) and (iii) of this Section 6(d) occur without the Executive’s express written consent; and provided further, that that no such occurrence of any of the events set forth in items (i), (ii) and (iii) of this Section 6(d) shall constitute Good Reason unless the Executive notifies the Company in writing of his intent to resign for Good Reason within 30 days following the occurrence of such circumstance and the Company fails to cure such circumstances within 30 days following receipt of such notice.

 

(e)                                  Termination by Executive without Good Reason.  During the Term, the Executive may resign his employment without Good Reason upon ninety (90) days prior written notice.  Upon such a termination of employment, the Executive shall be entitled to only those benefits described in clauses (i) and (ii) of Section 6(a).

 

(f)                                   Termination by the Company without Cause or by the Executive for Good Reason within 24 Months after a Change in Control.  Notwithstanding anything herein to the contrary, if, during the Term, the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, in each case, within 24 months after a Change in Control, the Executive shall be entitled to those benefits described in Section 6(c);

 

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provided that for purposes of applying clauses (ii) and (iii) of Section 6(c), “Severance Period” shall be a period of 24 months following the date of such termination of employment.

 

For purposes of this Agreement, “Change in Control” means, after the Effective Date (and not including the initial public offering of the Company, which shall not be treated as a Change in Control for purposes of this Agreement), any of the following events: (A) a “person” (as such term in used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13D-3 under the 1934 Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; (B) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clauses (A), (C) or (D) hereof) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved, cease for any reason to constitute a majority thereof; (C) the Company merges or consolidates with any other corporation, other than in a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (D) the complete liquidation of the Company or the sale or other disposition of all or substantially all of the Company’s assets; provided that no event shall constitute a Change in Control hereunder unless such event is also a “change in control event” as defined in Section 409A of the Code.

 

(g)                                  Any severance or termination pay granted in this Section 6 will be the sole and exclusive remedy, compensation or benefit due to the Executive or his estate upon any termination of the Executive’s employment (without limiting the Executive’s rights under any disability, life insurance or deferred compensation arrangement in which the Executive participates at the time of such termination of employment).

 

7.                                      Certain Company Remedies.  The Executive acknowledges that his promised services and covenants, including without limitation the covenants in Sections 8 and 9 hereof, are of a special and unique character, which give them peculiar value, the loss of which cannot be reasonably or adequately compensated for in an action at law, and that, in the event there is a breach hereof by the Executive, the Company will suffer irreparable harm, the amount of which will be impossible to ascertain.  Accordingly, the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, to obtain damages for any breach of this Agreement, or to enjoin the Executive from committing any act in breach of this Agreement.  The remedies granted to the Company in this Agreement are cumulative and are in addition to remedies otherwise available to the Company at law or in equity.  If the Executive violates any of the restrictions contained in this Agreement,

 

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the restrictive period shall not run in favor of the Executive from the time of commencement of any such violation until such time as such violation shall be cured by the Executive to the satisfaction of the Company.

 

8.                                      Restrictive Covenants.

 

(a)                                 Confidentiality.  During the Term and at all times thereafter, the Executive shall, and shall cause his or her affiliates and representatives to keep confidential and not disclose to any other person or entity or use for his own benefit or the benefit of any other person or entity any confidential proprietary information, technology, know-how, trade secrets (including all results of research and development), product formulas, industrial designs, franchises, inventions or other intellectual property regarding the Company or its business and operations (“Confidential Information”) in his possession or control.  The obligations of the Executive under this Section 8(a) shall not apply to Confidential Information which (i) is or becomes generally available to the public without breach of the commitment provided for in this Section; (ii) is required to be disclosed by law, order or governmental authority; (iii) information that is independently developed by the Executive after termination of all employment with the Company or its affiliates, without the use of or reliance on any Confidential Information and (iv) information which becomes known to the Executive after termination of all employment with the Company or its affiliates, on a non-confidential basis from a third-party source if such source was not subject to any confidentiality obligation; provided, however, that, in case of clause (ii), the Executive shall notify the Company as early as reasonably practicable prior to disclosure to allow the Company or its affiliates to take appropriate measures to preserve the confidentiality of such Confidential Information.  During the Term and at all times thereafter, the Executive shall, and shall cause his affiliates and his representatives to, keep confidential and not disclose to any other person or entity any of the terms of this Agreement, except as required by applicable law, in connection with the enforcement by the Executive of his rights hereunder.

 

(b)                                 Non-Competition; Non-Solicitation.

 

(i)                               During the period beginning on the Effective Date and ending 12 months following the date on which the Executive’s employment with the Company is terminated for any reason (the “Non-Compete Period”), the Executive covenants and agrees not to, and shall cause his affiliates not to, directly or indirectly anywhere in the world, conduct, manage, operate, engage in or have an ownership interest in any business or enterprise that (A) manufactures, sells, distributes or develops abuse deterrent orally delivered pharmaceuticals, (B) uses any trademarks, tradenames or slogans similar to those of the Company or its affiliates; or (C) is engaged in any other activities that are otherwise competitive with the business of the Company or its affiliates as conducted or proposed to be conducted as of the termination date (collectively, the “Business”).  Notwithstanding anything herein to the contrary, if the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason, in each case, within 24 months following a Change in Control, the Non-Compete Period shall be a period of 24 months.  Notwithstanding the foregoing, nothing herein shall preclude the Executive from performing any duties as a stockholder, director, employee, consultant or agent of Company or its affiliates or owning, directly or indirectly, in the aggregate less than 5% of any business competitive with the Company or its affiliates that is subject to the reporting obligations of the 1934 Act.

 

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(ii)                            During the Non-Compete Period, the Executive shall not, and shall cause his affiliates to not, directly or indirectly, call-on, solicit or induce any customer or other business relationship of the Company or its affiliates for the provision of products or services related to the business of the Company or in any other manner that would otherwise interfere with the business relationship between the Company and its affiliates  and their respective customers and other business relationships.

 

(iii)                         During the Non-Compete Period, the Executive shall not, and shall cause his affiliates to not, directly or indirectly, call-on, solicit or induce, any employee of the Company or its affiliates to leave the employ of, or terminate its relationship with, the Company or its affiliates for any reason whatsoever, nor shall the Executive offer or provide employment (whether such employment is for the Executive or any other business or enterprise), either on a full-time, part-time or consulting basis, to any person who then currently is, or within six (6) months immediately prior thereto was, an employee or independent contractor of the Company; provided, however, the foregoing shall not prohibit a general solicitation to the public through general advertising or similar methods of solicitation not specifically directed at employees of the Company.

 

(iv)                        The Executive acknowledges and agrees that the provisions of this Section 8 are reasonable and necessary to protect the legitimate business interests of the Company and its affiliates.  The Executive shall not contest that the Company’s and the Company’s affiliates’ remedies at law for any breach or threat of breach by the Executive or any of his or her affiliates of the provisions of this Section 8 will be inadequate, and that the Company and its affiliates shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Section 8 and to enforce specifically such terms and provisions, in addition to any other remedy to which the Company or its affiliates may be entitled at law or equity.  The restrictive covenants contained in this Section 8 are covenants independent of any other provision of this Agreement or any other agreement between the parties hereunder and the existence of any claim which the Executive may allege against the Company under any other provision of this Agreement or any other agreement will not prevent the enforcement of these covenants.

 

(v)                           The Executive expressly acknowledges that the covenants contained in this Section 8(b) are a material part of the consideration bargained for by the Company and, without the agreement of the Executive to be bound by such covenants, the Company would not have agreed to enter into this Agreement.

 

(vi)                        If any of the provisions contained in this Section 8(b) shall for any reason be held to be excessively broad as to duration, scope, activity or subject, then such provision shall be construed by limiting and reducing it, so as to be valid and enforceable to the maximum extent compatible with the applicable law or the determination by a court of competent jurisdiction.

 

9.                                      Intellectual Property; Company Property.

 

(a)                                 Inventions Retained and Licensed.  The Executive has attached hereto, as Exhibit C, a list describing any inventions, original works of authorship, developments, improvements, and trade secrets which were made by the Executive prior to the

 

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Effective Date (collectively referred to as “Prior Inventions”) which belong to the Executive, which relate to the Company’s products or research and developments and which are not assigned to the Company hereunder; or, if no such Prior Inventions are listed, the Executive represents that there are no such Prior Inventions.  The Executive agrees that he will not incorporate, or permit to be incorporated, any Prior Invention owned by the Executive or in which the Executive has an interest into a Company product, process or machine without the Company’s prior written consent.  Notwithstanding the foregoing sentence, if, in the course of his employment with the Company, the Executive incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which the Executive has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

 

(b)                                 Assignment of Inventions.  The Executive agrees that he will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and does hereby assign to the Company, or its designee, all right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or capable of registration under copyright or similar laws, which the Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the time the Executive is in the employ of the Company (collectively referred to as “Inventions”) except as provided in Section 9(e).  The Executive further acknowledges that all original works of authorship which are made by him (solely or jointly with others) within the scope of and during the period of his employment with the Company and which are protectable by copyright are “works made for hire” as that term is defined in the United States Copyright Act.  The Executive understands and agrees that the decision whether or not to commercialize or market any Invention developed by him solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to the Executive as a result of the Company’s efforts to commercialize or market any such Invention.

 

(c)                                  Maintenance of Records.  The Executive agrees to keep and maintain adequate and current written records of all Inventions made by him (solely or jointly with others) during the Term.  The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.  The records will be available to and remain the sole property of the Company at all times.

 

(d)                                 Patent and Copyright Registrations.  The Executive agrees to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including, but not limited to, the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  The Executive further agrees that his

 

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obligation to execute or cause to be executed, when it is in his power to do so, any such instrument or papers shall continue after the termination of the Term.  If the Company is unable because of the Executive’s mental or physical incapacity or for any other reason to secure the Executive’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then the Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Executive’s agent and attorney in fact, to act for and on the Executive’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the Executive.

 

(e)                                  Exception to Assignments.  The Executive understands that the provisions of this Agreement requiring assignment of Inventions to the Company shall not apply to any Invention that the Executive has developed entirely on his own time without using the Company’s equipment, supplies, facilities, trade secret information or Confidential Information except for those Inventions that either (i) relate at the time of conception or reduction to practice of the Invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company or (ii) result from any work that the Executive performed for the Company.  The Executive will advise the Company promptly in writing of any Inventions that the Executive believes meet the foregoing criteria and not otherwise disclosed on Exhibit C.

 

(f)                                   Upon the termination of his employment for any reason, the Executive shall deliver to the Company all memoranda, books, papers, letters, and other data, and all copies of the same, which were made by the Executive or otherwise came into his possession or under his control at any time prior to the termination of this Agreement, and which in any way relate to the business of the Company as conducted or as planned to be conducted on the date of the termination.

 

10.                               Survival of Representations.  The provisions of Sections 7, 8 and 9 shall survive the termination, for any reason, of the Executive’s employment with the Company or of this Agreement.

 

11.                               Key Person Insurance.  If the Company wishes to purchase a life insurance policy on the Executive or other insurance policy relating to the loss of the Executive’s services, the Executive agrees to submit to a customary insurance medical examination, if necessary, and otherwise cooperate with the Company in any reasonable manner with respect to obtaining any such insurance policy.

 

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12.                               Miscellaneous.

 

(a)                                 Neither the failure, nor any delay, on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same, or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

(b)                                 This Agreement and all questions relating to its validity, interpretation, performance and enforcement (including, without limitation, provisions concerning limitations of actions), shall be governed by and construed in accordance with the laws of the State of Delaware (notwithstanding any conflict-of-laws doctrines of such state or other jurisdiction to the contrary), and without the aid of any canon, custom or rule of law requiring construction against the draftsman.

 

(c)                                  This Agreement is intended to comply with Code Section 409A, and the parties hereto agree to interpret, apply and administer this Agreement in the least restrictive manner necessary to comply therewith and without resulting in any increase in the amounts owed hereunder by the Company.  If the Executive’s termination of employment hereunder does not constitute a “separation from service” within the meaning of Code Section 409A, then any amounts payable hereunder on account of a termination of the Executive’s employment and which are subject to Code Section 409A shall not be paid until the Executive has experienced a “separation from service” within the meaning of Code Section 409A.  If, and only if, the Executive is a “specified employee” (as defined in Code Section 409A) and a payment or benefit provided for in this Agreement would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6) months after the Executive’s separation from service, then such payment or benefit shall not be paid (or commence) during the six-month period immediately following the Executive’s separation from service except as provided in the immediately following sentence. In such an event, any payment or benefits that otherwise would have been made or provided during such six-month period and that would have incurred such additional tax under Code Section 409A shall instead be paid to the Executive in a lump-sum cash payment on the first day following the termination of such six-month period or, if earlier, within ten (10) days following the date of the Executive’s death.  No reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit and the amount available for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount available for reimbursement, or in-kind benefits to be provided, in a subsequent calendar year.  Any reimbursement to which the Executive is entitled hereunder shall be made no later than the last day of the calendar year following the calendar year in which such expenses were incurred.  Each payment hereunder shall be treated as a separate payment in a series of separate payments pursuant to Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

(d)                                 All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received only when delivered (personally, by courier service such as Federal

 

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Express, or by other messenger), when sent by facsimile transmission (with electronic confirmation of receipt) or three (3) days after deposit in the United States mails, registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

If to the Executive: the Executive’s home address on record with the Company.

 

If to the Company:

 

Egalet Corporation

101 Lindenwood Drive

Malvern, PA  19355
 Attention:            

Fax No.:              

 

Any party may alter the addresses to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this paragraph for the giving of notice.

 

(e)                            The rights and obligations of both parties under this Agreement shall inure to the benefit of and shall be binding upon their heirs, successors and assigns, but shall not be assigned without the written consent of both parties; provided, however, that the Company may make such an assignment in connection with a sale of substantially all of the assets or other change of control of the Company.

 

(f)                             This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

 

(g)                            The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other provision or provisions may be invalid or unenforceable in whole or in part.

 

(h)                           This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between the parties hereto except as herein contained (including without limitation any prior employment agreements between the parties hereto).  The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.  This Agreement may not be modified or amended other than by an agreement in writing.

 

(i)                               The section headings in this Agreement are for convenience only, form no part of this Agreement and shall not affect its interpretation.

 

12

 

(j)                              Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

 

13

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

 

	
 
    	
EGALET   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Stanley   J. Musial
    

 

 

EXHIBIT A

 

[ANNUAL INCENTIVE BONUS PLAN]

 

 

EXHIBIT B

 

RELEASE OF CLAIMS

 

This RELEASE OF CLAIMS (this “Release”) is given on this        day of               , 20      by Stanley J. Musial (the “Executive”).

 

WHEREAS, the Executive’s employment with Egalet Corporation, a Delaware corporation, (the “Company”), has terminated; and

 

WHEREAS, pursuant to Section 6(c) of the Employment Agreement by and between the Company and the Executive dated as of November       , 2013 (the “Employment Agreement”), the Company has agreed to pay the Executive certain amounts and to provide certain benefits, subject to his execution and non-revocation of this Release.  All terms used but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement.

 

NOW THEREFORE, in consideration of these premises and the mutual promises contained herein, and intending to be legally bound hereby, the Executive agrees as follows:

 

1.                                      Consideration.  The Executive acknowledges that: (i) the payments set forth in Section 6(c) of the Employment Agreement constitute full settlement of all his rights under the Employment Agreement, (ii) he has no entitlement under any other severance or similar arrangement maintained by the Company or any of its Affiliates, and (iii) except as otherwise provided specifically in this Release, the Company does not and will not have any other liability or obligation to the Executive by reason of the cessation of his employment.  The Executive further acknowledges that, in the absence of his execution of this Release, the payments and benefits specified in Section 6(c)(iii) of the Employment Agreement would not otherwise be due to him.

 

2.                                     Executive’s Release.  The Executive on his own behalf and together with his heirs, assigns, executors, agents and representatives hereby generally releases and discharges the Company and its predecessors, successors (by merger or otherwise), parents, subsidiaries, affiliates and assigns, together with each and every of their present, past and future officers, managers, directors, shareholders, members, general partners, limited partners, employees and agents and the heirs and executors of same, and all other persons or entities who/that might be claimed to be jointly or severally liable with any of the persons or entities named previously (herein collectively referred to as the “Releasees”) from any and all suits, causes of action, complaints, obligations, demands, common law or statutory claims of any kind, whether in law or in equity, direct or indirect, known or unknown (hereinafter “Claims”), which the Executive ever had, now has or may have against the Releasees, or any one of them arising at any time up to and including the date of the this Release.  This Release specifically includes, but is not limited to:

 

b.                                      any and all Claims arising out of or relating to the Executive’s employment with the Company or the termination thereof;

 

 

c.                                       any and all Claims for wages and benefits including, without limitation, salary, stock options, stock, royalties, license fees, health and welfare benefits, severance pay, vacation pay, and bonuses;

 

d.                                      any and all Claims for wrongful discharge, breach of contract, whether express or implied, and Claims for breach of implied covenants of good faith and fair dealing;

 

e.                                       any and all Claims for alleged employment discrimination on the basis of race, color, religion, sex, age, national origin, veteran status, disability, handicap or any other protected characteristic, or retaliation in violation of any federal, state or local statute, ordinance, judicial precedent or executive order, including but not limited to claims for discrimination or retaliation under the following statutes: Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. §1981; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §621 et seq.; the Older Workers Benefit Protection Act 29 U.S.C. §§ 623, 626 and 630; the Rehabilitation Act of 1972, as amended, 29 U.S.C. §701 et seq.; the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. §2601, et seq.; the Fair Labor Standards Act, as amended, 29 U.S.C. §201, et seq.; the Fair Credit Reporting Act, as amended, 15 U.S.C. §1681, et seq.;  and the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1000, et seq. (“ERISA”) or any comparable state statute or local ordinance;

 

f.                                        any and all Claims under any federal or state statute relating to employee benefits or pensions;

 

g.                                       any and all Claims in tort, including but not limited to, any Claims for assault, battery, misrepresentation, defamation, interference with contract or prospective economic advantage, intentional or negligent infliction of emotional distress, duress, loss of consortium, invasion of privacy and negligence; and

 

h.                                      any and all Claims for attorneys’ fees and costs.

 

The Executive expressly represents that he has not filed a lawsuit or initiated any other administrative proceeding against any Releasee.  The Executive further promises not to initiate a lawsuit or to bring any other Claim against any Releasee asserting a Claim that is released by this Release.  If he does so, and the action is found to be barred in whole or in part by this Release, the Executive agrees to pay the attorneys’ fees and costs, or the proportions thereof, incurred by the applicable Releasee in defending against those Claims that are found to be barred by this Release.  This Release will not prevent the Executive from filing a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency); provided, however, that any claims by the Executive for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred.  Furthermore, nothing in this Release precludes the Executive from challenging the validity of this Release under the requirements of the Age Discrimination in Employment Act, and the Executive shall not be responsible for reimbursing the attorneys’ fees and costs of the Releasees in connection with such a challenge to the validity of the Release.  The Executive acknowledges, however, that the Release applies to all Claims that he has under the Age Discrimination in Employment Act, and that, unless the Release is held to be invalid, all of the

 

 

Executive’s Claims under the Age Discrimination in Employment Act shall be extinguished by execution of this Release.

 

3.                                     Acknowledgment.  The Executive understands that the release of Claims contained in this Release extends to all of the aforementioned Claims and potential Claims which arose on or before the date that the Executive signs this Release, whether now known or unknown, suspected or unsuspected, and that this constitutes an essential term of this Release.  The Executive further understands and acknowledges the significance and consequences of this Release and of each specific release and waiver, and expressly consents that this Release shall be given full force and effect to each and all of its express terms and provisions, including those relating to unknown and uncompensated Claims, if any, as well as those relating to any other Claims specified herein.  The Executive hereby waives any right or Claim that the Executive may have to employment, reinstatement or re-employment with the Company.

 

4.                                     Remedies.  All remedies at law or in equity shall be available to the Releasees for the enforcement of this Release.  This Release may be pleaded as a full bar to the enforcement of any Claim released by this Release that the Executive may assert against the Releasees.

 

5.                                     No Admission of Liability.  This Release is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company to the Executive.  The Executive acknowledges that the Company specifically denies any such violations.

 

6.                                     Severability.  If any term or provision of this Release shall be held to be invalid or unenforceable for any reason, then such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms or provisions hereof, and such term or provision shall be deemed modified to the extent necessary to make it enforceable.

 

7.                                     Advice of Counsel; Revocation Period.  The Executive is hereby advised to seek the advice of counsel prior to signing this Release.  The Executive hereby acknowledges that the Executive is acting of his own free will, that he has been afforded a reasonable time to read and review the terms of this Release, and that he is voluntarily executing this Release with full knowledge of its provisions and effects.  The Executive further acknowledges that he has been given at least                                                          days within which to consider this Release and that he has SEVEN (7) days following his execution of this Release to revoke his acceptance, with this Release not becoming effective until the 7-day revocation period has expired.  If the Executive elects to revoke his acceptance of this Release, this Release shall not become effective and Executive must provide written notice of such revocation by certified mail (postmarked no later than seven days after the date the Executive accepted this Release) to:

 

Egalet Corporation

101 Lindenwood Drive

Malvern, PA  19355
 Attention:             

Fax No.:              

 

8.                                     Representations and Warranties.  The Executive represents and warrants that he

 

 

has not assigned any claim that he purports to release hereunder and that he has the full power and authority to enter into this Release and bind each of the persons and entities that the Executive purports to bind.  The Executive further represents and warrants that he is bound by, and agrees to be bound by, his post-employment obligations set forth in the Restrictive Covenant Agreement.

 

9.                                     Governing Law.  This Agreement shall be governed by the laws of the State of Delaware without regard to the conflict of law principles of any jurisdiction. Any legal proceeding arising out of or relating to this Release will be instituted in a state or federal court in the State of Delaware, and the Executive hereby consents to the personal and exclusive jurisdiction of such court(s) and hereby waives any objection(s) that he may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum.

 

IN WITNESS WHEREOF, the Executive has executed this Release on the date first above written.

 

 

	
 
    	
 
    
	
 
    	
Stanley J. Musial
    

 

 

EXHIBIT C

 

Proprietary/Confidentiality SchedulesU.S. Geothermal Inc.: Exhibit 10.4 - Filed by newsfilecorp.com

	Execution
      Version 

	
       

       

    USG NEVADA LLC 

	  
	
       

      $30,737,775 6.75% Senior Secured Notes due December 31, 2037

       

      __________________________

       

	
      NOTE PURCHASE AGREEMENT 

      __________________________

	
       

      Dated September 26, 2013 

       

       

       

       

       

      

	*
	Certain information in this exhibit has been omitted as confidential, as indicated by [***]. This information has been filed separately with the Commission.

TABLE OF CONTENTS 

	 	 	  	Page 
	 	 	  	  
	SECTION 1. 	AUTHORIZATION OF NOTES 	1 
	 	 	  	  
	SECTION 2. 	SALE AND PURCHASE OF NOTES 	1 
	 	 	  	  
	SECTION 3. 	CLOSING 	1 
	 	 	  	  
	SECTION 4. 	CONDITIONS TO CLOSING 	2 
	 	Section 4.1. 	Representations and Warranties 	2 
	 	Section 4.2. 	Performance; No Default 	2 
	 	Section 4.3. 	Compliance Certificate 	2 
	 	Section 4.4. 	Opinions of Counsel 	2 
	 	Section 4.5. 	Purchase Permitted By Applicable Law, Etc 	3 
	 	Section 4.6. 	Sale of Other Notes 	3 
	 	Section 4.7. 	Payment of Special Counsel and Other Fees and
      Expenses 	3 
	 	Section 4.8. 	Private Placement Number 	3 
	 	Section 4.9. 	Changes in Organizational Structure 	3 
	 	Section 4.10. 	Funding Instructions 	3 
	 	Section 4.11. 	Proceedings and Documents 	4 
	 	Section 4.12. 	Depositary Agreement, Security
      Agreement, Etc 	5 
	 	Section 4.13. 	Reserve Accounts 	6 
	 	Section 4.14. 	Real Estate Documentation 	6 
	 	Section 4.15. 	UCC Searches and Litigation Searches 	7 
	 	Section 4.16. 	Insurance 	7 
	 	Section 4.17. 	Financial Statements; Pro Forma Balance Sheet    	7 
	 	Section 4.18. 	Required Approvals 	7 
	 	Section 4.19. 	No Material Adverse Effect 	7 
	 	Section 4.20. 	IE Report 	8 
	 	Section 4.21. 	Geothermal Resource Assessment Report 	8 
	 	Section 4.22. 	Base Case Projections and
      Budget 	8 
	 	Section 4.23. 	Construction Completion 	8 
	 	Section 4.24. 	Extension of Ground Lease 	8 
	 	Section 4.25. 	Payoff of Existing Indebtedness; Lien Releases    	8 
	 	Section 4.26. 	Water Rights 	9 
	 	Section 4.27. 	PPA Adjustment 	9 
	 	 	  	  
	SECTION 5. 	REPRESENTATIONS AND WARRANTIES OF THE ISSUER	9 
	 	Section 5.1. 	Organization; Power and
      Authority 	9 
	 	Section 5.2. 	Authorization, Etc 	9 
	 	Section 5.3. 	Disclosure 	9 
	 	Section 5.4. 	Base Case Projections 	10 
		Section 5.5. 	Organization and Ownership of
      Interests in Issuer; Affiliates; Officers; No Subsidiaries 	10 
	 	Section 5.6. 	Financial Statements; Material Liabilities 	10 

i 

TABLE OF CONTENTS 

	 	 	  	Page 
	 	 	  	  
	 	Section 5.7. 	Compliance with Laws, Other
      Instruments, Etc 	10 
	 	Section 5.8. 	Governmental Authorizations, Etc 	11 
	 	Section 5.9. 	Litigation; Observance of
      Agreements, Statutes and Orders 	11 
	 	Section 5.10. 	Taxes 	11 
	 	Section 5.11. 	Title to Property; Leases; Real
      Estate; Insurance 	12 
	 	Section 5.12. 	Material Project Documents; Commercial
      Operation Date 	12 
	 	Section 5.13. 	Compliance with ERISA 	13 
	 	Section 5.14. 	Private Offering by the Issuer 	14 
	 	Section 5.15. 	Use of Proceeds; Margin
      Regulations 	14 
	 	Section 5.16. 	Foreign Assets Control Regulations, Etc 	14 
	 	Section 5.17. 	Status under Certain Statutes    	15 
	 	Section 5.18. 	Environmental Matters 	16 
	 	Section 5.19. 	Collateral 	17 
	 	Section 5.20. 	Labor Relations; Force Majeure Events 	17 
	 	Section 5.21. 	Indebtedness 	17 
	 	Section 5.22. 	Capitalization 	17 
	 	Section 5.23. 	Budget 	17 
	 	Section 5.24. 	Cash Grant 	17 
	 	 	  	  
	SECTION 6. 	REPRESENTATIONS OF THE PURCHASERS 	17 
	 	Section 6.1. 	Purchase for Investment 	18 
	 	Section 6.2. 	Source of Funds 	18 
	 	 	  	  
	SECTION 7. 	INFORMATION 	19 
	 	Section 7.1. 	Financial and Business
      Information 	19 
	 	Section 7.2. 	Officer’s Certificate 	23 
	 	Section 7.3. 	Visitation 	23 
	 	 	  	  
	SECTION 8. 	PAYMENT AND PREPAYMENT OF THE
      NOTES 	23 
	 	Section 8.1. 	Amortization; Maturity; Mandatory Prepayments    	23 
	 	Section 8.2. 	Optional Prepayments with
      Make-Whole Amount 	25 
	 	Section 8.3. 	Allocation of Partial Prepayments 	26 
	 	Section 8.4. 	Maturity; Surrender, Etc 	26 
	 	Section 8.5. 	Purchase of Notes 	26 
	 	Section 8.6. 	Make-Whole Amount 	26 
	 	 	  	  
	SECTION 9. 	AFFIRMATIVE COVENANTS 	28 
	 	Section 9.1. 	Compliance with Law 	28 
	 	Section 9.2. 	Insurance 	28 
	 	Section 9.3. 	Title, Water Rights, Etc 	30 
	 	Section 9.4. 	Payment of Taxes and Claims 	30 
	 	Section 9.5. 	Existence, Etc 	31 
	 	Section 9.6. 	Books and Records 	31 

ii 

TABLE OF CONTENTS 

	 	 	  	Page 
	 	 	  	  
	 	Section 9.7. 	Collateral;
      Further Assurances 	31 
	 	Section 9.8. 	Material Project Documents 	31 
	 	Section 9.9. 	Pledged Accounts    	31 
	 	Section 9.10. 	Annual Servicing Fee 	31 
	 	Section 9.11. 	Maintenance and
      Operation 	32 
	 	Section 9.12. 	Resource Review; Budgets 	32 
	 	Section 9.13. 	DSCR Notice on
      Payment Date 	33 
	 	Section 9.14. 	Turbine Warranty 	33 
	 	Section 9.15. 	Perfection
      Opinion 	33 
	 	Section 9.16. 	Payment of Obligations 	34 
	 	Section 9.17. 	Use of Proceeds    	34 
	 	 	  	  
	SECTION 10. 	NEGATIVE COVENANTS 	34 
	 	Section 10.1. 	Transactions with Affiliates 	34 
	 	Section 10.2. 	Merger,
      Consolidation 	34 
	 	Section 10.3. 	Line of Business 	34 
	 	Section 10.4. 	Terrorism
      Sanctions Regulations 	34 
	 	Section 10.5. 	Liens 	34 
	 	Section 10.6. 	Indebtedness 	35 
	 	Section 10.7. 	Regulatory Standing 	35 
	 	Section 10.8. 	Loans, Advances,
      Investments and Contingent Liabilities 	35 
	 	Section 10.9. 	No Subsidiaries 	35 
	 	Section 10.10.	Restricted
      Payments 	35 
	 	Section 10.11. 	Sale of Assets, Etc 	36 
	 	Section 10.12.	Equity Capital	36 
	 	Section 10.13. 	Amendments to Constitutive
      Documents 	36 
	 	Section 10.14.	No Employees; No
      ERISA Plans 	36 
	 	Section 10.15. 	No Margin Stock 	36 
	 	Section 10.16.	Reporting
      Practices 	36 
	 	Section 10.17. 	Material Project Documents 	36 
	 	Section 10.18.	Accounts 	36 
	 	Section 10.19. 	Lease Obligations 	37 
	 	Section 10.20.	Material
      Contracts 	37 
	 	 	  	  
	SECTION 11. 	EVENTS OF DEFAULT 	37 
	 	 	  	  
	SECTION 12. 	REMEDIES ON DEFAULT, ETC 	42 
	 	Section 12.1. 	Acceleration 	42 
	 	Section 12.2. 	Other Remedies	42 
	 	Section 12.3. 	Rescission 	42 
	 	Section 12.4. 	No Waivers or
      Election of Remedies, Expenses, Etc 	43 
	 	 	  	  
	SECTION 13. 	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES 	43

iii 

TABLE OF CONTENTS 

	 	 	  	Page 
	 	 	  	  
	 	Section 13.1. 	Registration of
      Notes 	43 
	 	Section 13.2. 	Transfer and Exchange of Notes	43 
	 	Section 13.3. 	Replacement of
      Notes 	44 
	 	 	  	  
	SECTION 14. 	PAYMENTS ON NOTES 	44 
	 	Section 14.1. 	Place of Payment 	44 
	 	Section 14.2. 	Home Office
      Payment 	44 
	 	 	  	  
	SECTION 15. 	EXPENSES, INDEMNIFICATION, ETC 	45 
	 	Section 15.1. 	Transaction Expenses 	45 
	 	Section 15.2. 	Indemnification    	45 
	 	Section 15.3. 	Survival 	46 
	 	 	  	  
	SECTION 16. 	SURVIVAL OF
      REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT 	46 
	 	 	  	  
	SECTION 17. 	AMENDMENT AND
      WAIVER 	46 
	 	Section 17.1. 	Requirements 	46 
	 	Section 17.2. 	Solicitation of Holders of Notes    	47 
	 	Section 17.3. 	Binding Effect,
      etc 	47 
	 	Section 17.4. 	Notes Held by Issuer, etc 	47 
	 	 		  
	SECTION 18. 	NOTICES 	48 
	 	 	  	  
	SECTION 19. 	REPRODUCTION OF
      DOCUMENTS 	48 
	 	 	  	  
	SECTION 20. 	CONFIDENTIAL
      INFORMATION 	48 
	 	 	  	  
	SECTION 21. 	SUBSTITUTION OF
      PURCHASER 	49 
	 	 	  	  
	SECTION 22. 	MISCELLANEOUS 	50 
	 	Section 22.1. 	Successors and
      Assigns 	50 
	 	Section 22.2. 	Payments Due on Non-Business Days    	50 
	 	Section 22.3. 	Accounting Terms    	50 
	 	Section 22.4. 	Severability 	50 
	 	Section 22.5. 	Construction, etc    	50 
	 	Section 22.6. 	Counterparts 	51 
	 	Section 22.7. 	Governing Law 	51 
	 	Section 22.8. 	Jurisdiction and Process; Waiver
      of Jury Trial 	51 
	 	Section 22.9. 	Transaction
      References 	52

iv 

TABLE OF CONTENTS 

	SCHEDULE A 	— 	INFORMATION
      RELATING TO PURCHASERS 
	 	 	 
	SCHEDULE B 	— 	DEFINED TERMS  
	 	 	 
	Schedule 4.11(b) 	— 	Consents to be
      delivered at Closing 
	 	 	 
	Schedule 4.22(a) 	— 	Budget 
	 	 	 
	Schedule 4.22 	— 	Base Case
      Projections 
	 	 	 
	Schedule 5.5 	— 	Ownership of the
      Issuer; Officers 
	 	 	 
	Schedule 5.8 	— 	Required
      Approvals 
	 	 	 
	Schedule 5.12 	— 	Material Project
      Documents 
	 	 	 
	Schedule 8.1 	— 	Amortization
      Schedule 
	 	 	 
	Schedule 9.2 	— 	Insurance
      Requirements 
	 	 	 
	Schedule 9.12 	— 	Required Make-Up
      Well Reserve Account Balance 
	 	 	 
	Exhibit 1 	— 	Form of 6.75%
      Senior Secured Note due December 31, 2037 
	 	 	 
	Exhibit 4.10 	— 	Form of Funding
      Instruction Letter 
	 	 	 
	Exhibit 7.1 	— 	Form of Monthly
      Operating Report 

Security Documents 

	Exhibit S-1 	Form of
      Depositary Agreement 
	 	 
	Exhibit S-2 	Form of
      Collateral Agency Agreement 
	 	 
	Exhibit S-3 	Form of Deed of
      Trust 
	 	 
	Exhibit S-4 	Form of Pledge
      Agreement 
	 	 
	Exhibit S-5 	Form of Security
      Agreement 
	 	 
	Exhibit S-6 	Form of Recapture
      Indemnity Agreement 

v 

USG Nevada LLC 
c/o U.S. Geothermal Inc. 
1505
Tyrell Lane 
Boise, Idaho 83706 

6.75% Senior Secured Notes due December 31, 2037 

September 26, 2013 

TO EACH OF THE PURCHASERS LISTED IN 
SCHEDULE
A HERETO: 

Ladies and Gentlemen: 

            USG
Nevada LLC, a Delaware limited liability company (the “Issuer”), agrees
with each of the purchasers whose names appear at the end hereof (each, a
“Purchaser” and, collectively, the “Purchasers”), as follows (this
“Agreement”): 

SECTION 1. AUTHORIZATION OF NOTES. 

The Issuer will authorize the issue and sale of $30,737,775
aggregate principal amount of its 6.75% Senior Secured Notes due December 31,
2037 (the “Notes”, such term to include any such notes issued in
substitution therefor pursuant to Section 13). The Notes shall be
substantially in the form set out in Exhibit 1. Certain capitalized and
other terms used in this Agreement are defined in Schedule B; and
references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement. 

SECTION 2. SALE AND PURCHASE OF NOTES. 

Subject to the terms and conditions of this Agreement, the
Issuer will issue and sell to each Purchaser and each Purchaser will purchase
from the Issuer, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite such Purchaser’s name in Schedule A
at the purchase price of 100% of the principal amount thereof. The Purchasers’
obligations hereunder are several and not joint obligations and no Purchaser
shall have any liability to any Person for the performance or non-performance of
any obligation by any other Purchaser hereunder. 

SECTION 3. CLOSING. 

The sale and purchase of the Notes to be purchased by each
Purchaser shall occur at the offices of Bingham McCutchen LLP, 399 Park Avenue,
New York, NY, at 11:00 a.m., New York time, at a closing (the “Closing”)
on September 26, 2013 or on such other Business Day thereafter on or prior to
September 30, 2013 as may be agreed upon by the Issuer and the Purchasers. At
the Closing the Issuer will deliver to each Purchaser the Notes to
be purchased by such Purchaser in the form of a single Note (or such greater
number of Notes in denominations of at least $1,000,000 as such Purchaser may
request) dated the Closing Date and registered in such Purchaser’s name (or in
the name of its nominee), against delivery by such Purchaser to the Issuer or
its order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Issuer: Wells Fargo Bank, N.A., ABA # 121000248, Account # 4945754166, Account
Name: Stewart Title Company, Ref: File Number 1050651, Reference Party: USG
Nevada LLC. If at the Closing the Issuer shall fail to tender such Notes to any
Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to such Purchaser’s
satisfaction, such Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such
Purchaser may have by reason of such failure or such nonfulfillment. 

SECTION 4. CONDITIONS TO CLOSING. 

Each Purchaser’s obligation to purchase and pay for the Notes
to be sold to such Purchaser at the Closing is subject to the fulfillment to the
satisfaction of such Purchaser, prior to or at the Closing, of the following
conditions: 

                          Section
4.1. Representations and Warranties. The representations and warranties of
the Issuer in this Agreement and of the Issuer and each Issuer Party in any
other Financing Document to which such Person is a party shall be true and
correct when made and at the time of the Closing. 

                          Section
4.2. Performance; No Default. The Issuer shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing and, after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.15), no Default or Event of
Default shall have occurred and be continuing. The Issuer shall not have entered
into any transaction since the date of the last financial statements of the
Issuer described in Section 4.17 hereof that would have been prohibited
by Section 10 had that Section applied since such date.

                          Section
4.3. Compliance Certificate. The Issuer shall have delivered to each of the
Secured Parties an Officer’s Certificate, dated the Closing Date, certifying
that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled and each of the other conditions precedent to the occurrence of the
Closing has been satisfied or waived. 

                          Section
4.4. Opinions of Counsel. Each Secured Party shall have received opinions in
form and substance satisfactory to such Person, dated the Closing Date, from (a)
(i) Hawley Troxell Ennis & Hawley LLP, special counsel for the Issuer, and
(ii) Hawley Troxell Ennis & Hawley LLP, special counsel for the Issuer
regarding state and local permitting matters and federal energy regulatory
matters, and the Issuer hereby instructs its counsel to deliver such opinions to
the Secured Parties, (b) Betsy M. Pain, counsel for the EPC Contractor with
respect to the EPC Contract and the Consent relating thereto, and (c) Bingham
McCutchen, LLP, special counsel for the Purchasers, in each case, covering such
matters incident to the transactions contemplated hereby and by the other Transaction Documents as
such Secured Party may reasonably request. 

                          Section
4.5. Purchase Permitted By Applicable Law, Etc. On the Closing Date, such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which such Purchaser is subject, without recourse to
provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. 

                          Section
4.6. Sale of Other Notes. Contemporaneously with the Closing, the Issuer
shall sell to each other Purchaser and each other Purchaser shall purchase the
Notes to be purchased by it at the Closing as specified in Schedule
A.

                         
Section 4.7. Payment of Special Counsel and Other Fees and Expenses. Without
limiting the provisions of Section 15.1, the Issuer shall have paid on or
before the Closing: (a) the fees, charges and disbursements of the Purchasers’
special counsel, Bingham McCutchen LLP, to the extent reflected in a statement
of such counsel rendered to the Issuer at least one Business Day prior to the
Closing, (b) the initial Servicing Fee payable to the holders of the Notes in
accordance with Section 9.10 hereof in an aggregate amount equal to
$50,000, (c) a fee payable to each Purchaser of the Notes in an amount equal to
1.5% of the principal amount of the Notes being purchased by such Purchaser on
the Closing Date, and (d) all other fees, out-of-pocket costs and expenses
(including legal fees and expenses, consultant fees and expenses (including the
fees and expenses of the Independent Engineer, the Geothermal Resource Engineer
and the Insurance Consultant), and title insurance premiums) and other
compensation contemplated hereby or by the other Financing Documents, or
pursuant to separate letter agreements, payable to the Purchasers, the
Collateral Agent or the Depositary at Closing. 

                          Section
4.8. Private Placement Number. A Private Placement Number issued by
S&P’s CUSIP Service Bureau (in cooperation with the SVO) shall have been
obtained for the Notes. 

                          Section
4.9. Changes in Organizational Structure. The Issuer shall not have changed
its jurisdiction of formation, or been a party to any merger or consolidation or
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Section 4.17. 

                          Section
4.10. Funding Instructions. At least three Business Days prior to the date
of the Closing, each Purchaser shall have received written instructions signed
by a Responsible Officer on letterhead of the Issuer confirming the information
specified in Section 3 including (a) the name and address of the
transferee bank, (b) such transferee bank’s ABA number and (c) the account name
and number into which the purchase price for the Notes is to be deposited, and
substantially in the form of Exhibit 4.10 hereto. 

                          Section
4.11. Proceedings and Documents. The Secured Parties shall have received the
following, each to be, unless otherwise indicated, dated the Closing Date and in
form and substance satisfactory to the Collateral Agent and the Purchasers: 

           
(a)        The Notes to be purchased by the
Purchasers; 

           
(b)        (i) This Agreement and each other
Financing Document duly executed, authorized and delivered by each party
thereto, and (ii) copies of the Material Project Documents executed prior to the
Closing Date, including any amendments or supplements thereto, and including the
Consents related thereto, in each case, duly authorized, executed and delivered
by each party thereto, and certified by an authorized officer of the Issuer as
being true, correct and complete and in full force and effect on the Closing
Date, each of which shall be in form and substance satisfactory to the
Purchasers; 

           
(c)        The certificate of formation, articles
of incorporation or other similar organizational documents of the Issuer and
each Issuer Party, each certified as of a recent date by the Secretary of State
of the State of Delaware (with respect to the Issuer, Holdings, the Operator and
USG Delaware) or Idaho (with respect to USG Idaho) and by such Person’s
secretary or other authorized officer; 

           
(d)        The limited liability company
agreement, by-laws and any other organizational documents of the Issuer and each
Issuer Party, certified by such Person’s secretary or other authorized officer;

           
(e)        With respect to the Issuer and each
Issuer Party, an incumbency certificate signed by the secretary or an assistant
secretary and one other officer of such Person, certifying as to the names,
titles and true signatures of the officers of such Person authorized to sign
this Agreement, the Notes, the other Financing Documents to which such Person is
a party and other documents to be delivered hereunder or thereunder; 

           
(f)        A certificate of the secretary of
the Issuer and each Issuer Party attaching resolutions of the governing body of
such Person evidencing approval of the transactions contemplated by this
Agreement and the other Transaction Documents to which such Person is a party
and, with respect to the Issuer, the issuance of the Notes, and in each case,
the execution, delivery and performance thereof, and authorizing certain
officers to execute and deliver the same, and certifying that such resolutions
were duly and validly adopted and have not since been amended, revoked or
rescinded; 

           
(g)        Certificates of existence issued by the
Secretary of State of the State of Delaware (with respect to each of the Issuer,
Holdings, the Operator and USG Delaware) and the Secretary of the State of Idaho
(with respect to USG Idaho) and certificates of qualification to do business in
Nevada issued by the Secretary of State of the State of Nevada as to the Issuer
and the Operator; 

           
(h)        Copies of reports listing
all effective financing statements which name the Issuer or Holdings as debtor
and which are filed in all applicable offices, together with copies of such
financing statements; 

            (i)       
A schedule of all Required Approvals in effect as of the Closing Date, together
with copies thereof certified by an officer of the Issuer as being true, correct
and complete, in full force and effect and not subject to any appeal or further
proceeding; and 

           
(j)        Such
additional documents or certificates with respect to such legal matters or
limited liability company, corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by the
Purchasers or the Collateral Agent. 

                          Section
4.12. Depositary Agreement, Security Agreement, Etc. The Obligations shall
be secured by a perfected first priority security interest (subject only to
Closing Date Permitted Liens) in the Collateral in favor of the Collateral
Agent, for the benefit of the Secured Parties, and the Issuer will deliver or
caused to be delivered to the Collateral Agent and the Purchasers on the Closing
Date, the following, each of which shall be in full force and effect: 

           
(a)        A Depositary and
Security Agreement in the form of Exhibit S-1, duly executed by each of
the Issuer, the Collateral Agent and the Depositary (the “Depositary
Agreement”); 

           
(b)        A Collateral
Agency Agreement in the form of Exhibit S-2, duly executed by the Issuer,
the Collateral Agent, the Depositary and the Purchasers (the “Collateral
Agency Agreement”); 

           
(c)        A Deed of Trust
with Assignment of Leases, Contracts and Rents, Security Agreement and Fixture
Filing in the form of Exhibit S-3, duly executed by the Issuer in favor
of Stewart Title Guaranty Company for the benefit of the Collateral Agent (the
“Deed of Trust”); 

           
(d)        A Pledge and
Security Agreement in the form of Exhibit S-4, duly executed by Holdings
in favor of the Collateral Agent for the benefit of the Secured Parties (the
“Pledge Agreement”) with respect to the pledge of Holdings’ ownership
interests in the Issuer, together with the certificates representing such
ownership interests and executed, undated transfer powers (in blank) relating
thereto; 

           
(e)        A Security
Agreement in the form of Exhibit S-5, duly executed by the Issuer (the
“Security Agreement”) in favor of the Collateral Agent for the benefit of
the Secured Parties; 

           
(f)        An Indemnity
Agreement, duly executed by the Sponsor, the Issuer and the Collateral Agent, in
the form of Exhibit S-6 (the “Recapture Indemnity Agreement”);

           
(g)        A Local Bank
Control Agreement, duly executed by the Issuer, the Collateral Agent and the
depositary bank holding the Local Account, which shall be in form and substance
satisfactory to the Collateral Agent and the Purchasers; 

           
(h)        Such other
pay-off letters, releases, documents, instruments and agreements as the
Collateral Agent or any of the Purchasers may reasonably request to grant to Collateral Agent first
priority perfected Liens on the Collateral (subject only to Closing Date
Permitted Liens). 

                          Section
4.13. Reserve Accounts. The Issuer shall deposit the Minimum Debt Service
Reserve Requirement in the Debt Service Reserve Account and $640,797 in the
Maintenance Reserve Account, or, in lieu thereof, provide Acceptable Letters of
Credit in accordance with the Depositary Agreement, and the Issuer shall deposit
$253,617 in the Upgrade Reserve Account.

                         
Section 4.14. Real Estate Documentation. 

            (a)       
Title Policy. The Secured Parties shall have received a lender’s
A.L.T.A. extended coverage policy of title insurance, together with such
endorsements as are reasonably required by the Purchasers (such policies and
endorsements being hereinafter referred to collectively as the “Title
Policy”), in an aggregate amount equal to the principal amount of the Notes,
issued by a title insurer satisfactory to the Secured Parties, in form and
substance and with such reinsurance as is reasonably satisfactory to the Secured
Parties, and insuring the Secured Parties that: 

           
(i)        the
Issuer has valid leasehold, geothermal and easement estates in the Site, free
and clear of Liens, encumbrances or other exceptions to title except Permitted
Liens; 

            
(ii)        the
Issuer has valid fee ownership of the Water Rights; and 

           
(iii)        the
Deed of Trust on the Site constitutes a valid, first priority Lien on the
leasehold, geothermal and easement estates in the Site and the Water Rights, and
includes all right, titles and interest of the Issuer in and to the Site and the
Water Rights, free and clear of all Liens, encumbrances and exceptions to title
whatsoever, other than Permitted Liens. 

The Title Policy shall effect full
coverage against losses arising out of encroachments on boundary or setback
lines, against losses from existing mechanics’ or materialmen’s liens and
subsequent mechanics’ and materialmen’s liens which may gain priority over the
Deed of Trust and against such other losses and with respect to such other
matters as the Secured Parties may reasonably request. 

            (b)       
Survey. The Secured Parties shall have received a recent A.L.T.A.
as-built survey of the real estate parcels with respect to the portions of the
Site consisting of the Site Leasehold Estate, the Kosmos Leasehold Estate, the
Easement Estates and portions of the BLM Leasehold Estate on which active wells
are currently located (as each such term is defined in the Deed of Trust),
whether owned, licensed or leased, certified to the Secured Parties by a
licensed surveyor, in form reasonably acceptable to the Secured Parties. 

            (c)       
Site Assessment. The Secured Parties shall have received a copy of an
environmental site assessment prepared by Legacy Team Environmental Consultants,
dated as of a recent date, in form and substance reasonably satisfactory to the
Purchasers, together with a letter addressed to the
Secured Parties permitting reliance on such site assessment. The environmental
site assessment shall cover the Site Leasehold Estate, the Kosmos Leasehold
Estate and the portion of the BLM Leasehold Estate on which the inactive Amor II
plant (as each such term is defined in the Deed of Trust) is located, and show
that (i) no Person has caused or permitted any material amount of Hazardous
Materials to be used or stored on the Site Leasehold Estate or the Kosmos
Leasehold Estate, and (ii) no Person has caused or permitted any amount of
Hazardous Materials to be used or stored on the portion of the BLM Leasehold
Estate on which the inactive Amor II plant is located in a manner contrary to
any Environmental Laws.

            (d)       
Assignments, Consents and Estoppel Certificates. The Secured
Parties shall have received (i) a lessor estoppel certificate and agreement, in
form and substance satisfactory to the Purchasers, executed by The Kosmos
Company, the Issuer and the Collateral Agent with respect to the Kosmos Lease
(the “Kosmos Estoppel”), (ii) a letter in form and substance satisfactory
to the Purchasers executed by the United States Bureau of Land Management
certifying that no defaults exist with respect to the BLM Leases (the “BLM
Letter”), and (iii) executed, undated (in blank) assignments of the BLM
Leases and the Well Permits (the “Assignments”), together with such other
documents and instruments as reasonably required to grant first-priority Liens
(subject only to Closing Date Permitted Liens) in the Issuer’s rights, title and
interests thereunder in favor of the Collateral Agent to secure the Obligations.

                          Section
4.15. UCC Searches and Litigation Searches. The Collateral Agent and the
Purchasers shall have received UCC and litigation searches of the Issuer and
each Issuer Party, dated a date reasonably near to the Closing Date, which
searches shall (i) confirm that no Liens other than Liens that will be released
on the Closing Date exist on the Collateral and that none of the Issuer or any
Issuer Party is subject to any litigation, and (ii) be otherwise in substance
satisfactory to the Collateral Agent and the Purchasers. 

                          Section
4.16. Insurance. The Issuer shall have delivered to the Secured Parties
evidence of insurance in effect that meets the requirements of Section
9.2. 

                          Section
4.17. Financial Statements; Pro Forma Balance Sheet. The Secured Parties
shall have received: (a) the unaudited financial statements of the Issuer for
the fiscal quarters ended March 31, 2013 and June 30, 2013, (b) the unaudited
monthly financial statements of the Issuer for the calendar month ended July 31,
2013, (c) the annual audited financial statements for the Issuer for the
calendar year 2012, and (d) a pro forma balance sheet of the Issuer as of the
date of Closing, giving pro forma effect to the transactions contemplated by
this Agreement. 

                          Section
4.18. Required Approvals. All Required Approvals then required to
have been obtained and to be in effect shall have been obtained and shall be in
effect, and all applicable waiting and appeal periods shall have expired without
any materially adverse action being taken by any applicable authority. 

                          Section
4.19. No Material Adverse Effect. No event, occurrence or condition that has
had, or could reasonably be expected to have, a Material Adverse Effect shall
have occurred and be continuing. A Responsible Officer of the Issuer
shall deliver a certificate to the Purchasers dated as of the Closing Date
certifying as to the foregoing. 

                            Section
4.20. IE Report. The Purchasers shall have received a report of the
Independent Engineer, addressed to the Purchasers and in form and substance
satisfactory to the Purchasers. 

                            Section
4.21. Geothermal Resource Assessment Report. The Purchasers shall have
received a final energy production analysis for the Project prepared by the
Geothermal Resource Engineer, addressed to the Purchasers and in form and
substance satisfactory to the Purchasers. 

                            Section
4.22. Base Case Projections and Budget. The Issuer shall have furnished the
Purchasers with the Base Case Projections, showing projections of the operating
results of the Issuer through 2037, and the initial Operating Budget, each of
which shall be satisfactory to the Purchasers.

                            Section
4.23. Construction Completion. The Purchasers shall have received: (a) a
certificate from the Independent Engineer confirming that (i) Final Completion
(as defined in the EPC Contract) and Commercial Operation (as defined in the
PPA) have occurred, and (ii) based on results of Project testing that the
Independent Engineer believes to be appropriate, the Project is capable of
operating at full design capacity without excessive vibration of the turbine
gearbox; (b) copies of the Certificate of Final Completion (as defined in the
EPC Contract) countersigned by the Issuer, the EPC Contractor’s final invoice
for settlement of all Punchlist Items (as defined in the EPC Contract) and a
final waiver of liens from the EPC Contractor; (c) evidence of payment in full
by the EPC Contractor of all Liquidated Damages (as defined in the EPC Contract)
due and owing under the EPC Contract; and (d) confirmation in the initial
Operating Budget that the Issuer will have cash reserves sufficient to complete
any remaining construction costs.

                             Section
4.24. Extension of Ground Lease. The Ground Lease shall have been amended in
form and substance satisfactory to the Required Holders, providing for extension
of the term to a date not earlier than December 31, 2038, and a memorandum of
such amendment shall have been recorded, and the Ground Lease, as so amended,
shall be in full force and effect. 

                             Section
4.25. Payoff of Existing Indebtedness; Lien Releases. The Secured Parties
shall have received a letter agreement providing for the termination and any
necessary pay-off of the existing credit facility of the Issuer provided by the
EPC Contractor and the release of all Liens granted thereunder, duly executed
and delivered by the Issuer and the EPC Contractor, together with such mortgage
discharges, termination statements and other releases as may be necessary to
terminate and release the mortgages, charges, deeds of trust, security
interests, escrow arrangements and other Liens granted by the Issuer in favor of
the EPC Contractor (or a collateral agent on its behalf) to secure
Indebtedness of the Issuer under such credit facility. 

                          Section
4.26. Water Rights. The Sponsor shall have conveyed all of its right, title
and interest in and to the Water Rights to the Issuer, and a Report of
Conveyance and a Notice of Pledge with respect to the Water Rights in form and
substance satisfactory to the Purchasers shall have been filed with the Nevada
Division of Water Resources, Office of the State Engineer. 

                          Section
4.27. PPA Adjustment. The Issuer shall have notified the Power Purchaser of
the increase of the “Annual Supply Amount” by 2.96% in accordance with Section
3.7.1 of the PPA and delivered to the Power Purchaser additional “Operating
Security” required in connection therewith. 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.

The Issuer represents and warrants to the Collateral Agent and
the Purchasers as of the Closing Date that: 

                          Section
5.1. Organization; Power and Authority. The Issuer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, and is duly qualified as a foreign limited liability
company and is in good standing in the State of Nevada and each other
jurisdiction in which such qualification is required by law. The Issuer has the
limited liability company power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and
the other Transaction Documents to which it is a party and to perform the
provisions hereof and thereof.

                          Section
5.2. Authorization, Etc. This Agreement and the other Transaction Documents
to which the Issuer is a party have been, or prior to their execution will be,
duly authorized by all necessary limited liability company action on the part of
the Issuer, and this Agreement and each other Transaction Document constitute,
and upon execution and delivery thereof each Note will constitute, legal, valid
and binding obligations of the Issuer enforceable against the Issuer in
accordance with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). 

                          Section
5.3. Disclosure. This Agreement, the other Transaction Documents and the
documents, certificates or other writings delivered to the Purchasers by or on
behalf of the Issuer or an Issuer Party in connection with the transactions
contemplated hereby (including by posting on an internet or intranet website to
which the Purchasers have password-protected access), and the financial
statements described in Section 4.17 (this Agreement, the other
Transaction Documents and such documents, certificates or other writings and
such financial statements delivered to each Purchaser prior to the Closing Date
being referred to, collectively, as the “Disclosure Documents”), taken as
a whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were
made. Except as disclosed in the Disclosure Documents, since December 31, 2012,
there has been no change in the financial condition, operations, business,
properties or prospects of the Issuer except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Issuer that could be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents. The Issuer is not aware of any condition, fact, act or circumstance
(or absence of any of the foregoing) that could reasonably be expected to
interfere with the operation of the Project as contemplated by the Material
Project Documents. 

                          Section
5.4. Base Case Projections. The Base Case Projections (a) have been prepared
with due care, (b) fairly present the Issuer’s good faith expectations as at the
Closing Date as to the matters covered thereby based on the best information
available to the Issuer at the time of such Closing, (c) are based on reasonable
assumptions as to the factual and legal matters material to the estimates
therein and (d) are consistent with the Material Project Documents.

                          Section
5.5. Organization and Ownership of Interests in Issuer; Affiliates; Officers; No
Subsidiaries.

            (a)       
Schedule 5.5 contains a complete and correct list and description of
(i) the Sponsor’s and Holdings’ indirect and direct ownership interests in the
Issuer and (ii) the Issuer’s officers.

            (b)       
The membership interests in the Issuer are validly issued, are fully paid and
nonassessable and are owned by Holdings free and clear of any Lien (except for
the Lien created by the Pledge Agreement). 

           
(c)        Holdings
is the only member of the Issuer. (d) The Issuer has no subsidiaries. 

                          Section
5.6. Financial Statements; Material Liabilities. The Issuer has delivered to
the Purchasers copies of the financial statements of the Issuer described in
Section 4.17. All of such financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
financial position of the Issuer as of the respective dates thereof and the
results of its operations and cash flows for the respective periods so specified
and have been prepared in accordance with GAAP consistently applied throughout
the periods involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end adjustments). The
Issuer has no Indebtedness or other material liabilities, except as disclosed on
such financial statements.

                          Section
5.7. Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Issuer of this Agreement, the Notes and the other
Transaction Documents to which it is a party do not and will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien (other than the Lien created by the Financing Documents) in
respect of any property of the Issuer under, any Material Project Document or
any indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, organizational documents of the Issuer, or any other agreement or
instrument to which the Issuer is bound or by which the Issuer or any of its properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Issuer, (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Issuer or any Approval, or (iv) require the Approval
of any Person, other than Approvals that have been obtained and are in full
force and effect and Approvals not required to be obtained until after the
Closing Date, and the Issuer is not aware of any facts or circumstances that
indicate that any such Approval required to be obtained after the Closing Date
will not be obtained on or prior to the required date. 

                          Section
5.8. Governmental Authorizations, Etc. All Required Approvals are listed on
Schedule 5.8. Each Required Approval listed in in Part I of Schedule
5.8 is validly issued, final and in full force and effect and is not subject
to any current legal proceedings, and there are no material unsatisfied
conditions to the effectiveness of any such Required Approval and all applicable
waiting periods with respect to each such Required Approval have expired without
any material adverse action being taken by the applicable authority. Each
Required Approval listed in Part II of Schedule 5.8 is not required to be
obtained until the date indicated thereon, and the Issuer is not aware of any
facts or circumstances that indicate that any such Required Approval will not be
obtained on or prior to the required date. 

                          Section
5.9. Litigation; Observance of Agreements, Statutes and Orders. 

           
(a)        There are no
actions, suits, investigations or proceedings pending or, to the knowledge of
the Issuer after due inquiry, threatened against or affecting the Issuer or any
Issuer Party in any court or before any arbitrator of any kind or before or by
any Governmental Authority that could reasonably be expected to have a Material
Adverse Effect, or that question the validity of any of the Transaction
Documents. 

            (b)       
Neither the Issuer nor any Issuer Party is (i) in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or (ii) in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws or the USA PATRIOT
Act) of any Governmental Authority. 

                         
Section 5.10. Taxes. The Issuer has filed all tax returns that are
required to have been filed in any jurisdiction, and has paid all taxes shown to
be due and payable on such returns and all other taxes and assessments levied
upon the Issuer or its properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent, except for any taxes and assessments (i) the amount of which
is not individually or in the aggregate material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which (A) the Issuer has established
adequate reserves in accordance with GAAP, and (B) the nonpayment of all such
taxes, assessments, charges, levies and claims during the pendency of such
contest could not reasonably be expected to result in a Lien on property or
assets of the Issuer other than Permitted Liens. The Issuer knows of no basis
for any other tax or assessment that could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of the Issuer in respect of Federal,
state or other taxes for all fiscal periods are adequate.

                          Section
5.11. Title to Property; Leases; Real Estate; Insurance. The Issuer has good
and sufficient title to, or leasehold interests in, the Project, the Site, the
Geothermal Resource, the Water Rights and all of its other properties that
individually or in the aggregate are material to the Issuer and the Project,
free and clear of Liens (other than Permitted Liens). The Ground Lease, the
Geothermal Leases and all other leases, easements and real property interests
that individually or in the aggregate are material to the Issuer and the Project
are valid and subsisting and are in full force and effect in all respects. The
Issuer is not in default under any terms of the Ground Lease or any Geothermal
Lease and no event or omission has occurred which with the giving of notice or
lapse of time, or both, would constitute a default under the Ground Lease or any
Geothermal Lease. The real property interests, leasehold estates, easements and
other rights of the Issuer set forth in the Title Policy or encumbered by the
Deed of Trust: 

           
(a)        comprise all of
the property interests necessary to secure any right required with respect to
the construction, operation or maintenance of the Project in accordance with all
requirements of law, including all Required Approvals; 

           
(b)        are sufficient to
enable the Project to be located, operated and routinely maintained on the Site
through the Maturity Date; and 

           
(c)        provide adequate
ingress and egress for any reasonable purpose in connection with the operation
and routine maintenance of the Project. 

None of the parcels comprising the Site needs to be subdivided
from larger tracts of land in order to be made subject to the Lien of the Deed
of Trust.

                         
Section 5.12. Material Project Documents; Commercial Operation Date. 

            (a)       
The Material Project Documents listed on Schedule 5.12 constitute and
include all contracts and agreements that are necessary for the construction,
ownership, operation and maintenance of the Project and the generation,
transmission and sale of energy generated by the Project. Each Material Project
Document is in full force and effect and constitutes the legal, valid and
binding obligation of the Issuer as of the date hereof. Neither the Issuer nor,
to the Issuer’s knowledge, any other Person party to a Material Project Document
or other material agreement with the Issuer is in default under any terms of a
Material Project Document or material agreement (including, without limitation,
the obligation of the Issuer to provide to the Power Purchaser all of the
agreements and certificates required to be delivered to the Power Purchaser
pursuant to Section 8.8 of the PPA), nor has an event or omission occurred which
with the giving of notice or lapse of time, or both, would constitute a default
under any of the Material Project Documents or other material agreements.

            (b)       
The Commercial Operation Date (as defined in the PPA) of the Project
occurred on May 25, 2012. 

            (c)       
Exhibit 13 to the PPA (as in effect on the date hereof) sets forth the current
Annual Supply Amounts, Monthly Supply Amounts and Supply Amounts (as each such
term is defined in the PPA) as of the Closing Date. 

           
(d)        The Yearly PC
Amount (as defined in the PPA) is 91,805,000. 

                          
Section 5.13. Compliance with ERISA.

            (a)       
The Issuer and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to result in a
Material Adverse Effect. Neither the Issuer nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in section
3 of ERISA), and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such liability
by the Issuer or any ERISA Affiliate, or in the imposition of any Lien on any of
the rights, properties or assets of the Issuer or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to
any such penalty or excise tax provisions under the Code or Federal law or
section 4068 of ERISA or by the granting of a security interest in connection
with the amendment of a Plan, other than such liabilities or Liens as would not
be individually or in the aggregate Material. 

            (b)       
The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan’s most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term “benefit liabilities” has
the meaning specified in section 4001 of ERISA and the terms “current value”
and “present value” have the meaning specified in section 3 of ERISA.

            (c)       
The Issuer and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material. 

            (d)       
The expected postretirement benefit obligation (determined as of the last day of
the Issuer’s most recently ended fiscal year in accordance with Financial
Accounting Standards Board Accounting Standards Codification Topic 715-60,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Issuer is not Material. 

            (e)       
The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
The representation by the Issuer to each Purchaser in the first sentence of this
Section 5.13(e) is made in reliance upon and subject to the accuracy of such
Purchaser’s representation in Section 6.2 as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by such Purchaser. 

                          Section
5.14. Private Offering by the Issuer. Neither the Issuer nor anyone acting
on its behalf has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than the Purchasers, each
of which has been offered the Notes at a private sale for investment. Neither
the Issuer nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act or to the registration
requirements of any securities or blue sky laws of any applicable jurisdiction.

                          Section
5.15. Use of Proceeds; Margin Regulations. The Issuer will apply the
proceeds of the sale of the Notes to (a) repay the construction financing of the
Project, (b) pay transaction expenses and third party fees related to the
development and financing of the Project, (c) fund the Debt Service Reserve
Account in the amount of the Minimum Debt Service Reserve Requirement, the
Maintenance Reserve Account in the amount of $640,797 and the Upgrade Reserve
Account in the amount of $253,617 and (d) fund the Closing Date Distribution. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Issuer in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). The Issuer does not own or
carry any margin stock. As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in
Regulation U. 

                         
Section 5.16. Foreign Assets Control Regulations, Etc.

            (a)       
Neither the Issuer or any Controlled Entity is (i) a Person whose name
appears on the list of Specially Designated Nationals and Blocked Persons
published by the Office of Foreign Assets Control, U.S. Department of Treasury
(“OFAC”) (an “OFAC Listed Person”) or (ii) a department, agency or
instrumentality of, or is otherwise controlled by or acting on behalf of,
directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity,
organization, foreign country or regime that is subject to any OFAC Sanctions
Program (each OFAC Listed Person and each other Person, entity, organization and
government of a country described in clause (ii), a “Blocked Person”).
Neither the Issuer nor any Controlled Entity is engaged in any activities that
could subject such Person or any Purchaser to sanctions under CISADA or under
any applicable state law that imposes sanctions on Persons that do business with
Iran or any other country that is subject to an OFAC Sanctions Program.

            (b)       
No part of the proceeds from the sale of the Notes hereunder constitutes or will
constitute funds obtained on behalf of any Blocked Person or will otherwise be
used, directly or indirectly, in connection with any investment in, or any
transactions or dealings with, any Blocked Person where
such investments, transactions or dealings could reasonably be expected to cause
the purchase, holding or receipt of any payment or exercise of any rights in
respect of any Note by the holder thereof to be in violation of any law or
regulation applicable to such holder. 

            (c)       
To the actual knowledge of the Issuer after making due inquiry, none of
the Issuer or any Controlled Entity (i) is under investigation by any
Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under any applicable law (collectively,
“Anti-Money Laundering Laws”), (ii) has been assessed civil penalties
under any Anti-Money Laundering Laws or (iii) has had any of its funds seized or
forfeited in an action under any Anti-Money Laundering Laws. The Issuer has
taken reasonable measures appropriate to the circumstances (in any event as
required by applicable law), to ensure that the Issuer and each Controlled
Entity is and will continue to be in compliance with all applicable current and
future Anti-Money Laundering Laws. 

            (d)       
No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any improper payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, official of any public international organization or
anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage. The Issuer has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable law), to ensure that the Issuer and each Controlled Entity is and
will continue to be in compliance with all applicable current and future
anti-corruption laws and regulations. 

                         
Section 5.17. Status under Certain Statutes. 

            (a)       
None of the Issuer or any Issuer Party is an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

            (b)       
The Issuer is not subject to or is exempt from regulation under PUHCA in either
case as a “public-utility company” or as a “holding company” of a
“public-utility company.” (c) The Issuer is entitled to (i) all of the
exemptions from the FPA provided for in 18 C.F.R. § 292.601(c) including the
exemptions from Sections 205 and 206 of the FPA set forth in § 292.601(c)(1);
(ii) the exemption from PUHCA set forth in 18 C.F.R. § 292.602(b); and (iii) the
exemption from certain state laws and regulations set forth in § 292.602(c), and
Holdings is a “holding company” solely of the Issuer. As of the date hereof, the
Issuer has filed with the FERC a notice of self-certification as a QF in FERC
Docket No. QF12-163-000 on or about January 13, 2012, which notice complies with
all of the applicable requirements of the FERC and which such notice is legally
effective and valid.

            (d)       
The PPA and Interconnection Agreement have received all Approvals required from
all applicable Governmental Authorities. The Interconnection Agreement is
sufficient to permit the Issuer to: (i) inject all of the Project’s electric
energy, capacity and ancillary services up to the point of interconnection
specified therein and (ii) satisfy the Issuer’s electrical delivery obligations
under the PPA.

            (e)       
The Issuer is in compliance with all and is not in violation of any applicable
requirements and rules of the Public Utilities Commission of Nevada and FERC,
including but not limited to all requirements applicable to the Issuer under
Section 215 of the FPA. The Issuer does not require permission or authorization
from, and is not required to deliver any notice to, the FERC or the Public
Utilities Commission of Nevada in order to execute and deliver the Transaction
Documents to which it is a party or to enter into and perform the transactions
contemplated thereby.

            (f)       
Solely as a result of the execution and delivery of the Financing
Documents and the entering into and performance of the transactions contemplated
thereby, neither the Collateral Agent nor any of the Purchasers shall become
subject to regulation either by the FERC (under either of the FPA or PUHCA) or
by the Public Utilities Commission of Nevada under Nevada law, except by the
exercise of the holders of certain remedies allowed under the Financing
Documents. 

                         
Section 5.18. Environmental Matters. 

            (a)       
The Issuer has no knowledge of any claim nor has it received any notice
of any claim, and no proceeding has been instituted raising any claim against
the Issuer, the Site or any of the real properties now or formerly owned, leased
or operated by the Issuer, alleging any damage to the environment or violation
of any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. 

            (b)       
The Issuer has no knowledge of any facts which would give rise to any
claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to the Site or
other real properties now or formerly owned, leased or operated by the Issuer or
to other assets or its use, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect. 

            (c)       
The Issuer has not stored any Hazardous Materials on the Site or other
real properties now or formerly owned, leased or operated by the Issuer and has
not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and (d) All buildings on the Site and
all other real properties now owned, leased or operated by the Issuer are in
compliance with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse Effect. 

                          Section
5.19. Collateral. The Collateral, as described in the Security
Documents, includes all of the real and personal property of the Issuer and
constitutes all assets necessary for the development, construction, operation
and maintenance of the Project. The security interests in the Collateral granted
to the Collateral Agent (for the benefit of the Secured Parties) pursuant to the
Financing Documents: (a) constitute as to personal property included in the
Collateral and, with respect to subsequently acquired personal property included
in the Collateral, will constitute, a perfected security interest and Lien under
each applicable Uniform Commercial Code, and (b) are, and, with respect to such
subsequently acquired property, will be, as to Collateral perfected under each
applicable Uniform Commercial Code, superior and prior to the rights of all
third Persons now existing or hereafter arising whether by way of mortgage,
Lien, security interests, encumbrance, assignment or otherwise, except for
Permitted Liens. All action as is necessary has been taken to establish and
perfect the Collateral Agent’s rights in and to, and the first lien priority
(subject only to Closing Date Permitted Liens) of its Lien on, the Collateral
for the benefit of the Secured Parties, including any recording, filing,
registration, delivery to the Collateral Agent, giving of notice or other
similar action (subject to the timely filing of continuation statements as
required under the applicable Uniform Commercial Code). The Security Documents
and financing statements relating thereto have been duly filed or recorded in
each office and in each jurisdiction where required in order to create and
perfect the Lien and security interest described above and the priority
thereof.

                          Section
5.20. Labor Relations; Force Majeure Events. No strike, slowdown or stoppage
is pending or, to the best of the Issuer’s knowledge, threatened, against the
Issuer, its contractors or the Project. Neither the Project nor the Issuer nor
(to the knowledge of the Issuer) any other Project Party has suffered any force
majeure event that is continuing.

                          Section
5.21. Indebtedness. After giving effect to the Closing, the Issuer does not
have any Indebtedness or other material liabilities, other than (a) Indebtedness
under the Financing Documents, (b) trade payables incurred in the ordinary
course of business, and (c) Indebtedness consisting of obligations permitted by
Section 10.6(c) hereof. 

                          Section
5.22. Capitalization. The Issuer has sufficient capitalization to perform
the Obligations under this Agreement and the other Financing Documents.

                          Section
5.23. Budget. The Issuer and the Operator are in compliance with the initial
Operating Budget.

                          Section
5.24. Cash Grant. The factual information and the representations of the
Issuer set forth in the Cash Grant Application are true, correct and complete in
all material respects. The Issuer received a Cash Grant in the amount of
$10,650,000 in November 2012 and an additional Cash Grant in the amount of
$1,050,000 in March 2013. A portion of the Cash Grant proceeds was applied to
repay in full the Issuer’s Cash Grant bridge loan provided by Ares Capital
Corporation. No Federal tax credit under Section 45 or Section 48 of the Code
has been claimed with respect to any assets comprising the Project.

SECTION 6. REPRESENTATIONS OF THE PURCHASERS. 

                          Section
6.1. Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser’s Note or its property shall at all times be
within such Purchaser’s or their control. Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Issuer is not required to register the Notes. 

                          Section
6.2. Source of Funds. Each Purchaser severally represents that at least one
of the following statements is an accurate representation as to each source of
funds (a “Source”) to be used by such Purchaser to pay the purchase price
of the Notes to be purchased by such Purchaser hereunder: 

           
(a)        the Source is an
“insurance company general account” (as the term is defined in the United States
Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual
statement for life insurance companies approved by the NAIC (the “NAIC Annual
Statement”)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities
for the general account contract(s) held by or on behalf of any other employee
benefit plans maintained by the same employer (or affiliate thereof as defined
in PTE 95-60) or by the same employee organization in the general account do not
exceed 10% of the total reserves and liabilities of the general account
(exclusive of separate account liabilities) plus surplus as set forth in the
NAIC Annual Statement filed with such Purchaser’s state of domicile; or 

           
(b)        the Source is a
separate account that is maintained solely in connection with such Purchaser’s
fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such
separate account (or to any participant or beneficiary of such plan (including
any annuitant)) are not affected in any manner by the investment performance of
the separate account; or 

           
(c)        the Source is
either (i) an insurance company pooled separate account, within the meaning of
PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the
PTE 91-38 and, except as disclosed by such Purchaser to the Issuer in writing
pursuant to this clause (c), no employee benefit plan or group of plans
maintained by the same employer or employee organization beneficially owns more
than 10% of all assets allocated to such pooled separate account or collective
investment fund; or 

           
(d)        the
Source constitutes assets of an “investment fund” (within the meaning of Part VI
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional
asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption),
no employee benefit plan’s assets that are managed by the QPAM in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the
    same employee organization and managed by such QPAM, represent more than 20% of
    the total client assets managed by such QPAM, the conditions of Part I(c) and
    (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
    controlling or controlled by the QPAM maintains an ownership interest in the
    Issuer that would cause the QPAM and the Issuer to be “related” within the
    meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM
    and (ii) the names of any employee benefit plans whose assets in the investment
    fund, when combined with the assets of all other employee benefit plans
    established or maintained by the same employer or by an affiliate (within the
    meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
    employee organization, represent 10% or more of the assets of such investment
    fund, have been disclosed to the Issuer in writing pursuant to this clause (d);
or 

 

             
(e)        the Source
constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23
(the “INHAM Exemption”)) managed by an “in-house asset manager” or
“INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Part IV(d) of the INHAM Exemption) owns a 10% or
more interest in the Issuer and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Issuer in writing pursuant to this clause (e); or 

             
(f)        the Source is a
governmental plan; or 

             
(g)        the Source is one
or more employee benefit plans, or a separate account or trust fund comprised of
one or more employee benefit plans, each of which has been identified to the
Issuer in writing pursuant to this clause (g); or 

             
  (h)        the
Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA. 

As used in this Section 6.2, the terms “employee
benefit plan,” “governmental plan,” and “separate account”
shall have the respective meanings assigned to such terms in section 3 of ERISA.

SECTION 7. INFORMATION. 

                          Section
7.1. Financial and Business Information. The Issuer shall deliver and cause
to be delivered to each of the holders: 

            
(a)        Quarterly
Statements — within 45 days after the end of each quarterly fiscal period in
each fiscal year of the Issuer, copies of 

            
(i)        a
balance sheet of the Issuer as at the end of such quarter, and 

            (ii)       
profit and loss statements and cash flows statements for the Issuer for such
quarter and (in the case of each quarter other than the first quarter) for the
portion of the fiscal year ending with such quarter, 

setting forth in each case in
comparative form the figures for the corresponding periods in the previous
fiscal year (except for the balance sheet, which shall set forth in comparative
form the figures as of the end of the previous fiscal year), all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, or accompanied by GAAP reconciliations, and certified by a
Senior Financial Officer of the Issuer as fairly presenting, in all material
respects, the financial position of the Issuer and its results of operations and
cash flows, subject to changes resulting from year-end adjustments;

 (b) Annual Statements — within 90 days after the end of each fiscal year of
  the Issuer, copies of 

            (i)           a balance sheet of the Issuer as at the end of such
  year, and 

            (ii)           statements of income, profit and loss statements and cash flows
statements for the Issuer for such year, 

setting forth in each case in
  comparative form the figures for the previous fiscal year, all in reasonable
  detail, prepared in accordance with GAAP, or accompanied by GAAP
  reconciliations, and accompanied by an opinion thereon of MartinelliMick PLLC or
  such other independent public accountants selected by the Issuer and approved by
  the Required Holders (which consent shall not be unreasonably withheld,
  conditioned or delayed) (herein, the “Approved Accountant”), which
  opinion shall (1) state that such financial statements present fairly, in all
  material respects, the financial position of the Issuer and its results of
  operations and cash flows and have been prepared in conformity with or
  accurately reconciled to GAAP, and that the examination of the Approved
  Accountants in connection with such financial statements has been made in
  accordance with generally accepted auditing standards, and that such audit
  provides a reasonable basis for such opinion in the circumstances, and (2) not
  contain any “going concern” or similar qualification or exception nor any
  qualification or exception as to the scope of the audit on which such opinion is
  based; 

           
(c)        Other
Reports — promptly upon their becoming available, one copy of each regular
or periodic report and filing (without exhibits except as expressly requested by
a holder) made by the Issuer to or with any state or federal regulatory body;

           
(d)        Notice of
Default or Event of Default — promptly, and in any case within five Business
Days, after a Responsible Officer has become aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Issuer is taking or proposes to
take with respect thereto; 

            (e)       
Audit Reports — promptly, and in any event within ten Business
Days after receipt, the results of any audit reports relating to the Issuer;

           
(f)        ERISA
Matters — promptly, and in any event within ten days after a Responsible
Officer becoming aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Issuer or an ERISA Affiliate
proposes to take with respect thereto: 

           
(i)        with respect to
any Plan, any reportable event, as defined in section 4043(c) of ERISA and the
regulations thereunder, for which notice thereof has not been waived pursuant to
such regulations as in effect on the date hereof; or 

           
(ii)        the taking by
the PBGC of steps to institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan, or the receipt by the
Issuer or any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer Plan; or

           
(iii)        any event,
transaction or condition that could result in the incurrence of any liability by
the Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans,
or in the imposition of any Lien on any of the rights, properties or assets of
the Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could reasonably be expected
to have a Material Adverse Effect; 

           
(g)        Notices from
Governmental Authority — promptly, and in any event within 30 days of
receipt (or knowledge) thereof copies of any notice to the Issuer from any
Federal, state or local Governmental Authority that could reasonably be expected
to have a Material Adverse Effect; 

           
(h)        Other
Notices— promptly, and in any event within five Business Days of receipt (or
knowledge) thereof: 

           
(i)        any press
releases and other statements made available generally by the Issuer; 

           
(ii)        notice of the
occurrence of any condition or event that could reasonably result in a Material
Adverse Effect; 

           
(iii)        copies of any
notice of a violation, breach or event of default under any Material Project
Document; 

           
(iv)        any actual
termination or rescission or any written threat of termination or rescission of
any Material Project Document, any notice of exercise of a right of termination or
suspension of a Material Project Document and any proposed or final amendment of
any Material Project Document; 

           
(v)        any material
pending or threatened adversarial or contested proceeding of or before a
Governmental Authority relating to the Project; 

           
(vi)        any termination,
suspension, written threat of termination or suspension, or other loss of any
Required Approval; 

           
(vii)        any material
litigation or proceeding taken or threatened in writing against the Issuer or
any Issuer Party; 

           
(viii)        any notices or
communications delivered to, or received by, the Issuer or any of its Affiliates
in connection with any Cash Grant application or relating to any Cash Grant
Recapture Liability applicable to the Project; 

           
(ix)        any claim of
force majeure under any Material Project Document; and 

           
(x)        any notice of
default, event of default or force majeure under the Holdings Loan Agreement.

            (i)       
Operating Reports -- within 30 days after the end of each month,
a monthly operating report substantially in the form attached hereto as
Exhibit 7.1 ; 

           
(j)        Annual
Insurance Certificates -- within 30 days of the end of each fiscal year of
the Issuer, evidence of insurance in effect that meets the requirements of
Section 9.2 ; 

            (k)       
Information Required by Rule 144A -- upon the request of a holder (and
shall deliver to any qualified institutional buyer designated by such holder),
such financial and other information as such holder may reasonably determine to
be necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Notes,
except at such times as the Issuer is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act (for the purpose of this Section
7.1(k) , the term “qualified institutional buyer” shall have the meaning
specified in Rule 144A under the Securities Act); 

           
(l)        Annual
Geothermal Resource Report, Operating Budget and DSCR Notices -- (i) at
least 30 days prior to the end of each fiscal year of the Issuer, the Annual
Geothermal Resource Report and the proposed annual operating plan and budget for
the Project for the following three consecutive calendar years required to be
delivered pursuant to Section 9.12, and (ii) not later than five Business
Days after each quarterly Payment Date, the DSCR Notice with respect to such
Payment Date required to be delivered pursuant to Section 9.13 ;

            (m)       
PPA Reports -- on or before January 31st and July 15th of each calendar
year, copies of the reports required to be delivered by the Issuer to the Power
Purchaser pursuant to Section 11.4.2 of the PPA; and 

           
(n)       
Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Issuer or relating to the
ability of the Issuer to perform its obligations hereunder and under the Notes
(including financial forecasts or cash flow projections) as from time to time
may be reasonably requested by a holder.

                          Section
7.2. Officer’s Certificate. Each set of financial statements delivered to
each of the holders pursuant to Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a Senior Financial Officer setting
forth a statement that such Senior Financial Officer has reviewed the relevant
terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Issuer from the beginning of
the quarterly or annual period covered by the statements then being furnished to
the date of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed or
exists (including, without limitation, any such event or condition resulting
from the failure of the Issuer to comply with any Environmental Law), specifying
the nature and period of existence thereof and what action the Issuer shall have
taken or proposes to take with respect thereto. 

                          Section
7.3. Visitation. The Issuer shall permit the representatives of each
Purchaser and each holder of a Note that is an Institutional Investor: 

           
(a)        No Default
— if no Default or Event of Default then exists, at the expense of such
Purchaser or holder and upon reasonable prior notice to the Issuer, to visit the
principal executive office of the Issuer, to discuss consultant reports and the
affairs, finances and accounts of the Issuer with the Issuer’s officers, and
(with the consent of the Issuer, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Issuer, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Issuer, all at such reasonable times and as often
as may be reasonably requested in writing; and 

           
(b)        Default —
if a Default or Event of Default then exists, at the expense of the Issuer to
visit and inspect any of the offices or properties of the Issuer, to examine all
of its books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss consultant reports and its affairs, finances
and accounts with the Issuer’s officers and independent public accountants (and
by this provision the Issuer authorizes said accountants to discuss the affairs,
finances and accounts of the Issuer), all at such times and as often as may be
requested. 

SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES. 

                         
Section 8.1. Amortization; Maturity; Mandatory Prepayments.

            (a)       
Amortization. On each Payment Date, the Issuer will prepay the
principal amounts set forth in the amortization schedule attached hereto as
Schedule 8.1 (the “Amortization Schedule”) (or such lesser
principal amount as shall then be outstanding) of the Notes at 100% of the
principal amount thereof and without payment of the Make-Whole Amount or any
premium, provided that upon any partial prepayment of the Notes pursuant
to Section 8.1(b) or 8.2, the principal amount of each required
prepayment of the Notes becoming due under this Section 8.1 on and after
the date of such prepayment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as a result of such
prepayment. The entire unpaid principal balance of the Notes shall be due and
payable on the Maturity Date.

            (b)       
Mandatory Prepayments. Except as otherwise provided in
Section 8.1(a) and this Section 8.1(b) , the Notes are not subject
to mandatory prepayments of principal.

            (i)       
Loss. If (A) there occurs a Loss or series of related Losses
(other than a Major Loss) and, after the restoration of the Project in
accordance with Section 9.2(b) , the remaining Loss Proceeds therefrom
exceed $250,000, (B) the conditions set forth in Section 9.2(b)(ii) are
not satisfied with respect to a Loss or series of related Losses in which the
aggregate Loss Proceeds exceed $250,000, or (C) the Loss Proceeds from any Loss
or series of related Losses are not applied in full to the restoration of the
affected property to the extent otherwise permitted by Section 9.2(b)
within 90 days following receipt of such Loss Proceeds, the Issuer shall
promptly, and in any event within three Business Days following (x) the
completion of the restoration of the Project (with respect to any prepayment
pursuant to clause (A) above), (y) receipt of any Loss Proceeds with respect to
such Loss or series of related Losses (with respect to any prepayment pursuant
to clause (B) above), or (z) the 90th day following receipt of such Loss
Proceeds (with respect to any prepayment pursuant to clause (C) above), apply
such Loss Proceeds to the prepayment of the principal amount of the Notes,
together with accrued and unpaid interest thereon to the date of such
prepayment, but without any Make-Whole Amount; provided that, in the case
of clause (z), if the Issuer has adopted an Approved Restoration Plan, but the
Restoration Work has not been completed by such 90th day, the Issuer shall have
an additional period of 90 days during which it can apply such Loss Proceeds to
the completion of the Restoration Work in the manner, and subject to the
conditions, provided in the Approved Restoration Plan and any Loss Proceeds
remaining at the end of such period shall be applied to the prepayment of the
Notes, together with accrued and unpaid interest thereon to the date of such
prepayment, but without any Make-Whole Amount. 

            (ii)       
Major Loss. If a Major Loss occurs, the Issuer shall, within ten
Business Days, repay the outstanding principal amount of the Notes (together
with accrued and unpaid interest thereon to the date of such prepayment, but
without any Make-Whole Amount) and all other outstanding Obligations. 

            (iii)       
Reduction in Annual Supply Amount. If the Issuer elects to
decrease the Annual Supply Amount in accordance with Section 3.7 of the PPA,
then on the first Payment Date following such election (and, to the extent
necessary, on each Payment Date occurring thereafter until the amount set forth
in clause (B) below has been paid in full), the Issuer shall prepay the
outstanding amount of the Notes (together with accrued and unpaid interest
thereon to the date of such prepayment and the Make-Whole Amount payable in
respect thereof) in an amount equal to the lesser of (A) funds then on deposit
in the Revenue Account after giving effect to all transfers and distributions to
be made from the Revenue Account on such Payment Date in accordance with clauses
(a) through (g), inclusive, of Section 4.1 of the Depositary Agreement, or (B)
an amount such that, after giving effect to such prepayment of the Notes, the
Projected Debt Service Coverage Ratios through the Maturity Date equal or exceed
the Debt Service Coverage Ratios shown in the Base Case Projections as of the
Closing Date (using an adjusted production forecast taking into account such
decreased Annual Supply Amount). 

If the Issuer is required to prepay the
Notes pursuant to clauses (i), (ii) or (iii) above, the Issuer shall give
written notice thereof to each holder. Such notice shall (w) describe the facts
and circumstances giving rise to such mandatory prepayment, (x) refer to this
Section 8.1(b) , (y) specify the date of repayment, which date shall be
on or before the date such prepayment is required to be made as specified in
clauses (i), (ii) or (iii) above, as applicable, and (z) identify the pro rata
portion of the Notes held by such holder to be prepaid (in the case of a
prepayment pursuant to clause (i) or (iii)), which pro rata portion shall be
calculated by multiplying the aggregate amount required to be applied to the
prepayment of the Notes as provided in clause (i) or (iii) above by a fraction
the numerator of which is the aggregate principal amount of the Notes held by
such holder and the denominator of which the aggregate principal amount of all
outstanding Notes (in each case calculated immediately prior to giving effect to
such prepayment). If prepayment is being made as specified in clause (iii), such
notice shall be accompanied by a certificate of a Responsible Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Issuer shall deliver to each holder of Notes a certificate of a Responsible
Officer specifying the calculation of such Make-Whole Amount as of the specified
prepayment date. On the date of prepayment, the pro rata portion of the
principal amount of the Notes held by each holder of Notes, together with
interest accrued thereon to such prepayment date, shall become due and payable
on such date. 

                          Section
8.2. Optional Prepayments with Make-Whole Amount. The Issuer may, at its
option, upon notice as provided below, prepay at any time all, or from time to
time any part of, the Notes, in an amount not less than $5,000,000 in the case
of a partial prepayment, at 100% of the principal amount so prepaid, and the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Issuer will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and
not more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify such date (which shall be a Business Day), the aggregate
principal amount of the Notes to be prepaid on such date, the principal amount of each Note
held by such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Issuer shall deliver to each holder
of Notes a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount as of the specified prepayment date. 

                         
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes at the time outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment. 

                          Section
8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Issuer shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Issuer and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note. 

                          Section
8.5. Purchase of Notes. The Issuer will not, and will not permit any
Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes. The Issuer will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment or prepayment of
Notes pursuant to this Agreement and no Notes may be issued in substitution or
exchange for any such Notes. 

                         
Section 8.6. Make-Whole Amount. 

            “Make-Whole
Amount” means, with respect to any Note, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments with respect to
the Called Principal of such Note over the amount of such Called Principal,
provided that the Make-Whole Amount may in no event be less than zero.
For the purposes of determining the Make-Whole Amount, the following terms have
the following meanings: 

           
“Called Principal” means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.1(b)(iii) or
Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires. 

            “Discounted
Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such
Called Principal from their respective scheduled due dates to the Settlement
Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on
the same periodic basis as that on which interest on the Notes is payable) equal
to the Reinvestment Yield with respect to such Called Principal. 

            “Reinvestment
Yield” means, with respect to the Called Principal of any Note, 0.50% over
the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New
York City time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as “Page PX1” (or
such other display as may replace Page PX1) on Bloomberg Financial Markets for
the most recently issued actively traded on-the-run U.S. Treasury securities
(“Reported”) having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. If there are no such U.S.
Treasury securities Reported having a maturity equal to such Remaining Average
Life, then such implied yield to maturity will be determined by (a) converting
U.S. Treasury bill quotations to bond equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between the yields
Reported for the applicable most recently issued actively traded on-the-run U.S.
Treasury securities with the maturities (1) closest to and greater than such
Remaining Average Life and (2) closest to and less than such Remaining Average
Life. The Reinvestment Yield shall be rounded to the number of decimal places as
appears in the interest rate of the applicable Note.

            If
such yields are not Reported or the yields Reported as of such time are not
ascertainable (including by way of interpolation), then “Reinvestment
Yield” means, with respect to the Called Principal of any Note, 0.50% over
the yield to maturity implied by the U.S. Treasury constant maturity yields
reported, for the latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable
successor publication) for the U.S. Treasury constant maturity having a term
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. If there is no such U.S. Treasury constant maturity having a
term equal to such Remaining Average Life, such implied yield to maturity will
be determined by interpolating linearly between (1) the U.S. Treasury constant
maturity so reported with the term closest to and greater than such Remaining
Average Life and (2) the U.S. Treasury constant maturity so reported with the
term closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Note.

            “Remaining
Average Life” means, with respect to any Called Principal, the number of
years obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number of
years, computed on the basis of a 360-day year composed of twelve 30-day months,
that will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment. 

            “Remaining
Scheduled Payments” means, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date, provided
that if such Settlement Date is not a date on which interest payments are due to
be made under the terms of the Notes, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date pursuant to
Section 8.1(b)(iii) or Section 8.2 or 12.1. 

            “Settlement
Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to Section
8.1(b)(iii) or Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context
requires. 

SECTION 9. AFFIRMATIVE COVENANTS. 

The Issuer covenants that so long as any of the Notes are
outstanding: 

                          Section
9.1. Compliance with Law. Without limiting Section 10.4, the Issuer
will comply with all laws, ordinances or governmental rules or regulations to
which it is subject, including, without limitation, ERISA, the USA PATRIOT Act,
Environmental Laws or any laws referenced in Section 5.16. The Issuer
will obtain and maintain in effect all licenses, certificates, permits,
franchises, Approvals and other governmental authorizations necessary to the
ownership of its properties, the financing of the Project or to the conduct of
its businesses, and will promptly pay when due all necessary license, franchise
and other fees and charges due and payable thereunder. 

                         
Section 9.2. Insurance.

            (a)       
The Issuer will maintain, with financially sound and reputable
insurers, insurance meeting the requirements of Schedule 9.2. 

            (b)       
Upon the occurrence of a Loss, the Issuer shall deposit all Loss
Proceeds other than proceeds of business interruption insurance (which shall be
deposited in the Revenue Account) in the Proceeds Account. So long as no Default
or Event of Default has occurred and is continuing, Loss Proceeds in the
Proceeds Account shall be applied in accordance with Section 9.2(b)(i) or
(ii), as applicable. 

            (i)       
If a Loss or series of related Losses in an aggregate amount up to $250,000
occurs, the Issuer shall submit to the holders a report describing the Loss and
the Issuer’s plan for effectuating restoration. If no Default or Event of
Default has occurred and is continuing or will exist after such transfer, the
Issuer may instruct the Depositary to transfer the Loss Proceeds in respect of
the Loss, in accordance with the Depositary Agreement, to pay the costs of
restoration. 

            (ii)       
Unless each of the following conditions is satisfied or waived by the
Required Holders, all Loss Proceeds with respect to a Loss or a series of related Losses in excess of an
aggregate of $250,000 shall be applied to the prepayment of the Notes in
accordance with Section 8.1(b)(i) : 

           
(A)        no Default or
Event of Default has occurred and is continuing; 

           
(B)        the Issuer
certifies, with the concurrence of the Independent Engineer, that restoration of
the affected property is technically and economically feasible and that
sufficient funds are available complete the restoration; 

           
(C)        the Required
Holders determine (after consultation with the Independent Engineer) that, after
restoration, the Projected Debt Service Coverage Ratio for each period of four
succeeding fiscal quarters ending after such date will equal or exceed 1.20 to
1.00; 

           
(D)        all Approvals
necessary to proceed with the restoration have been obtained or can reasonably
be expected to be obtained when required; 

           
(E)        the holders
receive such additional title insurance endorsements, mechanic’s lien waivers,
certificates, opinions or other matters as the Required Holders may reasonably
request in connection with such repairs or restoration to preserve or protect
the interests of the holders under the Financing Documents and in the
Collateral; and 

           
(F)        such Loss
Proceeds are (1) applied to the restoration of the affected property within 90
days of receipt thereof, (2) applied to prepay the Notes in accordance with
Section 8.1(b)(i)(A) to the extent applicable, or (3) reserved for
application to the Restoration of the Project in accordance with an Approved
Restoration Plan. 

If the conditions set forth above have
been satisfied or waived, the Issuer may instruct the Depositary to apply the
Loss Proceeds to the restoration of the affected property in accordance with the
following procedures: 

           
(A)        the
Issuer shall cause restoration to be commenced and completed promptly and
diligently; and 

           
(B)        Loss Proceeds
shall be released from the Proceeds Account from time to time for application
toward such restoration upon delivery to the Depositary of a requisition, in
accordance with the Depositary Agreement, accompanied by supporting documents,
certificates and other information with respect to such application of Loss
Proceeds, including a certificate from the Issuer (i) describing in reasonable
detail the nature of the restoration to be effected; (ii) stating the cost of
such restoration; (iii) stating that the aggregate amount requested by the
Issuer in respect of such restoration does not exceed the Issuer’s reasonable
estimation of the cost of such restoration and that a
sufficient amount of funds is or will be available to the Issuer to complete the
restoration; and (iv) stating that no Default or Event of Default has occurred
and is continuing. 

                         
Section 9.3. Title, Water Rights, Etc.

            (a)       
The Issuer shall maintain good, valid, marketable and insurable title to, or
leasehold interests in, its properties, including the Project, the Site, the
Geothermal Resource, the Water Rights and the other Collateral described in the
Security Documents, and shall at all times warrant and defend the title to such
property and Collateral against all claims that do not constitute Permitted
Liens. 

            (b)       
At least 120 days prior to the expiration of the term of any BLM Lease (other
than Lease Numbers NVN-75555 and NVN-75558; these leases, following their
expiration, shall cease to be BLM Leases), the Issuer shall have applied for
and, prior to expiration, received an extension of the term thereof, as
necessary so that each such BLM Lease is periodically extended until a date not
earlier than the Maturity Date. 

            (c)       
On or prior to June 2, 2014, the Issuer shall have applied for and
received an extension of time until June 2, 2015 to file a Proof of Application
of Water to Beneficial Use with the Nevada Division of Water Resources, Office
of the State Engineer with respect to each of water rights permits 66946, 68756,
and 69320 listed in the definition of “Water Rights” set forth in Schedule
B hereto. 

            (d)       
On or prior to June 2, 2015, the Issuer will file a Proof of Application of
Water to Beneficial Use with respect to each of water rights permits 66946,
68756, and 69320 with the Nevada Division of Water Resources, Office of the
State Engineer and will take all such other actions as may be necessary under
applicable law to maintain, preserve and protect the Water Rights for the
Project. 

            (e)       
On or prior to June 2, 2016, the Issuer shall have applied for and
received an extension of time until June 2, 2017 to file a Proof of Application
of Water to Beneficial Use with the Nevada Division of Water Resources, Office
of the State Engineer with respect to each of water rights permits 79899 and
79900 listed in the definition of “Water Rights” set forth in Schedule B
hereto. 

            (f)       
On or prior to June 2, 2017, the Issuer will file a Proof of
Application of Water to Beneficial Use with respect to each of water rights
permits 79899 and 79900 with the Nevada Division of Water Resources, Office of
the State Engineer and will take all such other actions as may be necessary
under applicable law to maintain, preserve and protect the Water Rights for the
Project. 

                          Section
9.4. Payment of Taxes and Claims. The Issuer will file all tax returns
required to be filed in any jurisdiction and pay and discharge all taxes shown
to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on it or any of its properties, assets,
income or franchises, to the extent the same have become due and payable, and
all claims for which sums have become due and payable; provided that the
Issuer need not pay any such tax, assessment, charge, levy or claim if (i) the
amount, applicability or validity thereof is contested by the Issuer on
a timely basis in good faith and in appropriate proceedings, and the Issuer has
established adequate reserves therefor in accordance with GAAP on the books of
the Issuer and (ii) the nonpayment of all such taxes, assessments, charges,
levies and claims could not reasonably be expected to result in a Lien on
property or assets of the Issuer. 

                          Section
9.5. Existence, Etc. The Issuer will at all times preserve and keep in full
force and effect its limited liability company existence and all rights and
franchises of the Issuer. 

                          Section
9.6. Books and Records. The Issuer will maintain proper books of record and
account in conformity with GAAP and all applicable requirements of any
Governmental Authority having legal or regulatory jurisdiction over the Issuer
and in a manner consistent with projects similar to the Project. 

                          Section
9.7. Collateral; Further Assurances. The Issuer shall obtain all consents
(other than any consent required by any Governmental Authority in connection
with foreclosure under the Security Documents) and take all actions necessary to
insure that the Collateral Agent, on behalf of the Secured Parties, has and
continues to have in all relevant jurisdictions duly and validly created,
attached, perfected, and enforceable first-priority Liens on the Collateral
described in the Security Documents (including after-acquired Collateral),
subject to no Liens other than Permitted Liens. The Issuer shall cause the
Obligations to constitute direct senior secured obligations of the Issuer and to
rank senior in priority of payment, in right of security and in all other
respects to all other Indebtedness of the Issuer.

                          Section
9.8. Material Project Documents. The Issuer shall (i) perform and observe
all of the terms, covenants, provisions and agreements required to be performed
and observed by it under the (A) Material Project Documents and (B) other
agreements to which the Issuer is a party except where the failure to perform
and observe such other agreements could not individually or in the aggregate
have a Material Adverse Effect, (ii) take all actions required to enforce all
rights and obligations thereunder, (iii) maintain the Material Project Documents
in full force and effect in accordance with the terms thereof and (iv) deliver
copies of any proposed or final amendments to the Material Project Documents to
the Purchasers. 

                          Section
9.9. Pledged Accounts. The Issuer shall establish and maintain the following
accounts at the Depositary in accordance with the Depositary Agreement: (i) the
Revenue Account, (ii) the Debt Service Reserve Account, (iii) the Make-up Well
Reserve Account, (iv) the Maintenance Reserve Account, (v) the Upgrade Reserve
Account and (vi) the Proceeds Account. The Issuer shall fund the Pledged
Accounts as required under the Depositary Agreement. All amounts held in the
Pledged Accounts shall be held in cash or, if permitted under the Depositary
Agreement, in Permitted Investments. 

                          Section
9.10. Annual Servicing Fee. The Issuer hereby agrees to pay to each holder
of Notes, in immediately available funds credited to such holder’s account as
specified in the Purchaser Schedule, such holder’s ratable portion of an annual
servicing fee in an aggregate amount equal to $50,000 per year (the
“Servicing Fee”), which fee will be payable in advance on the Closing
Date and annually in advance on each anniversary thereof until all Obligations
are repaid in full. The Servicing Fee shall not be refundable under any
circumstances. If the Servicing Fee is not paid when due, interest thereon shall be
payable from and including the due date until such fee is paid at the Default
Rate. 

                          Section
9.11. Maintenance and Operation. The Issuer shall operate and maintain the
Project, or cause the Project to be operated and maintained, in accordance with
Good Utility Practice (as defined in the PPA), all requirements of law, all
Required Approvals and all requirements of the Material Project Documents.

                         
Section 9.12. Resource Review; Budgets.

            (a)       
On each Payment Date, the Issuer shall cause the Depositary to deposit
in the Make-Up Well Reserve Account, in accordance with the priorities set forth
in Section 4.1 of the Depositary Agreement, and to the extent funds are
available in the Revenue Account, funds sufficient to cause the balance in the
Make-Up Well Reserve Account to equal the amount set forth opposite such
Repayment Date on Schedule 9.12 (as updated from time to time in
accordance with Section 9.12(c) below) (the “Required Make-Up Well
Reserve Account Balance”).

            (b)       
At least 30 days prior to the end of each calendar year, the Issuer
shall submit to the holders a report of the Geothermal Resource Engineer, which
report shall assess and project (i) the Geothermal Resource (based upon direct,
or inferred, reservoir pressure and enthalpy measurements) through the Maturity
Date, (ii) requirements for drilling or re-drilling wells through the Maturity
Date and (iii) related capital expenditures in each of the following three years
(each such report, an "Annual Geothermal Resource Report"). If the Annual
Geothermal Resource Report shows a negative deviation from the Geothermal
Resource characteristics predicted in the Geothermal Resource Assessment Report
at Closing, the Annual Geothermal Resource Report shall also include (A) an
estimate of the date when a new geothermal production well will be required to
restore the Projected Debt Service Coverage Ratios through the Maturity Date to
the Debt Service Coverage Ratios shown in the Base Case Projections as of the
Closing Date (the "Make-Up Well Drill Date") and (B) the estimated cost
of such new geothermal production well that will restore the Projected Debt
Service Coverage Ratios through the Maturity Date to the Debt Service Coverage
Ratios shown in the Base Case Projections as of the Closing Date (the
"Make-Up Well Cost").

            (c)       
At least 15 days prior to the end of each calendar year, the Issuer shall either
(i) revise Schedule 9.12 to take into account any update in the Make-Up
Well Drill Date and the Make-Up Well Cost as set forth in the most recent Annual
Geothermal Resource Report, and submit such revised Schedule 9.12 for the
approval of the Required Holders, or (ii) certify to the holders that there is
no update necessary to the most recent version of Schedule 9.12 based
upon the most recent Annual Geothermal Resource Report.

            (d)        At least 30 days prior to the end of each calendar year, the Issuer
shall submit to the holders and the Independent Engineer a proposed annual
operating plan and budget for the Project during each of the following three
calendar years (prepared on a month-by-month basis). The Required Holders and
the Independent Engineer will have the right to request revisions to or
approve each proposed operating plan and budget promptly and in any event within
30 days after receipt. After an operating plan and budget has been approved by
the Required Holders and the Independent Engineer (as approved, the
“Operating Budget”), the Issuer shall follow and comply with the
Operating Budget. Notwithstanding the foregoing, the Issuer may incur costs on
an annual basis for any line item in the then current Operating Budget in excess
ten percent (10%) of the budgeted amount therefor in such Operating Budget
without the prior written consent of the Required Holders or the Independent
Engineer. Any Operating Budget may be subsequently amended with the consent of
the Required Holders. If the Issuer fails to submit a proposed annual operating
plan and budget for the Project for any calendar year or if an operating plan
and budget has not yet been approved by the Required Holders and Independent
Engineer for any calendar year, then the Issuer shall follow and comply with the
Operating Budget most recently approved by the Required Holders and the
Independent Engineer, plus an increase in expenditures thereunder equal to the
CPI Adjustment (or, if any Material Project Document imposes escalation
limitations on any O&M Costs, subject to escalation in accordance with such
limitations), until such time as a new annual operating plan and budget has been
submitted to, and approved by, the Required Holders and the Independent Engineer
in accordance with this clause (h); provided that (i) any items of the
then-proposed operating plan and budget that have been approved by the Required
Holders and the Independent Engineer shall be given effect in substitution of
the corresponding items in the Operating Budget most recently in effect, and
(ii) with respect to any set amount of expenses which will be incurred under any
contract which has previously been entered into in accordance with the
provisions hereof, the term of which extends into any period beyond that of the
prior Operating Budget, the budgeted amount of expenses under the operating plan
and budget for such calendar year will be based on such expenses provided for in
such contract.

                          Section
9.13. DSCR Notice on Payment Date. Not later than five Business Days
after each quarterly Payment Date, the Issuer shall deliver to the Collateral
Agent and the holders the Issuer’s calculation of the Debt Service Coverage
Ratio for the 12-month period ending on such Payment Date (or, for any date
prior to the first anniversary of the Closing Date, for the period commencing on
the Closing Date and ending on such Payment Date) and the Projected Debt Service
Coverage Ratio for the 12-month period commencing on such Payment Date (the
“DSCR Notice”). The Required Holders shall notify the Issuer in writing
of any reasonable corrections, changes or adjustments to be made to such
calculations within ten Business Days of receipt of a DSCR Notice. 

                          Section
9.14. Turbine Warranty. The Issuer shall comply with the terms and
requirements of the Turbine Warranty. 

                          Section
9.15. Perfection Opinion. On the second anniversary of this Agreement and
every two years thereafter, the Issuer shall provide to the Collateral Agent and
the holders an opinion or opinions of counsel addressed to them (a) stating that
all action has been taken with respect to the filing, recording, re-filing and
re-recording of the Security Documents and/or financing statements and
continuation statements with respect thereto as is necessary to protect and
preserve the rights and interests of the Collateral Agent in and to the
Collateral and the Liens on and in the Collateral created by the Security
Documents and reciting the details of such action or referring to prior opinions of counsel in which such details
are given and (b) stating what, if any, action of the foregoing nature may
reasonably be expected to become necessary during the next 24 months in order to
protect and preserve the rights and interests of the Collateral Agent in and to
the Collateral and the Liens on and in the Collateral created by the Security
Documents. 

                          Section
9.16. Payment of Obligations. The Issuer shall pay and discharge as the same
shall become due and payable all Obligations incurred under this Agreement and
the other Financing Documents. 

                          Section
9.17. Use of Proceeds. The Issuer shall use the proceeds of the sale of the
Notes only in accordance with the purposes set forth in Section 5.15.

SECTION 10. NEGATIVE COVENANTS. 

The Issuer covenants that so long as any of the Notes are
outstanding: 

                          Section
10.1. Transactions with Affiliates. Except for the Material Project
Documents in effect on the date hereof, the Issuer will not enter into directly
or indirectly any transaction or group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate, except in the ordinary
course and pursuant to the reasonable requirements of the Issuer’s business and
upon fair and reasonable terms no less favorable to the Issuer than would be
obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate. The Issuer will not amend or waive any provision of a Material
Project Document to which an Affiliate of the Issuer is a party except with the
prior written consent of the Required Holders (which consent will not be
unreasonably withheld). 

                          Section
10.2. Merger, Consolidation. The Issuer will not consolidate or merge with
any other Person. 

                          Section
10.3. Line of Business. The Issuer will not engage in any business other
than the development, financing, construction, ownership, operation and
maintenance of the Project. 

                          Section
10.4. Terrorism Sanctions Regulations. The Issuer will not and will
not permit any Controlled Entity to (a) become a Blocked Person, (b) have any
investments in, or engage in any dealings or transactions with, any Blocked
Person if such investments, dealings or transactions would cause any holder of a
Note to be in violation of any laws or regulations that are applicable to such
holder or (c) engage in any activities that could subject such Person or any
holder of a Note to sanctions under CISADA or under any applicable law of any
state of the United States that imposes sanctions on Persons that do business
with Iran or any other country that is subject to an OFAC Sanctions Program.

                          Section
10.5. Liens. The Issuer will not directly or indirectly create, incur,
assume or permit to exist (upon the happening of a contingency or otherwise) any
Lien on the Collateral other than Permitted Liens. 

                          Section
10.6. Indebtedness. The Issuer will not incur or in any manner become or be
liable in respect of any Indebtedness, except (a) Indebtedness under the
Financing Documents, (b) trade accounts payable (other than for borrowed money)
in the ordinary course of the Issuer’s business which are not more than 90 days
past due, and (c) Indebtedness (including obligations in respect of Capital
Leases) incurred for general working capital purposes or for purposes of
acquiring equipment, material or supplies in the ordinary course of business,
provided that the principal amount of all such Indebtedness outstanding
at any one time and from time to time under this clause (c) shall not exceed
$250,000 in the aggregate. 

                          Section
10.7. Regulatory Standing. The Issuer will not take or cause to be taken any
action which could reasonably be expected to result in either (a) the Project
losing its QF status, or the Issuer ceasing to hold any of the exemptions from
regulation provided under 18 C.F.R. §§ 292.601(c) including the exception from
Sections 205 and 206 of the FPA set forth in §292.601(c)(1), 292.602(b) and
292.602(c), or would cause any disapproval, rejection, suspension, other action
adverse to the continued effectiveness of the PPA or the Interconnection
Agreement by the FERC or the Public Utilities Commission of Nevada, or (b) any
Secured Party or any “affiliate” (as that term is defined in PUHCA) of any
Secured Party, solely as a result of the Issuer’s or any of their Affiliates’
actions relating to the ownership, leasing or operation of the Project, the sale
of electricity therefrom or the entering into of any Financing Document or any
transaction contemplated thereby, becoming subject to, or not exempt from
regulation under, PUHCA or the FPA, other than any such regulation that may
result from the exercise by any Secured Party of its remedies under the
Financing Documents. 

                          Section
10.8. Loans, Advances, Investments and Contingent Liabilities. The Issuer
will not make or permit to remain outstanding any loan or advance to, or extend
credit to any Person, or own, purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or commit to do any of the foregoing, except Permitted Investments.

                         
Section 10.9. No Subsidiaries. The Issuer shall have no subsidiaries.

                          Section
10.10. Restricted Payments. The Issuer shall not, directly or indirectly,
make or declare any Distribution other than the Closing Date Distribution unless
the following conditions are met (the “Restricted Payment Conditions”):

           
(a)        there
does not exist and, after giving effect to the proposed Distribution, there will
not exist, a Default or an Event of Default; 

           
(b)        the Distribution
is to be made no sooner than 15 days and no later than 30 days following
delivery by the Issuer to the Collateral Agent and the holders of a DSCR Notice;

            (c)       
all reserve accounts created under the Depositary Agreement have been
fully funded or Acceptable Letters of Credit in the amounts required to be
funded in the reserve accounts have been delivered to the Depositary in
accordance with the terms of the Depositary Agreement; and 

           
(d)        the DSCR
Requirements are met. 

                          Section
10.11. Sale of Assets, Etc. The Issuer will not Transfer, or agree or
otherwise commit to Transfer, any of its assets, other than (a) sales of
capacity, ancillary services, power or energy pursuant to or in accordance with
the PPA, (b) sales of Permitted Investments for cash or other Permitted
Investments, and (c) obsolete or worn out equipment that is promptly replaced;
provided that, with respect to this clause (c), the Issuer may transfer
the Amor II plant with the prior written consent of the Required Holders
pursuant to a decommissioning contract in form and substance and on terms and
conditions satisfactory to the Required Holders in their sole discretion.

                          Section
10.12. Equity Capital. Except to the extent permitted by Section
10.10, the Issuer will not (either directly, or indirectly by the issuance
of rights or options for, or securities convertible into, such interests)
purchase, redeem or reduce its equity capital.

                          Section
10.13. Amendments to Constitutive Documents. The Issuer will not amend or
waive any provision of its Amended and Restated Limited Liability Company
Agreement dated September 26, 2013 or of any other constitutive documents
without the prior written consent of the Required Holders, except as may be
necessary to reflect any Transfer of any membership interest in the Issuer to
the extent such Transfer is permitted under the terms of this Agreement. 

                          Section
10.14. No Employees; No ERISA Plans. The Issuer will not (a) hire or become
the employer of any employees or (b) maintain or be a participating employer in
any Plan, or enter into any indemnity agreement or similar arrangement with, or
assume any liability or obligation with respect to, any ERISA Affiliate in
connection with any Plan maintained at any time by such ERISA Affiliate or in
connection with any Plan to which any ERISA Affiliate may at any time
contribute. 

                          Section
10.15. No Margin Stock. Anything herein contained to the contrary
notwithstanding, the Issuer will not make or authorize any investment in, or
otherwise purchase or carry, any margin stock.

                          Section
10.16. Reporting Practices. The Issuer will not make any change in reporting
practices, except as may be required or permitted by GAAP. 

                          Section
10.17. Material Project Documents. The Issuer will not enter into, amend,
modify, supplement, vary, waive, cancel, terminate, agree to terminate or agree
or purport to do any of the foregoing in relation to, any Material Project
Document, except that the Issuer may enter into additional well drilling
contracts with the prior written consent of the Required Holders. Promptly upon
its receipt thereof, the Issuer shall deliver to the Collateral Agent and the
holders copies of any proposed amendments to Material Project Documents. 

                          Section
10.18. Accounts. The Issuer will not maintain, establish or use any
deposit or securities accounts, other than (a) the accounts established under
the Depositary Agreement and (b) the Local Account, provided that, prior
to depositing any funds into such account, the Issuer, the Collateral Agent and
the local commercial bank shall have entered into a Local Account Control
Agreement. 

                          Section
10.19. Lease Obligations. Except for the Ground Lease and the
Geothermal Leases, the Issuer will not enter into, create or suffer to exist any
obligations for payment under any operating lease or agreement to lease (but
excluding any obligations under leases required to be classified as Capital
Leases to the extent such obligations would be permitted under Section
10.6(c) hereof). 

                          Section
10.20. Material Contracts. The Issuer will not execute, enter into or
otherwise be bound by any Material Contract, other than the Material Project
Documents in effect on the date hereof.

SECTION 11. EVENTS OF DEFAULT. 

An “Event of Default” shall exist if any of the
following conditions or events shall occur and be continuing: 

           
(a)        the Issuer
defaults in the payment of any principal or Make-Whole Amount, if any, on any
Note when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or 

           
(b)        the Issuer
defaults in the payment of (i) any interest on any Note or (ii) on any fees
payable under the Financing Documents, in each case for more than five Business
Days after the same becomes due and payable; or 

          
(c)        the Issuer
defaults in the performance of or compliance with any term contained in
Section 7.1(d) , Section 9.2, Section 9.3(b), (c), (d), (e) or
(f), Section 9.5 or Section 10; or 

          
(d)        the Issuer
defaults in the performance of or compliance with any term contained herein
(other than those referred to in another clause of this Section 11) or in
any other Financing Document or a Material Project Document (other than the PPA)
and such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining knowledge of such default and (ii) the Issuer
receiving written notice of such default from the Collateral Agent or holder of
a Note (any such written notice to be identified as a “notice of default” and to
refer specifically to this Section 11(d)) (or, if earlier, within any
applicable cure period provided in a Material Project Document); or 

           
(e)        the Issuer
defaults in the performance of or compliance with any term contained in the PPA
and such default is not remedied within any applicable cure period under the
PPA; or 

           
(f)        any
representation or warranty made in writing by or on behalf of the Issuer or
Holdings or by any officer of the Issuer or Holdings in this Agreement or any
other Financing Document or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or 

           
(g)        Any Financing
Document is declared by any Governmental Authority to be null and void or
otherwise unenforceable, or the Issuer or an Issuer Party claims that any Financing Document is null, void or
unenforceable or otherwise repudiates a Financing Document to which it is a
party; or 

           
(h)        (i) the
Issuer is in default (as principal or as guarantor or other surety) in the
payment of any principal of or premium or interest on any Indebtedness that is
outstanding in an aggregate amount of at least $250,000 beyond any period of
grace provided with respect thereto, or (ii) the Issuer is in default in the
performance of or compliance with any term of any evidence of any Indebtedness
in an aggregate outstanding principal amount of at least $250,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to declare
such Indebtedness to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests), (x) the Issuer has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled dates
of payment in an aggregate outstanding principal amount of at least $250,000, or
(y) one or more Persons have the right to require the Issuer to purchase or
repay such Indebtedness; or 

           
(i)        the Issuer or
Holdings (i) is generally not paying, or admits in writing its inability to pay,
its debts as they become due, (ii) files, or consents by answer or otherwise to
the filing against it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
takes limited liability company action for the purpose of any of the foregoing;
or 

           
(j)        a court or
Governmental Authority of competent jurisdiction enters an order appointing,
without consent by the Issuer or Holdings, as the case may be, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order
for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of the Issuer or Holdings or any such petition shall be filed
against the Issuer or Holdings and such petition shall not be dismissed within
60 days; or 

           
(k)        (i) the Kosmos
Lease or BLM Lease Number NVN-42707 or the Ground Lease is declared by any
Governmental Authority to be null and void or otherwise unenforceable, (ii) any
other Material Project Document is declared by any Governmental Authority to be
null and void or otherwise unenforceable; provided that, with respect to
any such Material Project Document other than the PPA, no Event of Default shall
be deemed to have occurred under this clause (k)(ii) if, within 60 days
following such event, the Issuer enters into a replacement
for such Material Project Document that has substantially similar or more
favorable terms to the Issuer than such Material Project Document, with an
experienced replacement counterparty whose credit rating equals or exceeds the
credit rating of the original Project Party as of the Closing Date, or (iii) the
Issuer claims that any Material Project Document is null, void or unenforceable
or otherwise repudiates any Material Project Document; or 

           
(l)        any
“Event of Default” or similar event occurs under any Material Project Document
as a result of (i) in the case of the PPA, a payment default of the Power
Purchaser, or (ii) in the case of any Material Project Document, any breach by
any Project Party that is a party thereto (other than a breach under the PPA
addressed in clause (i) above) which continues for more than 90 consecutive
days, unless, within 60 days, the Issuer enters into a replacement for such
Material Project Document that has substantially similar or more favorable terms
to the Issuer than such Material Project Document, with an experienced
replacement counterparty whose credit rating equals or exceeds the credit rating
of the original Project Party as of the Closing Date; or 

         
(m)        the Power
Purchaser or other Project Party (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes action for the
purpose of any of the foregoing; provided, however, that an Event of
Default shall not occur under this clause (m) with respect to any Project
Party (other than the Power Purchaser) until after the expiration of a period of
90 consecutive days; and, provided, further, that if, (x) with
respect to the Power Purchaser, within 60 days following such event, and (y)
with respect to any other Project Party, within 60 days following the expiration
of the 90-day period referenced above, the Issuer enters into a replacement
agreement (which shall be deemed a Material Project Document thereafter) that
has substantially similar terms or terms more favorable to the Issuer than the
agreement being replaced, with a counterparty whose credit rating and experience
equals or exceeds the credit rating and experience of the original Project Party
as of the Closing Date; or 

           
(n)        final,
non-appealable judgment or judgments for the payment of money aggregating in
excess of $250,000 are rendered against the Issuer, and (i) enforcement
proceedings are commenced with respect to such judgment or judgments, or (ii)
within 30 days after entry thereof, such judgment or judgments are not bonded,
discharged or stayed pending appeal; or 

           
(o)        (i) any Plan
fails to satisfy the minimum funding standards of ERISA or the Code for any plan
year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan has been or is reasonably expected to be
filed with the PBGC or the PBGC has instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC has notified the Issuer or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) the aggregate
“amount of unfunded benefit liabilities” (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of
ERISA, exceeds $250,000, (iv) the Issuer or any ERISA Affiliate has incurred or
is reasonably expected to incur any liability pursuant to Title I or IV of ERISA
or the penalty or excise tax provisions of the Code relating to employee benefit
plans, (v) the Issuer or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) the Issuer establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would increase
the liability of the Issuer thereunder; and any such event or events described
in clauses (i) through (vi) above, either individually or together with any
other such event or events, could reasonably be expected to have a Material
Adverse Effect; or 

           
(p)        the Issuer (i)
abandons the Project or (ii) suspends operation of the Project, except if such
suspension is due to (A) a default by the Operator under the O&M Agreement
which is remedied within 90 days, or (B) a Force Majeure (as defined in the PPA)
event that continues for less than 90 consecutive days; or 

           
(q)        any Lien granted
to the Collateral Agent pursuant to any of the Financing Documents is invalid,
void, unenforceable or unperfected or ceases to have first priority (subject to
Permitted Liens) or the Issuer or an Issuer Party commences any proceeding or
takes any other action to render any such Lien invalid, or to avoid any such
Lien or to render any such Lien unenforceable or unperfected or to challenge the
priority of such Lien; or 

           
(r)        (i) USG
Delaware and its Affiliates, collectively, cease to legally and beneficially own
and control, indirectly and directly, at least 51% of the outstanding membership
or other equity interests of the Issuer (measured by both economic interest and
voting power), or (ii) USG Idaho ceases to legally and beneficially own and
control, indirectly and directly, 100% of the outstanding membership or other
equity interests of Holdings (measured by both economic interest and voting
power), or (iii) Holdings ceases to legally and beneficially own and control,
indirectly and directly, 100% of the outstanding membership or other equity
interests of the Issuer (measured by both economic interest and voting power);
or 

           
(s)        (i) the Project
loses its QF status or the Issuer ceases to hold any of the exemptions from
regulation provided under 18 C.F.R. §§ 292.601(c) including the exemptions from
Sections 205 and 206 set forth in §262.601(c)(1), 292.602(b) and 292.602(c);
(ii) the Issuer suffers any regulatory disapproval, rejection, suspension, or
other action adverse to the continued effectiveness of the PPA or the
Interconnection Agreement or to the ability of the Issuer to (A) inject all of
the Project’s electric energy, capacity and ancillary services up to the point
of interconnection specified in the Interconnection Agreement or (B) satisfy all
of the Issuer’s electrical delivery obligations under the PPA; or (iii) the
Collateral Agent or any of the holders or any Affiliates thereof shall become
subject to or not exempt from regulation either by the FERC (under either of the FPA or PUHCA) or the Public
Utilities Commission of Nevada solely as a result of the execution, delivery or
performance of the Financing Documents, other than as a result of the exercise
of any remedies provided thereunder; or 

           
(t)        any of
Nevada Department of Conservation and Natural Resources, Division of Water
Resources Permit Number 66946, 68756, 69320, 79899 or 79900 or any Well Permit
is suspended, revoked or otherwise terminated, or expires, or any other Required
Approval is denied, suspended or revoked or expires, is held invalid or limited,
and is not replaced within 60 days; or 

           
(u)        any Cash Grant
Recapture Liability has been claimed against the Issuer or any of its Affiliates
pursuant to a written notice demanding payment issued by the U.S. Treasury
Department or any other applicable Governmental Authority unless (i) such Cash
Grant Recapture Liabilities are paid in full on or prior to the deadline for
payment set forth in such notice or demand, or (ii) (A) the Issuer or any
relevant Affiliate has commenced disputing in good faith the claim within the
time periods required for payment in such notice (and is thereafter diligently
and in good faith pursuing such dispute), and (B) adequate security, in form and
substance satisfactory to the Required Holders, in the full amount of such Cash
Grant Recapture Liability (as set forth in the demand notice) has been posted
for the benefit of the Secured Parties within the time periods required for
payment in such notice; or 

           
(v)        the Recapture
Indemnity Agreement ceases to be in full force and effect, either Sponsor or any
Person acting on behalf of either Sponsor shall contest in any manner the
validity, binding nature or enforceability of the Recapture Indemnity Agreement,
or the obligations of either Sponsor under the Recapture Indemnity Agreement are
not or cease to be legal, valid, binding and enforceable in accordance with the
terms of the Recapture Indemnity Agreement; or 

          
(w)        the Kosmos Lease
or any of the BLM Leases (other than BLM Lease Numbers NVN-75555 and NVN-75558)
or the Ground Lease terminates, expires or is canceled prior to the final
Maturity Date of the Notes; or 

           
(x)        the Project Party
that is a party to the Turbine Warranty fails to perform its warranty
obligations in accordance with the terms of the Turbine Warranty; or 

           
(y)        either Sponsor or
any of their respective Affiliates (i) develops or drills a production or
injection well within one-half mile of the location of any well located on
property leased by the Issuer under any Geothermal Lease (measured from the
closest point of such well to the downhole location of the proposed well to be
developed or drilled) or (ii) constructs a geothermal electric generation
facility on or adjacent to the Site, unless the Issuer first demonstrates to the
reasonable satisfaction of the Required Holder, in consultation with the
Geothermal Resource Engineer, that such well(s) or facility will not interfere
with, or impair the operation or production of, the Project.

As used in Section 11(n), the terms “employee benefit
plan” and “employee welfare benefit plan” shall have the respective
meanings assigned to such terms in section 3 of ERISA. 

SECTION 12. REMEDIES ON DEFAULT, ETC. 

                         
Section 12.1. Acceleration. 

            (a)       
If an Event of Default with respect to the Issuer described in Section
11(i) or (j) (other than an Event of Default described in clause (i)
of Section 11(i) or described in clause (vi) of Section 11(i) by
virtue of the fact that such clause encompasses clause (i) of Section
11(i)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable. 

            (b)        If
any other Event of Default has occurred and is continuing, any holder or holders
of more than 51% in principal amount of the Notes at the time outstanding may at
any time at its or their option, by notice or notices to the Issuer, declare all
the Notes then outstanding to be immediately due and payable. 

            (c)       
If any Event of Default described in Section 11(a) or (b)
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Issuer, declare all the Notes held by it or
them to be immediately due and payable. 

Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith
mature and the entire unpaid principal amount of such Notes, plus (x) all
accrued and unpaid interest thereon (including, but not limited to, interest
accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Issuer acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Issuer (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Issuer in the event that the
Notes are prepaid or are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such
circumstances. 

                          Section
12.2. Other Remedies. Without limiting the rights and remedies provided to
the holders under the other Financing Documents, if any Default or Event of
Default has occurred and is continuing, and irrespective of whether any Notes
have become or have been declared immediately due and payable under Section
12.1, the holder of any Note at the time outstanding may proceed to protect
and enforce the rights of such holder by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise. 

                          Section
12.3. Rescission. At any time after any Notes have been declared due and
payable pursuant to Section 12.1(b) or (c), the holders of not
less than 51% in principal amount of the Notes then outstanding, by written
notice to the Issuer, may rescind and annul any such declaration and its
consequences if (a) the Issuer has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes
that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) neither the Issuer nor any other
Person shall have paid any amounts which have become due solely by reason of
such declaration, (c) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or
decree has been entered for the payment of any monies due pursuant hereto or to
the Notes. No rescission and annulment under this Section 12.3 will
extend to or affect any subsequent Event of Default or Default or impair any
right consequent thereon. 

                          Section
12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Issuer under Section 15, the Issuer will pay to the
holder of each Note on demand such further amount as shall be sufficient to
cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation,
reasonable attorneys’ fees, expenses and disbursements. 

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES. 

                          Section
13.1. Registration of Notes. The Issuer shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Issuer shall not be affected by any notice or knowledge to the
contrary. The Issuer shall give to any holder of a Note that is an Institutional
Investor promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Notes. 

                          Section
13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the
Issuer at the address and to the attention of the designated officer (all as
specified in Section 18), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Issuer
shall execute and deliver, at the Issuer’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be shall be substantially in the form
of Exhibit 1 and shall be payable to any financial institution as
such holder may request. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid thereon. The Issuer may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$1,000,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $1,000,000. Any transferee, by its acceptance of a
Note registered in its name (or the name of its nominee), shall be deemed to
have made the representation set forth in Section 6.2. Notwithstanding
anything herein to the contrary, if any original Purchaser proposes to transfer
a Note to any Person (other than an Affiliate of such original Purchaser) such
that after giving effect to such transfer the original Purchasers would own less
that 50% of the aggregate principal amount of the Notes then outstanding, then,
unless a Default or an Event of Default has occurred and is continuing at such
time, such transfer shall require the Issuer's written consent (such consent not
to be unreasonably withheld conditioned or delayed). 

                          Section
13.3. Replacement of Notes. Upon receipt by the Issuer at the address and to
the attention of the designated officer (all as specified in Section 18)
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an Institutional Investor, notice from such Institutional Investor of
such ownership and such loss, theft, destruction or mutilation), and 

           
(a)        in the
case of loss, theft or destruction, of indemnity reasonably satisfactory to it
(provided that if the holder of such Note is, or is a nominee for, an
original Purchaser or another holder of a Note with a minimum net worth of at
least $100,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

           
 (b)        in
the case of mutilation, upon surrender and cancellation thereof, 

within ten Business Days thereafter, the Issuer at its own
expense shall execute and deliver, in lieu thereof, a new Note, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES. 

                          Section
14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of
JPMorgan Chase Bank, N.A. in such jurisdiction. The Issuer may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the Issuer
in such jurisdiction or the principal office of a bank or trust company in such
jurisdiction. 

                          Section
14.2. Home Office Payment. So long as any Purchaser or its nominee shall be
the holder of any Note, and notwithstanding anything contained in Section
14.1 or in such Note to the contrary, the Issuer will pay all sums becoming
due on such Note for principal, Make-Whole Amount, if any, interest and all
other amounts becoming due hereunder by the method and at the address specified
for such purpose below such Purchaser’s name in Schedule A, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Issuer in writing for such purpose,
without the presentation or surrender of such Note or the making of any notation
thereon, except that upon written request of the Issuer made concurrently with
or reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Issuer at its principal executive office or at the
place of payment most recently designated by the Issuer pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by a Purchaser
or its nominee, such Purchaser will, at its election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Issuer in exchange for a new Note or
Notes pursuant to Section 13.2. The Issuer will afford the benefits of
this Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by a Purchaser under this Agreement
and that has made the same agreement relating to such Note as the Purchasers
have made in this Section 14.2. 

SECTION 15. EXPENSES, INDEMNIFICATION, ETC. 

                          Section
15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Issuer will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel and, if reasonably
required by the Required Holders, local or other counsel) incurred by the
Purchasers and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in respect
of this Agreement or the other Financing Documents (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement or any
other Financing Document or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or any
other Financing Document, or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’ fees and other consultant’s
fees, incurred in connection with the insolvency or bankruptcy of the Issuer or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the other Financing Documents and (c) the costs and
expenses incurred in connection with the initial filing of this Agreement and
all related documents and financial information with the SVO, provided
that such costs and expenses under this clause (c) shall not exceed $3,500. In
addition, the Issuer will pay the reasonable fees and disbursements of the
Independent Engineer, the Insurance Consultant, the Geothermal Resource Engineer
and other consultants retained by the holders from time to time in connection
with this Agreement and the transactions contemplated hereby. The Issuer will
pay, and will save each Purchaser and each other holder of a Note harmless from,
all claims in respect of any fees, costs or expenses, if any, of brokers and
finders (other than those, if any, retained by a Purchaser or other holder in
connection with its purchase of the Notes). 

                          Section
15.2. Indemnification. The Issuer will pay, and will save each Purchaser and
any other holders of the Notes, the Collateral Agent, the Depositary and each of
their Affiliates and respective officers, directors, trustees, representatives,
employees, advisors and agents (collectively, the “Indemnified Parties”)
harmless from, all claims in respect of any fees, costs or expenses, if any, of
brokers and finders (other than those, if any, retained by a Purchaser or other
holder in connection with its purchase of the Notes) and any judgment,
liability, claim, order, decree, cost, fee, expense, loss, action or obligation
resulting from the consummation of the transactions contemplated hereby, including
the use of the proceeds of the Notes by the Issuer, and any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
claims, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against any Indemnified Party in
any way relating to or arising out of incurred in respect of the Project, this
Agreement, any other Financing Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the enforcement of any of the terms hereof or thereof or of any such other
documents, including any Environmental Claims, arising in connection with the
Release or presence of any Hazardous Material at the Project or the Site,
whether foreseeable or unforeseeable, including all costs of removal and
disposal of such Hazardous Material, all costs required by any Governmental
Authority or under any applicable law to be incurred in determining whether the
Project or the Site is in compliance, and causing the Project or the Site to be
in compliance, with all applicable requirements of law, all costs associated
with claims for damages to persons or property, and reasonable attorneys’ and
consultants’ fees and court costs (collectively, the “Indemnified
Losses”); except to the extent that any Indemnified Loss is finally
determined by a court of competent jurisdiction to be the direct result from the
gross negligence or willful misconduct of the party seeking indemnification.

                          Section
15.3. Survival. The obligations of the Issuer under this Section
15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement. 

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT. 

All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes, the purchase
or transfer by any Purchaser of any Note or portion thereof or interest therein
and the payment of any Note, and may be relied upon by any subsequent holder of
a Note, regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Issuer pursuant
to this Agreement shall be deemed representations and warranties of the Issuer
under this Agreement. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between each Purchaser and
the Issuer and supersede all prior agreements and understandings relating to the
subject matter hereof. 

SECTION 17. AMENDMENT AND WAIVER. 

                          Section
17.1. Requirements. This Agreement and the Notes may be amended, and
the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Issuer and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to any Purchaser
unless consented to by such Purchaser in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17
or 20. 

                         
Section 17.2. Solicitation of Holders of Notes. 

            (a)       
Solicitation. The Issuer will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of any of the other Financing Documents. The Issuer will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes. 

            (b)       
Payment. The Issuer will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security or provide other credit
support, to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof or of any of the other Financing Documents, unless
such remuneration is concurrently paid, or security is concurrently granted or
other credit support concurrently provided, on the same terms, ratably to each
holder of Notes then outstanding even if such holder did not consent to such
waiver or amendment. 

                          Section
17.3. Binding Effect, etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and
is binding upon them and upon each future holder of any Note and upon the Issuer
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Issuer
and the holder of any Note nor any delay in exercising any rights hereunder or
under any other Financing Document shall operate as a waiver of any rights of
any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented. 

                          Section
17.4. Notes Held by Issuer, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or any other
Financing Document, or have directed the taking of any action provided herein or
in any other Financing Document to be taken upon the direction of the holders of
a specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Issuer, any Issuer Party
or any of their respective Affiliates shall be deemed not to be outstanding.

SECTION 18. NOTICES. 

All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent: 

           
(A)        if to
any Purchaser or its nominee, to such Purchaser or nominee at the address
specified for such communications in Schedule A, or at such other address
as such Purchaser or nominee shall have specified to the Issuer in writing, 

           
(B)         if to any other
holder of any Note, to such holder at such address as such other holder shall
have specified to the Issuer in writing, and 

           
(C)        
if to the Issuer, to the Issuer at c/o U.S. Geothermal Inc., 1505
Tyrell Lane, Boise, Idaho 83706, Fax No. 208-424-1030, to the attention of
Dennis J. Gilles, or at such other address as the Issuer shall have specified to
the holder of each Note in writing. 

Notices under this Section 18 will be deemed given only
when actually received. 

SECTION 19. REPRODUCTION OF DOCUMENTS. 

This Agreement and all documents relating hereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Issuer agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit
the Issuer or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction. 

SECTION 20. CONFIDENTIAL INFORMATION. 

For the purposes of this Section 20, “Confidential
Information” means information delivered to any Purchaser by or on behalf of
the Issuer in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Issuer, provided that such
term does not include information that (a) was publicly known or otherwise known
to such Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Purchaser or any person acting on such Purchaser’s behalf, (c)
otherwise becomes known to such Purchaser other than through disclosure by the
Issuer or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that
such Purchaser may deliver or disclose Confidential Information to (i) its
directors, officers, employees, agents, attorneys, trustees and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by its Notes), (ii) its financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section
20, (iii) any other holder of any Note, (iv) any Institutional Investor to
which it sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security
of the Issuer (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section
20), (vi) any federal or state regulatory authority having jurisdiction over
such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to
information about such Purchaser’s investment portfolio, or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable to such
Purchaser, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under such Purchaser’s Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to
this Agreement. On reasonable request by the Issuer in connection with the
delivery to any holder of a Note of information required to be delivered to such
holder under this Agreement or requested by such holder (other than a holder
that is a party to this Agreement or its nominee), such holder will enter into
an agreement with the Issuer embodying the provisions of this Section 20. 

In the event that as a condition to receiving access to
information relating to the Issuer in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder
of a Note is required to agree to a confidentiality undertaking (whether through
IntraLinks, another secure website, a secure virtual workspace or otherwise)
which is different from this Section 20, this Section 20 shall not
be amended thereby and, as between such Purchaser or such holder and the Issuer,
this Section 20 shall supersede any such other confidentiality
undertaking. 

SECTION 21. SUBSTITUTION OF PURCHASER. 

Each Purchaser shall have the right to substitute any one of
its Affiliates as the purchaser of the Notes that it has agreed to purchase
hereunder, by written notice to the Issuer, which notice shall be signed by both
such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to
be bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section
6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in
this Section 21), shall be deemed to refer to such Affiliate in lieu of
such original Purchaser. In the event that such Affiliate is so substituted as a
Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Issuer of notice of such transfer, any reference to such Affiliate as a
“Purchaser” in this Agreement (other than in this Section 21), shall no
longer be deemed to refer to such Affiliate, but shall refer to such original
Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement. 

SECTION 22. MISCELLANEOUS. 

                          Section
22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not. 

                         
Section 22.2. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding (but without
limiting the requirement in Section 8.4 that the notice of any prepayment
specify a Business Day as the date fixed for such prepayment), any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day; provided that if the
maturity date of any Note is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional days elapsed in the computation of
interest payable on such next succeeding Business Day. 

                          Section
22.3. Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP. For purposes of determining compliance with the financial covenants
contained in this Agreement, any election by the Issuer to measure any financial
liability using fair value (as permitted by Accounting Standard Codification
Topic No. 825-10-25 – Fair Value Option or any similar accounting
standard) shall be disregarded and such determination shall be made as if such
election had not been made. 

                          Section
22.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

                          Section
22.5. Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person. 

For the avoidance of doubt, all Schedules and Exhibits attached
to this Agreement shall be deemed to be a part hereof. 

                          Section
22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. 

                          Section
22.7. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York, excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State. 

                         
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. 

            (a)       
The Issuer irrevocably submits to the non-exclusive jurisdiction of any
New York State or federal court sitting in the Borough of Manhattan, The City of
New York, over any suit, action or proceeding arising out of or relating to this
Agreement or the Notes. To the fullest extent permitted by applicable law, the
Issuer irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. 

            (b)       
The Issuer consents to process being served by or on behalf of any
holder of Notes in any suit, action or proceeding of the nature referred to in
Section 22.8(a) by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other
address of which such holder shall then have been notified pursuant to said
Section. The Issuer agrees that such service upon receipt (i) shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service. 

            (c)       
In addition to and notwithstanding the provisions of Section 22.8(b)
above, the Issuer hereby irrevocably appoints C T Corporation System as its
agent to receive on its behalf and its property service of copies of the summons
and complaint and any other process which may be served in any action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Issuer, in care of the process agent at 111 Eighth Avenue, New
York, NY 10011, and the Issuer hereby irrevocably authorizes and directs the process
agent to accept such service on its behalf. If for any reason the process agent
ceases to be available to act as process agent, the Issuer agrees to immediately
appoint a replacement process agent satisfactory to the Required Holders. Each
of the parties hereby waives any right to stay or dismiss any action or
proceeding under or in connection with any or all of this Agreement or any other
Financing Document brought before the foregoing courts on the basis of forum
non conveniens. 

            (d)       
Nothing in this Section 22.8 shall affect the right of any
holder of a Note to serve process in any manner permitted by law, or limit any
right that the holders of any of the Notes may have to bring proceedings against
the Issuer in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

            (e)       
The parties hereto hereby waive trial by jury in any action brought on or with
respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith. 

                         
Section 22.9. Transaction References. The Issuer agrees that
Prudential may (i) refer to its role in originating the purchase of the Notes
from the Issuer, as well as the identity of the Issuer and the aggregate
principal amount and issue date of the Notes, on its internet site or in
marketing materials, press releases, published “tombstone” announcements or any
other print or electronic medium and (ii) display the logo of the Issuer or the
Sponsor in conjunction with any such reference; provided, in the case of
each press release, that the release is subject to reasonable advance written
notice and consent of the Issuer, which may be withheld or conditioned in its
reasonable discretion. Neither the Issuer nor the Sponsor shall refer to
Prudential or the other Purchasers on an internet site or in marketing
materials, press releases, published “tombstone” announcements or any other
print or electronic medium, except with Prudential’s prior written consent,
which may be withheld in its sole discretion. 

* * * * * 

 

 

SCHEDULE A 

INFORMATION RELATING TO PURCHASERS USG Nevada LLC

6.75% Senior Secured Notes due December 31, 2037 

	  	  	Aggregate 	  
	  	  	Principal 	  
	  	  	Amount of Notes 	Note 
	  	  	to be Purchased 	Denomination(s)
    
	  	  	  	  
		THE PRUDENTIAL INSURANCE
      COMPANY OF AMERICA 	$21,897,775.00 	$6,528,887.50 
	  	  	  	$15,368,887.50 
	(1) 	All payments on account of Notes
      held by such purchaser shall be 	  	  
	  	made by wire transfer of
      immediately available funds for credit to: 	  	  
	  	  	  	  
	  	JPMorgan Chase Bank 	  	  
	  	New York, NY 	  	  
	  	ABA No.: 021-000-021 	  	  
	  	  	  	  
	  	Account Name: Prudential Managed
      Portfolio 	  	  
	  	Account No.: P86188 (please do
      not include spaces) (in the case 	  	  
	  	of payments on account of the
      Note originally issued in the 	  	  
	  	principal amount of
      $6,528,887.50) 	  	  
	  	  	  	  
	  	Account Name: Privest Plus 	  	  
	  	Account No.: P86288 (please do
      not include spaces) (in the case 	  	  
	  	of payments on account of the
      Note originally issued in the 	  	  
	  	principal amount of
      $15,368,887.50) 	  	  
	  	  	  	  
	  	Each such wire transfer shall set
      forth the name of the Company, a 	  	  
	  	reference to "6.75% Senior
      Secured Notes due December 31, 	  	  
	  	2037, Security No. INV11681, PPN
      90363* AA0" and the due 	  	  
	  	date and application (as among
      principal, interest and Make- 	  	  
	  	Whole Amount) of the payment
      being made. 	  	  
	  	  	  	  
	(2) 	Address for all notices relating
      to payments: 	  	  
	  	  	  	  
	  	The Prudential Insurance Company
      of America 	  	  
	  	c/o Investment Operations Group
    	  	  
	  	Gateway Center Two, 10th Floor
	  	  
	  	100 Mulberry Street 	  	  
	  	Newark, NJ 07102-4077 	  	  
	  	Attention: Manager, Billings and
      Collections 	  	  
	  	  	  	  
	(3) 	Address for all other
      communications and notices: 	  	  
	  	  	  	  
	  	The Prudential Insurance Company
      of America 	  	  
	  	c/o Prudential Capital Group 	  	  
	  	2200 Ross Avenue, Suite 4300 	  	  
	  	Dallas, TX 75201 	  	  
	  	Attention: Managing Director,
      Energy Finance Group - Power 	  	  

Schedule A - 1 

	(4) 	
      Recipient of telephonic prepayment notices:

	 	 
		
      Manager, Trade Management Group 
Telephone: (973)
      367-3141 
Facsimile:   (888) 889-3832

	 	 
	(5) 	
      Address for Delivery of Notes:

	 	 
		
      Send physical security by nationwide overnight delivery
      service to:

	 	 
		
      Prudential Capital Group 
2200 Ross Avenue, Suite 4300
      
Dallas, TX 75201 
Attention: Jaya McClure 
Telephone: (214)
      720-6207

	 	 
	(6) 	
      Tax Identification No.:
22-1211670

Schedule A - 2 

	  	  	Aggregate 	  
	  	  	Principal 	  
	  	  	Amount of Notes 	Note 
	  	  	to be Purchased 	Denomination(s)
    
	  	  	  	  
	  	PRUCO LIFE INSURANCE
      COMPANY 	$3,600,000.00 	$3,600,000.00 
	  	  	  	  
	(1) 	All payments on account of Notes
      held by such purchaser shall be 	  	  
	  	made by wire transfer of
      immediately available funds for credit to: 	  	  
	  	  	  	  
	  	JPMorgan Chase Bank 	  	  
	  	New York, NY 	  	  
	  	ABA No.: 021-000-021 	  	  
	  	Account Name: Pruco Life Private
      Placement 	  	  
	  	Account No.: P86192 (please do
      not include spaces) 	  	  
	  	  	  	  
	  	Each such wire transfer shall set
      forth the name of the Company, a 	  	  
	  	reference to "6.75% Senior
      Secured Notes due December 31, 	  	  
	  	2037, Security No. INV11681, PPN
      90363* AA0", and the due 	  	  
	  	date and application (as among
      principal, interest and Make- 	  	  
	  	Whole Amount) of the payment
      being made. 	  	  
	  	  	  	  
	(2) 	Address for all notices relating
      to payments: 	  	  
	  	  	  	  
	  	Pruco Life Insurance Company 	  	  
	  	c/o The Prudential Insurance
      Company of America 	  	  
	  	c/o Investment Operations Group
    	  	  
	  	Gateway Center Two, 10th Floor
	  	  
	  	100 Mulberry Street 	  	  
	  	Newark, NJ 07102-4077 	  	  
	  	Attention: Manager, Billings and
      Collections 	  	  
	  	  	  	  
	(3) 	Address for all other
      communications and notices: 	  	  
	  	  	  	  
	  	Pruco Life Insurance Company 	  	  
	  	c/o Prudential Capital Group 	  	  
	  	2200 Ross Avenue, Suite 4300 	  	  
	  	Dallas, TX 75201 	  	  
	  	Attention: Managing Director,
      Energy Finance Group - Power 	  	  
	  	  	  	  
	(4) 	Recipient of telephonic
      prepayment notices: 	  	  
	  	  	  	  
	  	Manager, Trade Management Group
    	  	  
	  	Telephone: (973) 367-3141 	  	  
	  	Facsimile: (888) 889-3832 	  	  

Schedule A - 3 

	(5) 	
      Address for Delivery of Notes:

	 	 
		
      Send physical security by nationwide overnight delivery
      service to:

	 	 
		
      Prudential Capital Group 
2200 Ross Avenue, Suite 4300
      
Dallas, TX 75201 
Attention: Jaya McClure 
Telephone: (214)
      720-6207

	 	 
	(6) 	
      Tax Identification No.:
22-1944557

Schedule A - 4 

	  	  	Aggregate 	  
	  	  	Principal 	  
	  	  	Amount of Notes 	Note 
	  	  	to be Purchased 	Denomination(s) 
	  	  	  	  
		PRUDENTIAL ARIZONA REINSURANCE CAPTIVE
      COMPANY 	$3,000,000.00 	$3,000,000.00 
	  	  	  	  
	(1) 	All payments on account of Notes held by such
      purchaser shall be 	  	  
	  	made by wire transfer of immediately available
      funds for credit to: 	  	  
	  	  	  	  
	  	JPMorgan Chase Bank 	  	  
	  	New York, NY 	  	  
	  	ABA No.: 021-000-021 	  	  
	  	Account Name: PARCCPLAZTrust1 	  	  
	  	Account No.: P30794 (please do not include
      spaces) 	  	  
	  	  	  	  
	  	Each such wire transfer shall set forth the
      name of the Company, a 	  	  
	  	reference to "6.75% Senior Secured Notes due
      December 31, 	  	  
	  	2037, Security No. INV11681, PPN 90363* AA0",
      and the due 	  	  
	  	date and application (as among principal,
      interest and Make- 	  	  
	  	Whole Amount) of the payment being made. 	  	  
	  	  	  	  
	(2) 	Address for all notices relating to payments:
    	  	  
	  	  	  	  
	  	Prudential Arizona Reinsurance Captive Company
    	  	  
	  	c/o The Prudential Insurance Company of America
    	  	  
	  	c/o Investment Operations Group 	  	  
	  	Gateway Center Two, 10th Floor 	  	  
	  	100 Mulberry Street 	  	  
	  	Newark, NJ 07102-4077 	  	  
	  	Attention: Manager, Billings and Collections
	  	  
	  	  	  	  
	(3) 	Address for all other communications and
      notices: 	  	  
	  	  	  	  
	  	Prudential Arizona Reinsurance Captive Company
    	  	  
	  	c/o Prudential Capital Group 	  	  
	  	2200 Ross Avenue, Suite 4300 	  	  
	  	Dallas, TX 75201 	  	  
	  	Attention: Managing Director, Energy Finance
      Group - Power 	  	  
	  	  	  	  
	(4) 	Recipient of telephonic prepayment notices: 	  	  
	  	  	  	  
	  	Manager, Trade Management Group 	  	  
	  	Telephone: (973) 367-3141 	  	  
	  	Facsimile: (888) 889-3832 	  	  

Schedule A - 5 

	(5) 	
      Address for Delivery of Notes:

	 	 
		
      Send physical security by nationwide overnight delivery
      service to:

	 	 
		
      Prudential Capital Group 
2200 Ross Avenue, Suite 4300
      
Dallas, TX 75201 
Attention: Jaya McClure 
Telephone: (214)
      720-6207

	 	 
	(6) 	
      Tax Identification No.:
33-1095301

Schedule A - 6 

	  	 	Aggregate 	  
	  	 	Principal 	  
	  	 	Amount of Notes 	Note 
	  	 	to be Purchased 	Denomination(s)
    
	  	 	  	  
		PRUDENTIAL RETIREMENT
      INSURANCE AND ANNUITY COMPANY 	$2,240,000.00 	$2,240,000.00 
	  	 	  	  
	(1) 	All payments on account of Notes
      held by such purchaser shall be 	  	  
	  	made by wire transfer of
      immediately available funds for credit to: 	  	  
	  	 	  	  
	  	JP Morgan Chase Bank 	  	  
	  	New York, NY 	  	  
	  	ABA No. 021000021 	  	  
	  	Account Name: PRIAC - SA -
      Principal Preservation - Privates 	  	  
	  	Account No. P86345 (please do not
      include spaces) 	  	  
	  	 	  	  
	  	Each such wire transfer shall set
      forth the name of the Company, a 	  	  
	  	reference to "6.75% Senior
      Secured Notes due December 31, 	  	  
	  	2037, Security No. INV11681, PPN
      90363* AA0" and the due 	  	  
	  	date and application (as among
      principal, interest and Make- 	  	  
	  	Whole Amount) of the payment
      being made. 	  	  
	  	 	  	  
	(2) 	Address for all notices relating
      to payments: 	  	  
	  	 	  	  
	  	Prudential Retirement Insurance
      and Annuity Company 	  	  
	  	c/o Prudential Investment
      Management, Inc. 	  	  
	  	Private Placement Trade
      Management 	  	  
	  	PRIAC Administration 	  	  
	  	Gateway Center Four, 7th Floor
	  	  
	  	100 Mulberry Street 	  	  
	  	Newark, NJ 07102 	  	  
	  	Telephone: (973) 802-8107 	  	  
	  	Facsimile: (888) 889-3832 	  	  
	  	 	  	  
	(3) 	Address for all other
      communications and notices: 	  	  
	  	 	  	  
	  	Prudential Retirement Insurance
      and Annuity Company 	  	  
	  	c/o Prudential Capital Group 	  	  
	  	2200 Ross Avenue, Suite 4300 	  	  
	  	Dallas, TX 75201 	  	  
	  	Attention: Managing Director,
      Energy Finance Group - Power 	  	  
	  	 	  	  
	(4) 	Address for Delivery of Notes:
	  	  
	  	 	  	  
	  	Send physical security by
      nationwide overnight delivery service 	  	  
	  	to: 	  	  
	  	 	  	  
	  	Prudential Capital Group 	  	  
	  	2200 Ross Avenue, Suite 4300 	  	  
	  	Dallas, TX 75201 	  	  
	  	Attention: Jaya McClure 	  	  
	  	Telephone: (214) 720-6207 	  	  
	  	 	  	  
	(5) 	Tax Identification No.:
      06-1050034 	  	  

Schedule A - 7 

SCHEDULE B 

DEFINED TERMS 

            As
used herein, the following terms have the respective meanings set forth below or
set forth in the Section hereof following such term: “Acceptable Letter of
Credit” is defined in the Depositary Agreement.

            “Affiliate”
means, at any time, and with respect to any Person, any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, such first Person, and, with
respect to the Issuer, shall include any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Issuer or any Person of which the Issuer beneficially owns or holds, in
the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to an
Affiliate of the Issuer.

            “Agreement”
means this Agreement, including all Schedules attached to this Agreement, as it
may be amended, restated, supplemented or otherwise modified from time to time.

           
“Amortization Schedule” is defined in Section 8.1(a) . 

           
“Annual Geothermal Resource Report” is defined in Section 9.12(b)
. 

           
“Annual Supply Amount” is defined in the PPA. 

           
“Anti-Money Laundering Laws” is defined in Section 5.16(c) . 

            “Approvals”
means any and all approvals, permits, permissions, licenses, authorizations,
consents, certifications, actions, orders, waivers, exemptions, variances,
franchises, filings, declarations, rulings, registrations, applications and
notices to, from or issued by any Person. 

            
“Approved Accountant” is defined in Section 7.1(b) . 

            “Approved
Restoration Plan” means a plan for Restoration Work that is submitted to and
approved by the Independent Engineer, no more than 90 days after the related
Loss that provides for the Restoration of the Project and includes a scope of
the work to be performed, conditions for the disbursement of any Loss Proceeds
and other amounts to be expended in connection with the implementation of such
plan, a completion test to be administered or observed by the Independent
Engineer upon completion of the Restoration Work and, a date specified for the
completion of such Restoration Work (the “Restoration Date Certain”) by
which the Independent Engineer shall certify successful completion of such
completion test and that is accompanied by (a) a certificate of the Independent
Engineer, if any, certifying that in its professional judgment (i) such plan is reasonable and
technically feasible and is reasonably expected to restore the Project to (A) at
least as good condition or state of repair as it was in prior to such Loss or
(B) its original specifications, and (ii) after taking into consideration the
Loss Proceeds with respect thereto and any business interruption insurance
(together with all other proceeds reasonably expected to be available for the
Restoration of the Project) there will be adequate cash flow during the
Restoration period to Restore the Project and to pay all ongoing obligations as
they become due, and such Restoration will not have a Material Adverse Effect on
the Issuer’s ability to perform its obligations under any of the Financing
Documents; and (b) a certificate of the Issuer certifying that the Restoration
of the Project in accordance with the plan or the operation of the Project
following such Restoration will not violate any terms of the Financing
Documents, any Required Approval or applicable law. 

Schedule B - 1 

           
“Assignments” is defined in Section 4.14(d) . 

            “Base
Case Projections” means the Final Base Case Projections attached as
Schedule 4.22 to this Agreement.

            “BLM
Leases” means each of the following licenses, land leases and leases for
geothermal resources and grants of rights-of-way issued by the United States
Bureau of Land Management to the Issuer on land located in Washoe County,
Nevada: BLM serial numbers NVN-42707, NVN-43284, NVN-47395, NVN-49240,
NVN-57441, NVN-57909, NVN-63004, NVN-63006, NVN-63007, NVN-75557, NVN-47169,
NVN-75555 and NVN-75558. 

           
“BLM Letter” is defined in Section 4.14(b) . 

           
“Blocked Person” is defined in Section 5.16(a) . 

            “Business
Day” means (a) for the purposes of Section 8.6 only, any day other
than a Saturday, a Sunday or a day on which commercial banks in New York City
are required or authorized to be closed, and (b) for the purposes of any other
provision of this Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York are required or authorized to be
closed. 

            “Capital
Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP. 

            “Cash
Grant” means the cash grant in lieu of electricity production credits under
Section 45 of the Code and energy credits under Section 48 of the Code from the
U.S. Department of the Treasury under Section 1603 of the American Recovery and
Reinvestment Act of 2009, or any successor or replacement law or regulation,
with respect to the Issuer’s investment in the Project. 

            “Cash
Grant Application” means an "Application for Section 1603: Payments for
Specified Renewable Energy Projects in Lieu of Tax Credits" filed by the Issuer,
as an applicant for the Cash Grant with respect to the Project. 

Schedule B - 2 

            “Cash
Grant Recapture Liability” means any loss or liability to the Issuer
resulting, directly or indirectly, from all or any portion of any Cash Grant
being required to be repaid to the U.S. Treasury Department. 

            “CISADA”
means the United States Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2010. 

           
“Closing” is defined in Section 3. 

           
“Closing Date” means the date upon which the Closing occurs. 

            “Closing
Date Distribution” means a distribution in the amount of $2,558,321.15 made
to the Sponsor on the Closing Date. 

            “Closing
Date Permitted Liens” means (a) Permitted Liens in respect of taxes not yet
due that by operation of law are prior in right, (b) Liens in respect of Capital
Lease obligations that constitute Permitted Liens pursuant to clause (vii) of
the definition of “Permitted Liens” and (c) Permitted Liens set forth on
Schedule B to the Title Policy delivered at Closing. 

            “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
the rules and regulations promulgated thereunder from time to time. 

            “Collateral”
means all of the Issuer’s right, title and interest in and to its real and
personal property, including without limitation, the Project, the Site, the
Geothermal Resource, the Geothermal Leases, the Well Permits and the Water
Rights, and the limited liability company membership interests and any other
equity interests in the Issuer. 

           
“Collateral Agency Agreement” is defined in Section
4.12(b) . 

            “Collateral
Agent” means Deutsche Bank Trust Company Americas, a New York banking
corporation, acting in its capacity as collateral agent for itself and the other
Secured Parties under the Financing Documents, or its successor in such capacity
appointed pursuant to the terms of the Collateral Agency Agreement. 

           
“Confidential Information” is defined in Section 20. 

            “Consents”
means the consents listed on Schedule 4.11(b) and any additional
consent delivered to Collateral Agent. 

            “Contractual
Obligation” means, with respect to any Person, any provision of any
document or undertaking (other than a Financing Document) to which such Person
is a party or by which it or any of its property is bound or to which any of its
property is subject. 

            “Controlled
Entity” means any of the subsidiaries of the Issuer and any of their or the
Issuer’s respective Controlled Affiliates. As used in this definition, “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. 

Schedule B - 3 

            “CPI
Adjustment” means, at any time, with respect to the most recent Operating
Budget previously approved by the Required Holders and the Independent Engineer,
an increase in each applicable line item of such Operating Budget by a
percentage of such line item equal to the percentage increase in the Consumer
Price Index from the last published Consumer Price Index prior to the approval
of such Operating Budget in accordance with Section 9.12(d) hereof to the
most recently published Consumer Price Index at such time. For purposes hereof,
“Consumer Price Index” shall mean the Consumer Price Index
for all Urban Consumers, Northeast Region, as published by the United States
Department of Labor, Bureau of Labor Statistics, such successor index as may be
published by the United States Government, or such substitute index as may be
mutually agreed to by the Issuer and the Required Holders.

            “Debt
Service” means, for any period, all payments of principal, interest, fees,
expenses or other charges, including Make Whole Amounts, due and payable by the
Issuer in respect of all Obligations in such period. 

            “Debt
Service Coverage Ratio” means, for any applicable period, the ratio
of (i) Operating Cash Flow Available for Debt Service for such period to (ii)
Debt Service for such period. 

           
“Debt Service Reserve Account” is defined in the
Depositary Agreement. 

           
“Debt Service Reserve Letter of Credit” is defined in the
Depositary Agreement. 

            “Deed of Trust” is defined in Section 4.12(c)
.

            “Default”
means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default. 

            “Default
Rate” means that rate of interest per annum from time to time equal to the
greater of (i) 8.75% per annum, and (ii) 2% over the rate of interest publicly
announced by JPMorgan Chase Bank, N.A. from time to time in New York as its
“base” or “prime” rate. 

            “Depositary”
means Deutsche Bank Trust Company Americas, a New York banking corporation,
in its capacity as Depositary under the Depositary Agreement, or its successor
in such capacity appointed pursuant to the terms of the Depositary Agreement.

           
“Depositary Agreement” is defined in Section 4.12(a)
. 

            “Disclosure Documents” is defined in Section 5.3. 

            “Distribution”
means a ny (i) distribution of any ornature kind, either directly or
indirectly, to a member or other equity holder of the Issuer, including any
dividend or distribution in cash or property of any kind; a purchase,
redemption, reduction, return or any other payment of capital; or any repayment
or reduction of Indebtedness owing to an Issuer Party or any Affiliate of an
Issuer Party; (ii) loans or other payments to an Issuer Party or any Affiliate
of an Issuer Party; and (iii) payment for or on behalf of an Issuer Party or any
Affiliate of an Issuer Party by way of guaranty, indemnity or otherwise
including in connection with any Indebtedness; but shall not include any payments made to
Operator pursuant to Section 6.1 and 6.2 of the O&M Agreement. 

Schedule B - 4 

           
“DSCR Notice” is defined in Section 9.13. 

            “DSCR
Requirements” means, as of any Payment Date, (i) the Debt Service Coverage
Ratio for the four consecutive quarters ending on such Payment Date and (ii) the
Projected Debt Service Coverage Ratio for the four consecutive quarters
immediately following such Payment Date, equals or exceeds 1.20:1.00. 

            “Environmental
Claim” means any and all administrative, regulatory or judicial
actions, suits, demands, decrees, claims, liens, judgments, warning notices,
notices of noncompliance or violation, investigations, proceedings, removal or
remedial actions or orders, or damages (foreseeable and unforeseeable, including
consequential and punitive damages), penalties, fees, out-of-pocket costs,
expenses, disbursements, attorneys’ or consultants’ fees, relating in any way to
any Environmental Law or any Required Approval issued under any such
Environmental Law (hereafter “Environmental Proceedings”), including (a)
any and all Environmental Proceedings by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all
Environmental Proceedings by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Material or arising from alleged injury or threat of injury to health,
safety or the environment. 

            “Environmental
Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to Hazardous Materials. 

            “EPC
Contract” means the Engineering, Procurement and Construction Contract,
dated August 27, 2010, between the Issuer and the EPC Contractor. 

            “EPC
Contractor” means SAIC Constructors LLC, as successor to Benham
Constructors, LLC, an Oklahoma limited liability company. 

            “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time
in effect. 

            “ERISA
Affiliate” means any trade or business (whether or not incorporated) that is
treated as a single employer together with the Issuer under section 414 of the
Code. 

           
“Event of Default” is defined in Section 11. 

            “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time. 

Schedule B - 5 

            “FERC”
means the Federal Energy Regulatory Commission, or any successor agency to its
duties and responsibilities. 

            “Financing
Documents” means, collectively, this Agreement, the Notes, the Security
Documents, the Collateral Agency Agreement, and any other documents, agreements
or instruments entered into in connection with any of the foregoing. 

            “FPA”
means the Federal Power Act, 16 U.S.C. §§791 et seq., as amended, and the
regulations of the FERC thereunder. 

            “GAAP”
means generally accepted accounting principles as in effect from time to time in
the United States of America. 

           
“Geothermal Leases” means (a) the Kosmos Lease and (b) the BLM
Leases.

            “Geothermal
Resource” means the electricity generating capacity of the geothermal
reservoirs subject to the Geothermal Leases and available for use by the
Project.

            “Geothermal
Resource Engineer” means Geothermal Science, Inc., a California
corporation. 

           
“Governmental Authority” means 

           
(a)        the
government of: 

            (i)       
the United States of America or any State or other political
subdivision thereof, or 

           
(ii)        any other
jurisdiction in which the Issuer conducts all or any part of its business, or
which asserts jurisdiction over any properties of the Issuer, or 

            
(b)        any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, any such government. 

            “Ground
Lease” means the Office and Land Lease Agreement, dated August 27,
2010, by and between USG Idaho, as lessor, and the Issuer, as lessee, as amended
by First Amendment to Office and Land Lease Agreement, dated as of the date
hereof. 

           “Guaranty”
means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person: 

            
(a)        to
purchase such indebtedness or obligation or any property constituting security
therefor; 

Schedule B - 6 

            (b)       
to advance or supply funds (i) for the purchase or payment of such indebtedness
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such indebtedness
or obligation; 

           
(c)        to lease
properties or to purchase properties or services primarily for the purpose of
assuring the owner of such indebtedness or obligation of the ability of any
other Person to make payment of the indebtedness or obligation; or 

            
(d)        otherwise to
assure the owner of such indebtedness or obligation against loss in respect
thereof. 

In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other obligations that are
the subject of such Guaranty shall be assumed to be direct obligations of such
obligor. 

            “Hazardous
Materials” means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which
may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances. 

            “holder”
means, with respect to any Note the Person in whose name such Note is registered
in the register maintained by the Issuer pursuant to Section 13.1,
provided, however, that if such Person is a nominee, then for the
purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this
Schedule B, “holder” shall mean the beneficial owner of such Note whose
name and address appears in such register.

            “Holdings”
means Nevada USG Holdings, LLC, a Delaware limited liability company. 

           
“Holdings Loan Agreement” means the Loan Agreement, dated as of
April 30, 2013, between Holdings and SAIC Constructors, LLC, as amended by 1st
Amendment to Loan Agreement dated as of September 24, 2013.

           
“Indebtedness” with respect to any Person means, at any time,
without duplication, 

           
(a)        its
liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock; 

           
(b)        its liabilities
for the deferred purchase price of property acquired by such Person (excluding
accounts payable arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property); 

Schedule B - 7 

            (c)       
(i) all liabilities appearing on its balance sheet in accordance with GAAP in
respect of Capital Leases and (ii) all liabilities which would appear on its
balance sheet in accordance with GAAP in respect of Synthetic Leases assuming
such Synthetic Leases were accounted for as Capital Leases; 

           
(d)        all
liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable
for such liabilities); 

           
(e)        all its
liabilities in respect of letters of credit or instruments serving a similar
function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money); 

           
(f)        the aggregate
Swap Termination Value of all Swap Contracts of such Person; and 

            
(g)        any Guaranty of
such Person with respect to liabilities of a type described in any of clauses
(a) through (f) hereof. 

Indebtedness of any Person shall include all obligations of
such Person of the character described in clauses (a) through (g) to the extent
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is deemed to be extinguished under GAAP.

            “Independent
Engineer” means Sigma Energy Solutions Inc., or any successor
independent engineering firm appointed by the holders. 

           
“Indemnified Losses” is defined in Section 15.2. 

           
“Indemnified Parties” is defined in Section 15.2. 

           
“INHAM Exemption” is defined in Section 6.2(e) . 

            “Institutional
Investor” means (a) any Purchaser of a Note, (b) any holder of a Note
holding (together with one or more of its affiliates) more than 5% of the
aggregate principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note. 

           
“Insurance Consultant” means Moore-McNeil, LLC. 

            “Insurance
Proceeds” means all amounts and proceeds (including instruments) in respect
of any Loss payable under any insurance policy maintained by or on behalf of the
Issuer. 

            “Interconnection
Agreement” means the Small Generator Interconnection Agreement, dated as of
December 28, 2010, by and between the Issuer and NV Energy, Inc. 

           
“Issuer” is defined in the introductory paragraph of this
Agreement. 

Schedule B - 8 

           
“Issuer Party” means Holdings, the Operator and the Sponsor. 

           
“Kosmos Estoppel” is defined in Section 4.14(d) . 

            “Kosmos
Lease” means the Geothermal Lease dated as of October 14, 1987
between The Kosmos Company, as lessor, and Michael B. Stewart, as lessee,
recorded October 16, 1987 in Book 2633, Page 282, as Document No. 1200497 of
Official Records, as assigned to San Emidio Resources, Inc. by that certain
Assignment of Lease dated May 26, 1992 and recorded as Document No. 1583278 of
Official Records, as further assigned to Empire Farms, a Nevada Partnership, by
that certain Assignment of Lease dated September 18, 1995 and recorded October
13, 1995 as Document No. 1933483 of Official Records, and as further assigned to
Empire Energy, LLC, a Nevada limited liability company, by that certain
Assignment and Assumption Agreement dated November 24, 1999, as evidenced by
that certain Memorandum of Assignment recorded May 11, 2000 as Document No.
2446152 of Official Records, and as further assigned to Empire Geothermal Power,
LLC by that certain Assignment of Geothermal Project Rights and Leasehold
Estates dated August 31, 2003, and recorded on October 3, 2003 as Document No.
2934363 of Official Records, and as further assigned to Issuer by that certain
Assignment and Acceptance of Assignment of Kosmos Geothermal Lease dated April
2008 and recorded on April 30, 2008 as Document No. 3645581 of Official Records,
as amended by that certain First Amendment to Geothermal Lease dated March 15,
2008 for reference purposes and that certain Second Amendment to Geothermal
Lease dated as of May 5, 2007 for reference purposes. 

            “Lien”
means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with respect to any
property or asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements). 

            “Local
Account” means the operating deposit account of the Issuer maintained
at a local commercial bank reasonably acceptable to the Required Holders and
which is subject to the Local Bank Control Agreement. 

            “Local
Bank Control Agreement” means a deposit account control agreement with
respect to the Local Account, by and among the Issuer, the Collateral Agent and
the financial institution maintaining such Local Account, in form and substance
satisfactory to the Collateral Agent. 

            “Loss”
means any loss, theft, destruction, damage, casualty, title defect or
failure, zoning change, taking, condemnation, seizure, confiscation or
requisition of or with respect to the Project or any part thereof. 

            “Loss
Proceeds” means the aggregate amount of all Insurance Proceeds (including,
without limitation, title insurance proceeds), other than proceeds received
under business interruption insurance, and any other proceeds paid to, or for
the benefit of, the Issuer in connection with any Loss. 

           
“Maintenance Reserve Account” is defined in the
Depositary Agreement. 

Schedule B - 9 

          
“Maintenance Reserve Letter of Credit” is defined in the Depositary
Agreement. 

            “Major
Loss” means any actual or constructive total loss of the Project, a
condemnation or taking of a material portion of the Project or the Site, or any
other Loss that, in the reasonable judgment of the Required Holders and the
Independent Engineer, makes restoration or continued operation of the Project
uneconomical or unfeasible.

           
“Make-Up Well Cost” is defined in Section 9.12(b) . 

           
“Make-Up Well Drill Date” is defined in Section 9.12(b) . 

           
“Make-up Well Reserve Account” is defined in the Depositary Agreement.

            “Make-Whole Amount” is defined in Section 8.6. 

            “Material”
means material in relation to the business, operations, affairs, financial
condition, assets, properties, or prospects of the Issuer. 

            “Material
Adverse Effect” means a material adverse effect on (i) the business,
assets, liabilities, operations, prospects or condition, financial or otherwise,
of the Issuer or the Project, (ii) the Issuer’s ability to perform any of its
obligations under the Notes or the other Financing Documents, (iii) the Issuer’s
ability to perform its obligations under any Material Project Document, (iv) the
rights or remedies of the Collateral Agent or any holder of the Notes under any
Financing Document, or (v) the validity or enforceability of the Notes or the
other Financing Documents or the validity or priority of the Collateral Agent’s
Liens with respect to the Collateral.

            “Material
Contract” means (i) any energy purchase or sale agreement entered into after
the Closing Date, (ii) any other Contractual Obligation of the Issuer that is
material to development, financing, construction, operation or maintenance of
the Project or (iii) any Contractual Obligation pursuant to which the aggregate
payments to be made by the Issuer or the aggregate liabilities to be incurred by
the Issuer thereunder exceed $250,000 in any calendar year or $500,000 during
the term thereof. 

            “Material
Project Document” means the PPA, the Ground Lease, the Geothermal
Leases, the Interconnection Agreement, the EPC Contract, the O&M Agreement,
the Turbine Warranty, Recapture Indemnity Agreement, any other documents listed
on Schedule 5.12, and any agreement that replaces any of the
foregoing.

           
“Maturity Date” means December 31, 2037. 

            “Minimum
Debt Service Reserve Requirement” is defined in the Depositary
Agreement. 

            “Minimum
Maintenance Reserve Requirement” is defined in the Depositary
Agreement. 

           
“Moody’s” means Moody’s Investors Service, Inc., or any successor
entity.

Schedule B - 10 

            “Multiemployer
Plan” means any “employee benefit plan” (as defined in section 3(3) of
ERISA) to which contributions are or, within the preceding five years, have been
made or required to be made, by the Issuer or any ERISA Affiliate, or with
respect to which the Issuer or any ERISA Affiliate may have any liability and
that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of
ERISA). 

            “NAIC”
means the National Association of Insurance Commissioners or any successor
thereto. 

           
“NAIC Annual Statement” is defined in Section 6.2(a) .

           
“Notes” is defined in Section 1. 

            “O&M
Agreement” means the Management Services Agreement, dated September
30, 2010, between the Issuer and the Operator. 

            “O&M
Costs” means, for any period, actual cash maintenance, administration and
operation costs related to the Project (including amounts payable under Section
6.1 and 6.2 of the O&M Agreement and amounts payable pursuant to Section
3.3.2 of the PPA) and for the purchase of goods and services in connection
therewith, or required by any requirement of law incurred and paid by the Issuer
for the Project in such period, including geothermal royalty and lease payments,
property taxes and other state or local taxes, insurance premiums, consumables,
legal fees, accounting fees and consulting fees and expenses of the Project,
fees and expenses of, and other amounts owing to, the Collateral Agent or the
Depositary, expenses of and other amounts owing to the holders and other costs
and expenses in connection with the management or operation of the Project, but
exclusive in all cases of (a) non-cash charges, including depreciation or
obsolescence charges or reserves therefor, amortization of intangibles or other
bookkeeping entries of a similar nature, (b) all payments of Debt Service
(including any Make Whole Amounts), (c) costs of restoration of the Project paid
with Loss Proceeds (other than the proceeds of business interruption insurance),
and (d) any capital expenditures, other than as contemplated in the applicable
Operating Budget as then in effect. 

            “Obligation”
means any loan, advance, debt, liability, and obligation of performance,
howsoever arising, owed by the Issuer to the Collateral Agent, the Depositary or
any holder of any kind or description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
pursuant to the terms of any Note or any of the other Financing Document,
including all principal, interest, Make-Whole Amounts, fees, charges, expenses,
attorneys’ fees and accountants fees payable or reimbursable by the Issuer under
any of the Financing Documents. 

            
“OFAC” is defined in Section 5.16(a) . 

           
“OFAC Listed Person” is defined in Section 5.16(a) . 

            “OFAC
Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs. 

Schedule B - 11 

            “Officer’s
Certificate” means a certificate of a Senior Financial Officer or of any
other officer of the Issuer whose responsibilities extend to the subject matter
of such certificate. 

           
“Operating Budget” is defined in Section 9.12(d) . 

            “Operating
Cash Flow Available for Debt Service” means, for any period, Project
Revenues received during such period less O&M Costs paid during such
period. 

            “Operator”
means US Geothermal Services, LLC, a Delaware limited liability company.

            “Payment Date” means the last day of March, June, September and
  December in each year, commencing with December 31, 2013 through the Maturity
  Date, and the Maturity Date. 

            “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
or any successor thereto. 

            “Permitted
Investment” means any (a) marketable direct obligation of the United
States of America, (b) marketable obligation directly and fully guaranteed as to
interest and principal by the United States of America, (c) demand deposit with
the Depositary, or time deposit, certificate of deposit and banker’s acceptance
issued by any member bank of the Federal Reserve System which is organized under
the laws of the United States of America or any state thereof or any United
States branch of a foreign bank, in each case whose equity capital is in excess
of $500,000,000 and whose long-term debt securities are rated “A” or better by
S&P and “A2” or better by Moody’s, (d) commercial paper or tax exempt
obligations given the highest rating by Moody’s and S&P, (e) obligation of a
commercial bank described in clause (c) above, in respect of the repurchase of
obligations of the type as described in clauses (a) and (b) hereof,
provided that such repurchase obligation shall be fully secured by
obligations of the type described in said clauses (a) and (b) and the possession
of such obligation shall be transferred to, and segregated from other
obligations owned by, any such bank, (f) money market instrument rated “AAA” by
S&P and “Aaa” by Moody’s, (g) Eurodollar certificate of deposit issued by
any bank described in clause (c) above, and (h) marketable security rated not
less than “A-1” by S&P or not less than “Prime-1” by Moody’s. In no event
shall Permitted Investments include any obligation, certificate of deposit,
acceptance, commercial paper or instrument which by its terms matures (A) more
than 180 days after the date of investment, unless a bank meeting the
requirements of clause (c) above shall have agreed to repurchase such
obligation, certificate of deposit, acceptance, commercial paper or instrument
at its purchase price plus earned interest within no more than 90 days after its
purchase thereunder or (B) after the next Payment Date. 

            “Permitted
Lien” means: (i) Liens created pursuant to any Financing Document;
(ii) Liens for taxes, assessments or governmental charges or levies not yet due
and payable or Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established and which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such Lien;
(iii) Liens in respect of property or assets of the Issuer arising by operation
of law, which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers’, warehousemen’s,
materialmen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business which in each and every such circumstance (x) do not individually or in the aggregate
materially detract from the value of the property or assets of the Issuer and do
not materially impair the use thereof in the operation of the business of the
Issuer or (y) are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien and for which adequate reserves have been
established; (iv) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, which do not secure Indebtedness and do not materially
affect the value of the properties or interfere with the conduct of the business
of the Issuer; (v) pledges or deposits to secure obligations under workers’
compensation or unemployment insurance laws or similar legislation (other than
ERISA) or to secure public or statutory obligations or good faith deposits in
connection with bids, tenders, contracts or leases; (vi) Liens arising out of
judgments or awards aggregating less than $250,000, so long as an appeal or
proceeding for review is being prosecuted in good faith and for the payment of
which adequate reserves in accordance with GAAP; and (vii) Liens on assets (real
or personal) of Issuer or the Project which assets have a fair market value of
less than $250,000 in the aggregate at any one time. 

Schedule B - 12 

            “Person”
means an individual, company, corporation, limited liability company,
association, trust, unincorporated organization, business entity or Governmental
Authority. 

            “Plan”
means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject
to Title I of ERISA that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Issuer or
any ERISA Affiliate or with respect to which the Issuer or any ERISA Affiliate
may have any liability. 

           
“Pledge Agreement” is defined in Section 4.12(d) . 

            “Pledged
Account” means any of (i) the Revenue Account, (ii) the Debt Service Reserve
Account, (iii) the Make-up Well Reserve Account, (iv) the Maintenance Reserve
Account (v) the Upgrade Reserve Account and (vi) the Proceeds Account. 

           
“Power Purchaser” means Sierra Pacific Power Company, a Nevada
corporation.

            “PPA”
means the Amended and Restated Long-Term Portfolio Energy Credit and Renewable
Power Purchase Agreement, dated as of May 31, 2011, between the Issuer and the
Power Purchaser, as amended by letter dated September 9, 2013 (increasing the
Annual Supply Amount from 71,334.1 MWh to 73,444.0 MWh). 

            “Preferred
Stock” means any class of capital stock of a Person that is preferred over
any other class of capital stock (or similar equity interests) of such Person as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such Person. 

           
“Proceeds Account” is defined in the Depositary
Agreement. 

            “Project”
means the approximately 8.6 MW (net) geothermal electric generation facility
located on the Site utilizing a water cooled binary generating unit manufactured
by TAS Energy Systems, Inc. 

Schedule B - 13 

            “Project
Party” means each Person party to a Material Project Document other than the
Issuer. 

            “Project
Revenues” means all amounts received by the Issuer from any source,
including all amounts paid to the Issuer (i) pursuant to the PPA, (ii) as
interest, profits or other income derived from the investment of amounts in any
fund or account established pursuant to the Depositary Agreement, or (iii) in
the form of any other receipts of the Issuer incidental to the ownership or
operation of the Project or otherwise, all as determined in conformity with cash
accounting principles, including as proceeds of any business interruption
insurance, but excluding (x) Loss Proceeds other than proceeds received under
business interruption insurance, and (y) Cash Grant proceeds.

            “Projected
Debt Service Coverage Ratio” means as of any Payment Date for the
four consecutive quarters commencing on such Payment Date, the ratio of (i)
projected Operating Cash Flow Available for Debt Service for such period,
calculated using the same assumptions used in preparing the Base Case
Projections, to (ii) scheduled principal and interest on the Notes and fees for
such period, in each case, as calculated by the Issuer and approved by the
Required Holders in accordance with this Agreement. 

            “property”
or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate. 

           
“Prudential” means Prudential Investment Management,
Inc. “PTE” is defined in Section 6.2(a) . 

            “PUHCA”
means the Public Utility Holding Company Act of 2005, as amended, and all
rules and regulations adopted thereunder. 

           
“Purchaser” is defined in the introductory paragraph of this
Agreement. 

            “QF”
means a “qualifying small power production facility” (as that term is defined
under 16 U.S.C. § 796(17)(C) and the regulations of the FERC at 18 C.F.R. Part
292 thereunder) not exceeding 20MW of total capacity. 

           
“QPAM Exemption” is defined in Section 6.2(d) . 

           
“Qualified Institutional Buyer” means any Person who is a
“qualified institutional buyer” within the meaning of such term as set forth in
Rule 144A(a)(1) under the Securities Act. 

           
“Recapture Indemnity Agreement” is defined in Section 4.12(f)
. 

            “Related
Fund” means, with respect to any holder of any Note, any fund or entity that
(i) invests in Securities or bank loans, and (ii) is advised or managed by such
holder, the same investment advisor as such holder or by an affiliate of such
holder or such investment advisor. 

           
“Reported” is defined in Section 8.6. 

Schedule B - 14 

            “Required
Approval” means all Approvals, including the Water Rights and
Well Permits, required in connection with (a) the execution, delivery,
performance, admission into evidence or enforcement of the Transaction
Documents, (b) the development, construction, ownership or operation and
maintenance of the Project, and/or (c) the generation, transmission and sale of
energy generated by the Project as contemplated under the Transaction Documents.

            “Required
Holders” means, at any time, the holders of at least 51% in principal amount
of the Notes at the time outstanding (without limiting Section 8.5,
exclusive of Notes then owned by the Issuer or any of its Affiliates). 

           
“Required Make-Up Well Reserve Account Balance” is defined in
Section 9.12(a) . 

            “Responsible
Officer” means any Senior Financial Officer and any other officer of the
Issuer with responsibility for the administration of the relevant portion of
this Agreement. 

            “Restoration
Work” means the design, engineering, construction, testing and other
work and any contracts and other arrangements for the performance thereof with
respect to the Restoration of the Project. 

            “Restore”
means, with respect to the Project, to rebuild, repair, restore or replace
the Project in accordance with an Approved Restoration Plan. The term
“Restoration” has a correlative meaning. 

           
“Restricted Payment Conditions” is defined in Section
10.10. 

           
“Revenue Account” is defined in the Depositary Agreement.

            “SEC”
shall mean the Securities and Exchange Commission of the United States, or any
successor thereto. 

            “Secured
Parties” means, collectively, the holders from time to time,
the Depositary and the Collateral Agent. 

            “Securities”
or “Security” shall have the meaning specified in Section 2(1) of the
Securities Act. 

            “Securities
Act” means the Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder from time to time in effect.

           
“Security Agreement” is defined in Section 4.12(e) . 

            “Security
Documents” m eans the Security Agreement, the Pledge Agreement, any
future security agreements, the Depositary Agreement, the Local Bank Control
Agreement, the Deed of Trust, the Recapture Indemnity Agreement, the Consents,
the Assignments, the Kosmos Estoppel, the BLM Letter, any Acceptable Letter of
Credit delivered to the Depositary pursuant to the Depositary Agreement and any
other security documents, financing statements and the like filed or recorded in
connection with the foregoing.

Schedule B - 15 

            “Senior
Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or comptroller of the Issuer. 

           
“Servicing Fee” is defined in Section 9.10. 

            “Site”
means the real property on which the Project or the Geothermal Resource is
to be located, the legal description of which is set forth in Exhibit A
and Exhibit D to the Deed of Trust and all related easements,
rights-of-way and other rights and interests. 

            “S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc., or any successor thereto. 

           
“Sponsor” means, collectively, USG Idaho and USG Delaware. 

           
“Substantial Completion” is defined in the EPC Contract. 

            “SVO”
means the Securities Valuation Office of the NAIC or any successor to such
Office. 

            “Swap
Contract” means (a) any and all interest rate swap transactions, basis swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward foreign exchange transactions, cap transactions, floor
transactions, currency options, spot contracts or any other similar transactions
or any of the foregoing (including, but without limitation, any options to enter
into any of the foregoing), and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement. 

            “Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amounts(s) determined as the
mark-to-market values(s) for such Swap Contracts, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts. 

            “Synthetic
Lease” means, at any time, any lease (including leases that may be
terminated by the lessee at any time) of any property (a) that is accounted for
as an operating lease under GAAP and (b) in respect of which the lessee retains
or obtains ownership of the property so leased for U.S. federal income tax
purposes, other than any such lease under which such Person is the lessor. 

           
“Tax Grant Consultant” means Deloitte Financial Advisory Services LLP.

           
“Title Policy” is defined in Section 4.14(a) . 

Schedule B - 16 

            “Transaction
Documents” means, collectively, the Financing Documents and the Material
Project Documents. 

            “Transfer”
means, with respect to any item, the sale, exchange, conveyance, lease,
transfer or other disposition of such item. 

            “Turbine
Supplier” means Atlas Copco Mafi-Trench Company, LLC, a Delaware limited
liability company.

            “Turbine
Warranty” means the Extended Warranty and Design Agreement - San
Emidio Project, dated as of December 10, 2012, between the Turbine Supplier and
Turbine Air Systems, Ltd., as assigned to the Issuer pursuant to the Assignment
of Warranty and Consent, dated as of September 16, 2013, among Turbine Air
Systems, Ltd., the EPC Contractor and the Issuer and consented to by the Turbine
Supplier. 

            
“Upgrade Reserve Account” is defined in the Depositary Agreement.

            “USA
PATRIOT Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect. 

           
“USG Delaware” means U.S. Geothermal Inc., a Delaware corporation. 

           
“USG Idaho” means U.S. Geothermal Inc., an Idaho corporation.

            “Water
Rights” means all water and water rights (whether permitted, certificated,
vested, or decreed, and whether or not appurtenant to the Land), applications to
appropriate water filed with Nevada Division of Water Resources, ditch and ditch
rights, wells, well permits, and well rights, stock or membership interests in
any irrigation, canal, ditch, or water company, and all applications or rights
to change the point of diversion, place of use, and manner of use with respect
thereto, which are now held or are hereafter acquired by the Issuer, or are
otherwise relating to, appurtenant to, or used in connection with, all or any
part of the Site or the Project, or the use and enjoyment thereof, including,
without limitation, the following water rights permits: Nevada Department of
Conservation and Natural Resources, Division of Water Resources Permit Numbers
66946, 68756, 69320, 79899, and 79900. 

            “Well
Permits” means Nevada Division of Minerals Permit Numbers 107 (for Well
43-21; API 27-031-90063), 136 (for Well 52-21; API 27-031-90074), 161 (for Well
42-21; API 27-031-90085), 163 (for Well 35-21; API 27-031-90087), 164 (for Well
45-21; API 27-031-90088), 173 (for Well 61-21; API 27-031-90090), 187 (for Well
53-21; API 27-031-90098), 280 (for Well 51-16; API 27-031-90133), 312 (for Well
75-16; API 27-031-90152), 360 (for Well 65C-16; API 27-031-90160), 403 (for Well
75B-16; API 27-031-90184), and 418 (for Well 76-16; 27-031-90191), and 816 (for
Well 68-9; API 27-031-90260).

Schedule B - 17 

RULES OF INTERPRETATION

	1. 	
      The singular includes the plural and the plural includes
      the singular; and words in the masculine, neuter or feminine gender shall
      be read and construed as though in either of the other genders where the
      context so requires.

	 	 
	2. 	
      The word “or” is not exclusive.

	 	 
	3. 	
      A reference to any law includes any amendment or
      modification to such law, and all regulations, rulings and other law and
      regulations promulgated under such law.

	 	 
	4. 	
      A reference to a Person includes its successors and
      permitted assigns.

	 	 
	5. 	
      The words “include,” “includes” and “including” are not
      limiting.

	 	 
	6. 	
      A reference in a document to an Article, Section,
      Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit,
      Schedule, Annex or Appendix of such document unless otherwise indicated.
      Exhibits, Schedules, Annexes or Appendices to any document shall be deemed
      incorporated by reference in such document.

	 	 
	7. 	
      References to “knowledge” or words of similar import
      refer to the actual knowledge of the current officers of the relevant
      Person, without any duty of investigation unless otherwise
    indicated.

	 	 
	8. 	
      References to any document, instrument or agreement (a)
      shall include all exhibits, schedules and other attachments thereto, (b)
      shall include all documents, instruments or agreements issued or executed
      in replacement thereof, and (c) shall mean such document, instrument or
      agreement, or replacement or predecessor thereto, as amended, modified and
      supplemented from time to time and in effect at any given time.

	 	 
	9. 	
      The words “hereof,” “herein” and “hereunder” and words of
      similar import when used in any document shall refer to such document as a
      whole and not to any particular provision of such document.

	 	 
	10. 	
      References to “days” shall mean calendar days, unless the
      term “Banking Days” shall be used. References to a time of day shall mean
      such time in New York City, unless otherwise specified.

	 	 
	11. 	
      The section and subsection headings in a document are for
      convenience of reference only and shall neither be deemed to be a part of
      such document nor modify, define, expand or limit any of the terms or
      provisions thereof.

Schedule B - 18 

Schedule 4.11(b) 

Consents

	1. 	
      Consent Agreement, dated as of September 26, 2013, by and
      among the Power Purchaser, the Issuer and the Collateral Agent.

	 	 
	2. 	
      Consent and Agreement, dated as of September 26, 2013, by
      and among the EPC Contractor, the Issuer and the Collateral
  Agent.

	 	 
	3. 	
      Consent and Agreement, dated as of September 26, 2013, by
      and among the Operator, the Issuer and the Collateral Agent.

	 	 
	4. 	
      Consent and Agreement, dated as of September 26, 2013, by
      and among U.S. Geothermal Inc., a Delaware corporation, U.S. Geothermal
      Inc., an Idaho corporation, and the Collateral Agent.

	 	 
	5. 	
      Lessor Estoppel Certificate and Agreement, dated as of
      September 26, 2013 by and among The Kosmos Company, the Issuer and the
      Collateral Agent.

Schedule 4.11(b) - 1 

Schedule 4.22(a) - 1 

Schedule 4.22 

Base Case Projections 

See Attached.

 

 

Schedule 4.22 

*Certain information in this exhibit has been omitted as confidential, as indicated by [***]. This information has been filed separately with the Commission.

*Certain information in this exhibit has been omitted as confidential, as indicated by [***]. This information has been filed separately with the Commission.

Schedule 5.5 

Schedule 5.8 

Required Approvals 

PART I (OBTAINED AS OF CLOSING)

	AGENCY/PERMIT 	NUMBER 
	Washoe County – 
Special Use Permit, AMOR II 	SPB4-8-87 

	Washoe County – 
Special Use Permit, SE-Unit 1 	
SW10-002 
	Truckee Meadows Regional 
Planning Agency, Regional
      Planning 
Governing Board – 
Utility Corridor Approval 	
RPA 10-006 
Resolution 11-01 

	

Washoe County – 
Certificate of Occupancy
      

	Certificate of Occupancy for Permit
      
#11-0351 dated 5/9/2012 
Certificate of Occupancy for Permit
      
#93-3216 dated 7/6/1994 
Certificate of Occupancy for Permit
      
#61334BC dated 7/25/19891 
	Washoe County – 
Business License 	038041/ B-1204164 

	Washoe County – 
Air Quality Permit, Unit 1 Plant 	A11-0012 

	Washoe County – 
Air Quality Permit, Unit 1 Generator
	A12-0040 

	Washoe County – 
Air Quality Permit,
      Conditional 
Geothermal Well Drilling Permit 
Approval
	
A08001 

	Nevada State Fire Marshall – 
Hazardous Materials
      Storage 
(Amor II) 	
26177 (replacing permit 21454)
  

____________________________________________
1
With respect to the Certificates of Occupancy: 
--#11-0351 for new power
plant 
--#93-3216 for dehydration facility/warehouse (no copy available due
to age) 
--#61334BC for Amor/Amor II power plant (no copy available due to
age) 

Schedule 5.8 - 1 

	Nevada State Fire Marshall – 
Hazardous Materials
      Storage 
(Unit 1) 	
26176 (replacing permit 22085) 

	Nevada Division of Industrial 
Relations –
      
Boiler/Pressure Vessel Permits 	9814814, 9814815, 9814816, 
9814817,
      9814818, 9814819, 
9814821, 9814882, 9814883 
	Nevada Division of Minerals – 
Geothermal Project Area
      Permit 	814 
07-07-2008, Letter Approval 
	
Nevada Division of Minerals – 
Individual Well
      Permits 
	Kettleman Numbers: 43-21, 42-21, 
53-21,
      51-16, 52-21, 35-21, 45-21, 
65C-16, 61-21, 75-16, 75B-16, 76- 
16,
      68-9 
	
Nevada Division of Water 
Resources – Water Rights
      
	66946 
68756 & 69320 
79899 &
      79900 
(Diversion Point - Sweetwater Well)2 
	Nevada Division of Environmental 
Protection – Surface
      Discharge 
Permit 	
NS 0094003 

	Nevada Division of Environmental 
Protection –
      Underground Injection 
Permit 	
UNEV-87041 

	Bureau of Land Management – 
National Environmental
      Policy Act 
(NEPA) Analysis 	DOI-BLM-NVN-W030-2010-0006- 
EA 

	Bureau of Land Management – 
Environmental Analysis (EA)
      and 
Finding of No Significant Impact 
(FONSI) 	
DOI-BLM-NVN-W030-2010-0006- 
EA;
      DOE/EA-1810 

	Bureau of Land Management – 
Amor II Plant Site License
    	NVN-47169 

	Federal Energy Regulatory 
Commission (FERC) 	Form 556, Self -Certification of 
Qualifying
      Facility Status 

_______________________________________________________________
2
The Water Rights are subject to Part II hereof. 

Schedule 5.8 - 2 

PART II (NOT REQUIRED TO BE OBTAINED AS OF
CLOSING)

	AGENCY/PERMIT 	NUMBER 
	

Nevada Division of Water Resources 
– Water
      Rights, Extension of time to 
file Proof of Application of Water to
      
Beneficial Use 

	
Receive extensions by June 2, 2014 
for the
      following water rights 
permits: 
66946 
68756 
69320
      

Receive extensions by June 2, 2016 
for the following water
      rights 
permits: 
79899 
79900 
	

Nevada Division of Water
      Resources 
– Water Rights, Proof of Application 
of Water
      to Beneficial Use (“PBU”) 

	File PBUs by June 2, 2015 for the 
following
      water rights permits: 
66946 
69320

      68756 

      
File PBUs by
      June 2, 2017 for the 
following water rights permits: 
79899
      
79900 

Schedule 5.8 - 3 

Schedule 5.12 

Material Project Documents 

           
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Agreement.

            Engineering,
Procurement and Construction Contract, dated August 27, 2010, between Issuer and
SAIC Constructors, LLC, an Oklahoma limited liability company, formerly known as
Benham Constructors, LLC (the “Construction Lender”), and the following related
Change Orders: Change Order No. 001 dated November 12, 2010 regarding builders
risk insurance premium. 

                          
Change Order No. 002 dated November 12, 2010 regarding technical assistances and
consulting services. 

                          
Change Order No. 003 dated November 18, 2010 regarding early site mobilization
to expedite preliminary site work and installation of new make up water line.

                          
Change Order No. 004 dated December 1, 2010 regarding cooling water pumps,
condenser tubes, cooling tower motors and related equipment. 

                          
Change Order No. 005 dated December 29, 2010 regarding NV Energy
interconnection. 

                          
Change Order No. 006 dated January 14, 2011 regarding enhanced machinery
condition monitoring, control infrastructure upgrades, production well VFDs and
other equipment. 

                          
Change Order No. 007 dated March 11, 2011 regarding scheduling and guaranteed
substantial completion. 

                         
Change Order No. 008 dated May 23, 2011 regarding additional work and
taxes. 

                          
Change Order No. 009 dated June 2, 2011 regarding changes to equipment and
remodel of control room. 

                          
Change Order No. 010 dated July 11, 2011 regarding equipment purchases and
additional labor. 

                          
Change Order No. 011 dated September 1, 2011 regarding repairs to fire water
system, inspections to pipeline and additional work. 

                          
Change Order No. 012 dated September 16, 2011 regarding additional work to
chemical treatment equipment, building permits, and other items. 

Schedule 5.12 - 1 

                          
Change Order No. 013 dated September 23, 2011 regarding spare parts for power
plant. 

                          
Change Order No. 014 dated October 27, 2011 regarding increase to
interconnection task and chemicals for startup. 

                          
Change Order No. 015 dated November 17, 2011 regarding miscellaneous
out-of-scope costs. 

                          
Change Order No. 016 dated January 27, 2012 regarding credit for E-monitor and
miscellaneous costs. 

                          
Change Order No. 017 dated January 27, 2012 regarding increased project
management and management agreement costs. 

                          
Change Order No. 018 dated May 22, 2012 regarding the adoption of final
performance test procedures. 

                          
Change Order No. 019 dated October 16, 2012 regarding installation of operator
access and safety equipment. 

            Management
Services Agreement dated as of September 30, 2010 between the Issuer and the
Operator. 

            Amended
and Restated Long-Term Portfolio Energy Credit and Renewable Power Purchase
Agreement between Issuer and Sierra Pacific Power Company, dated May 31, 2011
(subject to approval by the Public Utilities Commission of Nevada; upon approval
by PUCN, the 1987 PPA will be terminated). 

            Long
Term Agreement for Purchase and Sale of Electricity dated December 31, 1986
between Sierra Pacific Power Company and Issuer, as successor in interest to
Michael D. Steward, dba Empire Farms, as amended by the Amendment to Long Term
Agreement for Purchase and Sale of Electricity executed as of December 28, 1987.

            Small
Generator Interconnection Agreement (Service Agreement No. #10-01277), dated as
of December 28, 2010 between Sierra Pacific Power Company d/b/a NV Energy and
Issuer. 

            Office
and Land Lease Agreement dated as of August 27, 2010 between USG Idaho, as
lessor, and the Issuer, as lessee, as amended in conjunction with the
transactions described in the Agreement. 

            Extended
Warranty and Design Agreement – San Emidio Project dated as of December 10, 2012
between Atlas Copco Mafi-Trench Company LLC, a Delaware limited liability
company, and Turbine Air Systems, Ltd., a Texas limited partnership, as
subsequently assigned by Turbine Air Systems, Ltd. to the EPC Contractor and by
the EPC Contractor to the Issuer pursuant to that certain Assignment of Warranty
and Consent dated September 16, 2013. 

Schedule 5.12 - 2 

            The
Recapture Indemnity Agreement dated as of the date of the Agreement among the
Sponsor, the Issuer and the Collateral Agent. 

            The
Geothermal Lease dated as of October 14, 1987 between The Kosmos Company, as
lessor, and Michael B. Stewart, as lessee, recorded October 16, 1987 in Book
2633, Page 282, as Document No. 1200497 of Official Records, as assigned to San
Emidio Resources, Inc. by that certain Assignment of Lease dated May 26, 1992
and recorded as Document No. 1583278 of Official Records, as further assigned to
Empire Farms, a Nevada Partnership, by that certain Assignment of Lease dated
September 18, 1995 and recorded October 13, 1995 as Document No. 1933483 of
Official Records, and as further assigned to Empire Energy, LLC, a Nevada
limited liability company, by that certain Assignment and Assumption Agreement
dated November 24, 1999, as evidenced by that certain Memorandum of Assignment
recorded May 11, 2000 as Document No. 2446152 of Official Records, and as
further assigned to Empire Geothermal Power, LLC by that certain Assignment of
Geothermal Project Rights and Leasehold Estates dated August 31, 2003, and
recorded on October 3, 2003 as Document No. 2934363 of Official Records, and as
further assigned to Issuer by that certain Assignment and Acceptance of
Assignment of Kosmos Geothermal Lease dated April 2008 and recorded on April 30,
2008 as Document No. 3645581 of Official Records, as amended by that certain
First Amendment to Geothermal Lease dated March 15, 2008 for reference purposes
and that certain Second Amendment to Geothermal Lease dated as of May 5, 2007
for reference purposes. 

            The
leases for geothermal resources issued by the United States Bureau of Land
Management on land located in Washoe County, Nevada with serial numbers
NVN-42707, NVN-63004, NVN-63006, NVN-63007, NVN-75555, NVN-75557 and NVN-75558.

            The
power plant lease and site license issued by the United States Bureau of Land
Management on land located in Washoe County, Nevada with serial number
NVN-47169. 

            The
right-of-way grants / temporary use permits granted by the United States Bureau
of Land Management with serial numbers NVN-47395, NVN-49240, NVN-57441,
NVN-43284 and NVN-57909. 

Schedule 5.12 - 3 

Schedule 8.1 

Amortization Schedule

	  	PRINCIPAL 	  	PRINCIPAL 
	DATE 	PAYMENT 	DATE 	PAYMENT 
	  	  	3/31/2026 	$261,757.86 
	12/31/2013 	$232,274.95 	6/30/2026 	$319,205.48 
	3/31/2014 	$0.00 	9/30/2026 	$318,141.32 
	6/30/2014 	$6,059.84 	12/31/2026 	$472,132.84 
	9/30/2014 	$81,598.27 	3/31/2027 	$240,488.12 
	12/31/2014 	$235,508.55 	6/30/2027 	$284,947.31 
	3/31/2015 	$0.00 	9/30/2027 	$285,736.41 
	6/30/2015 	$106,672.16 	12/31/2027 	$437,796.72 
	9/30/2015 	$128,910.57 	3/31/2028 	$210,103.40 
	12/31/2015 	$280,792.00 	6/30/2028 	$182,384.07 
	3/31/2016 	$13,825.56 	9/30/2028 	$228,367.46 
	6/30/2016 	$135,470.65 	12/31/2028 	$501,450.39 
	9/30/2016 	$162,880.93 	3/31/2029 	$272,793.82 
	12/31/2016 	$312,250.89 	6/30/2029 	$293,801.38 
	3/31/2017 	$2,950.59 	9/30/2029 	$294,675.56 
	6/30/2017 	$170,936.04 	12/31/2029 	$455,053.99 
	9/30/2017 	$158,267.75 	3/31/2030 	$424,888.86 
	12/31/2017 	$306,794.93 	6/30/2030 	$432,870.25 
	3/31/2018 	$0.00 	9/30/2030 	$438,326.03 
	6/30/2018 	$98,004.97 	12/31/2030 	$599,600.17 
	9/30/2018 	$115,501.46 	3/31/2031 	$420,764.19 
	12/31/2018 	$371,123.16 	6/30/2031 	$415,278.68 
	3/31/2019 	$170.19 	9/30/2031 	$422,791.97 
	6/30/2019 	$192,412.73 	12/31/2031 	$582,201.15 
	9/30/2019 	$168,494.96 	3/31/2032 	$456,981.05 
	12/31/2019 	$334,877.92 	6/30/2032 	$375,355.82 
	3/31/2020 	$64,106.77 	9/30/2032 	$431,870.83 
	6/30/2020 	$178,689.08 	12/31/2032 	$589,828.68 
	9/30/2020 	$198,455.23 	3/31/2033 	$370,071.94 
	12/31/2020 	$367,478.61 	6/30/2033 	$336,850.81 
	3/31/2021 	$143,103.51 	9/30/2033 	$348,075.81 
	6/30/2021 	$302,495.55 	12/31/2033 	$502,907.52 
	9/30/2021 	$277,673.93 	3/31/2034 	$507,094.11 
	12/31/2021 	$448,414.77 	6/30/2034 	$462,702.30 
	3/31/2022 	$183,919.46 	9/30/2034 	$478,751.79 
	6/30/2022 	$317,393.93 	12/31/2034 	$634,043.37 
	9/30/2022 	$296,639.20 	3/31/2035 	$528,412.37 
	12/31/2022 	$466,554.49 	6/30/2035 	$470,870.97 
	3/31/2023 	$132,259.18 	9/30/2035 	$489,869.94 

Schedule 8.1 - 1 

	6/30/2023 	$240,149.49 	12/31/2035 	$643,585.54 
	9/30/2023 	$225,971.17 	3/31/2036 	$573,408.81 
	12/31/2023 	$388,109.19 	6/30/2036 	$441,705.54 
	3/31/2024 	$135,181.23 	9/30/2036 	$508,328.35 
	6/30/2024 	$154,026.06 	12/31/2036 	$660,589.0S 
	9/30/2024 	$191,947.94 	3/31/2037 	$579,169.90 
	12/31/2024 	$346,664.40 	6/30/2037 	$495,391.55 
	3/31/2025 	$208,369.76 	9/30/2037 	$520,749.88 
	6/30/2025 	$277,957.95 	12/31/2037 	$671,459.95 
	9/30/2025 	$274,083.53 	 
    	 
    
	12/31/2025 	$428,718.16 	  	  

Schedule 8.1 - 2 

Schedule 9.2 

Insurance Requirements

	 	(a) 	
      Issuer shall (and Issuer shall cause the Project to),
      without cost to the Secured Parties, maintain or cause to be maintained on
      its (or the Project’s as applicable) behalf in effect at all times the
      types of insurance required by the following provisions together with any
      other types of insurance required hereunder or in any other Material
      Project Document or Material Contract, with insurance companies rated A-,
      X or better, by Best’s Insurance Guide and Key Ratings (or an equivalent
      rating by another nationally recognized insurance rating agency of similar
      standing if Best’s Insurance Guide and Key Ratings shall no longer be
      published), or other insurance companies of recognized responsibility
      satisfactory to the Required Holders. Upon request of the Required
      Holders, Issuer shall supply copies of all required insurance policies or
      the agreed upon policy wordings to the extent copies of such policies are
      not yet available.

	 	 	 
	 	(b) 	
      The following insurance coverages shall be in form and
      substance reasonably satisfactory to the Required Holders and shall be in
      place as of the Closing Date until all of the Obligations have been paid
      in full:

		(i) 	
      Commercial General Liability insurance for Issuer and the
      Project on a “per occurrence” policy form that is substantially equivalent
      to Insurance Services Office’s (“ISO”) commercial general liability form
      CG 00 01 12 07 or later, or “AEGIS” claims-first made or equivalent
      claims-made policy form including coverage for premises/operations,
      products/completed operations and personal injury, with primary coverage
      limits of no less than $1,000,000 per any one occurrence and $2,000,000 in
      the aggregate. The Commercial General Liability policy shall also include
      a severability of interest clause with no exclusions or limitations for
      cross-liability. Deductibles and/or self-insured retentions in excess of
      $50,000 per occurrence shall be subject to review and approval by the
      Required Holders and any high deductible programs shall contain an
      aggregate cap on the deductible that is satisfactory to the Required
      Holders. To the extent exposures exist or if required by written contract,
      endorsement CG 2417 (or its equivalent) amending the definition of an
      insured contract to remove the exclusion for easement or license
      agreements in connection with construction or demolition operations on or
      within 50 feet of a railroad. 

	 	 	
       

		(ii) 	
      Automobile Liability insurance for Issuer and the
      Project, including coverage for owned, non-owned and hired automobiles, as
      applicable, for both bodily injury and property damage and containing
      appropriate no- fault insurance provisions or other endorsements in
      accordance with applicable state legal requirements, with limits of no
      less than $1,000,000 combined single limit per accident. To the extent
      exposures exist or if required by written contract, automobile liability
      insurance shall include coverage for transportation of hazardous materials with a
    limit of not less than $1,000,000 per accident.

Schedule 9.2 - 1 

	 	(iii) 	
      Worker’s Compensation insurance and employer’s liability
      insurance on a policy form that is substantially equivalent to ISO’s
      worker’s compensation and employer’s liability form WC 00 00 00 B, to the
      extent the Borrower has employees or is required by law to provide such
      insurance. Such insurance, shall include a list of applicable states
      (according to exposures) for coverage under the Other States section of
      the policy. Employer’s Liability shall be insured with limits of not less
      than bodily injury by accident $1,000,000 each accident, bodily injury by
      disease $1,000,000 policy limit, and bodily injury by disease $1,000,000
      each employee. These limits may be satisfied through a combination of
      primary and excess policies. High deductible programs must contain an
      aggregate cap on the deductible that is satisfactory to the Required
      Holders.

	 	 	 
	 	(iv) 	
      Umbrella/Excess Liability insurance written on an
      occurrence basis or AEGIS claims-first-made or equivalent form providing
      limits in excess of the primary limits applying under policies described
      in Sections (b)(i), (b)(ii) and (b)(iii) of this Schedule 9.2, with
      respect to Employer’s Liability. Such insurance coverage shall have a
      limit of liability of not less than $19,000,000 per occurrence and in the
      annual aggregate. The Umbrella and/or Excess Liability policies shall not
      contain endorsements which restrict coverages provided under the
      underlying policies required in Sections (b)(i), (b)(ii) and (b)(iii) of
      this Schedule 9.2, with respect to Employer’s Liability. If the policy or
      policies provided under this Section (b)(iv) contain(s) aggregate limits
      and such limits are diminished below $9,000,000 by any incident,
      occurrence, claim, settlement or judgment against such insurance which has
      caused the carrier to establish a reserve, Issuer shall take immediate
      steps to restore such aggregate limits or shall provide other equivalent
      insurance protection to cover such reduced aggregate limits.

	 	 	 
	 	(v) 	
      “All-risk” Property insurance covering against physical
      loss or damage to the Issuer and Project assets (including (i) buried
      cables of the Project site and (ii) transmission lines the Issuer or
      Project has ownership of and/or a responsibility to insure, which may be
      subject to a 1,000 foot limitation or self-insured if the value of such
      transmission lines is under $500,000), including fire and extended
      coverage, collapse, flood, earth movement and comprehensive equipment
      breakdown coverage (including pressurized equipment, electrical
      malfunction and mechanical breakdown), either as part of the “all risk”
      property insurance or under a separate policy (if insured separately both
      the “all-risk” property insurance and equipment breakdown policy shall
      include a joint loss agreement). Such insurance coverage shall include
      coverage for resultant damage caused by faulty workmanship, design or
      materials equivalent to LEG 2/96 design clause, or better. Such insurance
      coverage shall be written on a replacement cost basis with no coinsurance clauses or
penalties (or a waiver thereof) with policy limits equal to the full replacement
cost value of the Project or a blanket policy limit (or loss limit) reasonably
acceptable to the Required Holders, if accompanied by supporting independent
loss studies, and providing: 

Schedule 9.2 - 2 

	 	A. 	
      Time Element coverage extensions for expediting and extra
      expense with sublimits of not less than $1,000,000 (unless provided under
      the business interruption coverage required in paragraph (b)(v)(F)
      below);

	 	 	 
	 	B. 	
      Debris removal with a sublimit of not less than
      $5,000,000;

	 	 	 
	 	C. 	
      Transit coverage, to the extent exposure exists,
      with limits equivalent to the full replacement value of property at risk.
      Such coverage shall cover Project property and equipment being shipped on
      a “warehouse to warehouse” basis, including land, air and ocean transit
      insuring “all risks” of loss or damage on a replacement cost basis plus
      freight and insurance from the time the goods are in the process of being
      loaded for transit until they are finally delivered to the site of the
      Project, including during shipment deviation, delay, forced discharge,
      re-shipment and transshipment. Such insurance shall (i) include
      coverage for war, strikes, theft, pilferage, non-delivery, charges of
      general average sacrifice or contribution, salvage expenses, temporary
      storage in route, consolidation, repackaging, refused and returned
      shipments, (ii) contain a replacement by air extension clause,
      difference in conditions for C.I.F. shipments, unintentional errors and
      omissions clause, import duty clause, non-vitiation clause, (iii)
      contain no exclusion for inadequate packing, (iv) provide coverage
      on a difference in limits and difference in conditions basis for shipments
      in which coverage for physical damage is being provided by a third party
      and (v) provide coverage provided by paragraph (b)(v)(F) below, if
      not already provided by insurance required to be obtained in paragraph
      (b)(v)(F) below;

	 	 	 
	 	D. 	
      Earth movement and flood coverage may be written with a
      sublimit of not less than $5,000,000 with respect to earth movement and
      $10,000,000 with respect to flood but in no event less than 125% of the
      probable maximum loss (the “PML”) as supported by a qualified PML
      report specific to the Project and other assets that could reasonably be
      damaged by the same occurrence. Coverage for terrorism is considered
      optional, unless required by contract;

	 	 	 
	 	E. 	
      the policy limits shall be automatically reinstated
      following a loss event, with the exception of damage from earth
      movement, flood and cleanup of hazardous material and pollution,
  which shall apply on an annual aggregate basis;

Schedule 9.2 - 3 

	 	F. 	
      business interruption insurance covering against the same
      perils as set forth in this Section (b)(v), in an amount not less than
      twelve (12) months of projected revenues less non continuing expenses with
      an indemnity period of not less than twelve (12) months. With respect to
      establishing a combined policy limit (or blanket limit) for physical
      damage and business interruption losses, the business interruption
      requirements shall be in addition to the replacement cost requirements for
      physical damage to the Project as set forth in this Section (b)(v). The
      Issuer shall also maintain contingent business interruption coverage to
      the first non-owned substation(s) and transmission facilities or
      electrical distribution systems on a blanket or specified/named location
      basis with a limit not less than $2,000,000. Such business interruption
      and contingent business interruption coverage may be subject to a per
      occurrence waiting period not to exceed thirty (30) days; and

	 	 	 
	 	G. 	
      all such policies shall not have deductibles greater than
      $100,000 per occurrence for physical damage, except two percent (2%) of
      the total insured value, subject to a minimum of $250,000 for earthquake
      and a thirty (30) day waiting period for business interruption coverage,
      unless otherwise approved by the Required
Holders.

	 	(vi) 	
      Issuer shall obtain and maintain such other or additional
      insurance (as to risks covered, policy amounts, policy provisions or
      otherwise) as, under prudent industry practices, are from time to time
      insured against for geothermal facilities similar in type, nature, use and
      location to the Project, which the Required Holders may reasonably require
      in consultation with the Insurance Consultant and the
  Issuer.

	 	(c) 	
      Issuer shall use reasonable efforts to require each
      contractor to maintain insurance consistent with prudent industry
      practice. Such insurance, with the exception of Workers Compensation,
      supplied by each contractor shall:

	 	 	 	 
	 		(i) 	
      add the Issuer and the Secured Parties as additional
      insureds;

	 	 	 	 
	 		(ii) 	
      be primary and non-contributory as respects insurance
      provided by the Issuer and the Secured Parties;

	 	 	 	 
	 		(iii) 	
      waive rights of subrogation against the Issuer and the
      Secured Parties;

	 	 	 	 
	 		(iv) 	
      provide a separation of interest / cross liability
      clause;

	 	 	 	 
	 		(v) 	
      continue in force until all obligations of these parties
      are fulfilled with respect to the Projects; and

	 	 	 	 
	 		(vi) 	
      provide that contractors and sub-contractors shall be
      responsible for tools and equipment brought onto the
  Site.

Schedule 9.2 - 4 

	 	(d) 	
      All policies covering real or personal property or
      business interruption shall name the Collateral Agent as sole loss payee
      in accordance with lender’s loss payable endorsement 438 BFU or ISO CP
      1218 or such other lender loss payable form acceptable to the Required
      Holders in consultation with the Insurance Consultant.

	 	 	 
	 	(e) 	
      All property and liability policies required herein
      shall:

	 	(A) 	
      name (or include via blanket endorsement) the Secured
      Parties as additional insureds (with the exception of workers’
      compensation) under the policy;

	 	 	 
	 	(B) 	
      waive subrogation (to the extent allowed by law) against
      any of the Secured Parties, the Project or Issuer; and

	 	 	 
	 	(C) 	
      provide that if any premium or installment is not paid
      when due, or if such insurance is to be cancelled for any reason
      whatsoever, the insurers (or their representatives) will promptly notify
      Issuer, Collateral Agent and the holders, and any such cancellation shall
      not be effective until thirty (30) days (10 days with regard to
      non-payment) after receipt of such notice to the holders, and that
      appropriate certification shall be made to Issuer by each insurer with
      respect thereto. To the extent endorsement of the required policies to
      provide such written notice of cancellation to the holders is not
      commercially available, the Issuer shall be obligated to provide written
      notice of cancellation to the holders. Issuer shall provide prompt notice
      of material change in policy conditions to the Collateral Agent and the
      holders. For purposes of this section, material change is considered to be
      any modification or reduction in coverage that would cause the Issuer’s
      insurance policies to be out of compliance with this Schedule
  9.2.

	 	(f) 	
      All liability policies required herein (except workers
      compensation and employer’s liability) shall:

	 	(A) 	
      include a severability of interest clause; and

	 	 	 
	 	(B) 	
      be primary and non-contributory with insurance carried by
      or on behalf of additional insureds.

	 	(g) 	
      In the event that Issuer (or the Project) fails to
      respond in a timely and appropriate manner (as determined by the Required
      Holders) to take any steps necessary or requested by the Collateral Agent
      or the Required Holders to collect from any insurers for any loss covered
      by any insurance required to be maintained by this Schedule 9.2,
      Collateral Agent (or its designee) shall have the right to make all proofs
      of loss, adjust all claims with the insurance company or companies and/or
      receive all or any part of the proceeds of the foregoing insurance
      policies, either in its own name or the name of Issuer or the Project;
      provided that Issuer shall (and Issuer shall cause the Project to),
      upon Collateral Agent’s request (made at the direction of the Required
      Holders) and at Issuer’s (or the Project’s, as applicable) own cost and
      expense, make all proofs of loss and take all other
steps necessary or requested by Collateral Agent or the
      Required Holders to collect from insurers for any loss covered by any
      insurance required to be obtained by this Schedule 9.2. Notwithstanding
      this Schedule 9.2, Collateral Agent and the holders shall have the right
      to participate and receive information with respect to all claims and
  losses.

Schedule 9.2 - 5 

	 	(h) 	
      On or before the Closing Date and at each policy renewal
      (or policy cancellation and replacement) throughout the term of this
      Agreement, Issuer (or its authorized insurance representative) shall
      furnish evidence of insurance (in the form of certificates of insurance,
      binders, cover notes or complete copies of policies) to the Collateral
      Agent and the holders in accordance with industry standards including a
      certificate signed by a duly authorized representative of Issuer (or its
      authorized insurance representative), stating that the insurance then
      maintained by or on behalf of Issuer and the Project pursuant to this
      Schedule 9.2 complies in all material aspects with the terms hereof, is in
      good standing and in full force and effect without default and that all
      premiums then due have been paid and that no policies are in danger or
      threat of cancellation for non-payment of premiums or otherwise. Neither
      the Collateral Agent nor any holder shall have any obligation to verify
      the insurance pursuant to this Schedule 9.2 or any information or
      statement contained in the certificates or opinions of Issuer (or its
      authorized insurance representative), and failure of the Collateral Agent
      or a holder to verify the insurance pursuant to this Schedule 9.2 does not
      constitute a waiver of the required insurance or other obligations of this
      Schedule 9.2. In the event that at any time the insurance required by this
      Schedule 9.2 shall be reduced or cease to be maintained, then (without
      limiting the rights of the Secured Parties in respect of the Event of
      Default which arises as a result of such failure) Collateral Agent may on
      behalf of the Secured Parties, at its option, maintain the insurance
      required hereby and, in such event, Issuer shall reimburse Collateral
      Agent upon demand for the cost thereof together with interest thereon at a
      rate per annum equal to the late charge rate, but in no event shall the
      rate of interest exceed the maximum rate permitted by law.

	 	 	 
	 	(i) 	
      In the event any insurance (including the limits,
      deductibles or terms and conditions thereof) hereby required to be
      obtained and maintained by this Schedule 9.2, other than insurance
      required by law or a Material Project Document to be obtained and
      maintained, shall not be commercially available on reasonable terms in the
      commercial insurance market, the Required Holders in consultation with the
      Insurance Consultant, shall not unreasonably withhold their agreement to
      waive such requirement to the extent the maintenance thereof is not so
      available and/or, to the extent applicable, may allow Issuer (or the
      Project, as applicable) to obtain the best available insurance comparable
      to the requirements of this Schedule 9.2 on commercially reasonable terms
      then available in the commercial insurance market; provided that
      (i) Issuer shall first request any such waiver in writing, which
      request shall be accompanied by written reports prepared by Issuer (or its
      authorized insurance representative) and the Insurance Consultant,
      satisfactory to the Required Holders, certifying that such insurance is
      not commercially available on reasonable terms in the commercial insurance
      market for geothermal facilities similar in size, type and location (and,
      in any case where the required amount is not so available, certifying
      as to the maximum amount which is so available) and explaining in detail
      the basis for such conclusions and the form and substance of such reports
      to be satisfactory to the Required Holders; (ii) at any time after
      the granting of any such waiver, Issuer shall furnish to the holders on
      each anniversary thereof, supplemental reports satisfactory to the
      Required Holders updating the prior reports and reaffirming such
      conclusion; and (iii) any such waiver shall be effective only so
      long as such insurance shall not be commercially available on reasonable
      terms in the commercial insurance market (as determined by the Required
      Holders in consultation with the Insurance Consultant), it being
      understood that the failure of Issuer to timely furnish any such
      supplemental report shall be conclusive evidence that such waiver is no
      longer effective because such condition no longer exists.

Schedule 9.2 - 6 

	 	(j) 	
      In the event that any policy is written on a
      “claims-made” or “occurrence reported” basis and such policy is not
      renewed or the retroactive date of such policy is to be changed, Issuer
      shall obtain or cause to be obtained for each such policy or policies
      extended reporting period coverage or “tail” coverage for the longest
      period reasonably available in the commercial insurance market but in no
      event not less than a period of three (3) years for each such policy or
      policies and shall provide the holders with proof that such extended
      reporting period or “tail” coverage has been obtained and premiums due
      with respect to such coverage have been paid in
full.

Schedule 9.2 - 7 

Schedule 9.12 

Required Make-Up Well Reserve Account Balance

 

Schedule 9.12 - 1 

	Base Case Minimum Required Make-Up Well Reserve
      Balance 
	  	Minimum Required 	  	Minimum Required 
	Date 	Balance 	Date 	Balance 
	9/30/2013 	$0.00 	12/31/2025 	$1,004,850.48 
	12/31/2013 	$72,471.60 	3/31/2026 	$1,039,500.49 
	3/31/2014 	$144,943.20 	6/30/2026 	$1,074,150.51 
	6/30/2014 	$217,414.79 	9/30/2026 	$1,108,800.53 
	9/30/2014 	$289,886.39 	12/31/2026 	$1,143,450.54 
	12/31/2014 	$362,357.99 	3/31/2027 	$1,178,100.56 
	3/31/2015 	$434,829.59 	6/30/2027 	$1,212,750.58 
	6/30/2015 	$507,301.18 	9/30/2027 	$1,247,400.59 
	9/30/2015 	$579,772.78 	12/31/2027 	$1,282,050.61 
	12/31/2015 	$652,244.38 	3/31/2028 	$1,316,700.63 
	3/31/2016 	$724,715.98 	6/30/2028 	$1,386,000.66 
	6/30/2016 	$797,187.57 	9/30/2028 	$0.00 
	9/30/2016 	$869,659.17 	12/31/2028 	$0.00 
	12/31/2016 	$942,130.77 	3/31/2029 	$0.00 
	3/31/2017 	$1,014,602.37 	6/30/2029 	$0.00 
	6/30/2017 	$1,087,073.97 	9/30/2029 	$0.00 
	9/30/2017 	$1,159,545.56 	12/31/2029 	$0.00 
	12/31/2017 	$1,232,017.16 	3/31/2030 	$0.00 
	3/31/2018 	$1,304,488.76 	6/30/2030 	$0.00 
	6/30/2018 	$1,449,431.95 	9/30/2030 	$0.00 
	9/30/2018 	$0.00 	12/31/2030 	$0.00 
	12/31/2018 	$34,650.02 	3/31/2031 	$0.00 
	3/31/2019 	$69,300.03 	6/30/2031 	$0.00 
	6/30/2019 	$103,950.05 	9/30/2031 	$0.00 
	9/30/2019 	$138,600.07 	12/31/2031 	$0.00 
	12/31/2019 	$173,250.08 	3/31/2032 	$0.00 
	3/31/2020 	$207,900.10 	6/30/2032 	$0.00 
	6/30/2020 	$242,550.12 	9/30/2032 	$0.00 
	9/30/2020 	$277,200.13 	12/31/2032 	$0.00 
	12/31/2020 	$311,850.15 	3/31/2033 	$0.00 
	3/31/2021 	$346,500.16 	6/30/2033 	$0.00 
	6/30/2021 	$381,150.18 	9/30/2033 	$0.00 
	9/30/2021 	$415,800.20 	12/31/2033 	$0.00 
	12/31/2021 	$450,450.21 	3/31/2034 	$0.00 
	3/31/2022 	$485,100.23 	6/30/2034 	$0.00 
	6/30/2022 	$519,750.25 	9/30/2034 	$0.00 
	9/30/2022 	$554,400.26 	12/31/2034 	$0.00 
	12/31/2022 	$589,050.28 	3/31/2035 	$0.00 
	3/31/2023 	$623,700.30 	6/30/2035 	$0.00 
	6/30/2023 	$658,350.31 	9/30/2035 	$0.00 
	9/30/2023 	$693,000.33 	12/31/2035 	$0.00 
	12/31/2023 	$727,650.35 	3/31/2036 	$0.00 
	3/31/2024 	$762,300.36 	6/30/2036 	$0.00 
	6/30/2024 	$796,950.38 	9/30/2036 	$0.00 
	9/30/2024 	$831,600.40 	12/31/2036 	$0.00 
	12/31/2024 	$866,250.41 	3/31/2037 	$0.00 
	3/31/2025 	$900,900.43 	6/30/2037 	$0.00 
	6/30/2025 	$935,550.45 	9/30/2037 	$0.00 
	9/30/2025 	$970,200.46 	12/31/2037 	$0.00 

	Reserves relate to the funding of two scheduled make-up wells,
      OW-10 and MW-1. 
	Well OW-10 is projected to cost $1,300,000 and come on-line on
      9/30/2018. 
	The cost of well OW-10 escalated for inflation (2.2% per annum)
      is projected to be $1,449,432. 
	Well MW-1 is projected to cost $1,000,000 and come on-line on
      9/30/2028. 
	The cost of well MW-1 escalated for inflation (2.2% per annum)
      is projected to be $1,386,001. 

     EXHIBIT 1 

[FORM OF NOTE] 

USG NEVADA LLC 

6.75% SENIOR SECURED
NOTE DUE DECEMBER 31,
2037 

	No. [_____] 	[____ __], 2013 
	$[_______] 	PPN 90363* AA0 

      
     For Value Received, the undersigned, USG Nevada
LLC (herein called the “Issuer”), a limited liability company organized
and existing under the laws of the State of Delaware, hereby promises to pay to
[____________], or registered assigns, the principal sum of
[_____________________] Dollars (or so much thereof as shall not have been
prepaid) on December 31, 2037 (the “Maturity Date”), with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 6.75% per annum from the date hereof,
payable quarterly, on March 31st, June 30th, September 30th and December 31st in
each year, commencing with December 31, 2013, and on the Maturity Date, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law, on any overdue payment of interest and, during the continuance
of an Event of Default, on such unpaid balance and on any overdue payment of any
Make-Whole Amount, at a rate per annum from time to time equal to the greater
(i) 8.75% per annum, and (ii) 2% over the rate of interest publicly announced by
JPMorgan Chase Bank, N.A. from time to time in New York City, New York as its
“base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand). 

      
     Payments of principal of, interest on and any
Make-Whole Amount with respect to this Note are to be made in lawful money of
the United States of America at the principal office of JPMorgan Chase Bank,
N.A. in New York City, New York or at such other place as the Issuer shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below. 

      
     This Note is one of a series of Senior Secured
Notes (herein called the “Notes”) issued pursuant to the Note Purchase
Agreement, dated as of September 26, 2013 (as from time to time amended, the
“Note Purchase Agreement”), between the Issuer and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder of
this Note will be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representation set forth in Section 6.2 of
the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used
in this Note shall have the respective meanings ascribed to such terms in the
Note Purchase Agreement. 

           
This Note is secured by the Security Documents. 

      
     This Note is a registered Note and, as provided in
the Note Purchase Agreement, upon surrender of this Note for registration of
transfer accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Issuer may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Issuer will not be affected by any notice to the
contrary. 

Exhibit 1 - 1 

      
     The Issuer will make required prepayments of
principal on the dates and in the amounts specified in the Note Purchase
Agreement. This Note is also subject to mandatory and optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in
the Note Purchase Agreement, but not otherwise. 

      
     If an Event of Default occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable
in the manner, at the price (including any applicable Make-Whole Amount) and
with the effect provided in the Note Purchase Agreement. 

      
     This Note shall be construed and enforced in
accordance with, and the rights of the Issuer and the holder of this Note shall
be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would permit the application of the
laws of a jurisdiction other than such State. 

USG NEVADA
LLC 

 

	 	By
      _____________________________________________________________
	 	Name: 
	 	Title: 

Exhibit 1 - 2 

Exhibit 4.10 

Form of Funding Instruction Letter 

USG Nevada LLC 
[c/o U.S. Geothermal Inc. 
1505
Tyrell Lane 
Boise, Idaho 83706] 

Funding Instruction Letter 

____________, 20133 

TO EACH OF THE PURCHASERS LISTED IN 
SCHEDULE
A HERETO: 

Ladies and Gentlemen: 

      
     The undersigned, a Responsible Officer of USG
Nevada LLC, a Delaware limited liability company (the “Issuer”), hereby
confirms, in accordance with Section 4.10 of the Note Purchase Agreement, dated
as of September 26, 2013, among the Issuer and the Purchasers (the “Note
Purchase Agreement”), that you are to pay the purchase price for the
Issuer’s 6.75% Senior Secured Notes due December 31, 2037 issued pursuant to the
Note Purchase Agreement by wire transfer of immediately available funds for the
account of the Issuer: [Insert Bank Name and Address], ABA # ___________,
Account # [_________], Account Name [___________], FFC: [_________], Ref:
[_________].

Very truly yours, 

USG NEVADA LLC 

 

	 	By
      _________________________________________________
	 	Name 
	 	Title 

___________________________________________
3 To
be delivered three Business Days prior to Closing. 

Exhibit 4.10 - 1 

Exhibit 7.1 

Form of Monthly Operating Report 

See attached.

 

 

Exhibit 7.1 - 1 

	US
      Geothermal Services, LLC
      

	USG Nevada LLC
      office : PO Box 135 Gerlach, NV 89412 	 	Home
      office: 2960 S 2100 E Malta, ID 83342 
	Tel: 775-775-2207 Fax : 775-557-2204 	 	Tel: 208.645-2600 Fax: 208.208-645-2341
    

[Exhibit 7.1 – Form of Monthly Operating
Report] 

San Emidio – [Insert Month and Year] O&M Monthly
Report 
[Insert Report Preparation Date] 

	A. 	
      Executive Summary

	 	 
	B. 	
      Project Summary

	 	 
	C. 	
      Warranty Status

	 	 
	D. 	
      Safety & Regulatory Compliance

	 	 
	E. 	
      Personnel & Staffing

	 	 
	F. 	
      Training

A. Executive Summary 

Note: All comparisons to budget refer to the: [Insert
Approved Budget Date and Name].

Electrical Generation

	

	
Units 
	[Current 
Mo.] 
(Actual) 	[Current 
Month] 
(Plan) 	20__ YTD 
(Actual) 
	20__ YTD 
(Plan) 

	Total Net Energy Generated 	kWh 	  	  	  	  
	SE Unit 1 Available Hours 	Hrs. 	  	  	  	  
	SE Unit 1 Availability (AF) 	% 	  	  	  	  
	SE Unit 1 Average Gross Gen. 	kW 				
	SE Unit 1 Average Net Power 	kW 	  	  	  	  

Production Pump Availability 

	
Well # 
	AVG 
Flow 
(gpm) 	Service 
Hours 
	Cumulative 
flow month 
(kgal) 	Cumulative 
flow YTD 
(kgal) 	AVG 
Flowing 
Temp (°F) 	Service 
Factor 
(%) 	Service 
Factor 
YTD (%) 
	75-16 	  	  	  	  	  	  	  
	75B-16 	  	  	  	  	  	  	  
	76-16 	  	  	  	  	  	  	  

Field Data 

	
	[Current Mo.] 
20__ 	YTD 20__ 

	Average Brine Temperature (°F) 	 	  
	Average Operating Flow into SE Unit #1 (GPM) 	 	  
	Average Wet bulb Temperature (°F) 	 	  
	Make-up Water Volume (GPM) 	 	  
	Blow down Water Volume (GPM) 	 	  

Injection Well Data 

	
Well # 
	AVG 
Operating 
Flow (gpm) 	YTD 
Average 
GPM 	Service 
Hours 
	YTD Service 
Hours 
	Cumulative 
flow month 
	Cumulative 
flow YTD 

	43-21 	  	  	  	  	  	  
	42-21 	  	  	  	  	  	  
	53-21 	  	  	  	  	  	  
	52-21 	  	  	  	  	  	  

B. Project Summary 

Business Overview 

[The following financial table format to be consistent with the
approved annual Budget] 

	  	Budget 	  	Actuals 	  	Variance 	  
	Account Description 	[Current Month] 	YTD 	[Current Month] 	YTD 	[Current Month] 	YTD 
	  	  	  	  	  	  	  
	Revenues 	  	  	  	  	  	  
	  	  	  	  	  	  	  
	Royalties Expense 	  	  	  	  	  	  
	Payroll Expenses 	  	  	  	  	  	  
	Fuel Costs 	  	  	  	  	  	  
	Electricity Purchases 	  	  	  	  	  	  
	Chemicals/Water Treatment 	  	  	  	  	  	  
	Expenses 	  	  	  	  	  	  
	Lubricant Expenses 	  	  	  	  	  	  
	Tools/Safety 	  	  	  	  	  	  
	Vehicle Expenses 	  	  	  	  	  	  
	Maintenance Expenses 	  	  	  	  	  	  
	Misc Plant Expenses 	  	  	  	  	  	  
	Field Expenses 	  	  	  	  	  	  
	Insurance 	  	  	  	  	  	  
	Corporate Support 	  	  	  	  	  	  
	General & Administrative Expenses 	  	  	  	  	  	  
	Taxes 	  	  	  	  	  	  
	Management Fees 	  	  	  	  	  	  
	Loan Maintenance Fees 	  	  	  	  	  	  
	Total O&M Expenses 	  	  	  	  	  	  
	  	  	  	  	  	  	  
	EBITDA 	  	  	  	  	  	  

       [Insert
verbiage explaining material variances] 

Major Equipment Status: 

       [Insert
verbiage discussing material outages, equipment, instrumentation, refrigerant,
or other issues]

  Production and Injection: 

       [Insert
verbiage regarding current month production activity, flow activity, and
temperature activity] 

  Zero Demand Diesel: 

       [Insert
verbiage regarding current month ZDD activities]

C. Warranty Status 

       [Insert
verbiage regarding current month Warranty activities] 

D. Safety & Regulatory Compliance 

       [Insert
verbiage regarding current month Safety & Regulatory Compliance activities]

E. Personnel & Staffing: 

       [Insert
verbiage regarding current month Personnel & Staffing activities] 

F. Training: 

       [Insert
verbiage regarding current month Training activities] 

Exhibit S-1 

Form of Depositary Agreement

 

 

Exhibit S-1 - 1 

Execution Version 

DEPOSITARY AND SECURITY AGREEMENT 

            This
DEPOSITARY AND SECURITY AGREEMENT (this “Agreement”), dated as of
September 26, 2013, is by and among (i) USG NEVADA LLC, a Delaware limited
liability company (the “Issuer”), (ii) DEUTSCHE BANK TRUST COMPANY
AMERICAS, in its capacity as collateral agent (together with its successors and
assigns in such capacity, the “Collateral Agent”), for the benefit of the
Secured Parties (as defined in the Note Agreement referred to below), and (iii)
DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as depositary (together
with its successors and assigns in such capacity, the “Depositary”). 

RECITALS: 

            A.       
The Issuer has entered into a Note Purchase Agreement, dated as of the
date hereof (as amended, restated, modified and supplemented from time to time,
the “Note Agreement”), with the note purchasers named therein (the
“Purchasers”), providing for the issuance and sale by the Issuer to the
Purchasers of the Issuer’s senior secured notes thereunder (as amended,
restated, modified and supplemented from time to time, collectively, the
“Notes”).

            B.       
The Purchasers have appointed Deutsche Bank Trust Company Americas to act as
Collateral Agent on behalf of the Secured Parties in respect of the transactions
contemplated by the Note Agreement and the other Financing Documents, pursuant
to the terms of the Collateral Agency Agreement, dated as of the date hereof (as
amended, modified or supplemented from time to time, the “Collateral Agency
Agreement”), by and among the Collateral Agent, the Depositary and the
holders of the Notes. 

            C.       
It is a condition precedent to the obligations of the Purchasers under the Note
Agreement that the parties hereto enter into this Agreement. 

            The parties therefore agree as follows: 

ARTICLE 1 

DEFINITIONS 

            1.1       
General. Capitalized terms not otherwise defined in this Agreement
shall have the meanings attributed to them in the Note Agreement, or, if not
defined herein or therein, the meanings given to those terms in the Uniform
Commercial Code as in effect from time to time in the State of New York. The
rules of interpretation set forth in Schedule B of the Note Agreement
shall apply to this Agreement. 

            1.2       
Certain Defined Terms. The following terms shall have the following
meanings (such definitions to be equally applicable to both singular and plural
forms of the terms defined):

                          “Acceptable Letter of Credit” means an
  unconditional, irrevocable, direct-pay letter of credit, with such terms as are
  satisfactory to the Required Holders in their sole discretion, for the account
  of a Person that is not Holdings or the Issuer, by a commercial bank or trust company organized under the laws of the United States or
a political subdivision thereof whose long-term debt is rated at least “A-” by
S&P and “A3” by Moody’s, unless such Person is not rated by S&P and
Moody’s, in which case it shall be rated not less than “A-” by S&P or “A3”
by Moody’s, naming the Depositary, on behalf of the Secured Parties, as the
beneficiary. In addition to and without limiting the foregoing, (i) an
Acceptable Letter of Credit shall have an initial expiration date at least one
year after the date of delivery of the Acceptable Letter of Credit to the
Depositary, and shall not be secured by any of the Collateral, (ii) the
documents related thereto shall not require any reimbursement by the Issuer of
any draw thereunder or payment by the Issuer of any fee or expense related
thereto, (iii) an Acceptable Letter of Credit shall entitle the beneficiary to
present draws for payment in New York, New York, and (iv) an Acceptable Letter
of Credit shall entitle the beneficiary to draw the stated amount thereof (A)
upon the occurrence of an Event of Default and (B) within the 30-day period
prior to its expiration date. 

                         
“Account Collateral” is defined in Section 2.2. 

                          “Business
Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York, New York are required or authorized to be closed.

                         
“Collateral” is defined in Section 2.2. 

                         
“Collateral Agency Agreement” is defined in Recital B. 

                          “Debt
Service” means, for any period, all payments of principal, interest, fees,
expenses or other charges, including Make-Whole Amounts, due and payable by the
Issuer in respect of all Obligations pursuant to the terms of the Financing
Documents in such period. 

                         
“Debt Service Reserve Account” is defined in Section 2.1(b)(ii) .

                         
“Debt Service Reserve Letter of Credit” is defined in Section 3.2(b)
. 

                         
“Disbursement Requisition” means a requisition in the form attached
hereto as Exhibit A. 

                         
“Maintenance Reserve Account” is defined in Section 2.1(b)(iii) .

                         
“Maintenance Reserve Letter of Credit” is defined in Section 3.3(b)
. 

                          “Maintenance
Reserve Requisition” means a requisition in the form attached hereto as
Exhibit B. 

                         
“Make-up Well Requisition” means a requisition in the form attached hereto
as Exhibit C. 

                         
“Make-up Well Reserve Account” is defined in Section 2.1(b)(iv) .

                         
“Minimum Debt Service Reserve Requirement” means $1,594,437. 

-2- 

                          “Minimum
Maintenance Reserve Requirement” means, on any date, an amount equal to the
projected capital expenditures for the 36-month period following such date as
set forth in the current Operating Budget for such period; provided that at
Closing the amount shall equal $640,797. 

                         
“Monthly Date” means the last Business Day of each month. 

                         
“Note Agreement” is defined in Recital A. 

                         
“Notes” is defined in Recital A. 

                          “Officer’s
Certificate” means a certificate of the chief financial officer, treasurer,
chief executive officer or president of the Issuer. 

                          “Payment
Date” means the last day of March, June, September and December in
each year, commencing with December 31, 2013, through the Maturity Date, and the
Maturity Date. 

                          “Payment
Requisitions” means, collectively, the Disbursement Requisitions,
Maintenance Reserve Requisitions, the Make-up Well Requisitions, Proceeds
Requisitions and Upgrade Reserve Requisitions. 

                          “Permitted
Investment” means any (a) marketable direct obligation of the United
States of America, (b) marketable obligation directly and fully guaranteed as to
interest and principal by the United States of America, (c) demand deposit with
the Depositary, or time deposit, certificate of deposit and banker's acceptance
issued by any member bank of the Federal Reserve System which is organized under
the laws of the United States of America or any state thereof or any United
States branch of a foreign bank, in each case whose equity capital is in excess
of $500,000,000 and whose long-term debt securities are rated “A” or better by
S&P and “A2” or better by Moody's, (d) commercial paper or tax exempt
obligations given the highest rating by Moody's and S&P, (e) obligations of
a commercial bank described in clause (c) above, in respect of the repurchase of
obligations of the type as described in clauses (a) and (b) hereof, provided
that such repurchase obligation shall be fully secured by obligations of the
type described in said clauses (a) and (b) and the possession of such obligation
shall be transferred to, and segregated from other obligations owned by, any
such bank, (f) money market instruments rated “AAA” by S&P and “Aaa” by
Moody's, and (g) marketable security rated not less than “A-1” by S&P or not
less than “Prime-1” by Moody's. In no event shall Permitted Investments include
any obligation, certificate of deposit, acceptance, commercial paper or
instrument which by its terms matures (A) more than 180 days after the date of
investment, unless a bank meeting the requirements of clause (c) above shall
have agreed to repurchase such obligation, certificate of deposit, acceptance,
commercial paper or instrument at its purchase price plus earned interest within
no more than 90 days after its purchase thereunder or (B) after the next Payment
Date. 

                         
“Pledged Accounts” is defined in Section 2.2. 

                         
“Proceeds Account” is defined in Section 2.1(b)(v) . 

-3- 

                          
“Proceeds Requisition” means a requisition in the form attached hereto as
Exhibit D. 

                         
“Purchasers” is defined in Recital A. 

                         
“Revenue Account” is defined in Section 2.1(b)(i) . 

                         
“Upgrade Reserve Account” is defined in Section 2.1(b)(vi) . 

                          “Upgrade
Reserve Requisition” means a requisition in the form attached hereto as
Exhibit E.

ARTICLE 2 

ESTABLISHMENT OF THE ACCOUNTS; GRANT OF SECURITY INTEREST

           
2.1        Creation of the
Pledged Accounts. 

                          (a)       
The Issuer hereby appoints Deutsche Bank Trust Company Americas to act
as the Depositary under this Agreement. Deutsche Bank Trust Company Americas
hereby agrees to act as Depositary under this Agreement on the express terms set
forth herein and to receive, accept and hold on deposit all amounts to be
delivered to or held by the Depositary pursuant to the express terms of this
Agreement, and to deposit promptly all such amounts into the Pledged Accounts
specified herein. The Depositary will hold and safeguard the Pledged Accounts
during the term of this Agreement in the name of the Issuer, in accordance with
the terms of this Agreement. 

                          (b)       
The Depositary hereby establishes at its office in New York, New York the
following non-interest bearing trust accounts which shall be maintained at all
times until the termination of this Agreement: 

                                       
(i)          a special account
entitled “USG Nevada Revenue A/C” (the “Revenue Account”); 

                                       
(ii)         a special
account entitled “USG Nevada Debt Service Reserve A/C” (the “Debt Service
Reserve Account”); 

                                       
(iii)        a special
account entitled “USG Nevada Maintenance Reserve A/C” (the “Maintenance
Reserve Account”); 

                                       
(iv)        a special
account entitled “USG Nevada Make-up Well Reserve A/C” (the “Make-up Well
Reserve Account”); and 

                                       
(v)         a special account
entitled “USG Nevada Proceeds A/C” (the “Proceeds Account”); and 

                                        
(vi)       a special
account entitled “USG Nevada Upgrade Reserve A/C” (the “Upgrade Reserve
Account”). 

-4- 

                          (c)       
The account number for each of the Pledged Accounts and the Depositary’s wiring
instructions are set forth on Schedule 1 hereto. No payments will be made
out of the Pledged Accounts except for the purposes and on the terms provided in
this Agreement. 

            2.2       
Grant of Security Interest. As security for the prompt and complete
payment of the principal of, interest (including, without limitation, interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) and
Make-Whole Amount, if any, on the Notes issued and delivered and outstanding
under the Note Agreement, the payment of all other sums owing to the Secured
Parties under the Note Agreement, the Notes and the other Financing Documents
when due (whether at stated maturity, by acceleration, because of mandatory
prepayment, or otherwise, and including the payment of amounts which would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. §362(a)), and the performance of the covenants
contained in the Note Agreement and the other Financing Documents, the Issuer
hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to the
Collateral Agent, for the benefit of the Secured Parties, and grants to the
Collateral Agent, for the benefit of the Secured Parties, a continuing Lien on
and security interest in: (a) the Revenue Account, the Debt Service Reserve
Account, the Maintenance Reserve Account, the Make-up Well Reserve Account, the
Proceeds Account and the Upgrade Reserve Account (the Revenue Account, the Debt
Service Reserve Account, the Maintenance Reserve Account, the Make-up Well
Reserve Account, the Proceeds Account and the Upgrade Reserve Account, each, a
“Pledged Account” and, collectively, the “Pledged Accounts”), any
cash balances, securities and other investment property and other property from
time to time credited to any of the Pledged Accounts and any and all proceeds
thereof, whether now or hereafter existing or arising (collectively, the
“Account Collateral”); and (b) to the extent not already granted pursuant
to clause (a) above, (i) all Accounts of the Issuer, including any and all
accounts receivable and other Project Revenues, including all amounts received
by the Issuer pursuant to the Material Project Documents, and all interest,
profits or other income derived from the investment of such amounts; (ii) all
money and securities from time to time held by the Collateral Agent or the
Depositary under the terms of this Agreement and any and all other real or
personal property, whether now or in the future, by delivery or by writing of
any kind conveyed, pledged, assigned or transferred to the Collateral Agent or
the Depositary, as and for additional security hereunder by Issuer, (iii) all
funds and accounts established under this Agreement and the investments thereof,
if any, and money, securities and obligations therein (subject to disbursements
from any such fund or account upon the conditions set forth in this Agreement),
including any investment property, deposit accounts, letter-of-credit rights
securing, or commercial tort claims relating to the foregoing; and (iv) to the
extent not listed above as original collateral, the proceeds (including, without
limitation, insurance proceeds) and products of any or all of the foregoing, and
all accessions to, substitutions for or replacements of and rents and profits
from any or all of the foregoing and all of the Issuer’s rights, remedies,
security, Liens and supporting obligations, in, to and in respect of the
foregoing (collectively, those items listed in clauses (a) and (b) above are
referred to herein as the “Collateral”).

           
2.3        Continuing Security
Interest. This Agreement creates a continuing security interest in the
Collateral, which will remain in full force and effect until the indefeasible
payment in full in cash of the Obligations (excluding contingent
obligations and reimbursement obligations that by their terms expressly survive
the repayment in full of the Notes and for which no claim has been asserted).
If, at any time for any reason (including the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any of the Issuer, any Issuer
Party or any other Person or the appointment of any intervenor or conservator
of, or agent or similar official for any of the Issuer, any Issuer Party or any
other Person or any of their respective properties), any payment received by the
Collateral Agent, the Depositary or any holder of a Note in respect of the
Obligations is rescinded or must otherwise be restored or returned by such
Person, this Agreement will continue to be effective or will be reinstated, if
necessary, as if such payment had not been made. 

-5- 

           
2.4        Securities
Accounts. 

                          (a)       
The parties agree that each Pledged Account is and will at all times be
maintained as a Securities Account. 

                          (b)       
The Depositary agrees to act as a Securities Intermediary with respect to the
Pledged Accounts. The Issuer acknowledges that the Depositary shall act as a
Securities Intermediary with respect to the Pledged Accounts. 

                          (c)       
Upon the delivery or transfer of any cash or other Account Collateral
to the Depositary, the Depositary will indicate by book entry that such Account
Collateral has been credited to the appropriate Pledged Account or accept such
Account Collateral for credit to the appropriate Pledged Account, as applicable.
The Depositary agrees that all Account Collateral delivered or transferred to
the Depositary pursuant to this Agreement will be promptly credited to the
applicable Pledged Account. If the Depositary receives cash or other Account
Collateral without directions as to which Pledged Account the Account Collateral
is to be credited, the Depositary shall credit such Account Collateral to the
Revenue Account and request written directions from the Issuer. Upon receipt of
written directions the Depositary shall transfer such Account Collateral and
credit it to the appropriate Pledged Account set forth in such directions. All
Account Collateral credited to the Pledged Accounts shall be treated as
Financial Assets. 

                          (d)       
The Depositary agrees that all Financial Assets credited to or carried in any
Pledged Account will be registered in the name of, payable to or to the order
of, or endorsed to, the Depositary, for the benefit of the Collateral Agent, or
in blank. 

                          (e)       
To the extent that any Pledged Account is not considered a Securities
Account, such Pledged Account shall be deemed to be a Deposit Account, which the
Issuer shall maintain with the Depositary acting not as a Securities
Intermediary but as a Bank. 

                          (f)       
All parties hereto agree that, for purposes of the UCC, notwithstanding anything
to the contrary contained in any other agreement relating to the establishment
and operation of the Pledged Accounts, the jurisdiction of the Depositary (in
its capacity as the Securities Intermediary or as the Bank) is the State of New
York and the laws of the State of New York govern the establishment and
operation of the Pledged Accounts. 

            2.5       
Exclusive Instructions. Notwithstanding any provision of this
Agreement, the Collateral Agent (acting at the direction of the Required
Holders) shall be entitled at any time to give the Depositary instructions as to the withdrawal or
disposition of funds or other Account Collateral from time to time credited to
or carried in any Pledged Account, or as to any other matters relating to any
Pledged Account or any Account Collateral, without the further consent of the
Issuer or any other Person. The Depositary hereby agrees to comply with any such
instructions received from the Collateral Agent (acting at the direction of the
Required Holders) without any further consent from the Issuer or any other
Person and, upon the occurrence and during the continuance of a Default or an
Event of Default, shall cease honoring instructions received from the Issuer or
any other Person. Such instructions may include the giving of stop payment
orders for any payments requested pursuant to a Payment Requisition. The
Depositary shall be fully entitled to rely conclusively on such instructions
from the Collateral Agent (acting at the direction of the Required Holders),
even if the instructions are contrary to any instructions or Payment
Requisitions that the Issuer may give. 

-6- 

            2.6       
No Other Agreements. The Depositary represents and warrants to the
Collateral Agent that the Depositary has not entered, and the Depositary
covenants with the Collateral Agent that it will not enter, into any agreement
with any other Person by which the Depositary is obligated to comply with
instructions from such other Person as to the disposition of funds from any
Pledged Account or other dealings with any Account Collateral. 

ARTICLE 3 

DEPOSITS INTO ACCOUNTS 

            3.1       
Revenue Account. The Issuer agrees that, and confirms that it has
instructed each of the parties to the Material Project Documents that, all
payments made to the Issuer under each Material Project Document, including any
liquidated damages payments and warranty payments, are to be made directly to
the Depositary for deposit into the Revenue Account. The Issuer will instruct
each other party to a Material Project Document to which it becomes a party
after the date hereof to make all payments directly to the Depositary for
deposit into the Revenue Account. In the event that, notwithstanding the
foregoing, any amount is remitted directly to the Issuer, the Issuer will
promptly deliver such amounts to the Depositary for deposit into the Revenue
Account, and, until delivery, the Issuer shall hold such amounts in trust for
the Depositary. The Issuer agrees further that all other amounts received by it
from any source (other than any Loss Proceeds, which shall be deposited in the
Proceeds Account) shall be deposited promptly into the Revenue Account. Until so
deposited, the Issuer shall hold such amounts in trust for the Depositary.

           
3.2        Debt Service Reserve
Account. 

                          (a)       
On the Closing Date, the Issuer will deposit cash in the amount of the
Minimum Debt Service Reserve Requirement into the Debt Service Reserve Account.
Thereafter, on each Payment Date, the Depositary will withdraw from the Revenue
Account, subject to and in accordance with the priorities set forth in
Section 4.1, for deposit into the Debt Service Reserve Account funds
necessary to cause the balance in the Debt Service Reserve Account (after
accounting for the amount of cash then on deposit in the Debt Service Reserve
Account and any amount then available to be paid or drawn under any Debt Service
Reserve Letter of Credit) to equal the Minimum Debt Service Reserve
Requirement, all as set forth in a Disbursement Requisition. 

-7- 

                          (b)       
If no Default or Event of Default has occurred and is continuing, in lieu of
depositing cash into (or in replacement of cash theretofore deposited into) the
Debt Service Reserve Account (including in lieu of making the deposit of cash
described in Section 3.2(a) ), the Issuer may cause to be delivered to
the Depositary, and the Depositary shall accept, a single Acceptable Letter of
Credit issued in an initial stated amount equal to (x) the Minimum Debt Service
Reserve Requirement or (y) such lesser amount such that the aggregate amount of
cash then on deposit in the Debt Service Reserve Account (after giving effect to
the release of any cash in accordance with the next succeeding sentence), plus
any amount then available to be paid or drawn under such Debt Service Reserve
Letter of Credit, equals or exceeds the Minimum Debt Service Reserve Requirement
(the “Debt Service Reserve Letter of Credit”). On the date the Debt
Service Reserve Letter of Credit is delivered to the Depositary in accordance
with this Section 3.2(b) , the Depositary shall withdraw cash then on
deposit in the Debt Service Reserve Account in an amount equal to the face
amount of such Debt Service Reserve Letter of Credit and transfer such cash
directly to such account(s) or to such payee(s) as designated by the Issuer in
its sole discretion. To the extent at any time thereafter the sum of (i) the
amount then available to be drawn under a Debt Service Reserve Letter of Credit
plus (ii) cash then on deposit in the Debt Service Reserve Account exceeds the
Minimum Debt Service Reserve Requirement, as set forth in an Officer’s
Certificate of the Issuer received by the Depositary, and provided that no
Default or Event of Default has occurred and is continuing, the Depositary shall
promptly transfer cash held in the Debt Service Reserve Account in the amount of
such excess to such account(s) or to such payee(s) as specified in such
Officer’s Certificate. As a condition to the delivery to the Depositary of the
Debt Service Reserve Letter of Credit, the Issuer shall deliver to the
Depositary an Officer’s Certificate stating that such letter of credit
constitutes an Acceptable Letter of Credit in the amount required hereby, and
that all conditions precedent provided for in this Section 3.2(b) to the
delivery of such letter of credit have been satisfied. The Depositary shall have
no duty whatsoever to confirm whether such letter of credit meets the
requirements of an Acceptable Letter of Credit and may conclusively rely on the
certification of the Issuer. 

           
3.3        Maintenance Reserve
Account.

                          (a)       
On the Closing Date, the Issuer will deposit $640,797 into the
Maintenance Reserve Account. Thereafter, on each Payment Date, the Depositary
shall withdraw from the Revenue Account, subject to and in accordance with the
priorities set forth in Section 4.1, for deposit in the Maintenance
Reserve Account, funds necessary to cause the balance in the Maintenance Reserve
Account (after accounting for the amount of cash then on deposit in the
Maintenance Reserve Account and any amount then available to be paid or drawn
under any Maintenance Reserve Letter of Credit) to equal the Minimum Maintenance
Reserve Requirement as of such Payment Date, all as set forth in a Disbursement
Requisition. 

                          (b)       
If no Default or Event of Default has occurred and is continuing, in lieu of
depositing cash into (or in replacement of cash theretofore deposited into) the
Maintenance Reserve Account in accordance with Section 3.3(a) , the
Issuer may cause to be delivered to the Depositary, and the Depositary shall
accept an Acceptable Letter of Credit in a stated amount equal to (x) the
Minimum Maintenance Reserve Requirement on the date of such Acceptable Letter of Credit or (y) such lesser amount such that the
aggregate amount of cash then on deposit in the Maintenance Reserve Account
(after giving effect to the release of any cash in accordance with the next
succeeding sentence), plus any amount then available to be paid or drawn under
such Maintenance Reserve Letter of Credit, equals or exceeds the Minimum
Maintenance Reserve Requirement (the “Maintenance Reserve Letter of
Credit”). On the date the Maintenance Reserve Letter of Credit is delivered
to the Depositary in accordance with this Section 3.3(b) , the Depositary
shall withdraw cash then on deposit in the Maintenance Reserve Account in an
amount equal to the face amount of such Maintenance Reserve Letter of Credit and
transfer such cash directly to such account(s) or payee(s) as the Issuer
designates, in its sole discretion. To the extent at any time thereafter the sum
of (i) the amount then available to be drawn under a Maintenance Reserve Letter
of Credit, plus (ii) any cash then on deposit in the Maintenance Reserve Account
exceeds the Minimum Maintenance Reserve Requirement, as set forth in an
Officer’s Certificate of the Issuer received by the Depositary, and provided
that no Default or Event of Default has occurred and is continuing, the
Depositary shall promptly transfer cash in the amount of such excess directly to
such account(s) or to such payee(s) as are specified in such Officer’s
Certificate. As a condition to the delivery to the Depositary of the Maintenance
Reserve Letter of Credit, the Issuer shall deliver to the Depositary an
Officer’s Certificate stating that such letter of credit constitutes an
Acceptable Letter of Credit in the amount required hereby, and that all
conditions precedent provided for in this Section 3.3(b) to the delivery
of such letter of credit have been satisfied. The Depositary shall have no duty
whatsoever to confirm whether such letter of credit meets the requirements of an
Acceptable Letter of Credit and may conclusively rely on the certification of
the Issuer. 

-8- 

           
3.4        Make-up Well Reserve
Account.

            On
each Payment Date, the Depositary will withdraw from the Revenue Account, in
accordance with the priorities set forth in Section 4.1, for deposit in
the Make-up Well Reserve Account, the amount equal to the Required Make-up Well
Reserve Account Balance minus the then-current balance in the Make-up Well
Reserve Account, all as set forth in a Disbursement Requisition.

           
3.5        Proceeds
Account.

            The
Issuer shall deposit, or cause to be deposited, into the Proceeds Account, any
Loss Proceeds (which, for the avoidance of doubt, excludes proceeds of business
interruption insurance (which shall be deposited into the Revenue Account))
received by the Issuer with respect to a Loss, including a Major Loss. 

           
3.6        Upgrade Reserve
Account.

            On
the Closing Date, the Issuer will deposit $253,617.00 into the Upgrade Reserve
Account.

ARTICLE 4 

WITHDRAWALS FROM ACCOUNTS 

           
4.1        Withdrawals from the
Revenue Account. 

-9- 

                          The
Depositary will make withdrawals from the Revenue Account in the following
priority in accordance with a Disbursement Requisition of the Issuer if no
Default or Event of Default has occurred and is continuing or would exist upon
giving effect to the application (which shall be certified by the Issuer in each
such Disbursement Requisition), described below: 

                         
(a)        FIRST: on each
Monthly Date, the Depositary will withdraw and transfer to accounts and payees
specified in a Disbursement Requisition all fees, expenses and indemnities of
the Collateral Agent, the Depositary and the holders of the Notes then due and
payable or projected to be payable before the next Monthly Date, as set forth in
the Disbursement Requisition; 

                         
(b)        SECOND: on each
Monthly Date, the Depositary shall withdraw and transfer to the account or
accounts indicated in the Disbursement Requisition the amounts then payable or
projected to be payable before the next Monthly Date for O&M Costs (other
than, so long as the Operator is an Affiliate of the Issuer, amounts payable
pursuant to Section 6.1 or 6.2 of the O&M Agreement), as set forth in the
Disbursement Requisition; 

                         
(c)        THIRD: on each
Payment Date, the Depositary will withdraw and transfer to the holders of the
Notes principal, interest, fees and Make-Whole Amounts, if any, then due and
payable (other than mandatory prepayments of the Notes pursuant to section
8.1(b)(iii) of the Note Agreement), as set forth in the Disbursement
Requisition; 

                         
(d)        FOURTH: on each
Payment Date, the Depositary will withdraw and transfer to the Operator (if not
paid pursuant to clause SECOND of this Section 4.1) amounts then due and
payable pursuant to Sections 6.1 and 6.2 of the O&M Agreement, as set forth
in the Disbursement Requisition; 

                         
(e)        FIFTH: on each
Payment Date, the Depositary will withdraw and transfer to the Debt Service
Reserve Account the amount required to be deposited therein in accordance with
Section 3.2, as set forth in the Disbursement Requisition; 

                         
(f)        SIXTH: on each
Payment Date, the Depositary will withdraw and transfer to the Maintenance
Reserve Account the amount required to be deposited therein in accordance with
Section 3.3, as set forth in the Disbursement Requisition; 

                         
(g)        SEVENTH: on each
Payment Date during a Well Reserve Period (First Well) or Well Reserve Period
(Subsequent Well), the Depositary will withdraw and transfer to the Make-up Well
Reserve Account the amount required to be deposited therein in accordance with
Section 3.4, as set forth in the Disbursement Requisition; 

                         
(h)        EIGHTH: on each
Payment Date on which a mandatory prepayment of the Notes is required to be made
pursuant to Section 8.1(b)(iii) of the Note Agreement, the Depositary will
withdraw and transfer to the holders of the Notes principal, interest and
Make-Whole Amount, if any, then due and payable, as set forth in the
Disbursement Requisition; and 

                         
(i)        NINTH: on a date
specified in a Disbursement Requisition that is at least 15 days but no more
than 30 days following delivery of the DSCR Notice relating to the most recent Payment Date, unless the Depositary has been notified
that any Restricted Payment Condition has not been met on such date, the
Depositary shall withdraw any remaining funds in the Revenue Account and
transfer such funds directly to the account(s) or payee(s) designated by the
Issuer in its sole discretion, as set forth in the Disbursement Requisition.

-10- 

            4.2       
Withdrawals from the Debt Service Reserve Account. On each Payment
Date and on each other date on which Debt Service is due and owing on the Notes,
the Depositary will, after application to the payment of Debt Service of all
funds available therefor in the Revenue Account, at the written request of the
Collateral Agent (in accordance with the directions of the Required Holders),
withdraw from the Debt Service Reserve Account and/or draw on the Debt Service
Reserve Letter of Credit and/or withdraw from the Proceeds Account and transfer
to the holders of the Notes amounts necessary to pay Debt Service then due and
owing to such holders (as set forth in such written request). If no Event of
Default exists, any draw on the Debt Service Reserve Letter of Credit shall be
made only to the extent the amount of any cash then available in the Debt
Service Reserve Account is insufficient to satisfy the amount of Debt Service
then due and owing on the Notes (after application of all funds available
therefor in the Revenue Account). 

           
4.3        Withdrawals from the
Maintenance Reserve Account.

                          (a)       
The Issuer is authorized to submit Maintenance Reserve Requisitions to
request transfers of funds to pay costs of repair and replacement of major items
of equipment for the Project. Within three Business Days after the Depositary
receives a Maintenance Reserve Requisition, the Depositary will withdraw from
the Maintenance Reserve Account and/or draw on the Maintenance Reserve Letter of
Credit and transfer to the accounts or payees specified in the Maintenance
Reserve Requisition the amounts specified therein, provided no such transfer
shall be made if the Depositary has received written notice that a Default or
Event of Default has occurred and is continuing. 

                          (b)       
Withdrawals from the Maintenance Reserve Account, other than those made
in accordance with Sections 4.3(a), shall be made by the Depositary only
in accordance with the written directions of the Collateral Agent (given at the
direction of the Required Holders). 

           
4.4        Withdrawals from
Make-up Well Reserve Account.

                          (a)       
The Issuer is authorized to submit Make-up Well Requisitions to request
transfers of funds to pay costs of drilling geothermal wells on the Site. Within
three Business Days after the Depositary receives a Make-up Well Requisition,
the Depositary will withdraw from the Make-up Well Reserve Account and transfer
to the accounts or payees specified in the Make-up Well Requisition the amounts
specified therein, provided no transfer shall be made if the Depositary has
received written notice that a Default or Event of Default has occurred and is
continuing.

                          (b)       
Withdrawals from the Make-up Well Reserve Account, other than those
made in accordance with Section 4.4(a) , shall be made by the Depositary
only in accordance with the written directions of the Collateral Agent (given at
the direction of the Required Holders).

-11- 

           
4.5        Withdrawals from the
Proceeds Account.

                          (a)       
If the Depositary receives written notice from the Issuer or the Collateral
Agent (given at the direction of the Required Holders) that a Major Loss has
occurred, all Insurance Proceeds deposited in the Proceeds Account shall be
withdrawn by the Depositary and transferred to the holders of the Notes to pay
the Obligations in accordance with Section 8.1(b)(ii) of the Note
Agreement in accordance with written instructions delivered by the Collateral
Agent (acting at the direction of the Required Holders).

                          (b)       
The Issuer is authorized to submit Proceeds Requisitions to request transfers of
Loss Proceeds from the Proceeds Account to restore or repair the Project for the
related Loss or series of Losses to which such Loss Proceeds relate, as
specified in each Proceeds Requisition; provided that the Issuer shall
not be authorized to submit any Proceeds Requisitions with respect to (i) Loss
Proceeds received in connection with a Loss or series of related Losses in an
aggregate amount exceeding $250,000, unless the Issuer has satisfied each of the
requirements set forth in Section 9.2(b)(ii) of the Note Agreement, or
(ii) any Major Loss. Within three Business Days after the Depositary receives a
Proceeds Requisition, the Depositary will withdraw from the Proceeds Account and
transfer to the accounts or payees specified in the Proceeds Requisition the
amounts specified therein, provided that no such transfer shall be made if the
Depositary has received written notice that a Default or Event of Default has
occurred and is continuing. 

                          (c)       
After receipt of a notice and instruction from the Issuer or the Collateral
Agent (given at the direction of the Required Holders) that the Issuer has
completed restoring or repairing the Project resulting from a Loss or series of
related Losses and has paid all amounts owing in respect thereof to third
parties, the Depositary shall withdraw from the Proceeds Account and transfer to
the Revenue Account a sum equal to all funds remaining on deposit in the
Proceeds Account relating to such Loss or series of related Losses. 

                          (d)       
Withdrawals from the Proceeds Account, other than those made in accordance with
Section 4.5(a), 4.5(b) or 4.5(c) , shall be made by the Depositary
only in accordance with the written directions of the Collateral Agent (given at
the direction of the Required Holders). 

           
4.6        Withdrawals from the
Upgrade Reserve Account.

                          (a)       
The Issuer is authorized to submit Upgrade Reserve Requisitions to request
transfers of funds to pay costs of installation of a shunt reactor in the
Project’s transmission line. Within three Business Days after the Depositary
receives a Upgrade Reserve Requisition, the Depositary will withdraw from the
Upgrade Reserve Account and transfer to the accounts or payees specified in the
Upgrade Reserve Requisition the amounts specified therein, provided no such
transfer shall be made if the Depositary has received written notice that a
Default or Event of Default has occurred and is continuing. 

-12- 

                          (b)       
The Issuer shall send written notice to the Depositary when
installation of the shunt reactor has been completed and all costs relating
thereto have been paid. Within three Business Days after the Depositary receives
such notice, the Depositary will withdraw from the Upgrade Reserve Account all
funds remaining therein (if any), transfer such funds to the Revenue Account and
close the Upgrade Reserve Account. 

                          (c)       
Withdrawals from the Upgrade Reserve Account, other than those made in
accordance with Sections 4.6(a) or (b), shall be made by the
Depositary only in accordance with the written directions of the Collateral
Agent (given at the direction of the Required Holders). 

            4.7       
No Other Withdrawals. Except as specifically set forth in this
Article 4, no withdrawals or transfers in respect of any of the Pledged
Accounts shall be made, except upon the written direction of the Collateral
Agent (given at the direction of the Required Holders). 

            4.8       
Review of Supporting Documents and Certifications. The Depositary
shall not be required to review or confirm any documents, invoices,
certifications or calculations accompanying or contained in any Payment
Requisition or other withdrawal request other than the schedules provided for in
this Agreement, the Depositary’s sole responsibilities with respect to such
documents, invoices or certifications being to ascertain that any document,
invoice, certification or calculation referenced in a Payment Requisition or a
schedule thereto or such other withdrawal request that has been provided with
the Payment Requisition or such other withdrawal request and to deliver copies
thereof to the holders upon receipt. 

            4.9       
Reliance on Payment Requisitions. The Depositary may conclusively
rely on the accuracy of the information in each Payment Requisition delivered by
the Issuer hereunder and will act in accordance therewith, unless prior to the
date funds are withdrawn from any Pledged Account the Collateral Agent or any
holder delivers a written notice to the Depositary (with a copy to the Issuer)
that the amount requested to be withdrawn from any Pledged Account is incorrect
or that the Issuer has failed to include any amount required to be withdrawn.
The Depositary will conclusively rely on, and act in accordance with, any such
notice by the Collateral Agent or any holder. If the Issuer fails to timely
deliver any required Payment Requisition, the Collateral Agent (at the direction
of the Required Holders) may direct the Depositary, in writing, to make
withdrawals or apply funds in the manner contemplated by this Article 4.

            4.10     
Delivery of Payment Requisitions. Any Payment Requisition,
direction or notice and related certificate given by the Issuer to the
Depositary under this Agreement must (i) be delivered to the Depositary and the
Collateral Agent (with a copy to the holders of the Notes) at least three
Business Days prior to the first date specified therein for a withdrawal and
transfer of funds and (ii) be in writing and state with specificity the dollar
amount, source and disposition of funds (including wire transfer instructions)
requested to be withdrawn from any Pledged Account. Payment Requisitions shall
be delivered to the Depositary in accordance with the notice provisions in
Section 8.10(a) . 

            4.11     
Pro Rata Application. If funds remaining in the Revenue Account at
any level in Section 4.1 are insufficient to pay all amounts set forth in
a Disbursement Requisition at such level, funds shall be applied on a pro rata
basis among payees and accounts specified in a Disbursement Requisition at such level or, solely with respect
to clauses SECOND, FOURTH and NINTH of Section 4.1 and so long as there
is no Default or Event of Default, as otherwise directed by the Issuer in
writing. 

-13- 

ARTICLE 5 

PERMITTED INVESTMENTS; NOTICES OF DEFAULT; ETC. 

           
5.1        Permitted
Investments. 

                          (a)       
The Depositary will invest cash held in the Pledged Accounts in
Permitted Investments upon receipt of the notices specified in this Section
5.1 at the written direction of the Issuer. The Issuer shall notify the
Depositary in writing from time to time of the specific Permitted Investments in
which it desires cash in the Pledged Accounts to be invested. Any such notice
shall certify that the requested investment constitutes a Permitted Investment.
The Collateral Agent authorizes the Issuer to submit such notices (which may be
standing instructions of the Issuer) and directs the Depositary to invest cash
in the Pledged Accounts in accordance with such notices. 

                          (b)       
The Depositary is authorized and directed to sell or liquidate all or any of the
Permitted Investments when the proceeds thereof are required for transfer of
funds pursuant to the terms of this Agreement. All earnings and losses on any
investments shall be credited or debited, as applicable, to the Pledged Account
from which such investment was made. Any income tax payable on account of income
or gain on Permitted Investments will be for the account of the Issuer. 

                          (c)       
The Depositary shall have no obligation to invest or reinvest the funds
if deposited with the Depositary after 11:00 a.m. (New York City time) on such
day of deposit. The Depositary shall have no responsibility for any investment
losses resulting from the investment, reinvestment or liquidation of the funds.
If a selection is not made and a written direction not given to the Depositary,
the funds shall be invested in the JPMorgan Prime Money Market Fund -
Institutional Share Class, Fund #829. It is agreed and understood that the
entity serving as Depositary or its Affiliates may earn fees associated with the
investments outlined above in accordance with the terms of such investments. In
no event shall the Depositary be deemed an investment manager or adviser in
respect of any selection of investments hereunder. It is understood and agreed
that the Depositary or its affiliates are permitted to receive additional
compensation that could be deemed to be in the Depositary’s economic
self-interest for (i) serving as investment adviser, administrator, shareholder
servicing agent, custodian or sub-custodian with respect to certain of the
investments, (ii) using affiliates to effect transactions in certain investments
and (iii) effecting transactions in investments. 

            5.2       
Notice of Default. The Depositary shall rely conclusively on any
written notice it receives from the Collateral Agent, the Issuer or any holder
of a Note stating that a Default or an Event of Default exists. The Depositary
will not be deemed to have notice or knowledge of a Default or an Event of
Default unless and until it receives written notice from the Collateral Agent,
the Issuer, or a holder of a Note. If the Depositary has received written notice
that a Default or Event of Default exists, the Depositary shall be
deemed to have received written notice from the Collateral Agent (given at the
direction of the Required Holders) that the Restricted Payment Conditions are
not met. The Depositary will conclusively rely on a notice from the Collateral
Agent or a holder of a Note, notwithstanding any notice, direction, Payment
Requisition or certificate to the contrary received from the Issuer. 

-14- 

            5.3       
Event of Default. Notwithstanding anything in this Agreement to the
contrary, if the Depositary has received notice from the Issuer, the Collateral
Agent or any holder of a Note that a Default or Event of Default exists and
until the Depositary receives notice from (x) with respect to a Default or Event
of Default with respect to any payments owed to a holder, such holder, or (y)
with respect to any other Default or Event of Default, the Collateral Agent
(acting at the direction of the Required Holders), that such Default or Event of
Default has ceased to exist, (a) the Depositary will hold and apply the balances
in the Pledged Accounts in the manner directed by the Collateral Agent (in
accordance with directions of the Required Holders), and (b) except as provided
in clause (a), the Required Holders (acting through the Collateral Agent in
accordance with the Collateral Agency Agreement) will be entitled to give
instructions as to the disposition or investment of the Pledged Accounts and the
other Account Collateral, without the consent of the Issuer or any other
Person.

            5.4       
Account Balance Statements. The Depositary will, on a monthly basis
and at such other times as the Issuer or the Collateral Agent may request,
provide to the Issuer, the Collateral Agent and the holders of the Notes upon
request account balance statements in respect of the Pledged Accounts. The
requirements of this Section 5.4 shall be performed by the Depositary by
granting the Issuer, the Collateral Agent and the holders on-line read only
access to the Pledged Accounts. 

ARTICLE 6 

EXPENSES; INDEMNIFICATION; FEES 

            6.1       
Indemnification. The Issuer agrees to indemnify and hold harmless the
Depositary, its officers, employees, agents and their respective Affiliates from
and against any and all claims, liabilities, obligations, losses, damages,
penalties, judgments, costs, expenses and disbursements of any kind or nature
whatsoever (including documented costs and expenses of its counsel) that may be
imposed on, incurred by, or asserted against the Depositary, its Affiliates,
employees, agents or their respective Affiliates by any Person in any way
relating to or arising out of (a) this Agreement and the transactions hereunder
(including, without limitation, enforcement of this Agreement) or (b) any action
taken or omitted by the Depositary in connection with this Agreement; provided,
however, that the Issuer will not be liable to the Depositary, its Affiliates,
employees, agents or their respective Affiliates for any portion of such claims,
liabilities, obligations, losses, damages, penalties, judgments, costs, expenses
or disbursements resulting from the Depositary’s, its Affiliates’, employees’,
agents’ or their respective Affiliates’ gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction. Notwithstanding
anything contained to the contrary herein, under no circumstances shall the
Depositary be liable for special, indirect, consequential or punitive damages
hereunder. In addition, the indemnities from the Issuer set forth in Section
15.2 of the Note Agreement and the exceptions to the requirement of the
Issuer to indemnify the parties as set forth therein shall cover the administration of this
Agreement by the Depositary as if they were fully set forth herein. 

-15- 

            6.2       
Fees. The Issuer agrees to pay to the Depositary its expenses
(including reasonable counsel fees and expenses) and the fees separately agreed
to by the Issuer and the Depositary. 

            6.3       
Survival. The obligations of the Issuer to the Depositary under this
Article 6, Section 7.2, Section 8.12 or contained in any separate
agreement referred to in this Article 6 shall survive the termination of
this Agreement and the resignation or removal of the Depositary. 

ARTICLE 7 

NO SET-OFF; SUCCESSOR DEPOSITARY 

            7.1       
Waiver. The Depositary agrees not to exercise any right of recoupment or
set-off or to assert any security interest or other Lien that the Depositary may
have against or in any of the Pledged Accounts on account of any credit extended
by the Depositary to the Issuer or any other obligation owed to the Depositary
by the Issuer or any other Person, except a security interest or other Lien
granted to the Depositary under the Financing Documents in respect of amounts
owing to the Depositary thereunder. 

           7.2       
Successor Depositary. Subject to the appointment and acceptance of a
successor Depositary as provided below, the Depositary may resign at any time by
giving at least 30 days’ prior written notice to the Issuer, the Collateral
Agent and the holders of the Notes, or may be removed at any time upon 30 days’
prior written notice by the Required Holders. Upon any resignation or removal,
the Required Holders will have the right to appoint a successor Depositary. If
no successor Depositary has been appointed and has accepted its appointment
within 30 days after notice of the resignation or removal of the Depositary, the
Depositary may at the expense of the Issuer petition a court of competent
jurisdiction for the appointment of a successor Depositary, which will be a
commercial bank organized under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of its appointment as Depositary, the successor Depositary will
succeed to and be vested with all the rights, powers, privileges and duties of
the Depositary, and the Depositary will be discharged from its duties and
obligations under this Agreement. After a Depositary’s resignation or removal,
the provisions of Article 6 will inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Depositary. Any corporation
into which the Depositary may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Depositary shall be a party, or any corporation
succeeding to all or substantially all the corporate trust or agency business of
the Depositary, shall be the successor of the Depositary hereunder; provided
that such corporation shall be otherwise eligible under this Article 7 to
act as a successor Depositary, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. 

-16- 

ARTICLE 8 

MISCELLANEOUS 

            8.1       
Further Assurances. At any time as necessary and from time to time
upon the written request of the Depositary, the Collateral Agent or a holder,
the Issuer will execute and deliver such further documents and instruments and
do such other acts as necessary or as the Depositary, the Collateral Agent or a
holder may reasonably request in order to create, perfect, maintain and preserve
first-priority Liens on the Collateral in favor of the Collateral Agent, for the
benefit of the Secured Parties, and otherwise to carry out the purposes of this
Agreement. The Issuer authorizes the Collateral Agent, in its own name, at any
time and from time to time, to give notice to any Person of the assignment of
the Collateral to the Collateral Agent, for the benefit of the Secured Parties,
and of the Collateral Agent’s Lien and security interest in the Collateral. The
Issuer further authorizes the Collateral Agent, at any time and from time to
time as necessary, to file in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that describe the Collateral
and contain other information required by the Uniform Commercial Code for the
sufficiency or filing office acceptance of any financing statement or amendment.
The Issuer agrees to furnish any such information to the Collateral Agent upon
request. Nothing herein shall require the Depositary or the Collateral Agent to
file any financing statement, continuation statement or amendment thereto in any
public office at any time or times or to otherwise take any action to perfect or
maintain the perfection of the Lien on the Collateral in favor of the Collateral
Agent except as expressly provided herein, or to give notice of any such Lien to
any third party, all such responsibilities being responsibilities of the Issuer.
Neither the Depositary nor the Collateral Agent, nor any of their respective
officers, directors, employees, attorneys or agents, shall be responsible for
the existence, genuineness or value of any collateral, for the legality,
enforceability, effectiveness or sufficiency of the any security arrangements
with respect thereto, for the creation, perfection, priority, sufficiency or
protection of any lien. 

            8.2       
Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. The Issuer may not assign or otherwise transfer any of
its rights under this Agreement. Any holder of Notes will have the right to
transfer, assign, pledge and grant participations in their rights and interests
under this Agreement in accordance with the terms of the Note Agreement. The
Depositary may only assign or otherwise transfer its rights and obligations
hereunder to a successor in accordance with Section 7.2. The Collateral
Agent may only assign or otherwise transfer its rights and obligation hereunder
to a successor in accordance with Section 2.7 of the Collateral Agency
Agreement. 

            8.3       
Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision. 

            8.4       
Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant shall not (absent such
an express contrary provision) be deemed to excuse compliance with any other
covenant. 

-17- 

            8.5       
Counterparts. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties shall constitute a
single binding agreement. A facsimile or electronic transmission of the
signature page to this Agreement by any party hereto shall be effective as the
signature page of such party and shall be deemed to constitute an original
signature of such party to this Agreement and shall be admissible into evidence
for all purposes. 

            8.6       
Governing Law. THIS AGREEMENT, AND ANY INSTRUMENT OR AGREEMENT
REQUIRED HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN), SHALL BE
GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT
REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. 

            8.7       
Consent to Jurisdiction. The parties agree that any legal action or
proceeding by or against the Issuer or with respect to or arising out of this
Agreement or any other Financing Document may be brought in or removed to the
courts of the State of New York, in and for the County of New York, or of the
United States of America for the Southern District of New York. By execution and
delivery of this Agreement, each party accepts, for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each of the parties irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at its address for notices as specified herein. Each of the parties
agrees that such service upon receipt (a) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(b) shall, to the fullest extent permitted by applicable law, be taken and held
to be valid personal service upon and personal delivery to it. Notices hereunder
shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial
delivery service. 

            8.8       
Appointment of Process Agent. In addition to and notwithstanding the
provisions of Section 8.7 above, the Issuer hereby irrevocably appoints C
T Corporation System as its agent to receive on its behalf and its property
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Issuer, in care of the process agent at
111 Eighth Avenue, New York, NY 10011, and the Issuer hereby irrevocably
authorizes and directs the process agent to accept such service on its behalf.
Nothing in this Agreement will affect the right of any party to serve legal
process in any other manner permitted by law or affect the right of any party to
bring any action or proceeding in the courts of any other jurisdiction. If for
any reason the process agent ceases to be available to act as process agent, the
Issuer agrees to immediately appoint a replacement process agent satisfactory to
the Collateral Agent (acting at the direction of the Required Holders). Each of
the parties waives any right to stay or dismiss any action or proceeding under or in connection with any or all
of this Agreement or any other Financing Document brought before the foregoing
courts on the basis of forum non conveniens. 

-18- 

            8.9       
Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
TO ENTER INTO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

            8.10     
Notices. All notices and communications provided for hereunder shall
be in writing and sent (a) by facsimile transmission or electronic mail with a
portable document format (pdf) attached, in each case with confirmation of
receipt, or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid); provided that Payment Requisitions shall be delivered to the
Depositary by the means set forth in clause (a) above. Any such notice
must be sent to the address set forth under the intended recipient’s name set
forth on the signature pages hereto or at such other address as such Person
shall have specified to the other parties in writing. Notices will be deemed
given only when received. Notwithstanding the foregoing, (x) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, or return e-mail or other
written acknowledgement from such recipient confirming receipt), and (y)
communications or notices transmitted by facsimile or e-mail shall be deemed to
have been validly and effectively given on the day (if a Business Day and, if
not, on the next following Business Day) on which it is transmitted if
transmitted before 4:00 p.m., New York City time, and if transmitted after that
time, on the next following Business Day.

            8.11     
Transfer Call-Backs. In the event funds transfer instructions are
given (other than in writing at the time of the execution of this Agreement),
whether in writing, by facsimile transmission or otherwise, the Depositary may
seek confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule 2 hereto, and the Depositary may rely upon
the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed only
in writing actually received and acknowledged by the Depositary. The parties to
this Agreement acknowledge that such security procedure is commercially
reasonable. It is understood that the Depositary and a recipient’s bank in any
funds transfer may rely solely upon any account numbers or similar identifying
number provided in writing by the Person authorized by this Agreement to direct
or request the transfer to identify (i) the recipient, (ii) the recipient’s
bank, and (iii) an intermediary bank. The Depositary may apply any of the funds
in a Pledged Account for any payment order it executes using any such
identifying number, even where its use may result in a Person other than the
intended recipient being paid, or the transfer of funds to a bank other than the
recipient’s bank, or an intermediary bank, designated. 

-19- 

            8.12     
Rights of the Depositary. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Depositary shall not have any duties
or responsibilities except those expressly set forth herein, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or shall otherwise exist against the Depositary. The
Depositary shall be entitled to rely conclusively upon and to act and refrain
from acting in reliance upon any Payment Requisition, other written requisition,
notice, request, consent, certificate, order, affidavit, letter, facsimile or
other document furnished to it hereunder and reasonably believed by it to be
genuine and to have been signed or sent by the purported proper party; and the
Depositary shall not be liable for anything it may do or refrain from doing in
connection with its duties or obligations hereunder except as a result of its
own gross negligence or willful misconduct. The Depositary shall not be under
any duty to give the funds deposited with it hereunder any greater degree of
care than it gives the property of its other customers and shall not be required
to invest any funds held hereunder except as directed in accordance with this
Agreement. The Depositary may consult with counsel selected by it with
reasonable care and shall not be liable for anything it may do or refrain from
doing in good faith in accordance with the written advice of such counsel. The
Depositary’s duties under this Agreement are ministerial in nature. Except as
provided herein, the Depositary shall not incur any liability for (i) any act or
failure to act made or omitted in good faith, or (ii) any action taken or
omitted in reliance upon any Payment Requisition, instrument, order, request,
direction or instruction that the Depositary shall in good faith believe to be
genuine. The Depositary shall not be responsible for determining and verifying
the authority of any person acting or purporting to act on behalf of any party
to this Agreement. The Depositary shall have no duty to risk or advance its own
funds in the performance of any of its duties hereunder or in the exercise of
any of its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. All requests, directions, certificates and notices
to be furnished to the Depositary hereunder shall be in writing (which may be in
the form of electronic mail, to the extent permitted under Section 8.10).
The Depositary shall not be required to ascertain or inquire as to the
performance by the Issuer or any other Party under any Project Document or
Financing Document. The Depositary shall not be responsible for the provisions
or requirements of the Note Agreement or any other document to which the
Depositary is not a party in its capacity as such. The Depositary may execute
any of the agencies or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the Depositary shall not be
responsible for any negligence or misconduct on the part of any agent or
attorney appointed by it with due care hereunder. In no event shall the
Depositary be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Depositary has been advised of the likelihood of such loss or damage and
regardless of the form of action. The Depositary shall be entitled to rely on a
notice from a person or persons stating that such person is a holder or that
such persons constitute the Required Holders as conclusive evidence that such
person or persons are in fact a holder or the Required Holders. Notwithstanding
anything to the contrary contained herein, the Depositary shall not be
responsible for the calculation of any amounts hereunder and shall be entitled
to conclusively rely on the accuracy of any and all amounts stated in each
Disbursement Requisition delivered hereunder. Notwithstanding the foregoing, the
Depositary shall not be relieved from liability for its own grossly negligent
action, its own grossly negligent failure to act, or from its own willful
misconduct. 

-20- 

            8.13     
Termination. Subject to the Articles and Sections of this Agreement
which expressly survive, this Agreement shall terminate on the date on which all
amounts owing to the holders and the other Secured Parties under the Financing
Documents have been indefeasibly paid in full in cash (excluding contingent
obligations and reimbursement obligations that by their terms expressly survive
the repayment in full of the Notes and for which no claim has been asserted). In
connection therewith, the Depositary shall be entitled to conclusively rely, and
without any requirement to make any independent investigation, on a certificate
of the Required Holders certifying that the Obligations under the Financing
Documents have been paid in full in cash (other than contingent indemnification
and reimbursement obligations that by their terms expressly survive the
repayment in full of the Notes). Upon termination of this Agreement, the
Depositary shall transfer remaining amounts, if any, together with any earnings
thereon, on deposit in the Pledged Accounts to the party or parties specified in
a certificate of an officer of the Issuer. The Collateral Agent, the Depositary
and each other Secured Party shall execute and deliver to the Issuer, at the
Issuer’s expense, upon such termination such Uniform Commercial Code termination
statements and other documentation as shall be reasonably requested by the
Issuer to effect the termination and release of the Liens created under this
Agreement. 

            8.14    
 Incumbency Certificates. The Issuer agrees to deliver to
the Depositary concurrently with the execution and delivery of this Agreement
certificates as to the incumbency and specimen signatures of its officers
authorized to take actions in connection with this Agreement. Promptly after any
change in the officers authorized to take actions in connection with this
Agreement, the Issuer will deliver to the Depositary an updated incumbency
certificate containing specimen signatures. The Depositary shall be entitled to
conclusively rely on any such incumbency certificate until receipt of a
superseding incumbency certificate. In the absence of an initial or updated
incumbency certificate, the Depositary shall be entitled to rely on any
communication from the Issuer to be purported signed by any officer thereof.

            8.15     
Amendments. This Agreement may be amended, modified or waived only by
a writing signed by all of the parties. 

            8.16     
Force Majeure. In no event shall the Depositary or the Collateral
Agent be responsible or liable for any failure or delay in the performance of
its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Depositary and the Collateral Agent shall
use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the
circumstances. 

            8.17     
Collateral Agent Provisions. The Collateral Agent shall act hereunder
only in accordance with the written directions of the Required Holders in
accordance with the terms and conditions of the Collateral Agency Agreement. Any
and all actions the Collateral Agent takes or omits to take hereunder shall be
covered by the indemnity provisions of the Collateral Agency Agreement except as
a result of the gross negligence or willful misconduct of the Collateral Agent.
In the case of a conflict between this Agreement and the Collateral Agency
Agreement, the Collateral Agency Agreement shall govern the rights and
obligations of the Collateral Agent. 

-21- 

            8.18    
 USA PATRIOT Act. The parties hereto acknowledge that in
order to help the United States government fight the funding of terrorism and
money laundering activities, pursuant to federal regulations that became
effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial
institutions are required to obtain, verify, record and update information that
identifies each person establishing a relationship or opening an account. The
parties hereto agree that they will provide to the Depositary and the Collateral
Agent such information as it may request, from time to time, in order for the
Depositary and the Collateral Agent to satisfy the requirements of the USA
PATRIOT Act, including but not limited to the name, address, tax identification
number and other information that will allow it to identify the individual or
entity who is establishing the relationship or opening the account and may also
ask for formation documents such as articles of incorporation or other
identifying documents to be provided. 

            8.19     
Written Instructions. Notwithstanding anything else to the contrary
herein, whenever reference is made in this Agreement to any discretionary action
by, consent, designation, specification, requirement or approval of, notice,
request or other communication from, or other direction given or action to be
undertaken or to be (or not to be) suffered or omitted by the Depositary or to
any election, decision, opinion, acceptance, use of judgment, expression of
satisfaction or other exercise of discretion, rights or remedies to be made (or
not to be made) by the Depositary, it is understood that in all cases the
Depositary shall be fully justified in failing or refusing to take any such
action under this Agreement if it shall not have received written instructions
in accordance with this Agreement. This provision is intended solely for the
benefit of the Depositary and its successors and permitted assigns and is not
intended to and will not entitle the other parties hereto to any defense, claim
or counterclaim, or confer any rights or benefits on any party hereto. 

[Remainder of page intentionally left blank.] 

-22- 

            IN
WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused
this Agreement to be signed on the date first above written. 

USG NEVADA LLC 

 

	 	By:
______________________________________
	 	Name: Dennis J. Gilles 
	 	Title: Manager 

Address for notices: 
c/o
U.S. Geothermal Inc. 
1505 Tyrell Lane 
Boise, Idaho 83706 
Attention:
Dennis J. Gilles 
Phone: 208-424-1027 
Fax: 208-424-1030
E-mail:
dgilles@usgeothermal.com 

[Signature Page to Depositary and Security Agreement] 

	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, solely in its capacity as
      Collateral 
	 	Agent and not individually 
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	Address for notices: 
	 	  
	 	Deutsche Bank Trust Company Americas 
	 	60 Wall Street, 27th Floor 
	 	MS: NYC 60-2710 
	 	New York, New York 10005 
	 	Attn: Project Finance Team Manager/USG Nevada
    
	 	Fax: (732) 578-4636 
	 	  
	 	  
	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, solely in its capacity as
      Depositary 
	 	and not individually 
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	Address for notices: 
	 	  
	 	Deutsche Bank Trust Company Americas 
	 	60 Wall Street, 27th Floor 
	 	MS: NYC 60-2710 
	 	New York, New York 10005 
	 	Attn: Project Finance Team Manager/USG Nevada
    
	 	Fax: (732) 578-4636 

[Signature Page to Depositary and Security Agreement] 

SCHEDULE 1 
PLEDGED ACCOUNTS 

	Pledged Account 	Pledged Account Number 
	USG Nevada Revenue A/C 	Account No. S79352.1 
	USG Nevada Debt Service Reserve A/C 	Account No. S79352.2 
	USG Nevada Maintenance Reserve A/C 	Account No. S79352.3 
	USG Nevada Make-up Well Reserve A/C 	Account No. S79352.4 
	USG Nevada Proceeds A/C 	Account No. S79352.5 
	USG Nevada Upgrade Reserve Account 	Account No. S79352.6 

 

 

Wiring Instructions for Depositary: 

Deutsche Bank Trust Company Americas
New York, New York
10005
Swift: BKTRUS33
ABA: 021001033
Account #: 01419647 
For the
Account of: NYLTD Funds Control New York
Reference: [Insert
Relevant Pledged Account Name], Attn: N. Luke/L. Jiang 
FFC:
PORT [Insert Relevant Pledged Account Number]

S-1 

SCHEDULE 2 

Telephone Number(s) for Call-Backs and Person(s) Designated to
Confirm Payment Instructions The Depositary may confirm payment instructions
issued by the Issuer with any person purporting to be a person designated below,
whether or not that person is the person who has issued the payment instructions
to the Depositary. 

	Name 	Telephone Number 
	 	 
	1. Kerry Hawkley 	(208) 424-1027 Office 
	 	(208) 870-9477 Cell Phone 
	 	 
	 	 
	2. Jonathan Zurkoff 	(208) 424-1027 Office 
	 	(208) 343-8052 Cell Phone 
	 	 
	3. Edwin Eijckelhof 	(208) 424-1027 Office 
	 	(208) 385-9535 Cell Phone

S-2 

EXHIBIT A TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF DISBURSEMENT REQUISITION 

	Depositary 	[Date] 
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  
	  	  
	Collateral Agent 	  
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  

            Re:       
Disbursement Requisition - USG Nevada LLC Ladies and Gentlemen: 

            Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
the Depositary and Security Agreement, dated as of September 26, 2013 (as
amended, restated or otherwise modified from time to time, the “Depositary
Agreement”), by and among (i) USG Nevada LLC, a Delaware limited liability
company (the “Issuer”), (ii) Deutsche Bank Trust Company Americas, in its
capacity as collateral agent (together with its successors and permitted assigns
in such capacity, the “Collateral Agent”), for the benefit of the Secured
Parties, and (iii) Deutsche Bank Trust Company Americas, in its capacity as
depositary (together with its successors and assigns in such capacity, the
“Depositary”). 

            The
Issuer hereby requests that the transfers from the Revenue Account described on
Schedule I attached hereto, in the order set forth on Schedule I,
be made by the Depositary on ___________, 20__. 

            The
undersigned hereby certifies that immediately before and after giving effect to
the payments requested hereby, no Default or Event of Default (as defined in the
Note Agreement) has occurred and is continuing or will result therefrom. 

            The
date of the requested transfer [ ] is [ ] is not in a Well Reserve Period (First
Well) and [ ] is [ ] is not in a Well Reserve Period (Subsequent Well).

            On
the date of the requested transfer a prepayment of the Notes is [ ] is not [ ]
required pursuant to Section 8.1(b)(iii) of the Note Agreement. 

A-1 

            If
transfer is requested pursuant to Section 4.1(h) of the Depositary
Agreement, the undersigned hereby certifies that (i) the date of the transfers
requested hereby is at least 15 days but no more than 30 days following delivery
of the DSCR Notice relating to the most recent Payment Date, and (ii) the
Restricted Payment Conditions (as defined in the Note Agreement) are and will be
met on the date of the transfers requested hereby. 

            The
Issuer has caused this Disbursement Requisition to be executed and delivered on
behalf of the Issuer by its duly authorized signatory this ______day of
____________, 20__. 

USG NEVADA LLC 

	 	By:   
      ____________________________________________________
	 	         Name: 
	 	         Title:
  

 

cc:       
Holders of the Notes 

A-2 

SCHEDULE I TO DISBURSEMENT REQUISITION 
Section
references are to the applicable section in the Depositary and Security
Agreement 

Monthly Date: _________________

Payment Date: _________________

	
	Transfer 
Amount 	Transfer to 
	Wire Instructions / Address
      

	 
    	 	  	  
	(1) FIRST – Section 	 	  	  
	4.1(a) 	 	  	  
	 
    	 	  	  
	Transfers from Revenue 	 	  	  
	Account on Monthly 	 	  	  
	Dates: 	 	  	  
	 
    	 	  	  
	         Fees, expenses, 	 	  	  
	         indemnities, etc. of 	 	  	  
	         Collateral Agent, 	 	  	  
	         Depositary, other 	 	(may include Local Account)
	  
	         Secured Parties 	 	  	  
	 
    	 	  	  
	(2) SECOND – Section 	 	  	  
	4.1(b) 	 	  	  
	 
    	 	  	  
	Transfers from Revenue 	 	  	  
	Account on Monthly 	 	  	  
	Dates: 	 	  	  
	 
    	 	  	  
	         O&M Costs (other 	 	  	  
	         than amounts payable 	 	  	  
	         pursuant to Section 6.1 	 	  	  
	         or 6.2 of the O&M 	 	(may include Local Account)
	  
	         Agreement) 	 	  	  
	 
    	 	  	  
	(3) THIRD – Section 4.1(c) 	 	  	  
	 
    	 	  	  
	Transfers from Revenue 	 	  	  
	Account on Payment 	 	  	  
	Dates: 	 	  	  
	 
    	 	  	  
	         Payment of principal, 	 	  	  
	         interest, fees and 	 	  	  
	         Make-Whole Amounts 	 	  	  
	         then due and payable 	 	  	  
	         (other than amounts 	 	  	  
	         specified at level 	 	  	  
	         EIGHTH) 	 	  	  
	 
    	 	  	  
	(4) FOURTH – Section 	 	  	  
	4.1(d) 	 	  	  
	 
    	 	  	  
	Transfers from Revenue 	 	  	  
	Account on Payment 	 	  	  
	Dates: 	 	  	  
	 
    	 	  	  
	         If not paid pursuant to 	 	[Operator] 	  
	         clause SECOND, 	 	  	  
	         payment of amounts 	 	  	  
	         payable pursuant to 	 	  	  
	         Section [6.1 or 6.2 of 	 	  	  
	         the O&M Agreement 	 	  	  

A-3 

	  	Transfer 	Transfer to 	Wire Instructions / Address 
	  	Amount 	  	  
	 
    	  	  	  
	(5) FIFTH – Section 	  	  	  
	4.1(e) 	  	  	  
	 
    	  	  	  
	Transfers from Revenue 	  	  	  
	Account on Payment 	  	  	  
	Dates: 	  	  	  
	 
    	  	  	  
	         Current balance in 	-- 	  	  
	         Debt Service Reserve 	  	  	  
	         Account:$__________ 	  	  	  
	 
    	  	  	  
	         Available undrawn 	-- 	  	  
	         amount of Debt 	  	  	  
	         Service Reserve Letter 	  	  	  
	         of Credit: $_________ 	  	  	  
	 
    	  	  	  
	         Total available: 	-- 	  	  
	         $_____________ 	  	  	  
	 
    	  	  	  
	         Minimum Debt 	-- 	  	  
	         Service Reserve 	  	  	  
	         Requirement: 	  	  	  
	         $___________ 	  	  	  
	 
    	  	  	  
	         Amount to be 	  	Debt Service Reserve Account 	  
	         transferred to Debt 	  	  	  
	         Service Reserve 	  	  	  
	         Account 	  	  	  
	 
    	  	  	  
	(6) SIXTH – Section 4.1(f) 	  	  	  
	 
    	  	  	  
	Transfers from Revenue 	  	  	  
	Account on Payment 	  	  	  
	Dates: 	  	  	  
	 
    	  	  	  
	         Current balance in 	-- 	  	  
	         Maintenance Reserve 	  	  	  
	         Account: $_________ 	  	  	  
	 
    	  	  	  
	         Available undrawn 	-- 	  	  
	         amount of 	  	  	  
	         Maintenance Reserve 	  	  	  
	         Letter of Credit: 	  	  	  
	         $____________ 	  	  	  
	 
    	  	  	  
	         Total available: 	-- 	  	  
	         $____________ 	  	  	  
	 
    	  	  	  
	         Minimum 	-- 	  	  
	         Maintenance Reserve 	  	  	  
	         Requirement: 	  	  	  
	         $____________ 	  	  	  
	 
    	  	  	  
	         Amount to be 	  	Maintenance Reserve Account 	  
	         transferred to 	  	  	  
	         Maintenance Reserve 	  	  	  
	         Account 	  	  	  

A-4 

	  	Transfer 	Transfer to 	Wire Instructions / Address
  
	  	Amount 	  	  
	 
    	  	  	  
	(7) SEVENTH - Section 	  	  	  
	4.1(g) 	  	  	  
	 
    	  	  	  
	Transfers from Revenue 	  	  	  
	Account on Payment 	  	  	  
	Dates: 	  	  	  
	 
    	  	  	  
	         Current balance in 	-- 	  	  
	         Make-up Well Reserve 	  	  	  
	         Account: 	  	  	  
	         $_____________ 	  	  	  
	 
    	  	  	  
	         Required Make-up 	-- 	  	  
	         Well Reserve Account 	  	  	  
	         Balance: 	  	  	  
	         $____________ 	  	  	  
	 
    	  	  	  
	         Amount to be 	  	Make-up Well Reserve 	  
	         Transferred to Make- 	  	Account 	  
	         up Well Reserve 	  	  	  
	         Account 	  	  	  
	 
    	  	  	  
	(8) EIGHTH- Section 	  	  	  
	4.1(h) 	  	  	  
	 
    	  	  	  
	Distributions from 	  	  	  
	Revenue Account on 	  	  	  
	Payment Dates when 	  	  	  
	prepayment of Notes is 	  	  	  
	required pursuant to 	  	  	  
	Section 8.1(b)(iii) of the 	  	  	  
	Note Agreement: 	  	  	  
	 
    	  	  	  
	Payment of principal, 	  	  	  
	interest and Make-Whole 	  	  	  
	Amount 	  	  	  
	 
    	  	  	  
	(9) NINTH - Section 4.1(i) 	  	  	  
	 
    	  	  	  
	Distributions from 	  	  	  
	Revenue Account at least 	  	  	  
	15 but not more than 30 	  	  	  
	days after delivery of 	  	  	  
	DSCR Notice: 	  	  	  
	 
    	  	  	  
	         Remaining funds 	  	  	  
	 
    	  	  	  
	Total transfers 	  	  	  

A-5 

EXHIBIT B TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF MAINTENANCE RESERVE REQUISITION 

	Depositary 	[Date] 
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  
	  	  
	Collateral Agent 	  
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  

            Re:       
Maintenance Reserve Requisition - USG Nevada LLC Ladies and Gentlemen: 

            Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
in the Depositary and Security Agreement, dated as of September 26, 2013, by and
among (i) USG Nevada LLC, a Delaware limited liability company (the
“Issuer”), (ii) Deutsche Bank Trust Company Americas, in its capacity as
collateral agent (together with its successors and permitted assigns in such
capacity, the “Collateral Agent”), for the benefit of the Secured
Parties, and (iii) Deutsche Bank Trust Company Americas, in its capacity as
depositary (together with its successors and assigns in such capacity, the
“Depositary”). 

            The
Issuer hereby requests that the transfers from the Maintenance Reserve Account
described on Schedule I attached hereto be made by the Depositary on
___________, 20__. 

            The
undersigned hereby certifies that immediately before and after giving effect to
the payments requested hereby, no Default or Event of Default (as defined in the
Note Agreement) has occurred and is continuing or will result therefrom. The
Issuer further certifies that amounts requested to be transferred will be
applied to pay costs of major maintenance of the Project, as indicated in
Schedule I. 

B-1 

            The
Issuer has caused this Maintenance Reserve Requisition to be executed and
delivered by its duly authorized signatory this ______day of ____________, 20__.

USG NEVADA LLC 

	 	By:  
      __________________________________________________
	 	         Name: 
	 	         Title:
  

cc:        Holders of Notes

B-2 

SCHEDULE I 
MAINTENANCE RESERVE REQUISITION

 

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions) 	  

B-3 

EXHIBIT C TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF MAKE-UP WELL REQUISITION 

	Depositary 	[Date] 
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  
	  	  
	Collateral Agent 	  
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  

            Re:       
Make-up Well Requisition - USG Nevada LLC Ladies and Gentlemen: 

            Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
in the Depositary and Security Agreement, dated as of September 26, 2013, by and
among (i) USG Nevada LLC, a Delaware limited liability company (the
“Issuer”), (ii) Deutsche Bank Trust Company Americas, in its capacity as
collateral agent (together with its successors and permitted assigns in such
capacity, the “Collateral Agent”), for the benefit of the Secured
Parties, and (iii) Deutsche Bank Trust Company Americas, in its capacity as
depositary (together with its successors and assigns in such capacity, the
“Depositary”). 

            The
Issuer hereby requests that the transfers from the Make-up Well Reserve Account
described on Schedule I attached hereto be made by the Depositary on
___________, 20__. 

            The
undersigned hereby certifies that immediately before and after giving effect to
the payments requested hereby, no Default or Event of Default (as defined in the
Note Agreement) has occurred and is continuing or will result therefrom. The
Issuer further certifies that amounts requested to be transferred will be
applied to pay or reimburse costs of drilling geothermal wells on the Site, as
indicated in Schedule I. 

C-1 

            The
Issuer has caused this Make-up Well Requisition to be executed and delivered by
its duly authorized signatory this ______day of ____________, 20__. 

USG NEVADA LLC 

 

	 	By:  
      _________________________________________________
	 	         Name: 
	 	         Title:
  

cc:        Holders of Notes

C-2 

SCHEDULE I 
MAKE-UP WELL REQUISITION 

 

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions) 	  

C-1 

EXHIBIT D TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF PROCEEDS REQUISITION 

	Depositary 	[Date] 
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  
	  	  
	Collateral Agent 	  
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  

            Re:       
Proceeds Requisition - USG Nevada LLC Ladies and Gentlemen: 

            Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
in the Depositary and Security Agreement dated as of September 26, 2013 among
(i) USG Nevada LLC, a Delaware limited liability company (the “Issuer”),
(ii) Deutsche Bank Trust Company Americas, in its capacity as the Collateral
Agent (together with its successors and assigns in such capacity, the
“Collateral Agent”), for the benefit of certain secured parties, and
(iii) Deutsche Bank Trust Company Americas, in its capacity as depositary bank
(together with its successors and assigns in such capacity, the
“Depositary”). 

            The
Issuer hereby requests that the transfers from the Proceeds Account described on
Schedule I attached hereto be made by the Depositary on ___________,
20__. 

            The
undersigned hereby certifies that immediately before and after giving effect to
the payments requested hereby, no Default or Event of Default (as defined in the
Note Agreement) has occurred and is continuing or will result therefrom. The
Issuer further certifies that all amounts requested to be transferred will be
applied to restoration of the Project, as indicated in Schedule I. 

D-1 

            The
Issuer has caused this Proceeds Requisition to be executed and delivered by its
duly authorized signatory this ______day of ____________, 20__. 

USG NEVADA LLC 

	 	By:  
      _________________________________________________
	 	         Name: 
	 	         Title:
  

cc:        Holders of Notes

D-2 

SCHEDULE I 
PROCEEDS REQUISITION 

 

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions) 	  

D-3 

EXHIBIT E TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF UPGRADE RESERVE REQUISITION 

	Depositary 	[Date] 
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  
	  	  
	Collateral Agent 	  
	Deutsche Bank Trust Company Americas 	  
	60 Wall Street, 27th Floor 	  
	MS: NYC 60-2710 	  
	New York, New York 10005 	  
	Attention: Project Finance Team Manager/USG Nevada 	  
	Fax: (732) 578-4636 	  

            Re:       
Upgrade Reserve Requisition - USG Nevada LLC 

Ladies and Gentlemen: 

            Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
in the Depositary and Security Agreement, dated as of September 26, 2013, by and
among (i) USG Nevada LLC, a Delaware limited liability company (the
“Issuer”), (ii) Deutsche Bank Trust Company Americas, in its capacity as
collateral agent (together with its successors and permitted assigns in such
capacity, the “Collateral Agent”), for the benefit of the Secured
Parties, and (iii) Deutsche Bank Trust Company Americas, in its capacity as
depositary (together with its successors and assigns in such capacity, the
“Depositary”). 

           The
Issuer hereby requests that the transfers from the Upgrade Reserve Account
described on Schedule I attached hereto be made by the Depositary on
___________, 20__. 

            The
undersigned hereby certifies that immediately before and after giving effect to
the payments requested hereby, no Default or Event of Default (as defined in the
Note Agreement) has occurred and is continuing or will result therefrom. The
Issuer further certifies that amounts requested to be transferred will be
applied to pay costs installing a shunt reactor at the Project’s transmission
line, as indicated in Schedule I. 

E-1 

            The
Issuer has caused this Upgrade Reserve Requisition to be executed and delivered
by its duly authorized signatory this ______day of ____________, 20__. 

USG NEVADA LLC 

	 	By: 
      _______________________________________________
	 	         Name: 
	 	         Title:
  

cc:        Holders of Notes

E-2 

SCHEDULE I 
UPGRADE RESERVE REQUISITION 

 

	Amount 	Transferee Information 	Purpose 
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E-3 

Exhibit S-2 

Form of Collateral Agency Agreement

 

 

Exhibit S-2 - 1 

Execution Version 

COLLATERAL AGENCY AGREEMENT 

            This
COLLATERAL AGENCY AGREEMENT (this “Agreement”), dated as of September 26,
2013, is by and among (a) Deutsche Bank Trust Company Americas, in its capacity
as collateral agent for the Secured Parties (as defined below) (together with
its successors and assigns in such capacity, the “Collateral Agent”), (b)
USG Nevada LLC, a Delaware limited liability company (the “Issuer”), (c)
the holders of the Notes (as defined below) issued from time to time pursuant to
the Note Agreement (as defined below), and (d) Deutsche Bank Trust Company
Americas, in its capacity as depositary (together with its successors and
assigns in such capacity, the “Depositary”) under the Depositary and
Security Agreement, dated as of the date hereof, by and among the Issuer, the
Collateral Agent and the Depositary (as amended, modified or supplemented from
time to time, the “Depositary Agreement”). 

RECITALS: 

            A.       
The Issuer has duly authorized the issue and sale of its 6.75% Senior Secured
Notes due December 31, 2037 (as amended, modified or supplemented from time to
time, the “Notes”), subject to and in accordance with the Note Purchase
Agreement, dated as of the date hereof, among the Issuer and the holders of
Notes party thereto from time to time (as amended, modified or supplemented from
time to time, the “Note Agreement”). 

            B.       
In connection therewith, the Issuer and Nevada USG Holdings LLC, a Delaware
limited liability company, have agreed to grant to the Collateral Agent liens
upon and security interests in the Collateral (as defined in the Note Agreement)
to secure all of the obligations of the Issuer under the Note Agreement, the
Notes and the other Financing Documents (as defined in the Note Agreement). 

            C.       
The Depositary and the holders of the Notes desire to appoint the Collateral
Agent as their agent with respect to the Collateral and for all other purposes
specifically provided for herein. 

            D.       
The Depositary, the holders of the Notes and the Collateral Agent desire to set
forth the priorities for the application of any proceeds of the Collateral and
various other matters with respect to their rights in the Collateral and
otherwise. 

           
The parties therefore agree as follows: 

ARTICLE I 

DEFINITIONS 

            1.1.       
General. Capitalized terms used but not otherwise defined in
this Agreement shall have the meanings assigned to them in the Note Agreement.

            1.2.       
Certain Defined Terms. The following terms shall have the
following meanings (such definitions to be equally applicable to both singular
and plural forms of the terms defined): 

            “Enforcement”
means (a) a holder makes demand for payment of or accelerates the time for
payment prior to the scheduled payment date of its Note in accordance with
Section 12.1(c) of the Note Agreement, (b) subject to Section 2.1 hereof,
the Collateral Agent commences the enforcement of any rights or remedies under
any Security Document (other than an action solely for the purpose of
establishing or defending the Lien or security interest intended to be created
by any Security Document upon or in any Collateral as against or from claims of
third parties on or in the Collateral), to (i) setoff, freeze or otherwise
appropriate any balances held by it for the account of the Issuer, or any other
property at any time held by it for the credit or for the account of the Issuer,
or (ii) otherwise take any action to realize upon the Collateral, or (c) the
commencement by, against or with respect to the Issuer of any Insolvency
Proceeding. 

           
“holders” means the “holders” from time to time under the Note Agreement.

            “Insolvency
Proceeding” means, with respect to any Person, a general assignment
by such Person for the benefit of its creditors or the institution by or against
such Person of any proceeding seeking relief as debtor, or seeking to adjudicate
such Person as bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of such Person or its debts, under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking an
appointment of a receiver, trustee, custodian or any similar official for such
Person or for any substantial part of its property. 

           
“Losses” has the meaning given in Section 2.6. 

            “Responsible
Officer” when used with respect to the Collateral Agent, means any officer
of the Collateral Agent with direct responsibility for the administration of
this Agreement. 

ARTICLE II 

APPOINTMENT OF COLLATERAL AGENT FOR THE HOLDERS AND THE
DEPOSITARY 

            2.1.       
Authorization and Action. Each of the holders and the
Depositary hereby appoints and authorizes the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the Financing Documents as are expressly delegated to the Collateral Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; provided, however, that the Collateral Agent
shall not take any action described in clause (b) of the definition of
“Enforcement” except at the written direction of the Required Holders. The
Collateral Agent is hereby authorized and directed to execute and deliver all
Financing Documents dated as of the date hereof to which the Collateral Agent is
a party. The Collateral Agent will have no duties, responsibilities, obligations
or liabilities other than those expressly set forth in this Agreement and the
Security Documents, and no additional duties, responsibilities, obligations or
liabilities will be inferred from the provisions of this Agreement or the
Security Documents or imposed on the Collateral Agent. As to matters requiring
the exercise of discretion or of a right, including the right to give any
consent or make any demand under any Security Document or to determine under any
Security Document whether any matter is acceptable or satisfactory to it, or as
to matters not expressly provided for by this Agreement or the other Security Documents, the
Collateral Agent will not be required to exercise any discretion or right or
take any action, but will be required to act or to refrain from acting (and will
be fully protected in so acting or refraining from acting) and will only be
required to act upon the written instructions of the Required Holders, and such
instructions will be binding upon all of the Secured Parties, provided that the Collateral Agent will in no event be required to take any action which
exposes the Collateral Agent to personal liability, which is contrary to this
Agreement, the Security Documents or law or with respect to which the Collateral
Agent does not receive adequate instructions or full indemnification (subject to
the provisions of Section 2.9). In determining whether the requisite
holders have directed any action or granted an approval requiring the direction
or consent of the Required Holders, the Collateral Agent may request and rely on
written statements from each of the holders of the outstanding principal amount
of its Notes. The Collateral Agent shall not be required to take any such action
or give any such approval prior to receiving such written statements. In any
event, upon payment in full in cash of any Note, the holder thereof shall
deliver written notice to the Collateral Agent that such Note has been paid in
full in cash, and the Collateral Agent may rely thereon. 

            2.2.       
Delegation of Duties. The Collateral Agent may delegate any of
its responsibilities or duties under the Security Documents to one or more
agents and will not be liable for the negligence or misconduct of any agent
selected by it with reasonable care. 

            2.3.       
Collateral Agent’s Reliance. None of the Collateral Agent, its
agents or any of their respective Affiliates will be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or the Security Documents, except that each will be liable for its own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Collateral Agent: (a) may treat the Person in whose name any Note
was issued as the owner and holder of such Note until the Collateral Agent
receives written notice of the assignment or transfer of such Note signed by
such Person and in form satisfactory to the Collateral Agent; (b) may at the
expense of the Issuer consult with legal counsel, independent public accountants
and other experts selected by it and will not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) will incur no liability under or in respect
of this Agreement or any Security Document or otherwise by acting upon any
notice, consent, waiver, certificate or other writing or instrument (including
facsimiles and electronic transmissions) given in accordance with this Agreement
or any Security Document and believed by it, in good faith, to be genuine and
signed or sent by the proper person or persons; (d) will not be responsible for
insuring the Collateral, for the payment of taxes, charges, assessments or Liens
upon the Collateral; (e) will not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or under any of the Security Documents, or in the exercise of any of
its rights or powers hereunder or thereunder; and (f) except to the extent
directed by the Required Holders, shall have no responsibility to file any
financing statement, continuation statement or amendment thereto in any public
office at any time or times or to otherwise take any action to perfect or
maintain the perfection of the Lien on the Collateral in favor of the Collateral
Agent or to give notice of any such Lien to any third party, all such
responsibilities being responsibilities of the Issuer. 

            2.4.       
Notices; Defaults. The Collateral Agent shall rely on any
written notice it receives from the Issuer or a holder stating that a Default or
an Event of Default exists, and on any written notice it receives from a holder
stating that a notice of a Default or Event of Default is terminated. The
Collateral Agent shall not be deemed to have knowledge of any Default or Event
of Default unless a Responsible Officer has actual knowledge thereof.

            2.5.       
Credit Decisions. Each holder and the Depositary acknowledges
for the benefit of the Collateral Agent that none of the Collateral Agent nor
any of its Affiliates has made any representations or warranties with respect to
the Issuer or any other matter, and agrees that no review or other action by the
Collateral Agent or any of its Affiliates will be deemed to constitute any such
representation or warranty. Each holder acknowledges, for the benefit of the
Collateral Agent and the other holders, that it has, independently and without
reliance upon the Collateral Agent or any other holder, and based on the
financial statements and such other documents and information as it has deemed
appropriate, made its own credit analysis with respect to the Issuer. 

            2.6.       
Indemnification. The Issuer agrees to indemnify and hold
harmless the Collateral Agent, the Depositary, their respective directors,
officers, employees, agents and their respective Affiliates from and against any
and all claims, liabilities (including environmental liabilities), obligations,
losses, damages, penalties, judgments, costs, expenses (including the reasonable
fees and expenses of its agents and counsel) and disbursements of any kind or
nature whatsoever (“Losses”) that may be imposed on, incurred by, or
asserted against the Collateral Agent, the Depositary or their respective
directors, officers, employees, agents or Affiliates by any Person (including
any holder) in any way relating to or arising out of (a) this Agreement or the
Security Documents and the transactions contemplated hereby and thereby
(including, without limitation, any amendments, waivers or releases, and any
enforcement of this Agreement or any Security Document) or (b) any action taken
or omitted by the Collateral Agent or the Depositary under this Agreement or the
other Transaction Documents while it was Collateral Agent or Depositary;
provided that the Issuer will not be liable to the Collateral Agent, the
Depositary or their respective officers, directors, employees, agents or their
respective Affiliates for any portion of such Losses resulting from such
Person’s gross negligence or willful misconduct.

            2.7.       
Resignation and Removal; Successor Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
the Collateral Agent may resign at any time by giving at least 30 days’ prior
written notice to the holders and the Issuer, or shall resign at any time at the
request of the Required Holders upon 30 days’ prior written notice from the
Required Holders, provided that (i) such resignation will not be
effective until a successor Collateral Agent has been appointed and (ii) the
Issuer shall pay all fees and expenses then due and owing to the resigning
Collateral Agent prior to the effectiveness of its resignation. Upon any
resignation, the Required Holders will have the right to appoint a successor
Collateral Agent. If no successor Collateral Agent has been appointed and has
accepted its appointment within 30 days after notice of the resignation of the
resigning Collateral Agent, the resigning Collateral Agent may at the expense of
the Issuer petition a court of competent jurisdiction for the appointment of a
successor Collateral Agent, which will be a commercial bank organized under the
laws of the United States or of any state thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of its appointment as
Collateral Agent, the successor Collateral Agent will succeed to and be vested with all the
rights, powers, privileges and duties of the resigning Collateral Agent, and the
resigning Collateral Agent will be discharged from its duties and obligations
under this Agreement. After any resigning Collateral Agent’s resignation, the
provisions of this Article II will (x) inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Collateral Agent and
(y) survive with respect to any indemnification claim it may have relating to
this Agreement. Any corporation into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation succeeding to all or substantially all the
corporate trust or agency business of the Collateral Agent, shall be the
successor of the Collateral Agent hereunder; provided that such
corporation shall be otherwise eligible under this Article II to act as a
successor Collateral Agent, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In the event that the
Collateral Agent is required to acquire title to an asset, or take any
managerial action of any kind in regard thereto, in order to perform any
obligation under any Financing Document, which in the Collateral Agent’s sole
determination may cause the Collateral Agent to incur potential liability under
any environmental law, the Collateral Agent reserves the right, instead of
taking such action, to resign as the Collateral Agent in accordance with this Section 2.7.

            2.8.       
Collateral Agent Expenses. The Issuer agrees to reimburse, upon demand
by the Collateral Agent (and, in any event, within 10 days following receipt of
an invoice), all out-of-pocket costs and expenses (including counsel fees and
expenses) incurred by the Collateral Agent in connection with the performance of
its duties under this Agreement or the Security Documents, any amendments,
waivers or releases, realization upon or protection of the Collateral or
enforcement or defense of any Lien on the Collateral. 

            2.9.       
Indemnification by the Holders. If the Issuer defaults in its
obligations under Section 2.6, the holders agree to indemnify the
Collateral Agent, the Depositary and their respective directors, officers,
employees, agents and Affiliates (solely to the extent not reimbursed by the
Issuer), ratably according to their percentages of the sum of the principal
amount of all Notes issued and outstanding from time to time, from and against
any and all Losses which may be imposed on, incurred by or asserted against the
Collateral Agent, the Depositary or their respective directors, officers,
employees, agents or Affiliates by any Person (including any holder) in any way
relating to or arising out of this Agreement, any Security Document, the
transactions contemplated thereunder, or any action taken or omitted by the
Collateral Agent; provided that no holder will be liable to any Person
for any portion of such Losses resulting solely from such Person’s gross
negligence or willful misconduct. 

            2.10.     
Collateral Agent Fees. The Issuer agrees to pay to the Collateral
Agent its fees separately agreed to in writing (which may be amended from time
to time by the Issuer and the Collateral Agent) by the Issuer by the date
specified in such writing or, if not specified in such writing, on demand (and,
in any event, within 10 days) upon presentation of an invoice (including upon
execution of this Agreement, and the execution of any amendment, waiver or
release by the Collateral Agent). 

            2.11.    
 Force Majeure. In no event shall the Collateral Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Collateral Agent shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances. 

            2.12.     
Survival. The obligations of the Issuer and the holders under this
Article II shall survive the termination of this Agreement (including
without limitation, any termination under any bankruptcy law) and the
resignation or removal of the Collateral Agent or the Depositary. 

            2.13.     
USA PATRIOT Act. The parties hereto acknowledge that in order to help
the United States government fight the funding of terrorism and money laundering
activities, pursuant to federal regulations that became effective on October 1,
2003 (Section 326 of the USA PATRIOT Act) all financial institutions are
required to obtain, verify, record and update information that identifies each
person establishing a relationship or opening an account. The parties to this
Agreement agree that they will provide to the Collateral Agent and the
Depositary such information as it may request, from time to time, in order for
the Collateral Agent and the Depositary to satisfy the requirements of the USA
PATRIOT Act, including but not limited to the name, address, tax identification
number and other information that will allow it to identify the individual or
entity who is establishing the relationship or opening the account and may also
ask for formation documents such as articles of incorporation or other
identifying documents to be provided.

            2.14.    
 Special, Consequential and Indirect Damages. In no event
shall the Collateral Agent be responsible or liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether such Collateral Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action. 

ARTICLE III 

CERTAIN NOTICES 

            3.1.       
Notice of Default or Enforcement. Each holder agrees to use its
reasonable efforts to give to the others and the Collateral Agent, substantially
concurrently with the sending of such notice to the Issuer, (a) copies of any
notice of the occurrence or existence of a Default or Event of Default sent to
the Issuer, simultaneously with the sending of such notice to the Issuer, and
(b) any notice that a Default or Event of Default has been terminated, cured or
waived. The Collateral Agent and each holder agrees to use its reasonable
efforts to give to the others notice of an Enforcement by such party, prior to
commencing such Enforcement. The failure to give any of the foregoing notices
shall not affect the validity of such notice of a Default or Event of Default
given to the Issuer, notice of the termination, cure or waiver of any Default or
Event of Default or notice of an Enforcement or create a cause of action against
or cause a forfeiture of any rights of the party failing to give such notice or
create any claim or right on behalf of any third party. Following receipt of any
notice that an Event of Default has occurred, the Collateral Agent, subject to
Section 2.1, shall await direction from the Required Holders and will
act, or decline to act, as directed by the Required Holders, in the
exercise and enforcement of the Collateral Agent’s interests, rights, powers and
remedies in respect of the Collateral or under the Security Documents or
applicable law and, following the initiation of such exercise of remedies, the
Collateral Agent, subject to Section 2.1, will act, or decline to act,
with respect to the manner of such exercise of remedies as directed by the
Required Holders. 

ARTICLE IV 

PROCEEDS OF COLLATERAL 

            4.1.       
Proceeds. Upon receipt by the Collateral Agent of written
notice of the occurrence of an Event of Default and the direction of the
Required Holders to pay and distribute funds as set forth in this Section
4.1, all proceeds of the Collateral held or received by the Collateral
Agent, the Depositary or any of the holders and, except as provided in
Section 4.2, any other payments received, directly or indirectly, by the
Collateral Agent, the Depositary or any of the holders on or with respect to any
Obligations (including, without limitation, any payment in an Insolvency
Proceeding and the proceeds from any sale of any Obligations, or any interest
therein to the Issuer or any Affiliate of the Issuer) shall be delivered to the
Collateral Agent and distributed as follows: 

                         
(a)        first: to the (i)
Collateral Agent in the amount of any sums owed to it under or pursuant to the
Financing Documents, and (ii) Depositary in the amount of any sums owed to it
under the Depositary Agreement, ratably in accordance with the respective
amounts thereof; and 

                         
(b)        second: to pay any fees,
costs, charges, expenses and any other amounts, and all principal, interest or
Make-Whole Amount in respect of the Notes due and payable to the holders of the
Notes, ratably in accordance with the amounts owing to each holder in respect of
the Notes held by such holder as a percentage of the total amounts owing to all
holders in respect of all Notes. 

           
Unless otherwise notified in writing by a holder of Notes (as applicable),
payments to such holder shall be paid in accordance with the payment
instructions set forth on Schedule A to the Note Agreement. 

           4.2.       
Remaining Proceeds. After the Obligations have been paid in
full in cash (the payment in full in cash of such Obligations, to the extent
relating to amounts due to the holders, to be evidenced to the Collateral Agent
by written certification from the holders), the balance of the proceeds of the
Collateral, if any, shall be paid to the Issuer or as otherwise required by law.

ARTICLE V 

ACTIONS RELATED TO COLLATERAL 

            5.1.       
Recourse of Holders; Other Collateral. Each of the holders acknowledges
and agrees that (a) it shall only have recourse to the Collateral through the
Collateral Agent and that it shall have no independent recourse to the
Collateral, and (b) the Collateral Agent shall have no obligation to take any
action, or refrain from taking any action, except upon instructions given in
accordance with this Agreement. Nothing contained herein shall
restrict a holder’s rights to pursue remedies, by proceedings in law and equity,
to enforce the performance of and provisions of the Financing Documents in
accordance with the terms thereof to the extent that such remedies do not relate
to the Collateral or interfere with the Collateral Agent’s right to take action
hereunder or under the Security Documents. 

ARTICLE VI 

DUTIES OF COLLATERAL AGENT 

           
6.1.        Actions
Under the Security Documents. 

                          (a)       
The Collateral Agent shall not amend or waive any provisions of any Security
Document or release any Lien or any pledgor or guarantor, except in each case at
the written direction of the Required Holders pursuant to such consents as may
have been required under Section 17.1 of the Note Agreement or as
otherwise expressly provided in the Security Documents. 

                          (b)       
At any time when a notice of an Event of Default has been delivered to the
Collateral Agent by a holder or the Issuer, the Collateral Agent shall exercise
or refrain from exercising all rights, powers and remedies as shall be available
to it under the Security Documents in accordance with any written instructions
received from the Required Holders, subject to Section 2.1. Absent such
written instructions (a) at a time when a notice of an Event of Default has been
delivered to the Collateral Agent and has not been terminated by a written
notice delivered to the Collateral Agent by the Required Holders or a holder, or
(b) in the case of an emergency in order to protect any of the Collateral, the
Collateral Agent may take, but shall have no obligation to take, any and all
actions under the Security Documents or otherwise (other than Enforcement
actions) as it shall deem to be in the best interests of the Depositary and the
holders. 

            6.2.       
No Impairment. Nothing contained in this Agreement shall (a)
prevent any holder from imposing a default rate of interest in accordance with
its Note or any other Financing Document or prevent a holder from raising any
defenses in any action in which it has been made a party defendant or has been
joined as a third party, except that the Collateral Agent may direct and control
any defense directly relating to the Collateral or any one or more of the
Security Documents in accordance with Section 6.1, or (b) affect or
impair the right any holder may have under the Financing Documents to accelerate
the Obligations. 

ARTICLE VII 

ACCOUNTING 

            The
Collateral Agent, the Depositary and each of the holders agrees to render a
written accounting to the others of the amounts of its outstanding Obligations,
receipts of payments from the Issuer or from the Collateral Agent and other
items relevant to the provisions of this Agreement upon the reasonable request
from one of the others, as soon as reasonably practicable after such request.

ARTICLE VIII 

NOTICES 

            All
notices and communications provided for hereunder shall be in writing and sent
(i) by facsimile transmission if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), (ii) by registered or certified mail with return receipt requested
(postage prepaid), (iii) by a recognized overnight delivery service (with
charges prepaid) or (iv) by electronic mail with a portable document format
(pdf) attachment, with confirmation of receipt and (a) if to a holder, addressed
to it at the address specified for such communications in Section 18 of
the Note Agreement, or at such other address as a holder shall have specified to
the Collateral Agent, in writing, (b) if to the Collateral Agent or the
Depositary addressed to it in such capacity at Deutsche Bank Trust Company
Americas, 60 Wall Street, 27th Floor, MS: NYC 60-2710, New York, NY 10005,
Attention: Project Finance Team Manager/USG Nevada, Facsimile: (732) 578-4636 or
at such other address as the Collateral Agent or the Depositary shall have
specified to each holder and the Issuer, and (c) if to the Issuer, addressed to
it at c/o U.S. Geothermal Inc., 1505 Tyrell Lane, Boise, Idaho 83706, Attention:
Dennis J. Gilles. Facsimile: (760)-348-2315, E-mail: dgilles@usgeothermal.com,
or at such other address as the Issuer shall have specified to each holder, the
Depositary and the Collateral Agent in writing. Notwithstanding the foregoing,
(x) notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available, or
return e-mail or other written acknowledgement from such recipient confirming
receipt), and (y) communications or notices transmitted by facsimile or e-mail
shall be deemed to have been validly and effectively given on the day (if a
Business Day and, if not, on the next following Business Day) on which it is
transmitted if transmitted before 4:00 p.m., New York City time, and if
transmitted after that time, on the next following Business Day.

ARTICLE IX 

CONTESTING LIENS OR SECURITY INTERESTS; NO PARTITIONING OR
MARSHALLING OF COLLATERAL; CONTESTING OBLIGATIONS 

            9.1.       
No Contest of Liens. None of the Collateral Agent, the Depositary nor
any holder shall contest the validity, perfection, priority or enforceability of
or seek to avoid, have declared fraudulent or have put aside any lien or
security interest granted to the Collateral Agent pursuant to this Agreement,
the Note Agreement or any other Financing Document, and each party hereby agrees
to cooperate in the defense of any action contesting the validity, perfection,
priority or enforceability of such liens or security interests. 

            9.2.       
No Partition. Notwithstanding anything to the contrary in this
Agreement or in any Security Document, no holder or the Depositary shall have
the right to have any of the Collateral, or any security interest or other
property being held as security for all or any part of the Obligations by the
Collateral Agent, partitioned, or to file a complaint or institute any
proceeding at law or in equity to have any of the Collateral or any such
security interest or other property partitioned, and each holder and the
Depositary hereby waives any such right.

            9.3.       
No Contest of Obligations. None of the Collateral Agent, the Depositary
nor any holder shall contest the validity or enforceability of or seek to avoid,
have declared fraudulent or have set aside any Obligations. Subject to
Section 2.1, in the event any of the Obligations is invalidated, avoided,
declared fraudulent or set aside for the benefit of the Issuer, the Collateral
Agent, the Depositary and the holders agree that such Obligations shall
nevertheless be considered to be outstanding for all purposes of this Agreement.

ARTICLE X 

NO ADDITIONAL RIGHTS FOR THE ISSUER HEREUNDER 

            The
Issuer acknowledges and agrees that it shall have no rights to enforce this
Agreement except to the extent arising out of any breach of any obligation owed
by the Collateral Agent to the Issuer hereunder or with respect to any Losses of
the Issuer arising out of the gross negligence or willful misconduct of the
Collateral Agent. The Issuer agrees that if the Collateral Agent, the Depositary
or any holder violates the terms of this Agreement, it shall not use such
violation as a defense to any enforcement by any such party nor assert such
violation as a counterclaim or basis for setoff or recoupment against any such
party. 

ARTICLE XI 

INSOLVENCY PROCEEDINGS 

            This
Agreement shall survive the commencement of any Insolvency Proceeding. In the
event of any Insolvency Proceeding relative to the Issuer or any other Issuer
Party, the Collateral Agent shall be entitled and empowered in any such
Insolvency Proceeding, at the request of the Required Holders, to (a) file and
prove a claim for the whole amount of the principal, interest, fees and
Make-Whole Amounts owing and unpaid in respect of the Notes and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Secured Parties
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Secured Parties and their respective agents and counsel)
allowed in such Insolvency Proceeding, in each case to the extent that any such
Secured Party fails to do so prior to 10 Business Days’ before the expiration of
the time to file any such proof of claim or other documents, and (b) collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same in accordance with this Agreement.

            Nothing
contained herein shall limit or restrict the independent right of any holder of
the Notes to initiate any Insolvency Proceeding in its individual capacity and
to appear or be heard on any matter before the bankruptcy or other
applicable court in any such Insolvency Proceeding, including, without
limitation, with respect to any question concerning the post-petition usage of
Collateral and post-petition financing arrangements. The Collateral Agent is not
authorized in any such proceeding to enter into any agreement for, or give any
authorization or consent with respect to, the post-petition usage of Collateral,
unless such agreement, authorization or consent has been approved in writing by
the Required Holders. Nothing contained herein shall be deemed to authorize the
Collateral Agent to authorize or consent to or accept or adopt on behalf of any
Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the
rights of any Secured Party or to authorize the Collateral Agent to vote in
respect of the claim of any Secured Party in any such proceeding. 

ARTICLE XII 

TURNOVER OF COLLATERAL 

            If
any holder or the Depositary acquires custody, control or possession of any
Collateral (except pursuant to the Depositary Agreement) or any proceeds thereof
by set-off or any other means other than pursuant to the terms of this
Agreement, such holder and/or the Depositary, as applicable, shall promptly
cause such Collateral or the proceeds thereof to be delivered to or put in the
custody, possession or control of the Collateral Agent for disposition and
distribution in accordance with the provisions of this Agreement. Until such
time as any such holder and/or the Depositary, as applicable, shall have
complied with the provisions of the immediately preceding sentence of this
Article XII, such holder and/or the Depositary, as applicable, shall be
deemed to hold such Collateral and the proceeds thereof in trust for the
Collateral Agent. 

ARTICLE XIII 

AMENDMENT 

            This
Agreement and the provisions hereof may be amended, modified or waived only by a
writing signed by all of the parties hereto. 

ARTICLE XIV 

SUCCESSORS AND ASSIGNS 

            The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns who execute and
deliver a Joinder Agreement in substantially the form attached as Exhibit A
hereto. The Issuer may not assign or otherwise transfer any of its rights
under this Agreement. Any holder of Notes will have the right to transfer,
assign, pledge and grant participations in its rights and interests under this
Agreement in accordance with the terms of the Note Agreement. The Collateral
Agent may only assign or otherwise transfer and assign its rights and interests
under this Agreement to a successor in accordance with Section 2.7
hereof. The Depositary may only assign or otherwise transfer and assign its
rights and interests under this Agreement to a successor in accordance with
Section 7.2 of the Depositary Agreement. 

ARTICLE XV 

SEVERABILITY 

            In
case any one or more of the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and the parties shall enter into good faith negotiations to
replace the invalid, illegal or unenforceable provision. 

ARTICLE XVI 

CONSTRUCTION, ETC. 

            Each
covenant contained herein shall be construed (absent express provision to the
contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other covenant. The rules of
interpretation set forth in Schedule B of the Note Agreement shall apply
to this Agreement. 

ARTICLE XVII 

COUNTERPARTS; ELECTRONIC SIGNATURES 

            This
Agreement may be executed in one or more duplicate counterparts and when signed
by all of the parties shall constitute a single binding agreement. A facsimile
or electronic transmission of the signature of any party on any counterpart
shall be effective as the signature of the party executing such counterpart and
shall be deemed to constitute an original signature of such party to this
Agreement and shall be admissible into evidence for all purposes. 

ARTICLE XVIII 

GOVERNING LAW 

            THIS
AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD
APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY
OF REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL IS GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. 

ARTICLE XIX 

CONSENT TO JURISDICTION; PROCESS AGENT; WAIVER OF JURY
TRIAL 

            19.1.    
 Consent to Jurisdiction. The parties agree that any
legal action or proceeding arising out of this Agreement or any other Financing
Document may be brought in or removed to the courts of the State of New York, in
and for the County of New York, or of the United States of America for the
Southern District of New York, in each case, in the Borough of Manhattan. By
execution and delivery of this Agreement, each party accepts, for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Issuer agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Each of the parties
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, return receipt requested to such party at its address
for notices as specified herein. Each of the parties agrees that such service
upon receipt (i) shall be deemed in every respect effective service of process
upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by applicable law, be taken and held to be valid personal
service upon and personal delivery to it. Notices under this Section 19.1 shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial
delivery service. 

            19.2.     
Appointment of Process Agent. In addition to and notwithstanding the
provisions of Section 19.1 above, the Issuer hereby irrevocably appoints
C T Corporation System as its agent to receive on its behalf and its property
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Issuer, in care of the process agent at
111 Eighth Avenue, New York, NY 10011 and the Issuer hereby irrevocably
authorizes and directs the process agent to accept such service on its behalf.
Nothing in this Agreement will affect the right of any party hereto to serve
legal process in any other manner permitted by law or affect the right of any
party hereto to bring any action or proceeding in the courts of any other
jurisdiction. If for any reason the process agent ceases to be available to act
as process agent, the Issuer agrees to immediately appoint a replacement process
agent satisfactory to the Collateral Agent. Each of the parties waives any right
to stay or dismiss any action or proceeding under or in connection with any or
all of this Agreement or any other Financing Document brought before the
foregoing courts on the basis of forum non conveniens. 

            19.3.    
 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN),
OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES TO ENTER INTO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

ARTICLE XX 

TERMINATION 

           
The provisions of this Agreement and the Security Documents shall terminate on
the date on which all of the Obligations owing to the holders under the Notes
and the other Secured Parties under the Financing Documents have been paid in
full in cash (excluding contingent obligations and reimbursement obligations
that by their terms expressly survive the repayment in full of the Notes and for
which no claim has been asserted). Upon receipt of written notice from each of
the holders that the Obligations under the Financing Documents have been paid in
full in cash (excluding contingent obligations and reimbursement obligations
that by their terms expressly survive the repayment in full of the Notes), the
Collateral Agent is hereby directed to execute the documents provided to it by the Issuer to release
the Collateral. Any liability or obligation hereunder arising prior to the
termination of this Agreement shall survive such termination (including without
limitation, any termination under any bankruptcy law). Any indemnity of any
Person relating to events occurring prior to the termination of such documents
shall survive termination of this Agreement. 

ARTICLE XXI 

LIMITATION RELATIVE TO OTHER AGREEMENTS 

            Nothing
contained in this Agreement is intended to impair as between the holders, on the
one hand, and the Issuer, on the other hand, the rights of the holders and the
obligations of the Issuer under the Note Agreement and the other Financing
Documents. To the extent there is any discrepancy between provisions of this
Agreement and any other Financing Document to which the Collateral Agent is a
party, the terms of this Agreement shall govern. 

[Remainder of page intentionally left blank.] 

            IN
WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused
this Agreement to be signed on the date first above written. 

Issuer: 

USG NEVADA LLC 

 

By:
_________________________________________________
Name: Dennis J. Gilles

Title: Manager 

	 	Purchasers: 
	 	 
	 	THE PRUDENTIAL INSURANCE COMPANY 
	 	 OF AMERICA 
	 	 
	 	By: ______________________________
	 	        Vice
      President 
	 	 
	 	PRUCO LIFE INSURANCE COMPANY 
	 	 
	 	By: ______________________________
	 	         Assistant
      Vice President 
	 	 
	 	PRUDENTIAL ARIZONA REINSURANCE 
	 	 CAPTIVE COMPANY 
	 	 
	 	By:       
      Prudential Investment Management, Inc., 
	 	             
      as investment manager 
	 	 
	 	             
      By:______________________________ 
	 	                    
      Vice President 
	 	 
	 	PRUDENTIAL RETIREMENT INSURANCE 
	 	 AND ANNUITY COMPANY 
	 	 
	 	By:       
      Prudential Investment Management, Inc., 
	 	             
      as investment manager 
	 	 
	 	             
      By:______________________________ 
	 	                    
      Vice President 

	 	Collateral Agent: 
	 	  
	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, not in its individual capacity
      but 
	 	solely in its capacity as the Collateral Agent
    
	 	  
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title: 
	 	  
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title: 
	 	  
	 	  
	 	  
	 	Depositary: 
	 	  
	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, not in its individual capacity
      but 
	 	solely in its capacity as the Depositary 
	 	  
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title: 
	 	  
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title:
  

EXHIBIT A 

FORM OF JOINDER AGREEMENT 

            Reference
is made to the Collateral Agency Agreement (the “Collateral Agency
Agreement”), dated as of September 26, 2013, by and among Deutsche Bank
Trust Company Americas, in its capacity as collateral agent for the Secured
Parties and as depositary, USG Nevada LLC, a Delaware limited liability company,
and the holders of the Notes signatory thereto from time to time. All
capitalized terms used but not defined herein have the respective meanings
ascribed thereto in the Collateral Agency Agreement. This agreement is a Joinder
Agreement referred to in Article XIV of the Collateral Agency
Agreement.

            The
undersigned hereby agrees that it is a party to the Collateral Agency Agreement
and is therefore bound by, and subject to, the terms of the Collateral Agency
Agreement, and that it is a “holder” under, and as defined, therein. 

            The
undersigned certifies that on or about the date hereof it is the holder of the
following Notes: 

[describe Notes] 

           
The address for notices and wiring instructions for all payments to the
undersigned pursuant to the Collateral Agency Agreement and all other Security
Documents is as follows: 

[Address and wiring instructions] 

Very truly yours, 

[NAME OF
HOLDER OF NOTES] 

 

By
__________________________________________________
Name: 
Title: 

Exhibit S-3 

Form of Deed of Trust

 

 

Exhibit S-3 - 1 

	APN: __________________________________________________	 	 
	  	 	 
	RECORDING REQUESTED BY 	 	 
	AND WHEN RECORDED, RETURN TO: 	 	 
	  	 	 
	Bingham McCutchen LLP 	 	 
	One Federal Street 	 	 
	Boston, MA 02110 	 	 
	Attention: Nancy M. Persechino 	 	 
	  	 	 
	
      The undersigned hereby affirms that this document,
      including any exhibits, submitted for recording does not contain the
      social security number of any person or persons. (Per NRS 239B.030)

	 	

DEED OF TRUST
WITH ASSIGNMENT OF LEASES, CONTRACTS
AND RENTS, 
SECURITY AGREEMENT AND FIXTURE FILING 

from 

 

USG NEVADA LLC 
a Delaware limited liability company

(Trustor) 

to 

STEWART TITLE GUARANTY COMPANY 
(Trustee) 

for the benefit of 

DEUTSCHE BANK TRUST COMPANY AMERICAS 
in its capacity
as Collateral Agent 
(Beneficiary)

DEED OF TRUST 
WITH ASSIGNMENT OF LEASES, CONTRACTS
AND RENTS 
SECURITY AGREEMENT AND FIXTURE FILING 

                          This
Deed of Trust with Assignment of Leases, Contracts and Rents, Security
Agreement, and Fixture Filing (this "Deed of Trust"), dated as of
September ___, 2013 is by USG Nevada LLC, a Delaware limited liability company,
as trustor, ("Trustor"), in favor of Stewart Title Guaranty Title
Company, as trustee, ("Trustee") for the benefit of Deutsche Bank
Trust Company Americas, in its capacity as collateral agent (together with its
successors and permitted assigns in such capacity, the "Collateral
Agent") , for itself and for the benefit of the holders from time to
time of the Notes (as defined below), and Deutsche Bank Trust Company Americas,
in its capacity as depositary (together with its successors and assigns in such
capacity, the "Depositary") under the Depositary and Security
Agreement, dated as of the date hereof, among Trustor, the Collateral Agent and
the Depositary (as may be amended, modified or supplemented from time to time,
the "Depositary Agreement"), as beneficiary,
("Beneficiary") (the Holders, the Depositary and the Collateral
Agent are referred to herein collectively as the "Secured
Parties"). 

RECITALS 

                          A.       
Trustor is the record owner of certain interests in real property located in the
County of Washoe, State of Nevada, described on Exhibit A attached
hereto (collectively, the "Land"), consisting of the following:

                                       
(i) a leasehold estate (the "Site Leasehold Estate") in certain
real property in the County of Washoe, State of Nevada, described as Parcel 25
on Exhibit A, created by that certain Office and Land Lease
Agreement between U.S. Geothermal, Inc., a Delaware corporation, as Landlord,
and Trustor, as Tenant, dated as of August 27, 2010, a memorandum of which was
recorded on September 2, 2010 in the Official Records of the office of the
County Recorder of Washoe County, Nevada ("Official Records") as
Document No. 3918518, as amended by the First Amendment to Office and Land Lease
Agreement dated concurrently herewith (as may be further amended, restated,
replaced, supplemented or otherwise modified from time to time, the "Site
Lease"); 

                                       
(ii) a geothermal leasehold estate (the "Kosmos Leasehold Estate")
in that certain property described as Parcel 1 on Exhibit A,
created by that certain Geothermal Lease dated as of October 14, 1987 between
The Kosmos Company, as lessor, and Michael B. Stewart, as lessee, recorded
October 16, 1987 in Book 2633, Page 282, as Document No. 1200497 of Official
Records, as assigned to Empire Farms, a Nevada Partnership, by that certain
Assignment of Lease dated September 18, 1995 and recorded October 13, 1995 as
Document No. 1933483 of Official Records, and as further assigned to Empire
Energy, LLC, a Nevada limited liability company, by that certain Assignment and
Assumption Agreement dated November 24, 1999, as evidenced by that certain
Memorandum of Assignment recorded May 11, 2000 as Document No. 2446152 of
Official Records, and as further assigned to Empire Geothermal Power, LLC by
that certain Assignment of Geothermal Project Rights and Leasehold Estates dated August 31, 2003, and recorded on
October 3, 2003 as Document No. 2934363 of Official Records, and as further
assigned to Trustor by that certain Assignment and Acceptance of Assignment of
Kosmos Geothermal Lease dated April 2008 and recorded on April 30, 2008 as
Document No. 3645581 of Official Records, as amended by that certain First
Amendment to Geothermal Lease dated March 15, 2008 for reference purposes and
that certain Second Amendment to Geothermal Lease dated as of May 5, 2007 for
reference purposes (as so assigned and amended, and as it may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
"Kosmos Lease"); 

1 

                                       
(iii)     the geothermal leasehold estates (collectively,
the "BLM Leasehold Estates") described as Parcels 2, 3, 7, 15, 17,
18 and 27 of Exhibit A, created by those certain Leases for
Geothermal Resource executed by United States Department of the Interior Bureau
of Land Management ("BLM") as Lessor, described on Exhibit
B (collectively, the "BLM Leases," and, together with the
Kosmos Lease, collectively, the "Geothermal Leases"; the Kosmos
Leasehold Estate and the BLM Leasehold Estates are sometimes collectively called
the "Geothermal Leasehold Estates"); and 

                                       
(iv)      the licenses, rights-of-way and easements
(collectively, the “Easement Estates”) described as Parcels 5, 6,
19, 20, 24, and 26 of Exhibit A, created by those certain
Right-of-Way Grant/Temporary Use Permit executed by BLM, described on
Exhibit C (collectively, the "BLM ROWs"). 

                         
B.        Trustor is the owner of the Water
Rights (defined below). 

                          C.       
Trustor has constructed and plans to operate and maintain an approximately 8.6
MW (net) geothermal electric generation facility (the "Project")
on the Land, as further described in the Note Agreement (as defined below). 

                          D.       
Trustor has duly authorized the execution and delivery of a Note Purchase
Agreement, dated as of the date hereof (as may be amended, modified or
supplemented from time to time, the "Note Agreement"), by and
between Trustor, and the purchasers of the notes named therein, providing for
the issue of Trustor's senior secured notes thereunder (the
"Notes"). 

                          E.       
Certain capitalized terms used in this Deed of Trust are defined in Article 7
hereof. Terms not otherwise defined in this Deed of Trust shall have the
meanings given them in the Note Agreement. 

                          NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, Trustor agrees as follows for the benefit of Trustee and
Beneficiary: 

ARTICLE 1. GRANT IN TRUST 

                          Trustor
hereby irrevocably and unconditionally grants, bargains, sells, transfers,
conveys, sets over and assigns to Trustee, in trust, for the benefit of
Beneficiary, with power of sale and right of entry and possession, all of
Trustor's right, title and interest, whether now owned or hereafter acquired, in
or to the property and rights listed in paragraphs (a) through (t) below
(hereinafter collectively referred to as the "Property"): 

2 

                         
(a)        The Site Leasehold Estate; 

                         
(b)        The Geothermal Leasehold Estates;

                         
(c)        The Easement Estates; 

                         
(d)        All Improvements constructed,
installed or placed, and to be constructed, installed or placed by or for
Trustor in, on or under the Land, including any alterations or replacements;

                          
(e)        All Water Rights, including, for
purposes of clarity, the Water Rights described on Exhibit D; 

                         
(f)        All easements, rights-of-way,
strips and gores of land, streets, ways, alleys, passages, utility rights, sewer
rights, air rights and development rights, liberties, tenements, hereditaments
and appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Site Leasehold Estate, the Geothermal Leasehold Estates, the
Easement Estates or Improvements and all the estates, rights, titles, interests,
property, possession, claim and demand whatsoever, both in law and in equity, of
Trustor of, in and to the Land and the Improvements, with the appurtenances
thereto whether now owned or hereafter acquired by Trustor; 

                         
(g)        All Fixtures and accessions
thereof and renewals, replacements thereof and substitutions therefor, now or
hereafter located upon the Land or the Improvements, or appurtenances thereto;

                         
(h)        All awards of payments, including
interest thereon, which may heretofore and hereafter be made with respect to the
Property to the extent actually received by Trustor, whether from the exercise
of the right of eminent domain (including, but not limited to, any transfer or
part thereof made in lieu of or in anticipation of the exercise of said right),
or for any other injury to or decrease in the value of the Property; 

                         
(i)        All appurtenances in respect of or
otherwise relating to the Site Lease, the Geothermal Leases or the documents or
instruments creating the Easement Estates (collectively, the "Easement
Agreements"), including, without limitation, renewal option and
expansion rights, and all estate and rights of Trustor of, in and to (i) all
modifications, extensions and renewals of the Site Lease, the Geothermal Leases
or the Easement Agreements and all rights to renew or extend the term thereof,
(ii) all credits to and deposits of Trustor under the Site Lease, the Geothermal
Leases or the Easement Agreements, (iii) all other options and privileges
granted, assigned and demised to Trustor under the Site Lease, the Geothermal
Leases or the Easement Agreements, (iv) all of the right and privilege of
Trustor to terminate, cancel, abridge, surrender, merge, modify or amend the
Site Lease, the Geothermal Leases or the Easement Agreements, and (v) any and
all possessory rights of Trustor and other rights or privileges of possession,
including, without limitation, Trustor's right to elect to remain in possession
of the Land or Site Leasehold Estate or the Geothermal Leasehold Estates
pursuant to Section 365(h)(1) of the United States Bankruptcy Code (11 U.S.C.
§101 et seq.) (the "Bankruptcy Code"); 

3 

                         
(j)        All of Trustor's claims and rights
to damages and any other remedies in connection with or arising from the
rejection of the Site Lease, any of the Geothermal Leases by the lessor under
the Site Lease or any of the Geothermal Leases by the lessor thereunder or of
any Easement Agreement by the grantor under any Easement Agreement (including
any successors and assigns of such lessors and grantors, "Fee
Owner") or any trustee, custodian or receiver appointed pursuant to the
Bankruptcy Code in the event that there shall be filed by or against any Fee
Owner any petition, action or proceeding under the Bankruptcy Code or under any
other similar federal or state law now or hereafter in effect (collectively,
"Fee Owner's Bankruptcy"); 

                         
(k)        All proceeds of and any unearned
premiums on any property insurance policies covering the Property, including,
without limitation, the right to receive and apply the proceeds of any
insurance, judgments (including with respect to a casualty thereto or
condemnation thereof), or settlements made in lieu thereof, for damage to the
Property; 

                         
(l)        The right, in the name and on
behalf of Trustor, to appear in and defend any action or proceeding brought with
respect to the Property and to commence any action or proceeding to protect the
interest of Beneficiary in the Property, subject to the terms of the Financing
Documents; 

                         
(m)        All real estate, possessory
interest and personal property tax refunds or rebates or charges in lieu of
taxes now or hereafter assessed or levied against the Property, including
interest thereon, and the right to receive the same, whether such refunds or
rebates relate to fiscal periods before or during the term of this Deed of
Trust, payable to Trustor with respect to the Property, and refunds, credits or
reimbursements payable with respect to bonds, escrow accounts or other sums
payable in connection with the use, occupation, enjoyment, development,
operation or ownership of the Property; 

                         
(n)        To the extent assignable, all of
Trustor's right, title and interest in and to all abstracts of title, plans,
specifications, operating manuals, computer programs, computer data, maps,
surveys, studies, reports, permits and licenses, governmental approvals,
appraisals, architectural, engineering and construction contracts, books of
account, insurance policies and other documents, of whatever kind or character,
relating to the Project; 

                         
(o)        All right, title and interest of
every nature of Trustor in all receivables and other accounts of Trustor (x)
arising out of any sale, lease or other transfer of any interest in all or any
portion of the Property, (y) in connection with any insurance policies covering
all or any portion of the Property, and (z) any and all moneys deposited by
Trustor or deposited on behalf of Trustor with any city, county, public body or
agency, irrigation, sewer, or water district or company, gas or electric company, telephone
company, and any other body or agency, for the installation, or to secure the
installation of, any utility pertaining to the Property; 

4 

                          (p)       
All rights, titles, interests, estates or other claims, both in law and in
equity, which Trustor now has or may hereafter acquire in the Land or in and to
any greater estate in the Land or in and to any greater estate in the Property;

                          (q)       
All of Trustor's right, title and interest in and to all property hereafter
acquired or constructed by Trustor located at or used in connection with the
Land which shall forthwith, upon acquisition or construction thereof by Trustor
and without any act or deed by Trustor or Beneficiary, become subject to the
lien of this Deed of Trust as if such property were now owned by Trustor and
were specifically described in this Deed of Trust and were specifically conveyed
or encumbered hereby, including, without limitation the Personal Property; 

                          (r)       
Any liens and security interests in favor of Trustor securing payment of
proceeds from the sale of energy (including station use credits), ancillary
services or environmental credits (including portfolio energy credits) from the
Project including, but not limited to, those liens and security interests
provided for under the Nevada Uniform Commercial Code; 

                          (s)       
All Required Approvals; and 

                          (t)       
All products and Proceeds of the foregoing. 

The Property shall not include the Excluded Assets. 

ARTICLE 2. OBLIGATIONS SECURED 

                          Trustor
makes the foregoing grants under Article 1 hereof for the purpose of securing
the following obligations, whether now existing or hereafter arising, voluntary
or involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred, and
all amendments, revisions or renewals thereof (collectively, the "Secured
Obligations"): 

                         
2.1       
Indebtedness. The prompt and complete payment and performance when due of
the principal, interest (including, without limitation, interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), Make-Whole Amount, and
premium, if any, on all of the Notes issued and delivered and outstanding under
the Note Agreement, the payment of all other sums owing under the Note Agreement
and each other Financing Document (whether at stated maturity, by acceleration,
because of mandatory prepayment, or otherwise, and including the payment of amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)),
from time to time outstanding, and of all other amounts payable under the
Financing Documents, and any modifications, extensions or renewals thereof
(including, without limitation, (i) modifications of the required principal,
interest and/or payment dates, deferring or accelerating said payment dates in
whole or in part, and/or (ii) modifications, extensions or renewals at a
different rate of interest, whether or not any such modification, extension or
renewal is evidenced by a new or additional promissory note or notes); \

5 

                         
2.2       
Financing Documents. The payment, satisfaction, observance and
performance of all other debts, liabilities, obligations, covenants, agreements,
and duties of Trustor to Trustee and/or Beneficiary arising out of, connected
with, or related to the Financing Documents and the transactions contemplated
thereby (including, without limitation, all interest, fees, charges, expenses,
attorneys' fees and consultants' fees); and 

                         
2.3        Further
Secured Obligations. Payment of such further sums and/or performance of such
further obligations as Trustor or a successor owner of the Property may
undertake to pay and/or perform for the benefit of the Secured Parties, their
successors or assigns, when said borrowing and/or obligation is evidenced by a
writing or writings reciting that it or they are so secured by this Deed of
Trust. 

ARTICLE 3. ASSIGNMENT OF LEASES, CONTRACTS AND RENTS 

                          3.1       
Assignment of Leases, Contracts and Rents. Trustor hereby presently,
absolutely, unconditionally and irrevocably assigns, warrants, transfers,
conveys and sets over unto Beneficiary all right, title and interest of Trustor
in and to (a) all present and future leases of the Property or any portion
thereof, and all other agreements of any kind relating to the use or occupancy
of the Property, and the geothermal resources, brine, minerals, heat, steam or
other resources in, on or under the Property, or any portion of the foregoing
("Leases"); (b) all present and future licenses, contracts or
other agreements relating to the production, sale, transmission or distribution
of energy, heat, steam, brine, or other resources, ancillary services and
environmental credits, energy credits or environmental attributes generated by
the Project ("Contracts"); and (c) all the income, revenues,
rents, royalties, issues, profits and proceeds of the Property, including
without limitation all amounts payable and rights and benefits to Trustor under
the Leases and Contracts (collectively, the "Rents"). The
assignment of Leases, Contracts and Rents constitutes a present and continuing
assignment and not merely the passing of a security interest, and Beneficiary's
right to the Leases, Contracts and Rents is not contingent upon, and may be
exercised without, possession of the Property. To the extent any provision of
Article 3 hereof is inconsistent with the provisions of Chapter 107A of the
Nevada Revised Statutes ("NRS"), the provisions of NRS Chapter
107A shall control. 

                          3.2       
Grant of License. All Rents from the Property are to be collected and
deposited in accordance with the provisions of the Depositary Agreement and the
other Financing Documents. Subject to the foregoing, and so long as no Event of
Default shall have occurred and be continuing, Trustor shall have, as a
revocable license from Beneficiary, the right to use the Rents in accordance with the Depositary
Agreement and the other Financing Documents. Upon the occurrence and during the
continuation of an Event of Default, the license may be revoked by Beneficiary
and, in such event, Beneficiary may collect and apply the Rents to the Secured
Obligations without notice and without taking possession of the Property.
Trustor hereby appoints Beneficiary as its attorney-in-fact, which power of
attorney is coupled with an interest and irrevocable, to sign the name of
Trustor and to bind Trustor on all papers and documents relating to the
operation, leasing and maintenance of the Property. Trustor shall do nothing to
impair Beneficiary's ability to collect and retain the Rents herein assigned.
All Rents collected by Trustor after revocation of Trustor's license shall be
held by Trustor as trustee in a constructive trust for the benefit of
Beneficiary only. 

6 

                          3.3       
Authorization and Direction to Third Parties. Trustor hereby irrevocably
authorizes and directs the lessees under the Leases and the other parties to the
Contracts to rely upon and comply with any notice or demand by Beneficiary for
the payment to Beneficiary of any rental or other sums which may at any time
become due under the Leases or Contracts, or for the performance of any of the
lessees' undertakings under the Leases or contracting parties' undertakings
under the Contracts, and the lessees and contracting parties shall have no right
or duty to inquire as to whether any Event of Default has actually occurred or
is then existing hereunder. Trustor hereby relieves the lessees and contracting
parties from any liability to Trustor by reason of relying upon and complying
with any such notice or demand by Beneficiary. 

                          3.4       
Effect of Assignment. The foregoing irrevocable assignment shall
not cause Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases or
Contracts, or (c) responsible or liable for any dangerous or defective condition
of the Property; or for any negligence in the management, upkeep, repair or
control of the Property resulting in loss or injury or death to any lessee,
licensee, employee, invitee or other Person (except to the extent any of the
foregoing are the result of the gross negligence or willful misconduct of
Beneficiary). Beneficiary and Trustee shall not directly or indirectly be liable
to Trustor or any other Person as a consequence of: (i) the exercise or failure
to exercise by Beneficiary or Trustee, or any of their respective employees,
agents, contractors or subcontractors, any of the rights, remedies or powers
granted to Beneficiary or Trustee hereunder, or (ii) the failure or refusal of
Beneficiary to perform or discharge any obligation, duty or liability of Trustor
arising under the Leases or Contracts. 

                          3.5       
Limitation on Liability; Indemnity. Beneficiary shall not be
obligated to perform or discharge any obligation, duty or liability of Trustor
under any of the Leases or Contracts by reason of this Article 3,
and Trustor shall, and hereby agrees to indemnify Beneficiary and its officers,
directors, employees, agents and affiliates for, and to hold such indemnified
persons harmless from and against, any and all claims, liability (including
Environmental Costs), expenses, losses or damages which may or might be asserted
against or incurred by such indemnified persons solely by reason of
Beneficiary's status as an assignee pursuant to the assignment of Leases,
Contracts and Rents contained herein or in the Financing Documents. Should Beneficiary incur any such
liability (other than solely as a result of its own gross negligence or willful
misconduct), the amount thereof, including costs, expenses and attorneys' fees,
shall constitute Secured Obligations and Trustor shall reimburse such
indemnified person therefor promptly upon demand, as and to the extent set forth
in the Financing Documents. This Section 3.5 shall survive the termination of
this Deed of Trust and the removal or resignation of the Beneficiary. 

7 

                          3.6       
No Waiver. The exercise by Beneficiary of the option granted it in this
Article 3 and the collection of the Rents and the application
thereof as herein provided shall not be considered a waiver of any Event of
Default by Trustor under this Deed of Trust or any other Financing Document.

ARTICLE 4. RIGHTS AND DUTIES OF THE PARTIES 

                          To
protect the security of this Deed of Trust, Trustor hereby covenants and agrees
as follows: 

                         
4.1        Title.
Trustor warrants that it lawfully holds and possesses the Property free and
clear of all liens other than Permitted Liens, and without limitation on the
right to encumber except as set forth in the Financing Documents. 

                          4.2       
Taxes and Assessments. Trustor shall pay or cause to be paid,
prior to delinquency all taxes, assessments and charges of any kind
("Taxes") imposed by any Governmental Authority or utility company
which are or may become a lien upon the Property, any part thereof or interest
therein; provided that Trustor shall have the right to contest the validity or
amount of such Taxes as and to the extent permitted under the Note Agreement.
Trustor shall also pay or cause to be paid, prior to delinquency, Taxes imposed
by any Governmental Authority upon the Secured Parties and/or Beneficiary by
reason of the interest in the Property created hereby or by reason of any
payment, or portion thereof, made to the Secured Parties and/or Beneficiary
hereunder or pursuant to any Secured Obligation hereby secured; provided,
however, that, except as otherwise provided under the Note Agreement, Trustor
shall have no obligation to pay or discharge any Secured Party's or
Beneficiary's business or franchise taxes, federal or state income taxes or
other taxes which are measured by and imposed upon the Secured Parties' or
Beneficiary's net or gross income or receipts, and provided further that Trustor
shall have the right to contest the validity or amount of such Taxes as and to
the extent permitted under the Note Agreement. 

                          4.3       
Insurance. Trustor shall provide, maintain and deliver to the Secured
Parties such insurance as may be required by the terms of the Financing
Documents and Applicable Law from time to time, covering the Property. 

                          4.4       
Liens and Encumbrances. Trustor shall pay or cause to be paid, when due,
all obligations secured by or reducible to liens other than Permitted Liens
which shall now or hereafter encumber the Property or any part thereof or
interest therein, whether senior or subordinate hereto, including without
limitation all claims for work or labor performed, or materials or supplies furnished, in connection with any work of
demolition, alteration, improvement of or construction upon the Property;
provided, however, Trustor shall have the right to contest the validity or
amount of such liens as and to the extent permitted under the Note Agreement.

8 

                          4.5       
Disposition of Insurance and Condemnation Proceeds. Trustor
assigns to Beneficiary (i) all awards for damages suffered or compensation paid
by reason of a taking for public use of, or an action in eminent domain
affecting all or any part of, the Property or any interest therein, and (ii) all
proceeds of any insurance policies paid by reason of loss sustained to the
Property or any part thereof. Beneficiary may apply any such sum to any Secured
Obligation secured hereby and in such order as Beneficiary may in its sole
option determine, subject to the provisions of the Financing Documents.
Beneficiary shall be entitled to settle and adjust all claims under insurance
policies provided hereunder; provided, however, that Beneficiary may, in the
absolute discretion of Beneficiary and regardless of any impairment of security
or lack of impairment of security, release to Trustor all or any part of the
entire amount so collected upon any conditions Beneficiary chooses. Application
of all or any portion of said funds, or the release thereof, shall not cure or
waive any default or notice of default hereunder or invalidate any acts done
pursuant to such notice. 

                         
4.6       
Maintenance and Preservation of the Property. 

                                        (a)       
Subject to and in accordance with the provisions of the Financing
Documents, Trustor shall: (i) keep the Property in good working order and
condition, ordinary wear and tear excepted; (ii) maintain and preserve the
Project and make all repairs, alterations, additions and replacements which are
necessary for the Project to operate safely and to meet all requirements of
Applicable Law, including all Required Approvals, all requirements of the
Material Project Documents, all warranties and prudent industry practices; (ii)
promptly inform Beneficiary and the Secured Parties of all demolition on or of
the Property; (iii) complete or restore promptly and in good and workmanlike
manner the Property or any part thereof which may be damaged or destroyed
(provided, that, in the case of an insured loss, any insurance proceeds are made
available by Beneficiary in accordance with the terms and conditions set forth
in Section 4.5); (iv) comply with and not suffer any violations of (A)
Applicable Law, (B) all covenants, conditions, restrictions and equitable
servitudes, whether public or private, of every kind and character, and (C) all
requirements of insurance companies and any bureau or agency which establishes
standards of insurability, which Applicable Law, covenants or requirements
affect the Property and pertain to acts committed or conditions existing
thereon; (v) not commit or permit waste of the Property or any part thereof;
(vi) perform the obligations required to be performed by Trustor in the Site
Lease, the Geothermal Leases and the Easement Agreements; (vii) make no further
assignment of rents of the Property; (viii) not create or consent to any deed of
trust, mortgage or other encumbrance upon the Property other than the Permitted
Liens; and (ix) execute and, where appropriate, acknowledge and deliver such
further instruments as Beneficiary or Trustee deems necessary or appropriate to
preserve, continue, perfect and enjoy the security provided for herein. 

9 

                                        (b)       
Trustor shall not seek, make, or consent to any agreements or
restrictions, or any change in the zoning or conditions of use of the Property,
that would be binding on Trustor's successors or assigns or that would affect
the ability of Trustor to continue to use the Property for the purposes of
owning and operating power generating and related facilities, without the prior
written consent of Beneficiary. Trustor shall comply with and make all payments
required under the provisions of any covenants, conditions, or restrictions
affecting the Property. Trustor shall comply with all existing and future
requirements Governmental Authorities having jurisdiction over the Property.

                          4.7       
Defense and Notice of Actions. Trustor shall, without liability,
cost or expense to the Secured Parties, Beneficiary or Trustee, protect,
preserve and defend (by counsel reasonably satisfactory to Beneficiary) title to
the Property, the security hereof and the rights or powers of Beneficiary or
Trustee hereunder. Said protection, preservation and defense shall include,
without limitation, protection, preservation and defense against any
termination, forfeiture, or other cancellation of any rights constituting the
Property and all adverse claimants to title or any possessory or non-possessory
interest therein, whether or not such claimants or encumbrances assert title
paramount to that of Trustor or claim their interest on the basis of events or
conditions arising subsequent to the date hereof, except for the Permitted
Liens. Trustor shall give the Secured Parties and Beneficiary prompt notice in
writing of the filing of any such action or proceeding, and Beneficiary shall
have the right to intervene and participate in such proceeding. 

                         
4.8        Site Lease,
Geothermal Leases and Easement Agreements. 

                                      (a)       
Trustor shall promptly and fully keep, observe and perform, or cause to
be kept, observed and performed, all of the terms, covenants, provisions and
agreements imposed upon or assumed by Trustor under the Site Lease, the
Geothermal Leases, the Easement Agreements, the Leases and the Contracts, and
Trustor shall not do or fail to do, or permit or fail to permit to be done, any
act or thing, the doing or omission of which will give any other party under the
Site Lease, the Geothermal Leases, the Easement Agreements, the Leases or the
Contracts a right to terminate or to abate any material payment due thereunder.
Trustor shall not under any circumstances modify, amend, cancel, or terminate
any of the Site Lease, the Geothermal Leases, the Easement Agreements, the
Leases or the Contracts without Beneficiary's prior written consent, and any
attempted modification, cancellation, amendment or termination of any of the
Site Lease, the Geothermal Leases, the Easement Agreements, the Leases or
Contracts without such consent shall be void and of no force or effect
whatsoever. 

                                      (b)       
If Trustor shall, in any manner, fail to comply with subsection (a) above,
Trustor covenants and agrees that Beneficiary may (but shall not be obligated
to) take, upon five (5) business days' written notice to Trustor (or upon lesser
notice, or without notice, if Beneficiary reasonably deems that the same is
required to protect its interest in the Property), any action that Beneficiary
shall reasonably deem necessary or desirable to keep, observe and perform or
cause to be kept, observed or performed any such terms, covenants, provisions or
agreements and to enter upon the Property and take all action thereon as may be necessary to prevent or cure any default by
Trustor in the performance of or compliance with any of Trustor's covenants or
obligations under the Site Lease, the Geothermal Leases, the Easement
Agreements, the Leases or the Contracts. Beneficiary may rely on any notice of
default received from any lessor, lessee or other contracting party. Trustor
shall promptly deliver to the Secured Parties and Beneficiary a copy of any
notice relating to the Site Lease, the Geothermal Leases, the Easement
Agreements, the Leases or the Contracts, including without limitation, defaults
received from a lessor, lessee or other contracting party or the trustee,
receiver or successor for or to a lessor, lessee or other contracting party. The
Secured Parties and Beneficiary may expend such sums of money as are reasonable
and necessary for any such purposes, and Trustor hereby covenants and agrees to
pay to Secured Parties and Beneficiary, immediately upon demand, all sums so
reasonably expended by the Secured Parties or Beneficiary, together with
interest thereon from the date of such payment at the Default Rate, and until so
paid by Trustor, all sums so reasonably expended by the Secured Parties or
Beneficiary and the interest thereon shall be added to the Secured Obligations
secured by the lien and legal operation and effect of this Deed of Trust. 

 10 

                          4.9       
Consents. Trustor shall obtain and maintain the consent or
approval to the lien of this Deed of Trust from any Person whose consent or
approval is required to the granting of a lien on any interest in the Property.

                          4.10    
 Right of Inspection. Beneficiary and its agents, contractors and
employees, may enter the Property upon reasonable prior notice during normal
business hours for the purpose of inspecting the Property and ascertaining
Trustor's compliance with the terms hereof. 

                          4.11     
Acceptance of Trust, Notice of Indemnification. Trustee accepts this
trust when this Deed of Trust, duly executed and acknowledged, becomes a public
record as provided by Applicable Law. Trustee shall not be obligated to perform
any act required of it hereunder unless the performance of such act is requested
in writing by Beneficiary. 

                          4.12     
No Merger. If both the respective Fee Owner's and Trustor's estates under
any Site Lease, Geothermal Lease or Easement Agreements shall at any time become
vested in one owner, this Deed of Trust and the lien created hereby shall not be
destroyed or terminated by application of the doctrine of merger, and in such
event, Beneficiary shall continue to have and enjoy all of the rights, title,
interest and privileges of Beneficiary as to the separate estates. In addition,
foreclosure of such property shall not destroy or terminate the Site Lease,
Geothermal Leases or Easement Agreements by application of the doctrine of
merger or as a matter of law or as the result of foreclosure unless Beneficiary
or any purchaser at a foreclosure sale may so elect. In the event Trustor shall
at any time prior to the release of this Deed of Trust, acquire fee simple title
to the Site Leasehold Estate, any Geothermal Leasehold Estate or any Easement
Estate, such fee simple title shall not merge with the Site Leasehold Estate,
such Geothermal Leasehold Estate or such Easement Estate encumbered by this Deed
of Trust, but such fee simple title shall immediately, without further action on
the part of Beneficiary, become subject to the lien hereof. In the event of such
acquisition by Trustor, Trustor agrees to execute and deliver to Beneficiary
such further instruments, conveyances and assurances as Beneficiary may reasonably
require in order to further confirm and assure that the fee simple title so
acquired by Trustor is subject to the terms, provisions and lien of this Deed of
Trust. Without limiting the foregoing sentence, Trustor hereby irrevocably
appoints Beneficiary its true and lawful attorney-in-fact (which appointment
shall be deemed to be an agency coupled with an interest), with full power of
substitution, to prepare, execute, deliver, file and record all such instruments
and documents in the name and behalf of Trustor.

11 

                          4.13    
 Preservation of Permits and Compliance with Laws. Trustor will take
or cause to be taken all such action as may from time to time be necessary to
obtain, preserve, maintain and renew all governmental approvals, including,
without limitation, all Required Approvals, authorizations, waivers (including
approved requests for determination), certificates, and permits now or hereafter
granted or upon it conferred that are reasonably necessary or beneficial to the
construction, ownership, operation, and maintenance of the Project, in
accordance with the Financing Documents. Trustor will comply with, and will
cause all Persons acting under or through Trustor to comply with all
governmental approvals, including, but not limited to, all Required Approvals,
authorizations, waivers (including approved requests for determination),
certificates, and permits, and laws, rules, and regulations applicable to
Trustor, the Project, the Site Leasehold Estate, the Geothermal Leasehold
Estates or the Easement Estates. 

                          4.14     
Powers of Trustee. From time to time, upon written request of
Beneficiary, upon presentation of this Deed of Trust for endorsement, and
without affecting the personal liability of any Person for payment or
performance of any of the Secured Obligations secured hereby, Trustee may,
without liability therefor and without notice, (i) reconvey all or any part of
the Property, (ii) consent to the making of any map or plat thereof, (iii) join
in granting any easement thereon, (iv) join in any declaration of covenants and
restrictions, or (v) join in any extension agreement or any agreement
subordinating the lien or charge hereof. Trustee or Beneficiary may from time to
time apply to any court of competent jurisdiction for aid and direction in the
execution of the trusts hereunder and the enforcement of the rights and remedies
available hereunder, and Trustee or Beneficiary may obtain orders or decrees
directing or confirming or approving acts in the execution of said trusts and
the enforcement of said remedies. Trustee has no obligation to notify any party
of any pending sale or any action or proceeding unless held or commenced and
maintained by Trustee under this Deed of Trust. Trustor shall pay to Trustee
compensation and reimbursement for services and expenses in the administration
of the trusts created hereunder, including attorneys' fees. Trustor indemnifies
Trustee, Beneficiary and the Secured Parties and their respective directors,
officers, employees, agents and Affiliates against all losses, claims, demands
and liabilities (including Environmental Costs) (except losses, claims, demands
or liabilities arising solely from the gross negligence or willful misconduct of
the indemnified party as finally determined by a court of competent
jurisdiction) that Trustee, Beneficiary or the Secured Parties may incur,
suffer, or sustain in the execution of the trusts created hereunder or in the
performance of any act required or permitted hereunder or by Applicable Law. The
foregoing indemnity provision shall survive the termination of this Deed of
Trust and the removal or resignation of the Trustee or Beneficiary. 

12 

                          4.15     
Substitution of Trustee. From time to time, by a writing prepared in
accordance with Applicable Law and signed and acknowledged by Beneficiary and
recorded in the Office of the Recorder of the County in which the Property is
situated, Beneficiary may appoint another trustee to act in the place and stead
of Trustee or any successor. Such writing shall refer to this Deed of Trust and
set forth the date, book and page of its recordation. The recordation of such
instrument of substitution shall discharge Trustee herein named and shall
appoint the new trustee as the trustee hereunder with the same effect as if
originally named Trustee herein. A writing recorded pursuant to the provisions
of this Section 4.15 shall be conclusive proof of the proper substitution of
such new trustee. 

                          4.16     
Acceleration Upon Sale or Encumbrance. Upon a Transfer, whether
voluntary, involuntary or by operation of law, of all or any part of the
Property without the prior written consent of Beneficiary that is not a
permitted Transfer under the Financing Documents, Beneficiary may, at its sole
option, accelerate and declare the Secured Obligations immediately due and
payable. Furthermore, the amalgamation, merger or consolidation of Trustor with
or into any other Person or the issuance, sale, or, other disposition by Trustor
of any shares of its capital stock or any other interest in Trustor, that is not
permitted under the Financing Documents, shall be deemed a Transfer of the
Property for purposes of this Section 4.16 

                         
4.17      Reconveyance. Trustee
shall reconvey, without warranty, the Property or that portion thereof then held
hereunder upon Beneficiary's written request, and upon payment in full of the
Secured Obligations and surrender to Trustee for cancellation of this Deed of
Trust. The recitals of any matters or facts in any reconveyance executed
hereunder shall be conclusive proof of the truthfulness thereof. To the extent
permitted by Applicable Law, the reconveyance may describe the grantee as "the
person or persons legally entitled thereto." Neither Beneficiary nor Trustee
shall have any duty to determine the rights of Persons claiming to be rightful
grantees of any reconveyance. When the Property has been fully reconveyed, the
last such reconveyance shall operate as a reassignment of all future rents,
issues and profits of the Property to the Person or Persons legally entitled
thereto, unless such reconveyance expressly provides to the contrary. 

                          4.18     
Certain Taxes. In the event of the passage, after the date of this Deed
of Trust, of any Applicable Law deducting from the value of the Property the
amount of any lien thereon for the purpose of taxation, or changing in any way
Applicable Law now in force for the taxation of deeds of trust or debts secured
by deeds of trust or similar instruments, or the manner of the collection of any
such taxes, so as to affect this Deed of Trust, or imposing payment of the whole
or any portion of any Taxes against the Property, Trustor shall pay or cause to
be paid such Tax or increased portion and shall agree with Beneficiary and the
Secured Parties in writing to pay, or reimburse Beneficiary and the Secured
Parties for the payment of, any such Tax or increased portion thereof when
thereafter levied or assessed against the Property or any portion thereof. Such
obligations of Trustor whether or not evidenced under an agreement shall be
secured by this Deed of Trust. 

13 

                          4.19     
Water Rights. The Water Rights are, and will be for the duration of this
Deed of Trust, in good standing with the Nevada Division of Water Resources
("NDWR"), and Trustor has paid and shall pay all fees required to
maintain the Water Rights in good standing, has complied and shall comply with
all deadlines (or obtained all necessary extensions), and performed and shall
perform all other work or other obligations required or necessary to maintain
the availability, validity, and good standing of the Water Rights. Without
limiting the foregoing, Trustor covenants with Beneficiary as follows: 

                                       
(a)        Trustor shall
comply with all filing deadlines, pay all fees, file for such extensions, and
perform such work or other obligations (including such work necessary to obtain
approval of proofs of completion and proofs of beneficial use) which are
required in connection with the Water Rights or which are necessary to maintain
the availability, validity, and good standing of the Water Rights; 

                                       
(b)        Beneficiary shall
have the right, but not the obligation, to complete and make all filings, pay
all fees, file such extensions, and perform such work or other obligations which
are required in connection with the Water Rights or which are necessary to
maintain the availability, validity, and good standing of the Water Rights if
Trustor fails to take such actions. Trustor shall be responsible for any and all
associated fees and costs; 

                                       
(c)        Trustor shall
provide a copy of all correspondence related to the Water Rights (excluding
general notices not specifically applicable to the Water Rights), including,
without limitation, any filings received from, or sent to, NDWR, to Beneficiary
within three (3) business days following receipt or transmittal by Trustor; 

                                       
(d)        If Trustor fails
to put the full quantity of water authorized for use with respect to any NDWR
permit comprising a portion of the Water Rights to beneficial use by NDWR’s
deadline for filing a proof of beneficial use for such permit (as the same may
be actually and validly extended), or for two (2) consecutive years after the
filing a proof of beneficial use with respect to such permit, Beneficiary shall
have the right, but not the obligation, to take all necessary actions to put
such water to beneficial use, including, without limitation, filing applications
to change the point of diversion, manner of use, and/or place of use for such
Water Rights, and allowing such water rights to be used by third parties,
including Beneficiary, in order to ensure that the full quantity of water
authorized for use under such permit is placed to beneficial use and is not
subject to forfeiture or abandonment. Trustor shall be responsible for any and
all associated fees and costs in the above-referenced process; 

                                       
(e)        Trustor shall
obtain the written consent of Beneficiary prior to filing an application to
change the point of diversion, manner of use and/or place of use of any of the
Water Rights. Further, Trustor shall obtain the written consent of Beneficiary
prior to filing any other document that changes, or proposes to change, in any
way the point of diversion, place of use or manner of use of the Water Rights;

14 

                                        (f)       
Trustor shall not take any action consistent with abandoning or forfeiting the
Water Rights; 

                                       
(g)        Trustor shall
file a Proof of Completion and a Proof of Beneficial Use with NDWR for each
uncertificated Water Right in accordance with the provisions of the Note
Agreement; 

                                       
(h)        If Trustor fails
to make any filing, fails to put the full quantity of Water Rights to beneficial
use, or otherwise takes or fails to take any action with respect to the Water
Rights resulting in a forfeiture or cancellation action by the NDWR, Beneficiary
shall have the right to appear in such action and, if necessary, prosecute an
appeal of the decision on behalf of Trustor, and Beneficiary is hereby appointed
as the Trustor's attorney-in-fact to prosecute such appeal and execute any
documents, including administrative appeals and court filings, in connection
therewith on behalf of Trustor. This appointment is coupled with an interest and
may not be revoked. Trustor shall be responsible for any and all associated fees
and costs of such actions; and 

                                       
(i)        Trustor shall not
transfer or further encumber the Water Rights (including by lease), or any
portion thereof, or put the Water Rights to any use other than for the benefit
of the Project. 

ARTICLE 5. DEFAULT PROVISIONS 

                          5.1       
Rights and Remedies. At any time after the occurrence and during the
continuance of an Event of Default, the Secured Parties, Beneficiary and
Trustee, to the fullest extent permitted by Applicable Law and Governmental
Authority, shall have the following rights and remedies: 

                                       
(a)        To declare all
Secured Obligations immediately due and payable; 

                                       
(b)        With or without
notice, and without releasing Trustor from any obligation hereunder, to cure any
default of Trustor and, in connection therewith, to enter upon the Property and
to perform such acts and things as Beneficiary or Trustee deem necessary or
desirable to inspect, investigate, assess and protect the security hereof,
including without limitation of any other rights: to obtain a court order to
enforce Beneficiary's right to enter and inspect the Property; to have a
receiver appointed; to enforce Beneficiary's right to enter and inspect the
Property for Hazardous Materials pursuant to NRS 40.507; to appear in and defend
any action or proceeding purporting to affect the security hereof or the rights
or powers of Beneficiary or Trustee hereunder; to pay, purchase, contest or
compromise any encumbrance, charge, lien or claim of lien which, in the
reasonable judgment of either Beneficiary or Trustee, is prior or superior
hereto, the judgment of Beneficiary or Trustee being conclusive as between the
parties hereto; to pay any premiums or charges with respect to insurance
required to be carried hereunder; and to employ counsel, accountants,
contractors and other appropriate persons to assist them; 

15 

                          (c)       
To commence and maintain an action or actions in any court of competent
jurisdiction to foreclose this instrument as a deed of trust or to obtain
specific enforcement of the covenants of Trustor hereunder, and Trustor
covenants and agrees that such covenants shall be specifically enforceable by
injunction or any other appropriate equitable remedy and that for the purposes
of any suit brought under this subsection (c), Trustor waives the defense of
laches and any applicable statute of limitations; 

                         
(d)       
Beneficiary or its employees, acting by themselves or through a court-appointed
receiver, may enter upon, possess, manage, operate, dispose of and contract to
dispose of the Property or any part thereof; negotiate with Governmental
Authorities with respect to the Property's environmental compliance and remedial
measures; make, terminate, enforce or modify Leases upon such terms and
conditions as Beneficiary deems proper; contract for goods and services, hire
agents, employees and counsel, make repairs, alterations and improvements to the
Property necessary, in Trustee's or Beneficiary's judgment, to protect and
preserve the security thereof; to incur the risks and obligations ordinarily
incurred by owners of property (without any personal obligation on the part of
the receiver); and/or to take any and all other actions which may be necessary
or desirable to comply with Trustor's obligations hereunder and under the
Financing Documents. All sums realized by Beneficiary under this subparagraph,
less all costs and expenses incurred by it under this subparagraph, including
attorneys' fees, and less such sums as Beneficiary deems appropriate as a
reserve to meet future expenses under this subparagraph, shall be applied to the
Secured Obligations in accordance with the Financing Documents. Except as
required by Applicable Law, neither application of said sums to said
indebtedness nor any other action taken by Beneficiary under this subparagraph
shall cure or waive any Event of Default or notice of default hereunder or
nullify the effect of any such notice of default. Beneficiary or Trustee, or any
employee or agent of Beneficiary or Trustee, or a receiver appointed by a court,
may take any action or proceeding hereunder without regard to (i) the adequacy
of the security for the Secured Obligations secured hereunder, (ii) the
existence of a declaration that the Notes have been declared immediately due and
payable, or (iii) the filing of a notice of default, except as required by
Applicable Law; 

                         
(e)        To
exercise the power of sale granted to Trustee hereunder, and in connection
therewith, to execute a written notice of such Event of Default and of its
election to cause the Property, or so much thereof as is real property, to be
sold; Trustee shall give and record such notice as Applicable Law requires as a
condition precedent to a Trustee's sale. When the minimum period of time
required by Applicable Law after such notice has elapsed, Trustee, without
notice to or demand upon Trustor except as otherwise required by Applicable Law,
shall sell the Property at the time and place of sale fixed by it in the notice
of sale and in such order as it or Beneficiary may determine, at public auction
to the highest bidder for cash, in lawful money of the United States, payable at
time of sale (the obligations hereby secured being the equivalent of cash for
purposes of said sale). If the Property consists of several lots, parcels, or
items of property, Beneficiary may: (i) designate the order in which such lots,
parcels, or items shall be offered for sale or sold, or (ii) elect to sell such
lots, parcels or items through a single sale, through two or more successive
sales, or in any other manner Beneficiary deems in its best interest. Trustor
shall have no right to direct the order in which the Property is sold. Trustee may postpone sale of all or
any portion of the Property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public
announcement at such time fixed by the preceding postponement. Trustee shall
deliver to the purchaser at such sale a deed conveying the Property or portion
thereof so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any Person, including Trustee, Trustor, Beneficiary or the
Secured Parties, may purchase at such sale. 

16 

                         
Trustor hereby agrees to the assignment of the BLM Leases and all the
BLM ROWs, following any foreclosure sale or conveyance by deed in lieu of
foreclosure, to the transferee entitled to such Property at such
foreclosure sale or through such deed in lieu of foreclosure. To the extent that
the BLM or any other agency requires the assignor of the BLM Leases or a BLM ROW
to execute any assignment, assignment application, or other document or
instrument with respect to such assignment, Trustor agrees to execute such
assignment following such foreclosure or deed in lieu of foreclosure. In
addition to, and not in lieu of, Trustor’s agreement to execute any necessary
assignments and transfer forms following a foreclosure sale or after a deed in
lieu of foreclosure, Trustor agrees to execute, at any time during the term of
this Deed of Trust, any such assignments and forms that Beneficiary may
reasonably request for Beneficiary’s delivery to the BLM following a foreclosure
or deed in lieu of foreclosure with respect to a BLM Lease or a BLM ROW.
Additionally, Trustor hereby appoints Beneficiary as Trustor’s attorney-in-fact
to execute any such assignments, assignment applications, forms and any other
documents or instruments required to effectuate such assignments on behalf of
Grantor; this appointment is coupled with an interest and cannot be revoked.

                          In
connection with any sale or sales hereunder, Beneficiary may elect to treat any
of the Property which consists of a right in action or which is property that
can be severed from the real property covered hereby or any improvements thereon
without causing structural damage thereto as if the same were personal property
or a Fixture, as the case may be, and dispose of the same in accordance with
Applicable Law separate and apart from the sale of real property. Any sale of
any personal property or Fixtures hereunder shall be conducted in any manner
permitted by the UCC. 

                          After
deducting all costs, fees and expenses of Trustee and of this trust, including
all costs of evidence of title and reasonable attorneys' fees in connection with
sale, Trustee shall apply the proceeds of sale to payment of all sums so
expended under the terms hereof not then repaid, the payment of the Secured
Obligations in accordance with the Financing Documents; and the remainder, if
any, to the person or persons legally entitled thereto; and 

                         
(f)        To
resort to and realize upon the security hereunder and any other security now or
hereafter held by Beneficiary in such order and manner as Trustee and
Beneficiary or either of them may, in their sole discretion, determine; and
resort to any or all such security may be taken concurrently or successively and in
one or several consolidated or independent judicial actions or lawfully taken
non judicial proceedings, or both. 

17 

                          5.2       
Payment of Costs, Expenses and Attorneys' Fees. All costs and expenses
incurred by Beneficiary pursuant to Section 5.1 (including without limitation
court costs, consultants' fees and attorneys' fees, whether incurred in
litigation or not and whether before or after judgment) shall bear interest at
the Default Rate, from the date of expenditure until said sums have been paid.
Beneficiary shall be entitled to bid, at the sale of the Property held pursuant
to subsections 5.1(c) or 5.1(e) above, the amount of said costs, expenses and
interest in addition to the amount of the other Secured Obligations hereby
secured as a credit bid, which shall be deemed the equivalent of cash. 

                          5.3       
Remedies Cumulative. All rights and remedies of Beneficiary and Trustee
hereunder are cumulative and in addition to all rights and remedies provided in
the other Financing Documents, at law and in equity. 

                          5.4       
Releases, Extensions, Modifications and Additional Security.
Without affecting the liability of any Person for payment of any Secured
Obligation secured hereby, or the lien or priority of this Deed of Trust upon
the Property, Beneficiary may, from time to time, with or without notice, do one
or more of the following: release any Person's liability for the payment or
satisfaction of any Secured Obligation secured hereby, make any agreement or
take any action extending the maturity or otherwise altering the terms or
increasing the amount of any Secured Obligation secured hereby, and accept
additional security or release all or a portion of the Property and/or other
security held to secure the Secured Obligations secured hereby. 

                          5.5       
Marshaling. Trustor hereby waives any right to require that any
security given hereunder or under any other agreement securing the Secured
Obligations be marshaled and further waives any right otherwise available in
respect to marshaling of assets which secure any Secured Obligation or to
require Beneficiary to pursue its remedies against any such assets. 

                          5.6       
Secured Parties' Right to Advance Funds. Any reference in this
Deed of Trust to amounts advanced by or owed to Beneficiary shall be deemed to
refer equally to amounts advanced by or owed to any of the Secured Parties under
the Financing Documents, or which Trustor is otherwise liable for, and wherever
Beneficiary is required or permitted to advance funds, such funds may be
advanced by any of the Secured Parties with the same effect as if advanced by
Beneficiary. 

ARTICLE 6. SECURITY AGREEMENT AND FIXTURE FILING 

                          6.1       
Security Agreement; Fixture Filing. Trustor hereby grants,
assigns and transfers to Beneficiary a first priority security interest in and
to the personal property encumbered hereby, including, without limitation, the
collateral described in Exhibit E
("Personal Property"); and this Deed of Trust shall constitute a
security agreement pursuant to the UCC with respect to Personal Property located
in Nevada. For purposes of treating this Deed of Trust as a security agreement,
Trustor shall be deemed to be the "Debtor" and Beneficiary the "Secured Party".
As to all of the above described personal property which is or which hereafter
becomes a "fixture" under applicable law, this Deed of Trust constitutes a
financing statement filed as a fixture filing under NRS 104.9502(3), as amended
or recodified from time to time. 

18 

                                               6.1.1       
Trustor is a limited liability company, duly organized under the laws of the
State of Delaware. Trustor maintains a place of business in the State of Idaho
at the address set forth in Section 8.11 of this Deed of Trust, such address is
Trustor's mailing address; and Trustor will immediately notify Beneficiary in
writing of any change in its place of business and/or mailing address. The
organizational identification number for Trustor is 4514579. 

                                        (a)       
The Trustor irrevocably authorizes the Trustee and the Beneficiary, at
any time and from time to time, to file, at the expense of the Trustor, in any
UCC jurisdiction any financing statements and amendments thereto that contain
information required by the UCC for the sufficiency of any financing statement
or amendment. The Trustor agrees to promptly furnish any information necessary
to prepare such financing statements and amendments upon prior written request.
Notwithstanding the foregoing, nothing herein shall require the Trustee or the
Beneficiary to file financing statements or continuation statements or be
responsible for maintaining the security interest purported to be created as
described herein, and such responsibility shall be solely the responsibility of
the Trustor. 

                                               6.1.3       
In addition to Beneficiary's rights under the UCC, Beneficiary may, but
shall not be obligated to, at any time without notice and at the expense of
Trustor, (i) give notice to any Person of Beneficiary's rights hereunder and
enforce such rights; (ii) insure, protect, defend and preserve the Personal
Property and any rights or interest of Beneficiary therein; (iii) inspect the
Personal Property; and (iv) endorse, collect and receive any right to payment of
money owing to Trustor under or from the Personal Property. Beneficiary shall
have no duty or obligation to make or give any presentments, demand for
performance, notices of nonperformance, notices of protest or notices of
dishonor in connection with any of the Personal Property. 

                                               6.1.4       
Upon the occurrence of a Default, Beneficiary shall have with respect
to the Personal Property, in addition to all of its rights and remedies as
stated in this Deed of Trust, all rights and remedies of a secured party under
the UCC as well as all other rights and remedies available at law or in equity.

                                               6.1.5       
PARTS OF THE PERSONAL PROPERTY ARE, OR ARE TO BECOME, FIXTURES ON THE
PROPERTY. 

                                               6.1.6       
Beneficiary has no responsibility for and does not assume any of, Trustor's
obligations or duties under any agreement or obligation which is part of the
Personal Property or any obligation relating to the acquisition, preparation,
custody, use, enforcement or operation of any of the Property. 

19 

                                               6.1.7       
Trustor and Beneficiary agree that the filing of a financing statement
in the records normally having to do with personal property shall never be
construed as in any way derogating or impairing this Deed of Trust and the
intention of the parties that everything used in connection with the production
of income from the Property or adapted for use therein or which is described or
reflected in this Deed of Trust is and at all times and for all purposes and in
all proceedings both legal or equitable shall be regarded as, part of the real
estate subject to the lien hereof, irrespective of whether (i) any such item is
physically attached to improvements located on such real property or (ii) any
such item is referred to or reflected in any financing statement so filed at any
time. Similarly, the mention in any such financing statement of (A) the Property
or (B) any award in eminent domain proceedings for taking or for loss of value
or for any cause of action or proceeds thereof in connection with any damage or
injury to the Property or any part thereof shall never be construed as in any
way altering any of the rights of Beneficiary as determined by this instrument
or impugning the priority of Beneficiary's lien granted hereby or by any other
recorded document, but such mention in such financing statement is declared to
be for the protection of Beneficiary in the event any court shall at any time
hold with respect to matters (A) and (B) above that notice of Beneficiary's
priority of interest, to be effective against a particular class of persons,
including, without limitation, the Federal government and any subdivision or
entity of the Federal government, must be filed in the personal property records
or other commercial code records. 

                                               6.1.8       
Except as otherwise authorized by the Financing Documents, Trustor shall not
permit any of the Personal Property to be removed from the Improvements or the
Land, as the case may be, without the prior written consent of Beneficiary
unless Trustor is replacing obsolete or worn-out equipment with the items of
Personal Property that are of equivalent or superior value and quality and
Trustor has good and clear title to such replacements free and clear of any and
all liens, encumbrances, security interests, ownership interests, claims of
title (contingent or otherwise). 

                                               6.1.9       
Trustor hereby acknowledges that the sale of the Personal Property by
Trustee after default of Trustor pursuant to the provisions of this Agreement
and Chapter 107 of the Nevada Revised Statutes (as the same may be amended from
time to time) or pursuant to a court order rendered in a judicial foreclosure
proceeding, shall be deemed to constitute a "commercially reasonable" sale
within the meaning of Article 9 of Chapter 104 of the Nevada Revised Statutes,
as to the Personal Property collateral. 

           
Notwithstanding any provision to the contrary set forth herein,
Beneficiary, may, at its sole discretion, choose such other means for sale of
the Personal Property collateral or a portion or portions thereof, which
Beneficiary deems to be reasonable, so long as such sale complies with the
provisions of Article 9 of Chapter 104 of the Nevada Revised Statutes. In such
event Beneficiary shall, in its sole discretion, determine which of the Property
is personal property and therefore subject to the provisions of such Article 9.

                          6.2       
Limitations. Except for Permitted Liens, Beneficiary has not consented to
any other security interest of any other Person in the Personal Property and has
not disclaimed any interest in the Personal Property. Beneficiary has not agreed
or consented to the removal of the Personal Property from the Property, and any
such consent by Trustor shall not be binding on Beneficiary. 

20 

                          6.3       
Removal. Trustor shall not, without the prior written consent of
Beneficiary, remove or permit the removal of any Fixtures from the Property,
except for Fixtures removed and replaced as permitted by the Financing
Documents. Beneficiary further reserves the right to prohibit the removal of any
Fixtures by any Person with the legal right to remove any such Fixtures from the
Property unless and until such Person makes arrangements with (and satisfactory
to) Beneficiary for the payment to Beneficiary of all costs of repairing any
physical injury to the Property which may be caused by the removal of those
Fixtures. Beneficiary shall have the right to require that any such payment
shall be made directly to Beneficiary. If no Event of Default shall be
continuing, Beneficiary shall make any such payments made directly to
Beneficiary available to Trustor to pay the costs of repairing any physical
injury caused by the removal of such Fixtures, subject to such requirements and
conditions as Beneficiary may reasonably impose. If an Event of Default shall be
continuing, Beneficiary may hold such payment as additional Collateral under
this Deed of Trust or may apply such payment to any indebtedness secured by the
Financing Documents pursuant to NRS 104.9608 (as applicable) or otherwise.
Failure by Trustor to cause the delivery to Beneficiary of any such payment
shall constitute both (a) waste under (and a breach of) this Deed of Trust; and
(b) conversion of the Collateral under (and a breach of) the Financing
Documents. 

ARTICLE 7. DEFINITIONS 

                          7.1       
Defined Terms. The following terms shall have the meanings
defined below for all purposes of this Deed of Trust, and the definitions shall
be applicable to both the singular and the plural form of the term defined,
where either of such form is used herein. 

                         
Affiliate: As defined in the Note Agreement. 

                          Applicable
Law: All controlling applicable federal, state and local statutes,
regulations, ordinances and administrative rules and orders (that have the
effect of law) as well as all applicable final, non-appealable judicial
opinions. 

                         
Bankruptcy Code: As defined in Article 1. 

                          Beneficiary:
As defined in the first paragraph on page 1 hereof, but including any and all
successor collateral agents for the Secured Parties or other successor
beneficiaries. 

                         
BLM Leases: As defined in Recital A. 

                         
BLM ROWs: As defined in Recital A. 

                         
Collateral: As defined in Section 6.2. 

                         
Collateral Agency Agreement: As defined in the Note Agreement. 

21 

                         
Contracts: As defined in Section 3.1. 

                          Deed
of Trust: This Deed of Trust with Assignment of Leases, Contracts and Rents,
Security Agreement and Fixture Filing, as amended and modified from time to
time. 

                         
Default Rate: As defined in the Note Agreement. 

                          Depositary:
As defined in the first paragraph on page 1 hereof, but including any and all
successor depositaries under the Depositary Agreement. 

                         
Depositary Agreement: As defined in the first paragraph on page 1. 

                         
Easement Estates: As defined in Recital A. 

                         
Environmental Costs: As defined in Section 8.16. 

                         
Environmental Laws: As defined in the Note Agreement. 

                         
Environmental Provisions: As defined in Section 8.16. 

                          Excluded
Assets: (a) Any property to the extent that a grant of a security interest
in such property is prohibited by any Applicable Law, requires a consent not
obtained of any Governmental Authority pursuant to such Applicable Law or is
prohibited by, or constitutes a breach or default under or results in the
termination of, or grants any Person (other than the Trustor) the right to
terminate its obligations thereunder, or constitutes or results in the
abandonment, invalidation or unenforceability of any right, title or interest of
the Trustor therein, or requires any consent not obtained under, any lease,
contract, authorization, license, agreement, instrument or other document
evidencing or giving rise to such property, except to the extent that such
Applicable Law or the term in such lease, contract, authorization, license,
agreement, instrument or other document providing for such prohibition, breach,
default or termination or requiring such consent is ineffective under applicable
law (including, without limitation, Sections 104.9406, 104.9407, 104.9408, or
104.9409 of the Nevada Revised Statutes); provided, that, any such property
shall constitute an Excluded Asset only to the extent and for so long as the
consequences specified above shall exist and shall cease to be an Excluded Asset
and shall become subject to the lien of this Deed of Trust immediately and
automatically, at such time as such consequence shall no longer exist; (b) any
equipment (as such term is defined in the UCC) owned by the Trustor that is
subject to a purchase money lien or a capital lease in each case constituting
indebtedness permitted by the Note Agreement, if the contract or other agreement
in which said lien is granted (or in the documentation providing for such
capital lease) prohibits or requires the consent of any Person other than the
Trustor as a condition to the creation of any other lien on such equipment, but
only, in each case, to the extent, and for so long as, the indebtedness secured
by the applicable lien or the capital lease has not been repaid in full or the
applicable prohibition (or consent requirement) has not otherwise been removed
or terminated; and (c) any cash or other property distributed or paid by the
Trustor to any Person following a distribution or payment expressly permitted by
the Note Agreement. 

22 

                         
Event of Default: As defined in the Note Agreement. 

                         
Fee Owner: As defined in Article 1. 

                         
Fee Owner's Bankruptcy: As defined in Article 1. 

                         
Financing Documents: As defined in the Note Agreement. 

                          Fixtures:
Personal property now owned or the ownership of which is hereafter acquired by
Trustor which is so related to the Property that it is deemed a fixture or real
property under Applicable Law, including, without limitation, all building or
construction materials intended for construction, reconstruction, alteration or
repair of or installation on the Property, construction equipment, appliances,
machinery, plant equipment, generators, fittings, apparatus and other items now
owned or the ownership of which is hereafter acquired by Trustor and now or
hereafter attached to, installed on or in, or used in connection with (temporary
or permanently), any of the Land or Improvements, or which in some fashion are
deemed to be fixtures to the Land or Improvements under the Applicable Law,
including, but not limited to, equipment, engines, devices for the operation of
electrical generators, transmission or distribution systems, pumps, pipes,
plumbing, cleaning, call and sprinkler systems, fire extinguishing apparatus and
equipment, water tanks, heating, ventilating, plumbing, laundry, incinerating,
air conditioning and air cooling equipment and systems, gas and electric
machinery, appurtenances and equipment, pollution control equipment, disposals,
dishwashers, refrigerators and ranges, recreational equipment and facilities of
all kinds, and water, gas, electrical, storm and sanitary sewer facilities,
utility lines and equipment (whether owned individually or jointly with others,
and, if owned jointly, to the extent of Trustor's interest therein) and all
other utilities whether or not situated in easements, all water tanks, water
supply, water power sites, fuel stations, fuel tanks, fuel supply, and all other
structures, together with all accessions, appurtenances, additions,
replacements, betterments and substitutions for any of the foregoing and the
proceeds thereof. 

                         
Governmental Authority: As defined in the Note Agreement. 

                         
Geothermal Lease: As defined in Recital A. 

                          Hazardous
Materials: As defined in the Note Agreement and as further defined in
Section 8.15(a) .

                          Improvements:
Any and all buildings, structures, Fixtures, facilities, utility sheds,
workrooms, transmission towers, open parking areas, and all other structures and
improvements of every kind whatsoever owned or installed by or for Trustor on
the Land, and any and all additions, alterations, betterments or appurtenances
thereto, and all renewals, substitutions or replacements now or at any time
owned, or hereafter acquired by Trustor and situated, placed or constructed on,
over or under the Land or any part thereof. 

                         
Kosmos Lease: As defined in Recital A. 

23 

                         
Kosmos Leasehold Estate: As defined in Recital A. 

                         
Land: As defined in Recital A. 

                         
Leases: As defined in Section 3.1. 

                         
Make-Whole Amount: As defined in the Note Agreement. 

                         
Material Adverse Effect: As defined in the Note Agreement. 

                         
Material Project Documents: As defined in the Note Agreement. 

                         
Note Agreement: As defined in Recital C. 

                         
Notes: As defined in Recital C. 

                         
Official Records: As defined in Recital A. 

                         
Permitted Liens: As defined in the Note Agreement. 

                         
Person: As defined in the Note Agreement. 

                         
Personal Property: As defined in Section 6.1 hereof. 

                          Proceeds:
All of Trustor's right, title and interest now held or hereafter acquired, to
all proceeds (including claims or demands thereto) from the conversion,
voluntary or involuntary, of any of the Property into cash or liquidated claims,
including, without limitation, proceeds of all present and future fire, hazard
or casualty insurance policies and all condemnation awards or payments in lieu
thereof made by any public body or decree by any court of competent jurisdiction
for taking or for degradation of the value in any condemnation or eminent domain
proceeding and all causes of action and the proceeds thereof of all types for
any damage or injury to the Land, Improvements, Easement Estates, Fixtures or
personal property which is a portion of the Collateral or any part thereof,
including, without limitation, causes of action arising in tort or contract and
causes of action for fraud or concealment of a material fact and all proceeds
from the sale thereof. 

                         
Project: As defined in Recital A.

                          Property:
As defined in Article 1.

                          Rents:
As defined in Section 3.1. 

                         
Required Approval: As defined in the Note Agreement. 

                         
Secured Obligations: As defined in Article 2. 

                         
Site Lease: As defined in Recital A. 

24 

                         
Site Leasehold Estate: As defined in Recital A. Taxes: As defined
in Section 4.2. 

                         
Transfer: As defined in the Note Agreement. 

                          Trustee:
As defined in the first paragraph on page 1 hereof but also including any
successor trustee. 

                          Trustor:
As defined in the first paragraph on page 1 hereof, but also including any
subsequent owner or owners of the Property. 

                          UCC:
The Uniform Commercial Code as in effect in the State of Nevada, as amended and
recodified from time to time. 

                         
Water Rights: As defined in Exhibit D. 

ARTICLE 8. MISCELLANEOUS PROVISIONS 

                          8.1       
Non-Waiver. By accepting payment of any sum secured hereby after its due
date or late performance of any Secured Obligation, Beneficiary shall not waive
its right against any Person obligated directly or indirectly hereunder or on
any Secured Obligation, either to require prompt payment or performance when due
of all other sums and Secured Obligations or to declare default for failure to
make such prompt payment or performance. No exercise of any right or remedy by
Beneficiary or Trustee hereunder shall constitute a waiver of any other right or
remedy herein contained or provided by Applicable Law. 

                          8.2       
Further Assurances. Trustor shall, upon demand by Beneficiary or
Trustee, execute, acknowledge (if appropriate) and deliver any and all documents
and instruments and do or cause to be done all further acts reasonably necessary
or appropriate to effectuate the provisions hereof. 

                          8.3       
Usury Savings Clause. Nothing contained herein or in the Financing
Documents shall be deemed to require the payment of interest or other charges by
Trustor in excess of the amount the Secured Parties may lawfully charge. In the
event Beneficiary or the Secured Parties shall collect monies which are deemed
to constitute interest which would increase the effective interest rate to a
rate in excess of that permitted to be charged lawfully, all such sums deemed to
constitute interest in excess of the legal rate shall, upon such determination,
at the option of the Secured Parties, be returned to Trustor or credited against
the principal balance of any Secured Obligation then outstanding. 

                         
8.4       
[Intentionally omitted.]

25 

                          8.5        No Joint Venture. Beneficiary and the Secured Parties neither
undertake nor assume any responsibility or duty to Trustor or to any third party
with respect to the Property. Notwithstanding any other provisions of this
Deed of Trust and the Financing Documents: (a) Beneficiary and the Secured
Parties are not, and shall not be construed as, a partner, joint venturer,
alter-ego, manager, controlling person or other business associate or
participant of any kind of Trustor and Beneficiary and the Secured Parties do
not intend to ever assume such status; (b) Beneficiary and the Secured Parties
do not intend to ever assume any responsibility to any Person for the quality,
suitability, safety or condition of the Property; and (c) Beneficiary and the
Secured Parties shall not be deemed responsible for or a participant in any
acts, omissions or decisions of Trustor. Except to the extent caused by their
own gross negligence or willful misconduct, Beneficiary and the Secured Parties
shall not be directly or indirectly liable or responsible for any loss, claim,
cause of action, liability, indebtedness, damage or injury of any kind or
character to any Person or property arising from any construction on, or
occupancy or use of, any of the Property, whether caused by or arising from: (i)
any defect in any building, structure, grading, fill, landscaping or other
improvements thereon or in any on-site or off-site improvement or other facility
therein or thereon; (ii) any act or omission of Trustor or any of Trustor's
agents, employees, independent contractors, licensees or invitees; (iii) any
accident in or on any of the Property or any fire, flood or other casualty or
hazard thereon; (iv) the failure of Trustor, any of Trustor's licensees,
employees, invitees, agents, independent contractors or other representatives to
maintain the Property in a safe condition; and (v) any nuisance made or suffered
on any part of the Property. 

                         
8.6       
Beneficiary's Duties; Reliance by Beneficiary. 

                                        (a)       
The powers conferred on the Beneficiary hereunder are solely to protect
its interest in the Property and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Property in its possession
and the accounting for monies actually received by it hereunder, the Beneficiary
shall have no duty as to any Property or as to the taking of any necessary steps
to preserve rights against prior parties or any other rights pertaining to any
Property. The Beneficiary shall be deemed to have exercised reasonable care in
the custody and preservation of any Property in its possession if such Property
is accorded treatment substantially equal to that which the Beneficiary accords
its own property, it being understood that the Beneficiary shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any Property. 

                                        (b)       
Whenever reference is made in this Agreement to any action by, consent,
designation, specification, requirement or approval of, notice, request or other
communication from, or other direction given or action to be undertaken or to be
(or not to be) suffered or omitted by the Beneficiary or to any election,
decision, opinion, acceptance, use of judgment, expression of satisfaction or
other exercise of discretion, rights or remedies to be made (or not to be made)
by the Beneficiary, it is understood that in all cases the Beneficiary shall be
fully justified in failing or refusing to take any such action under this
Agreement if it shall not have received such advice or concurrence of the other
Secured Parties, as it deems appropriate. This provision is intended solely for
the benefit of the Beneficiary and its successors and permitted assigns and is
not intended to and will not entitle Trustor to any defense, claim or
counterclaim, or confer any rights or benefits on Trustor.

26 

The Beneficiary shall act hereunder only in accordance with the
terms and conditions of the Collateral Agency Agreement. Any and all actions the
Beneficiary takes or omits to take hereunder shall be covered by the indemnity
provisions of the Collateral Agency Agreement which shall be deemed to be
incorporated by reference herein. In the case of a conflict between this Deed of
Trust and the Collateral Agency Agreement, the Collateral Agency Agreement shall
govern the rights and obligations of the Beneficiary. 

                                        (c)       
The Beneficiary's performance under this Agreement shall be subject to,
and the Beneficiary shall be entitled to, all protections, indemnities and
rights provided in the Collateral Agency Agreement. 

                          8.7       
Rules of Construction. When the identity of the parties hereto or other
circumstances make it appropriate, the masculine gender includes the feminine
and/or neuter, and the singular number includes the plural. Specific enumeration
of rights, powers and remedies of Trustee and Beneficiary and of acts which they
may do and acts Trustor must or must not do shall not exclude or limit the
general. The headings of the paragraphs are for information and convenience and
do not limit or construe the contents of any provision hereof. 

                          8.8       
Severability. If any term of this Deed of Trust, or the application
thereof to any Person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Deed of Trust, or the application of such
term to Persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Deed of
Trust shall be valid and enforceable to the fullest extent permitted by
Applicable Law. 

                          8.9       
Successors in Interest. The terms, covenants, and conditions herein
contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. 

                          8.10    
 Request for Notice. To the extent provided by Applicable Law,
Trustor hereby requests that a copy of any notice of default and/or notice of
sale filed pursuant hereto be mailed to Trustor at the address set forth in
Section 8.11 below. 

                          8.11     
Notices. All notices, demands or documents which are required or
permitted to be given or served hereunder shall be in writing and delivered,
mailed or sent by hand delivery, recognized overnight courier, or registered or
certified mail addressed as follows: 

27 

	To TRUSTOR at: 	USG Nevada, LLC 
	  	c/o U.S. Geothermal Inc. 
		1505 Tyell Lane
	  	Boise, Idaho 83706 
	  	Attn: Dennis Gilles 
	  	Fax: 208-424-1030 
	  	dgilles@usgeothermal.com 
	  	  
	To BENEFICIARY at: 	Deutsche Bank Trust Company Americas 
	  	Trust and Agency Services 
	  	60 Wall Street, 27th Floor 
	  	Mail Stop: NYC60 - 2710 
	  	New York, New York 10005 
	  	Attn: Project Finance, USG Nevada 
	  	Fax: 732-578-4636 

Any such notice or demand shall be deemed given three (3) days
following the date of mailing, if sent by certified mail, return receipt
requested, or on the date of actual receipt if delivered or sent by any other
method (including facsimile and "pdf" attachment to an e-mail). The above
addresses may be changed from time to time by either party by giving notice as
heretofore provided. 

                          8.12     
No Oral Modification. This Deed of Trust may not be changed or terminated
orally. This Deed of Trust may be modified or terminated only by a written
instrument or instruments executed by Trustor and Beneficiary. Any alleged
modification or termination that is not so documented shall not be effective as
to any party. Any agreement made by Trustor and Beneficiary after the date of
this Deed of Trust relating to this Deed of Trust shall be superior to the
rights of the holder of any intervening or subordinate deed of trust, lien or
encumbrance. 

                          8.13     
Recording of Deed of Trust. Trustor will cause this Deed of Trust and all
amendments and supplements thereto and substitutions therefor and all financing
statements, continuation statements, and, with respect to the Water Rights, NDWR
Notices of Pledge relating hereto to be recorded, filed, re-recorded and
refilled in such manner and in such places as are necessary to perfect the
Beneficiary's lien therein or as Beneficiary shall reasonably request, and will
pay all such recording, filing, re-recording and refilling taxes, fees and other
charges relating thereto and Trustor hereby authorizes Beneficiary to take all
such action without further authorization or signature of Trustor to the extent
allowed by law, at Trustor's cost and expense. 

                          8.14    
 Law Applicable To Deed of Trust. This Deed of Trust shall be
construed under and interpreted in accordance with the laws of the state in
which the Property is located. 

28 

                         
8.15     Hazardous Materials.

                                        (a)       
Trustor represents and warrants that no Hazardous Materials exist on,
under or about the Property or, to the best of Trustor's knowledge after
diligent inquiry, have been transported to or from the Property or used,
generated, manufactured, stored or disposed of on, under or about the Property
and the Property is not in violation of any federal, state or local law,
ordinance or regulation relating to industrial hygiene or the environmental
conditions on, under or about the Property, including, without limitation, soil
and groundwater conditions. "Hazardous Materials" shall include:
(i) oil, flammable substances, explosives, radioactive materials, hazardous
wastes or substances, toxic wastes or substances or any other materials or
pollutants which pose a hazard to the Property or to persons on or about the
Property, cause the Property to be in violation of any local, state or federal
law or regulation or are defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials" or "toxic" or words of
similar import under any applicable local, state or federal law or under the
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to: (A) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; (B) the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801, et
seq.; (C) the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
§6901, et seq.; (D) the applicable provisions of NRS Chapters 444, 445A,
445B, 445C, 459, 590 and 618; and the Uniform Fire Code (1988 Edition), each as
hereafter amended from time to time and the present and future rules,
regulations and guidance documents promulgated under any of the foregoing; and
(E) regulations adopted and publications promulgated pursuant to the aforesaid
laws; (ii) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty (50) parts per million; and (iii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety of
the occupants of the Property or the owners and/or occupants of property
adjacent to or surrounding the Property. 

                                        (b)       
Trustor shall, at its sole cost and expense, prevent the imposition of any lien
against the Property for the cleanup of any Hazardous Materials and shall comply
and cause (i) all tenants under any lease or occupancy agreement affecting any
portion of the Property and (ii) any other person or entity on or occupying the
Property, to comply with all federal, state and local laws, regulations, rules,
ordinances and policies concerning the environment, health and safety and
relating to the use, handling, production, disposal, discharge and storage of
Hazardous Materials in, on or about the Property. Without limiting the
generality of the foregoing, Trustor represents, covenants and agrees that the
Property does not and will not contain any Hazardous Materials. Trustor hereby
grants to Beneficiary, its agents, employees, consultants and contractors an
irrevocable license to enter upon the Property and to perform such tests on the
Property as are reasonably necessary to conduct an investigation and/or review.

29 

                                        (c)       
Trustor shall promptly take any and all necessary remedial action in
response to the presence, storage, use, disposal, transportation or discharge of
any Hazardous Materials on, under or about the Property; provided, however that
Trustor shall not, without Beneficiary's prior written consent, take any
remedial action in response to the presence of any Hazardous Materials on, under
or about the Property, nor enter into any settlement agreement, consent decree
or other compromise in respect to any claims, proceedings, lawsuits or actions,
completed or threatened pursuant to any Environmental Laws or in connection with
any third party, if such remedial action, settlement, consent or compromise
might, in Beneficiary's sole determination, impair the value of Beneficiary's
security hereunder; Beneficiary's prior consent shall not, however, be necessary
in the event that the presence of Hazardous Materials on, under or about the
Property either (i) poses an immediate threat to the health, safety or welfare
of any individual or (ii) is of such a nature that an immediate remedial
response is necessary and it is not possible to obtain Beneficiary's consent
prior to undertaking such action. In the event Trustor undertakes any remedial
action with respect to any Hazardous Materials on, under or about the Property,
Trustor shall immediately notify Beneficiary of any such remedial action and
shall conduct and complete such remedial action (A) in compliance with all
applicable federal, state and local laws, regulations, rules, ordinances and
policies, (B) to the satisfaction of Beneficiary and (C) in accordance with the
orders and directives of all federal, state and local governmental authorities.

                                        (d)       
Trustor shall protect, defend, indemnify and hold Beneficiary and
Secured Parties, their respective directors, officers, employees and agents and
any successors to Beneficiary's interest in the Property and any other person or
entity who acquires any portion of the Property at a foreclosure sale, by the
receipt of a deed in lieu of foreclosure or otherwise through the exercise of
Beneficiary's rights and remedies under the Financing Documents and any
successors to any such other person or entity and all directors, officers,
employees and agents of all of the aforementioned indemnified parties, harmless
from and against any and all claims, proceedings, lawsuits, liabilities,
damages, losses, fines, penalties, judgments, awards, costs and expenses
(including, without limitation, attorneys fees and costs and expenses of
investigation) which arise out of or relate in any way to any use, handling,
production, transportation, disposal or storage of any Hazardous Materials in,
on or about the Property whether by Trustor or any tenant or other person
occupying the Property or any other person or entity, including, without
limitation: (i) all foreseeable and all unforeseeable consequential damages
directly or indirectly arising out of (A) the use, generation, storage,
discharge or disposal of Hazardous Materials by Trustor, any prior owner or
operator of the Property or any person or entity on or about the Property or (B)
any residual contamination affecting any natural resource or the environment,
(ii) the costs of any required or necessary repair, cleanup or detoxification of
the Property and the preparation of any closure or other required plans and
(iii) all of the foregoing, whether or not related to the sole negligence or
contributory negligence of Beneficiary (all such costs, damages and expenses
referred to in this subsection 8.15(d) hereafter referred to as
"Expenses"). In addition, Trustor agrees that in the event any
Hazardous Materials are caused to be removed from the Property by Trustor,
Beneficiary or any other person or entity, the number assigned by the
Environmental Protection Agency to such Hazardous Materials shall be solely in
the name of 

30 

Trustor and Trustor shall assume any and all liability for such
removed Hazardous Materials. In the event Beneficiary or any of the Secured
Parties pays any Expenses, such Expenses shall be additional Secured Obligations
and shall become immediately due and payable without notice and with interest
thereon at the Default Rate. 

                                        (e)       
In the event that Trustor shall fail to timely comply with the provisions of
this Section 8.15, Beneficiary may either (i) declare that an event of default
shall have occurred, and/or (ii) in addition to any rights granted to
Beneficiary hereunder, do or cause to be done whatever is necessary to cause the
Property to comply with the applicable law, rule, regulation or order and the
cost thereof shall be additional Secured Obligations and shall become
immediately due and payable without notice and with interest thereon at the
Default Rate. Trustor shall give Beneficiary and its agents and employees access
to the Property for the purpose of effecting such compliance and hereby
specifically grants to Beneficiary an irrevocable license, effective (x)
immediately if, in the opinion of Beneficiary, irreparable harm to the
environment, the Property or persons or material amounts of property is imminent
or (y) otherwise, upon expiration of the applicable cure period, to do whatever
necessary to cause the Property to so comply, including, without limitation, to
enter the Property and remove therefrom any Hazardous Materials. Trustor shall
pay or reimburse Beneficiary for any and all loss, cost, damage and expense
(including, without limitation, attorneys fees and costs incurred in the
investigation, defense and settlement of claims) that Beneficiary may incur as a
result of or in connection with the assertion against Beneficiary of any claims
relating to the presence or removal of any Hazardous Materials or compliance
with any federal, state or local laws, rules, regulations or order relating
thereto and the amount(s) thereof shall be additional Secured Obligations and
shall become immediately due and payable without notice and with interest
thereon at the Default Rate. 

                                        (f)       
The covenants and obligations of Trustor in this Section 8.15 shall inure to the
benefit of and may be enforced by Beneficiary or any subsequent holders of the
Secured Obligations. Such covenants and obligations shall survive the
termination of this Deed of Trust whether by a foreclosure sale (either judicial
or non-judicial) held hereunder or by a conveyance in lieu of foreclosure in the
event Beneficiary or other holder of the Secured Obligations acquires title to
the Property by such foreclosure sale or conveyance in lieu of foreclosure;
provided, however, that the obligations of Trustor set forth herein shall not
apply to Hazardous Materials which are initially placed on, in or under all or
any portion of the Property after the date Beneficiary or other holder of the
Secured Obligations so takes title to the Property. 

                          8.16  
 Environmental Provisions. In accordance with NRS 40.512,
Beneficiary may waive its lien against the Property or any portion thereof,
together with fixtures or personal property thereon, to the extent such property
is found to be environmentally impaired, and may exercise any and all rights and
remedies of an unsecured creditor against Trustor and all of Trustor's assets
and property for the recovery of deficiency, including, without limitation,
seeking an attachment order under NRS Chapter 31. No such waiver shall be final
or binding on Beneficiary unless and until a final money judgment is obtained
against Trustor. As between Beneficiary and Trustor, Trustor shall have the
burden of proving that the release or threatened release was not
knowingly or negligently caused or contributed to, or knowingly or wilfully
permitted or acquiesced to by Trustor or any related party (or any affiliate or
agent of Trustor or any related party) and that Trustor made written disclosure
of the release to Beneficiary or that Beneficiary otherwise obtained actual
knowledge thereof. The Secured Obligations hereunder shall survive the
foreclosure, deed in lieu of foreclosure, release, reconveyance or any other
transfer of the Property or this Deed of Trust. For the purposes of any action
brought under this Section 8.16, Trustor hereby waives the defense of laches and
any applicable statute of limitations.

31 

           
In accordance with NRS 40.508, Beneficiary may seek a judgment that
Trustor has breached its covenants, representations and/or warranties with
respect to the environmental matters contained in Section 8.15(a) through (e) of
this Deed of Trust (the "Environmental Provisions"), and may
commence and maintain an action or actions in any court of competent
jurisdiction for enforcement of the Environmental Provisions and/or recovery of
any and all costs, damages, expenses, fees, penalties, fines, judgments,
indemnification payments to third parties, and other out of pocket costs or
expenses (including, without limitation, court costs, reasonable consultants'
fees and reasonable attorney's fees whether incurred in litigation or not and
whether before or after judgment), incurred or advanced by Beneficiary pursuant
to the Environmental Provisions (collectively, the "Environmental
Costs"). All Environmental Costs incurred by Beneficiary shall bear
interest at the Default Rate. All Environmental Costs together with interest
thereon shall be secured by this Deed of Trust and shall enjoy the same priority
as the other obligations secured hereby. Trustor acknowledges and agrees that
notwithstanding any term or provision contained in this Deed of Trust or in the
other Financing Documents, Environmental Costs shall be exceptions to any
nonrecourse or exculpatory provisions, if any, and Trustor shall be fully and
personally liable for Environmental Costs. Such liability shall not be limited
to the original principal amount of the obligations secured by this Deed of
Trust. The Secured Obligations hereunder shall survive foreclosure, deed in lieu
of foreclosure, release, reconveyance or any other transfer of the Property or
this Deed of Trust. 

                          8.17       
Nevada Covenants. Where not inconsistent with the other terms of this
Deed of Trust or the other Financing Documents, which shall govern and prevail
in the event of any conflict, Covenants Nos. 1 through No. 9, inclusive, as set
forth in NRS 107.030 are hereby adopted and made a part of this Deed of Trust
with the following modifications: Covenant No. 2 – insurance as required by the
Financing Documents; Covenant No. 4 – the maximum interest rate set forth in the
Financing Documents following an Event of Default; Covenant No. 7 – reasonable
fees; Covenant No. 9 – deleting the requirement of a corporate resolution.

                          IN
WITNESS WHEREOF, Trustor has executed this Deed of Trust on the day and year
first set forth above. 

                          TRUSTOR
PLEASE NOTE: IN THE EVENT OF YOUR DEFAULT, NEVADA LAW AND PROCEDURE PERMITS THE
TRUSTEE TO SELL THE PROPERTY AT A SALE HELD WITHOUT SUPERVISION BY ANY COURT
AFTER EXPIRATION OF A PERIOD PRESCRIBED BY LAW. SEE SUBSECTION 5.1(e)
ABOVE FOR A DESCRIPTION OF THIS PROCEDURE. UNLESS YOU PROVIDE AN ADDRESS FOR THE
GIVING OF NOTICE, YOU MAY NOT BE ENTITLED TO OTHER NOTICE OF THE COMMENCEMENT OF
SALE PROCEEDINGS. BY EXECUTION OF THIS DEED OF TRUST, YOU CONSENT TO SUCH
PROCEDURE. IF YOU HAVE ANY QUESTIONS CONCERNING IT, YOU SHOULD CONSULT YOUR
LEGAL ADVISOR. BENEFICIARY URGES YOU TO GIVE IT PROMPT NOTICE OF ANY CHANGE IN
YOUR ADDRESS SO THAT YOU MAY RECEIVE PROMPTLY ANY NOTICE GIVEN PURSUANT TO THIS
DEED OF TRUST. 

32 

	TRUSTOR: 	USG NEVADA, LLC, 
	  	a Delaware limited liability company 
	 	 
	 	 
	  	By:
      ___________________________________________________
	 	 
	  	Its:
      ___________________________________________________

	STATE OF 	) 
	  	) 
	County of 	) 

           
This instrument was acknowledged before me on _________________, 2013,
by _______________________as ____________________of USG Nevada, LLC, a Delaware
limited liability company. 

 

_________________________________

(Signature of Notarial Officer) 

33 

EXHIBIT A 
TO DEED OF TRUST 

DESCRIPTION OF LAND 

PARCEL 1: 

All that certain property situate in the County of Washoe,
State of Nevada, being all that portion of Township 29 North and Township 30
North, Range 23 East, M.D.B.&M., being contained in United States Patent No.
356675, U.S. Survey No. 4036 and Patent No. 809407, U.S. Survey No. 4323,
described as follows: 

Fanny Placer Survey No. 4323 
Black Sulphur Placer Survey
No. 4036 
Cy Edwards Placer Survey No. 4323 
Brimstone Placer Survey No.
4036, also known as Parcels 1 and 2 of a Map of Division into large Parcels for
the Kosmos Company, a portion of Mineral Survey 4036 Brimstone Placer, a portion
of Section 16, Township 29 North, Range 23 East, Mount Diablo Meridian, recorded
on August 10, 1994, as File No. 1823117, Washoe County, Records. 
Washoe
Placer Survey No. 4323 
San Emidio Placer Survey No. 4323 
South 460 feet
of Higgins Placer Survey No. 4323 
South 460 feet of Azufre Placer Survey No.
4036 

PARCEL 2: N-63006 

All of Sections 32, 33 and 34 in Township 29 North, Range 23
East, M.D.B.&M. 

PARCEL 3: N-63007 

All of Sections 27, 28 and 29 in
  Township 29 North, Range 23 East, M.D.B.&M.

 PARCEL 5: N-47395 

Right
  of Way for transmission line over and across Mount Diablo Meridian, Nevada, 

T.29 N., R.23 E.,
Sec. 21, S 1⁄2 NE 1/4, SE 1⁄4 NW 1⁄4, 
Sec.
22, SW 1⁄4 NE 1⁄4, S 1⁄2 NW 1⁄4, N 1⁄2 SE 1⁄4 
Sec. 23, N 1⁄2 SW 1/4, SE 1⁄4 SW 1⁄4, S 1⁄2 SE 1⁄4

Sec. 25, Lots 3 and 4, - W 1⁄2 NW 1⁄4, SE 1⁄4 NW 1⁄4, NE 1⁄4 SW 1⁄4, NW 1⁄4 SE 1⁄4 
Sec.
26, NE 1⁄4 NE 1⁄4 

PARCEL 6: N-47169 

A parcel of land situate in the Southeast one-quarter (1/4) of
the Northwest one-quarter (1/4) of Section 21, T. 29 N., R. 23 E., MDM, Washoe County, Nevada,
containing 2.709 acres of land more or less and being more particularly
described as follows: 

Commencing at the North one-quarter (1/4) of said Section 21
and proceeding, thence S. 5°13’58” W., 1,829.50 feet to the TRUE POINT OF
BEGINNING, being the Northeasterly corner of said parcel. 

Thence, around said parcel, the following 14 courses and
distances: 

South 168.00 feet, East 58.00 feet, South 50.00 feet, West
50.00 feet, South 118.00 feet, West 212.00 feet, North 174.00 feet, West 143.00
feet, North 162.00 feet, East 25.00 feet, North 150.00 feet, East 150.00 feet,
South 150.00 feet, East 172.00 feet to the TRUE POINT OF BEGINNING. 

PARCEL 7: N-42707 

T. 29 N., R 23 E., Mount Diablo Meridian, State of Nevada,
County of Washoe 

Sec. 16: Lots 1,2,3,4; 
Sec. 17: Lots 1,2,3,4, SW 1⁄4 NE 1⁄4, W
1⁄2, W 1⁄2 SE 1⁄4; 
Sec. 20: Lot 1, NW 1⁄4 NE 1⁄4, S 1⁄2 NE 1⁄4, W 1⁄2, SE 1⁄4; 
Sec. 21:
Lots 1,2,3,4, S 1⁄2 N 1⁄2, S 1⁄2 

PARCEL 15: NVN-075555 

The East 1⁄2, and the East 1⁄2 of the West 1⁄2 of Section 24,
Township 29 North, Range 22 East, M.D.B&M. 

The East 1⁄2, and the East 1⁄2 of the West 1⁄2 of Section 25,
Township 29 North, Range 22 east, M.D.B.&M. 

PARCEL 17: NVN-075557 

All of Section 30 and 31 in Township 29 North, Range 23 East,
M.D.B.&M. 

PARCEL 18: NVN-075558 

The Southeast 1⁄4 of the Southeast 1⁄4 of Section 35, Township 29
North, Range 22 East, M.D.B.&M. 

All of Section 36, Township 29 North, Range 22 East,
M.D.B.&M. 

PARCEL 19: N-49240 

Right of Way for roads, pipelines, buried cable and wells on
public lands (or Federal land for MLA Rights of Way) described as follows: 

2 

Mount Diablo Meridian, Nevada 

T. 30 N., R. 22 E., Sec 36, NE 1⁄4 
T. 29 N., R. 23E., Sec. 6,
Lots 2 and 3, SW 1⁄4 NE 1⁄4, N 1⁄2 SE 1⁄4, SE 1⁄4 SE
1⁄4, 
                             
Sec. 7, E 1⁄2 NE
1⁄4, 
                             
Sec. 8, SW 1⁄4 NW 1⁄4, W 1⁄2 SW 1⁄4, SE 1⁄4 SW
1⁄4, 
                             
Sec. 17, SW 1⁄4 NE 1⁄4, E 1⁄2 NW 1⁄4, NE 1⁄4 SW 1⁄4, W 1⁄2 SE
1⁄4, 
                             
Sec. 20, Lot 1, NW 1⁄4 NE
1⁄4, 
                             
Sec. 21, Lot 4, S1/2 NW 1⁄4, 
T. 30 N., R 23 E., Sec 31, Lots 1, 2, 3,
SE 1⁄4 NW 1⁄4, E 1⁄2 SW 1⁄4. 

PARCEL 20: N-57441 

T. 29 N., R. 23 E., Sec. 21: Lots 2 and 3, SE 1⁄4 NW 1⁄4 Mount
Diablo Meridian, Nevada. 

PARCEL 24: N-43284 

Right-of-Way

T. 30., R. 22 E., Sec. 36: NE1/4 NE1/4 
T. 29., R. 23
E.,  Sec. 6: Lots 2 and 3, SW1/4 NE1/4, N1/2 SE1/4, SE1/4
SE1/4 
                           
Sec. 7: E1/2
NE1/4. 
                           
Sec. 8: Lot 4, SW1/4 NW1/4, W1/2 SW1/4, SE1/4
SW1/4 
                           
Sec. 17: SW1/4 NE1/4, E1/2 NW1/4, NE1/4 SW1/4, W1/2
SE1/4 
                           
Sec. 20: Lot 1, NW1/4
NE1/4 
                           
Sec. 21: Lot 4, S1/2 NW1/4 
T. 30., R. 23 E., Sec. 31: Lots 1, 2 and
3, SE1/4 NW1/4, E1/2 SW1/4 

PARCEL 25: 

PARCEL A: 

Parcel 2 of a Map of Division into Large Parcels for the Kosmos
Company, a portion of Mineral Survey 4036 Brimstone Placer, a portion of Section
16, Township 29 North, Range 23 East, Mount Diablo Meridian, recorded on August
10, 1994 as File No. 1823117, Division Map No. 148, Washoe County Records. 

PARCEL B: 

An easement over a 50 foot roadway over Parcel 1 of said Map of
Division into Large Parcels as shown on said map. 

EXCEPTING THEREFROM all oil. gas hydrocarbons, water,
geothermal resources and minerals of whatsoever nature found under said land,
together with the right of ingress and egress to conduct surveys for the
substances and the right to remove any of the substances found below the surface
of the property and to maintain any operations on the property for those
purposes contemplated in that Geothermal Resource Supply Agreement dated
June 18, 1993 between vestee and Empire Farms, a Nevada general partnership,
provided that such removal or operations shall in no way interfere with the
surface of the property. 

3 

APN: 071-070-19 

PARCEL 26: N-57909: 

Right of way for
  road 

T.29 N., R. 23 E., Section 4: Lot 3, 
T.30 N., R. 23 E.,
Section 28: S1/2NW1/4, E1/2SW1/4,
SW1/4SE1/4; 
                             
Section 33: W1/2NE1/4, SE1/4NW1/4, E1/2SW1/4. 

PARCEL 27 N-63004 

All of Sections 15 and 22 in Township 29 North, Range 23 East,
M.D.B.& M. 

4 

EXHIBIT B 
TO DEED OF TRUST 

BLM LEASES 

PARCEL 2: N-63006 

A leasehold estate as created by that certain Lease for
Geothermal Resource dated December 23, 1998, executed by United States
Department Of The Interior Bureau Of Land Management, as Lessor, and Empire
Energy/Amor Ii, as Lessee, recorded September 8, 1999 as Document No. 2378314,
Official Records of Washoe County, Nevada. 

As modified by that certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Lessor in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 3: N-63007 

A Leasehold Estate as created by that certain Lease for
Geothermal Resource dated December 28, 1998, executed by United State Department
of the Interior Bureau of Land Management, as Lessor, and Empire Energy/Amor II,
as Lessee, recorded September 8, 1999 as Document No. 2378315, Official Records
of Washoe County, Nevada. 

As modified by that certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Lessor in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 7: N-42707 

A leasehold estate as created by that certain Lease for
Geothermal Resource dated December 20, 1985, executed by United States
Department of the Interior Bureau of Land Management, as Lessor, and Michael B.
Stewart, as Lessee, recorded July 7, 1997 in Book 4918, Page 605 as Document No.
2114992 in Official Records of Washoe County, Nevada.

As modified by that certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Lessor in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 15: N-75555 

A leasehold interest as created by that certain unrecorded Lease for Geothermal Resources dated October 22, 2002, executed by United States Department of the Interior Bureau of Land Management, as Lessor, and Empire Energy, LLC, as Lessee. 

As modified by that certain Assignment of Geothermal Project Leasehold Estates dated March 31, 2008, executed by Empire Geothermal Power, LLC, a Nevada limited liability company, as Assignor, the interest of Lessor in and to the above leasehold
estate was assigned to USG Nevada LLC, a Nevada limited liability company, as Assignee, and recorded April 9, 2008 as Document No. 3638236, Official Records of Washoe County, Nevada. 

PARCEL 17: N-75557 

A leasehold interest as created by that certain unrecorded Lease for Geothermal Resource dated November 1, 2002, executed by United States Department of the Interior Bureau of Land Management, as Lessor, and Empire Energy, LLC, as Lessee. 

As modified by that certain Assignment of Geothermal Leasehold Estates dated March 31, 2008, executed by Empire Geothermal Power, LLC, a Nevada limited liability company, as Assignor, the interest of Lessor in and to the above leasehold estate was
assigned to USG Nevada LLC, a Nevada limited liability company, as Assignee, and recorded April 9, 2008 as Document No. 3638236, Official Records of Washoe County, Nevada. 

PARCEL 18: N-75558 

A leasehold interest as created by that certain unrecorded Lease for Geothermal Resource dated October 22, 2002, executed by United States Department of the Interior Bureau of Land Management, as Lessor, and Empire Energy, LLC, as Lessee. 

As modified by that certain Assignment of Geothermal Leasehold Estates dated March 31, 2008, executed by Empire Geothermal Power, LLC, a Nevada limited liability company, as Assignor, the interest of Lessor in and to the above leasehold estate was
assigned to USG Nevada LLC, a Nevada limited liability company, as Assignee, and recorded April 9, 2008 as Document No. 3638236, Official Records of Washoe County, Nevada. 

PARCEL 27: N-63004 

A Leasehold Estate as created by that certain Lease for Geothermal Resource dated January 1, 1999, executed by United States Department of the Interior Bureau of Land Management, as Lessor, and Empire Energy/Amor II, as Lessee, recorded September 8,
1999 as Document No. 2378313, Official Records of Washoe County, Nevada. 

As modified by that Assignment of Geothermal Project Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal Power, LLC, a Nevada limited liability company, as Assignor, the interest of Lessor in and to the above leasehold
estate was assigned
to USG Nevada LLC, a Nevada limited liability company, as Assignee, and recorded April 30, 2008 as Document No. 3645585, Official Records of Washoe County, Nevada.

EXHIBIT C 
TO DEED OF TRUST 

EASEMENT ESTATES 

PARCEL 5: N-47395 

A Right-of-Way as created by that certain Right of Way Grant
No. N-47395, for road, pipelines, buried cable, wells and 60 KV transmission
line dated November 4, 1987, executed by United States Department of the
Interior Bureau of Land Management, as Grantor, and Amor Ii Corp./Ormat Inc., as
Grantee, and recorded August 30, 1999 as Document No. 2375739, Official Records
of Washoe County, Nevada.

As modified by that certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Grantee in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 6: N-47169 

A parcel of land situate in the Southeast one-quarter (1/4) of
the Northwest one-quarter (1/4) of Section 21, T. 29 N., R. 23 E., MDM, Washoe
County, Nevada, containing 2.709 acres of land more or less and being more
particularly described as follows: 

Commencing at the North one-quarter (1/4) of said Section 21
and proceeding, thence S. 5°13’58” W., 1,829.50 feet to the TRUE POINT OF
BEGINNING, being the Northeasterly corner of said parcel. 

Thence, around said parcel, the following 14 courses and
distances: 

South 168.00 feet, East 58.00 feet, South 50.00 feet, West
50.00 feet, South 118.00 feet, West 212.00 feet, North 174.00 feet, West 143.00
feet, North 162.00 feet, East 25.00 feet, North 150.00 feet, East 150.00 feet,
South 150.00 feet, East 172.00 feet to the TRUE POINT OF BEGINNING. 

PARCEL 19: N-49240 

A right-of-way created by that certain Right of Way Grant No.
N-49240, for road, pipelines, buried cable, wells and 60 KV transmission line
dated October 17, 1988, executed by United States Department of the Interior
Bureau of Land Management, as Grantor and Amor Ii Corporation, as Grantee,
recorded August 30, 1999 as Document No. 2375739, Official Records of Washoe
County, Nevada. 

As modified bythat certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of Grantee in and to the
above leasehold estate was assigned to USG Nevada LLC, a Nevada limited
liability company, as Assignee, and recorded April 30, 2008 as Document No.
3645585, Official Records of Washoe County, Nevada. 

PARCEL 20: N-57441 

A right-of-way created by that certain unrecorded Right of Way
Grant No. N-57441 for buried telephone cable and water pipeline dated July 28,
1993, executed by the United States Department of the Interior Bureau of Land
Management, as Grantor, and Armor II Corporation, as Grantee, recorded May 16,
2000 as Document No. 2447465, Official Records of Washoe County, Nevada. 

As modified bythat certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Grantee in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 24: N-43284 

A right-of-way created by that certain unrecorded Right-of-Way
Grant for an access road dated December 1, 1988, executed by the United States
Department of the Interior Bureau of Land Management, as Grantor, and Michael B.
Stewart, as Grantee. 

As modified bythat certain Assignment of Geothermal Project
Rights and Leasehold Estates dated April 28, 2008, executed by Empire Geothermal
Power, LLC, a Nevada limited liability company, as Assignor, the interest of
Grantee in and to the above leasehold estate was assigned to USG Nevada LLC, a
Nevada limited liability company, as Assignee, and recorded April 30, 2008 as
Document No. 3645585, Official Records of Washoe County, Nevada. 

PARCEL 26: N-57909 

A right-of-way as created by that certain unrecorded
Right-of-Way Grant for a road dated June 9, 1995, executed by the United States
Department of the Interior Bureau of Land Management, as Grantor, and Integrated
Ingredients, as Grantee. 

As modified bythat certain unrecorded Application for
Transportation and Utility Systems and Facilities on Federal Lands (Assignment)
dated November 12, 2008, executed by Empire Foods, LLC, as assignor, the
interest of Grantee in and to the above right-of-way was assigned to USG Nevada,
LLC, as assignee. 

EXHIBIT D 
TO DEED OF TRUST 

WATER RIGHTS 

All water and water rights (whether permitted, certificated,
vested, or decreed, and whether or not appurtenant to the Land), applications to
appropriate water filed with the Nevada Division of Water Resources, ditch and
ditch rights, wells, well permits, and well rights, stock or membership
interests in any irrigation, canal, ditch, or water company, and all
applications or rights to change the point of diversion, place of use, and
manner of use with respect thereto, which are now held or are hereafter acquired
by Trustor, or are otherwise relating to, appurtenant to, or used in connection
with, all or any part of the Land or the Project, or the use and enjoyment
thereof, including, without limitation, State of Nevada Department of
Conservation and Natural Resources, Division of Water Resources, Office of the
State Engineer Water Rights Permits 66946, 68756, 69320, 79899, and 79900. 

EXHIBIT E 
TO DEED OF TRUST 

COLLATERAL DESCRIPTION 

Trustor's interests in all of its properties, assets and
rights, wherever located, whether now owned or hereafter acquired or arising,
and all proceeds and products thereof (collectively, the
"Collateral"), including: all personal and fixture property of
every kind and nature, including all goods (including inventory, equipment and
accessions thereto), instruments (including promissory notes), timber to be cut,
documents (including, if applicable, electronic documents), accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter of credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, tort
claims and all general intangibles (including payment intangibles), and
including each of the Material Project Documents, and any other Material Project
Documents entered into from time to time in accordance with the Note Agreement
(including any guaranty or liquidated damages payments thereunder) and each of
the Required Approvals obtained by Trustor from time to time. Notwithstanding
anything herein to the contrary, the term "Collateral" shall not include, and
the lien and security interest granted under the Financing Documents or this
Deed of Trust shall not attach to (a) any Required Approval which by its terms
or by operation of law would become void, voidable, terminable or revocable or
would constitute a breach or default thereunder if a security interest therein
was granted hereunder (such Required Approval being expressly excepted and
excluded from the lien and terms of this Agreement solely to the extent
necessary so as to avoid such voidness, avoidability, terminability,
revocability, breach or default) or (b) any lease, license, contract, property
rights or agreement to which Trustor is a party or any of its rights or
interests thereunder if and for so long as the grant of such lien or security
interest shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of Trustor therein or (ii) a
breach of termination pursuant to the terms of, or a default under, any such
lease, license, contract property rights or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to NRS Sections
104.9406, 104.9407, 104.9408 or 104.9409 (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law or
principles of equity), provided, however, that such lien and security interest
shall attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable,
shall attach immediately to any portion of such lease, license, contract,
property rights or agreement that does not result in any of the consequences
specified in clauses (i) or (ii) above, including, without limitation, any
proceeds of such lease, license, contract, property rights or agreement. 

Exhibit S-4 

Form of Pledge Agreement

 

Exhibit S-4 - 1 

Execution Version 

PLEDGE AND SECURITY AGREEMENT 

            This
PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of September
26, 2013, is by and among Nevada USG Holdings, LLC, a Delaware limited liability
company (the “Pledgor”), and Deutsche Bank Trust Company Americas, in its
capacity as collateral agent (together with its successors and permitted assigns
in such capacity, the “Collateral Agent”), for the benefit of itself, the
holders from time to time of the Notes (as defined below) and Deutsche Bank
Trust Company Americas, in its capacity as depositary (together with its
successors and assigns in such capacity, the “Depositary”) under the
Depositary and Security Agreement, dated as of the date hereof, among the Issuer
(as defined below), the Collateral Agent and the Depositary (as amended,
modified or supplemented from time to time, the “Depositary Agreement”)
(the holders of the Notes from time to time, the Depositary and the Collateral
Agent are referred to herein collectively as the “Secured Parties”), and
acknowledged and consented to by USG Nevada LLC, a Delaware limited liability
company (the “Issuer”). 

RECITALS: 

            The
Issuer has authorized the issue and sale of its 6.75% Senior Secured Notes due
December 31, 2037 (as amended, modified or supplemented from time to time, the
“Notes”), subject to and in accordance with the Note Purchase Agreement,
dated as of the date hereof, among the Issuer and the holders of Notes party
thereto from time to time (as amended, modified or supplemented from time to
time, the “Note Agreement”).

            The
Pledgor owns 100% of the outstanding limited liability company interests of the
Issuer. The Pledgor will benefit from the issuance of the Notes. It is a
condition precedent to the purchase of the Notes pursuant to the Note Agreement
that the Pledgor pledge and grant the security interests described in this
Agreement, and the Pledgor wishes to pledge and grant a security interest in
favor of the Collateral Agent, for the benefit of the Secured Parties, as herein
provided.

            Capitalized
terms used but not defined in this Agreement have the meanings assigned to them
in the Note Agreement. 

             The
Pledgor and the Collateral Agent therefore agree as follows: 

ARTICLE I. 

ASSIGNMENT AND PLEDGE 

            1.1.       
Grant. As collateral security for the prompt and
complete payment when due of the principal, interest (including, without
limitation, interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), Make-Whole Amount, if any, and premium, if any, on all of the Notes
issued and delivered and outstanding under the Note Agreement, the payment of
all other sums owing under the Note Agreement and each other Financing Document,
when due (whether at stated maturity, by acceleration, because of mandatory prepayment, or otherwise)
and the performance of the covenants contained in the Note Agreement and each of
the other Financing Documents (in each case, including the payment of amounts
which would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) and of all obligations of the
Pledgor under this Agreement (collectively, the “Secured Obligations”),
and to induce the Purchasers to purchase the Notes, the Pledgor hereby assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent,
for the benefit of the Secured Parties, and grants to the Collateral Agent a
continuing first priority Lien on and security interest in the following
(collectively, the “Pledged Collateral”): 

                         
(a)        the Pledgor’s
right, title and interest in and to all of the limited liability company
interests and all other ownership or equity interests of every class which the
Pledgor holds in the Issuer, as more fully described on Annex A hereto (collectively, the “Securities”); 

                         
(b)        all of the
Pledgor’s present and future rights, authority, status and powers as a member of
the Issuer, whether arising under the Governing Documents (as defined below) of
the Issuer, at law or otherwise, including all of the Pledgor’s rights to vote
and otherwise control or participate in the management of the business and
affairs of the Issuer; 

                         
(c)        all additional
limited liability company interests or other ownership or equity interests in
the Issuer, all warrants, rights and options to acquire or subscribe for any
such interests, and all securities and instruments convertible into or
exchangeable for any such interests, in which the Pledgor at any time has or
obtains any right, title, or interest; and 

                         
(d)        all
distributions, profit allocations, interest, revenues, income and proceeds of
any kind, whether cash, instruments, securities or other property, received by
or distributable to the Pledgor in respect of, or in exchange for, its
Securities or any other Pledged Collateral and all of the Pledgor’s rights to
receive the foregoing; Notwithstanding the foregoing, the Pledged Collateral
shall not include any Distributions to the Pledgor made in compliance with
Section 10.10 of the Note Agreement. 

            1.2.       
Continuing Security Interest. This Agreement creates a
continuing security interest in the Pledged Collateral and will remain in full
force and effect until the indefeasible payment in full in cash and performance
of all Secured Obligations. If, at any time for any reason (including the
occurrence of a Bankruptcy Event (as defined in Section 2.3(c) ) with
respect to the Issuer or the Pledgor), any payment received by the Collateral
Agent or any holder of a Note in respect of the Secured Obligations is rescinded
or must otherwise be restored or returned by such Person, this Agreement will
continue to be effective or will be reinstated, if necessary, as if such payment
had not been made. 

            1.3.       
Delivery of Certificates and Instruments. The Pledgor shall deliver
at Closing, and thereafter agrees to deliver to the Collateral Agent,
immediately upon receipt thereof, all certificates and instruments evidencing or
representing any of the Pledged Collateral, in each case properly endorsed in
blank and in suitable form for transfer by delivery and accompanied by
instruments of transfer endorsed in blank, in form and substance satisfactory to
the Collateral Agent. The Collateral Agent will hold such certificates and
instruments until the Secured Obligations have been paid and satisfied in full in cash. The
Pledgor will not cause or permit any of the Securities to be or become
uncertificated or to constitute a security not governed by Article 8 of the
Uniform Commercial Code of the State of Delaware. 

- 2 - 

            1.4.       
Waiver of Certain Operating Agreement Provisions. The Pledgor
irrevocably waives any and all provisions of its articles of organization,
limited liability company operating agreement and other constitutive documents
(any such documents with respect to any Person, collectively, its “Governing
Documents”) or the Governing Documents of the Issuer, as applicable, that
(a) prohibit, restrict, condition or otherwise affect the grant hereunder of any
Lien on any of the Pledged Collateral or any enforcement action which may be
taken in respect of any such Lien or the transfer of the Pledged Collateral by
the Collateral Agent or any of its designees or transferees, (b) would operate
to limit or restrict the ability of the Collateral Agent or any of its designees
or transferees from becoming a full voting member of the Issuer following an
Event of Default, or (c) otherwise conflict with the terms of this Agreement.
The Issuer agrees that it shall not (and the Pledgor agrees that it shall not
cause or permit the Issuer to) issue any equity interests to any Person other
than the holders of its equity interests on the date hereof unless such issuance
is permitted under the Note Agreement and such Person shall have agreed to be
bound by the provisions of this Section 1.4 pursuant to documentation in
form and substance reasonably satisfactory to the Required Holders and the
Collateral Agent. 

            1.5.       
Authorization to File Statements. The Pledgor
authorizes the Collateral Agent to file in any Uniform Commercial Code filing
office financing statements naming the Collateral Agent as the secured party and
indicating the Pledged Collateral as the collateral. The financing statements
may indicate some or all of the Pledged Collateral on the financing statement,
whether specifically or generally. Notwithstanding the foregoing, nothing herein
shall require the Collateral Agent to file financing statements or continuation
statements, or be responsible for maintaining the security interests purported
to be created as described herein and such responsibility shall be solely that
of the Pledgor. 

ARTICLE II. 

REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVERS AND
AUTHORIZATIONS, ETC. 

            2.1.       
Representations and Warranties. As of the date of this
Agreement, the Pledgor represents and warrants to the Collateral Agent as
follows: 

                         
(a)        Existence and
Authority. It is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State Delaware, is duly
qualified to do business as a foreign limited liability company and is in good
standing in each jurisdiction in which it is required by law to be qualified. It
has all necessary rights, franchises and privileges and full limited liability
company power and authority to execute, deliver and perform this Agreement and
to act as a member of the Issuer. It has taken all necessary limited liability
company action to execute, deliver and perform this Agreement, and this
Agreement has been duly executed and delivered by it and constitutes its legally
valid and binding obligation, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by
general principles of equity; 

- 3 - 

                         
(b)        No Violations or Defaults.
The execution, delivery and performance of this Agreement by it do not
and will not (i) violate any applicable law, (ii) violate, or result in a
default under its or the Issuer’s Governing Documents, (iii) violate, or result
in a default under, any contractual obligation to which it or the Issuer is a
party, or (iv) require an Approval or any consent from any Person that has not
been obtained; 

                         
(c)        Membership Interests.
All of the Securities have been duly and validly issued and are fully
paid and non-assessable, are certificated and constitute securities governed by
Article 8 of the Uniform Commercial Code of the State of Delaware; the
certificate representing the Securities has been delivered, together with
transfer powers in substantially the form of Annex B, endorsed in
blank, to the Collateral Agent; and the Securities identified on Annex
A hereto constitute all of the outstanding limited liability company
interests and other ownership interests of the Issuer; 

                         
(d)        No Liens. (i) It
is the sole, direct, legal and beneficial owner of, and has good and valid title
to, the Pledged Collateral; none of the Pledged Collateral is subject to any
Lien (except the Lien of this Agreement); and (ii) no effective security
agreement (other than this Agreement), financing statement (except for financing
statements in favor of the Collateral Agent) or other instrument similar in
effect is on file or of record in the office of any Governmental Authority with
respect to any of the Pledged Collateral; 

                         
(e)        Name and
Address. Its name set forth in the first paragraph of this Agreement is its
true, correct and complete name; its legal address and the address of its
principal place of business and chief executive office, its organizational
number and its EIN are all are set forth below its name on Annex C
hereto; its type of organization is a limited liability company, its
jurisdiction of formation is Delaware; 

                         
(f)        Perfection and
Priority of Liens. The pledge and grant of a security interest in, and
delivery of the Pledged Collateral pursuant to this Agreement, will create a
valid and perfected Lien on and in the Pledged Collateral, and the proceeds
thereof, securing the payment of the Secured Obligations, subject to no prior
Lien, assuming continued possession of the original certificates evidencing the
Securities constituting Pledged Collateral by the Collateral Agent. 

                          (g)       
No Litigation. There are no actions, suits, investigations or proceedings
pending or, to the knowledge of the Pledgor, threatened against or affecting the
Pledgor in any court or before any arbitrator or before or by any Governmental
Authority; 

                         
(h)        Blocked Person.
It is not (i) a Person whose name appears on the list of Specially Designated
Nationals and Blocked Persons published by the Office of Foreign Assets Control,
U.S. Department of Treasury (“OFAC”) (an “OFAC Listed Person”) or
(ii) a department, agency or instrumentality of, or is otherwise controlled by
or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or
(y) any Person, entity, organization, foreign country or regime that is subject
to any OFAC Sanctions Program (each OFAC Listed Person and each other Person, entity, organization and
government of a country described in clause (ii), a “Blocked Person”). It
is not engaged in any activities that could subject it or any holder to
sanctions under CISADA or under any applicable law of any state of the United
States that imposes sanctions on Persons that do business with Iran or any other
country that is subject to an OFAC Sanctions Program; 

- 4 - 

                         
(i)        Anti-Money Laundering
Laws. It (i) is not under investigation by any Governmental Authority
for, or has been charged with, or convicted of, money laundering, drug
trafficking, terrorist-related activities or other money laundering predicate
crimes under any applicable law (collectively, “Anti-Money Laundering
Laws”), (ii) has not been assessed civil penalties under any Anti-Money
Laundering Laws or (iii) has not had any of its funds seized or forfeited in an
action under any Anti-Money Laundering Laws. It has taken reasonable measures
appropriate to the circumstances (in any event as required by applicable law),
to ensure that it is and will continue to be in compliance with all applicable
current and future Anti-Money Laundering Laws. 

            2.2.       
Affirmative Covenants. The Pledgor covenants and agrees
that it will perform and observe each of the following covenants: 

                         
(a)        Existence.
It will preserve and maintain its existence, rights, franchises and
privileges and remain in good standing in the jurisdiction of its formation, and
qualify and remain qualified as a foreign company in good standing in each
jurisdiction in which such qualification is necessary in view of its current or
proposed business and operations or the ownership of its properties; 

                         
(b)        Compliance with Laws,
Approvals, and Obligations. It will comply with all laws and Approvals
to which it or its property is subject and with its Governing Documents and all
material contractual obligations to which it is a party. It will obtain and
maintain in full force and effect all Approvals necessary (i) for its current
and proposed business and operations and the ownership of its properties and
(ii) for the execution, delivery, performance and enforcement of this Agreement;
and 

                         
(c)        Defend
Title. (i) It will defend the rights of the Collateral Agent and
security interest of the Collateral Agent in the Pledged Collateral against the
claims and demands of all other persons whomsoever; and (ii) it will have like
title to and the right to pledge and grant a security interest in the Pledged
Collateral hereafter pledged or in which a security interest is granted to the
Collateral Agent, for the benefit of the Secured Parties, hereunder and will
likewise defend the rights, pledge and security interest thereof and therein of
the Collateral Agent. 

            2.3.       
Negative Covenants. The Pledgor covenants and agrees
that it will perform and observe each of the following covenants: 

                         
(a)        Business, Name
and Address. It will not change its name, the address of its principal
place of business or chief executive office, its type of organization, its
jurisdiction of formation or its organizational identification number without
giving the Collateral Agent and the holders of the Notes 30 days’ prior
notice of such change; and the Pledgor will not engage in any business other
than owning the Pledged Collateral; 

- 5 - 

                         
(b)        Governing Documents.
It will not permit or agree to any amendment of its Governing Documents
or the Governing Documents of the Issuer, except in connection with the
admission of a new member or substitution of an existing member of the Issuer in
compliance with Section 2.3(d) . It will not sell, assign, lease, or
otherwise dispose of (whether in one transaction or in a series of
transactions), any or all of its rights, title or interest in the Pledged
Collateral, except as provided in Section 2.3(d) ; 

                         
(c)        Bankruptcy. It
will not take or authorize any other Person to take any action that might result
in the occurrence of a Bankruptcy Event (as defined below) with respect to it or
the Issuer. In addition, it will not solicit, consent to or join in any such
action, nor will it consent to the appointment of a custodian, receiver, trustee
or other official, or to any other relief, for itself or for the Issuer or any
of its or the Issuer’s property. “Bankruptcy Event” means, with respect
to any Person, (i) such Person’s insolvency, inability to pay its debts as they
become due, or admission in writing of its inability to pay its debts as they
become due; (ii) a general assignment by such Person for the benefit of its
creditors; (iii) any action taken or initiated by it for its winding-up,
dissolution or liquidation or for the appointment of a receiver, trustee,
custodian or similar officer for it or for any of its assets or revenues; (iv)
the commencement by such Person of any bankruptcy, insolvency, moratorium,
reorganization or liquidation case, action or proceeding or any other proceeding
for relief under any bankruptcy law or any other law for the relief of debtors
or affecting the rights of creditors generally; (v) the commencement against
such Person by any other Person of a case, action or proceeding described in
clause (iii) or (iv) or similar in effect, which action or proceeding, for
purposes of the first sentence of this Section 2.3(c) , shall not be
dismissed or vacated within 60 days thereof; (vi) any action by which a court
takes jurisdiction of its assets or revenues; or (vii) any corporate,
partnership, member, management or other action taken or initiated by such
Person authorizing, approving, consenting to or indicating acquiescence in any
case, action or proceeding described in clause (ii), (iii), (iv), (v), or (vi);

                         
(d)        New Members.
Except as set forth in this Section 2.3(d) , the Pledgor
will not permit or consent to the admission of any new or substitute members in
the Issuer, except, following an Event of Default and the exercise by the
Collateral Agent or its designee of remedies under the Financing Documents, a
new or substitute member that is the Collateral Agent or a designee of the
Collateral Agent; the Pledgor will not effect or permit any sale, transfer or
encumbrance of the Pledged Collateral, except, following an Event of Default, in
connection with an exercise of remedies by the Secured Parties. Notwithstanding
the foregoing, the Pledgor may transfer its Securities in the Issuer to a new or
substitute member so long as, in each case, after giving effect to such
transaction (x) an Event of Default under the Note Agreement does not occur, (y)
the Lien created by this Agreement continues to be a first-priority perfected
Lien in all of the Pledged Collateral (to the extent this Agreement continues
after such transfer and is not replaced by a new pledge and security agreement
in accordance with clause (z) hereof), and (z) the new or substitute member
(including any transferee of the Pledgor’s limited liability company interests
in the Issuer) executes and delivers a pledge and security agreement on
substantially the same terms and conditions as this Agreement and causes to be
delivered an opinion of counsel with respect to the matters set forth in clause
(y) above and the enforceability of the pledge and
security agreement against such new member, which opinion shall otherwise be in
form and substance reasonably satisfactory to the Required Holders. 

- 6 - 

           
2.4.        Protection of
Secured Parties. The Pledgor agrees that: 

                          (a)       
its liabilities and obligations under its or the Issuer’s Governing
Documents will not be affected by this Agreement or the Lien on the Pledged
Collateral created in favor of the Collateral Agent pursuant to this Agreement,
or the exercise by the Collateral Agent of any of its rights under this
Agreement; 

                         
(b)        no
Secured Party, unless it expressly agrees in writing, will have any liabilities
or obligations under the Issuer’s Governing Documents as a result of this
Agreement or the exercise by the Collateral Agent of its rights under this
Agreement; and 

                         
(c)        no Secured Party
has any obligation to enforce any contractual obligation or claim with respect
to the Pledged Collateral, or to take any other action with respect to the
Pledged Collateral except as expressly set forth in this Agreement and the other
Financing Documents. 

            2.5.       
Waiver of Subrogation. Notwithstanding any payment made
by the Pledgor under this Agreement or any set-off or application by any Secured
Party of any funds of the Pledgor, until all of the Secured Obligations have
been indefeasibly paid in full in cash, the Pledgor will not (a) be entitled to
be subrogated to any of the rights of any Secured Party against the Issuer or
any guarantor or in any collateral security or guaranty or right of offset held
by the Collateral Agent for the payment of any Secured Obligations; or (b) seek
any reimbursement or contribution from the Issuer or any guarantor in respect of
any payment made by it under this Agreement or any set-off or application of any
of its funds. 

            2.6.       
Additional Waivers. The Pledgor waives diligence,
presentment, demand of any kind, protests of any kind and notices of any kind,
all set-offs and all counterclaims, to the extent permitted by applicable law,
and all suretyship defenses to the extent otherwise applicable. 

ARTICLE III. 

RIGHTS AND REMEDIES 

           
3.1.        Distributions and
Voting Rights. 

                          (a)       
So long as no Event of Default has occurred and is continuing, the
Pledgor will be entitled to exercise any and all management, voting, consent and
other rights with respect to the Pledged Collateral for any purpose not
inconsistent with the terms of the Note Agreement or any of the Financing
Documents and to receive and retain any and all cash distributions and other
payments in respect of the Pledged Collateral made in accordance with the Note
Agreement and the other Financing Documents. 

                          (b)       
Upon the occurrence and during the continuation of an Event of Default, all
rights of the Pledgor to exercise management, voting, consent and other rights
with respect to the Pledged Collateral and to receive distributions and
other payments in respect of the Pledged Collateral will cease, and all such
rights will immediately become vested solely in the Collateral Agent or its
nominee. After the occurrence and during the continuation of an Event of
Default, any distributions and other payments in respect of the Pledged
Collateral received by the Pledgor will be held in trust for the Collateral
Agent, and the Pledgor will keep all such amounts separate and apart from all
other funds and property so as to be capable of identification as the property
of the Collateral Agent and the Pledgor will deliver such amounts promptly to
the Collateral Agent or its designee in the identical form received, properly
endorsed or assigned when required to enable the Collateral Agent or its
designee to complete collection thereof. 

- 7 - 

            3.2.       
Collateral Agent’s Rights Upon Default. Upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent may, but shall not be obligated to, in its sole discretion, take any or
all of the following actions, in each case at the Pledgor’s expense and without
prior notice to the Pledgor except as required below or under applicable law:

                         
(a)        give
notice of the Event of Default to any Person, collect distributions and other
amounts constituting or payable in respect of the Pledged Collateral, and
enforce all rights of the Pledgor in the Pledged Collateral; 

                         
(b)        take possession
of any or all of the Pledged Collateral, including through agents, wherever it
may be found, and hold and manage the same; 

                         
(c)        foreclose its
Lien upon any or all of the Pledged Collateral; 

                         
(d)        become, or cause
its nominee or a transferee to become, a substitute or successor member of the
Issuer; 

                         
(e)        sell, lease,
assign and deliver or otherwise dispose of any or all of the Pledged Collateral
at public or private sale, with or without having any or all of the Pledged
Collateral at the place of sale, upon terms, in such manner, at such time or
times, and at such place or places as the Collateral Agent may determine; and

                         
(f)        exercise any or
all other rights or remedies available to the Collateral Agent under applicable
law, the Note Agreement and the other Financing Documents, or any other
agreement between the parties. 

The Collateral Agent may, to the fullest extent permitted by
law, exercise the foregoing rights and remedies in such order, at such times and
in such manner as the Collateral Agent may, in its sole and exclusive judgment,
determine from time to time. 

            3.3.       
Power of Attorney. The Pledgor irrevocably constitutes
and appoints the Collateral Agent and any officer or agent thereof, with each
full power of substitution, as the Pledgor’s true and lawful attorney-in-fact
and proxy, in the Pledgor’s name or in such Collateral Agent’s name or
otherwise, and at the Pledgor’s expense, to take any or all of the following
actions upon the occurrence and during the continuation of an Event of Default,
without notice to or the consent of the Pledgor: 

- 8 - 

                          (a)       
take any or all of the actions described in Section 3.2 and exercise any
other right or power granted to the Collateral Agent and any holder of a Note
under this Agreement or any other Financing Document or by law; 

                         
(b)        transfer
to, or register in the name of, the Collateral Agent or its nominee any or all
of the Pledged Collateral; 

                         
(c)        exercise all
voting, consent, management and other rights relating to any Pledged Collateral;
and 

                         
(d)        do any and all
things necessary and proper to carry out the purposes of this Agreement. 

The Pledgor recognizes and agrees that the power of attorney
granted pursuant to this Section 3.3 is coupled with an interest and is
not revocable until the termination of this Agreement in accordance with its
terms. The Pledgor ratifies and confirms all actions taken by the Collateral
Agent or its agents pursuant to this power of attorney in accordance herewith.

           
3.4.        Other Rights of the
Collateral Agent. 

                          (a)       
The Collateral Agent will have, with respect to the Pledged Collateral,
in addition to the rights and remedies set forth in this Agreement: (i) all of
the rights and remedies available to a secured party under applicable law, as if
such rights and remedies were fully set forth in this Agreement, and (ii) all of
the rights, protections and indemnities set forth in the Collateral Agency
Agreement, which provisions are incorporated by reference and made a part of
this Agreement. 

                          (b)       
The Collateral Agent may at any time and from time to time release or
relinquish any right, remedy or Lien it has with respect to a particular item of
Pledged Collateral without thereby releasing, relinquishing or in any way
affecting its rights, remedies or Lien with respect to any other item of Pledged
Collateral. 

           
3.5.        Disposition of
Collateral. 

                          (a)       
Upon the written request by the Collateral Agent (acting at the
direction of the Required Holders) or the Required Holders after the occurrence
and during the continuation of an Event of Default, the Pledgor agrees, promptly
and at its own expense, to assemble any or all of the Pledged Collateral and
make it available to the Collateral Agent. 

                          (b)       
The Collateral Agent will be entitled to sell the Pledged Collateral on any
commercially reasonable terms, and the Pledgor agrees that a private sale or a
sale on extended payment terms, or in exchange for property, stock or other
consideration will not in and of itself be deemed to be commercially
unreasonable. The Pledged Collateral may be sold in one lot as an entirety or in
separate parcels. Any Secured Party may purchase any or all of the Pledged
Collateral sold at any public sale and, to the extent permitted by applicable
law, may purchase any or all of the Pledged Collateral sold at any private sale,
including by a credit bid. 

- 9 - 

                          (c)       
The Collateral Agent may, at the direction of the Required Holders, restrict the
prospective bidders or purchasers at any sale as to their number, nature of
business, financial or business expertise, net worth or financial resources and
investment intention or on the basis of any other factors that are commercially
reasonable. Any sale of Pledged Collateral may be subject to the requirement
that any purchase of all or any part of the Pledged Collateral constituting a
security for purposes of the Securities Act or the Exchange Act must be for the
purpose of investment and without any intention to make a distribution thereof.

                          (d)       
The Pledgor expressly agrees that the Collateral Agent need not give more than
10 days’ prior written notice to it of the time and place of any public sale of
Pledged Collateral or of the time after which a private sale of the Pledged
Collateral may take place, and that such notice will constitute reasonable
notice under all circumstances. The Collateral Agent will not be obligated to
hold any sale pursuant to any such notice and may, without notice or
publication, adjourn any public or private sale by announcement at the time and
place fixed for such sale, and a subsequent sale may be held at the time and
place designated in such announcement without further notice or publication. To
the extent permitted by applicable law, the Pledgor irrevocably waives any right
it may have to demand performance or other demand, advertisement, judicial
hearing or notice to it or any other Person in connection with the collection,
sale or other disposition of, or realization upon, any or all of the Pledged
Collateral. 

                          (e)       
The Collateral Agent may settle, pay or discharge any or all taxes, Liens,
claims and other charges with respect to Pledged Collateral. All sums expended
by the Collateral Agent pursuant to this Section 3.5(e) will constitute
Secured Obligations secured by the Liens created by the Financing Documents.
Neither the Collateral Agent, nor any other Secured Party will have any duty to
take any action authorized by this Section 3.5(e) , and no sale of
Pledged Collateral will be deemed to have been commercially unreasonable by
reason of the decision not to take any such action. 

           
3.6.        No Marshaling or
Right of Redemption. 

                          (a)       
Except to the extent required by applicable law, neither the Collateral
Agent nor any other Secured Party will be required to marshal any Pledged
Collateral or any guaranties of the Secured Obligations, or to resort to any
item of Pledged Collateral or any guaranty in any particular order, and the
Collateral Agent’s rights with respect to the Pledged Collateral and any
guaranties will be cumulative and in addition to all other rights, however
existing or arising. To the extent permitted by applicable law, the Pledgor
irrevocably waives, and agrees that it will not invoke or assert, any law
requiring or relating to the marshaling of collateral or any other law which
might cause a delay in or impede the enforcement of the Collateral Agent’s
rights under this Agreement or any other Financing Document. 

                          (b)       
To the extent permitted by applicable law, the Pledgor irrevocably
waives, and agrees that it will not invoke or assert, any rights to equity of
redemption or other rights of redemption, appraisement, valuation, stay,
extension or moratorium that it may have in equity, at law, or otherwise with
respect to any Pledged Collateral. The sale or other transfer pursuant to this
Agreement of any right, title or interest of the Pledgor in any item of Pledged
Collateral will operate to permanently divest the Pledgor and all Persons
claiming under or through the Pledgor of such right, title or interest, and will
be a perpetual bar, both at law and in equity, to any and all claims by the
Pledgor or any such Person with respect to such item of Pledged Collateral. 

- 10 - 

            3.7.       
Application of Proceeds. After the occurrence and
during the continuation of an Event of Default, or after the exercise of
remedies by the Collateral Agent, any cash held by the Collateral Agent as
Pledged Collateral and all cash proceeds received by the Collateral Agent from
any realization upon Pledged Collateral may, at the direction of the Required
Holders, be held by the Collateral Agent as collateral security for the payment
of the Secured Obligations or applied by the Collateral Agent in accordance with
the Collateral Agency Agreement. 

           
3.8.        Collateral Agent’s
Duties. 

                          (a)       
The grant to the Collateral Agent under this Agreement of any right or power
does not impose upon the Collateral Agent any duty to exercise such right or
power. The Collateral Agent will have no obligation to take any steps to
preserve any claim or other right against any Person or with respect to any
Pledged Collateral. 

                          (b)       
To the extent permitted by applicable law, the Pledgor waives all claims against
the Collateral Agent or its agents arising out of the repossession, taking,
retention, storage, operation or sale of the Pledged Collateral except to the
extent such actions constitute gross negligence or willful misconduct of such
Person. To the extent permitted by applicable law, the Pledgor waives any claim
it may have based on the allegation or fact that the price obtained for Pledged
Collateral sold at a private sale was less than could have been obtained for the
same Pledged Collateral at a public sale. Subject to the following sentence, all
risk of loss, damage, diminution in value, or destruction of the Pledged
Collateral will be borne by the Pledgor. The Collateral Agent will have no
responsibility to the Pledgor for any act or omission of the Collateral Agent,
except to the extent such act or failure to act constitutes gross negligence or
willful misconduct by the Collateral Agent. Notwithstanding anything herein to
the contrary, in no event shall the Collateral Agent be liable for special,
punitive indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Collateral Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action. 

                          (c)       
The Collateral Agent does not and will not make any express or implied
representations or warranties with respect to any Pledged Collateral or other
property released to the Pledgor or its successors and assigns. 

                          (d)       
The Collateral Agent will be accountable only for such proceeds as the
Collateral Agent actually receives as a result of the exercise of its rights
under this Agreement, and delivery or other accounting of such proceeds or the
Pledged Collateral by the Collateral Agent to the Pledgor or the assignee of the
Secured Obligations will discharge the Collateral Agent of all liability
therefor. 

                          (e)       
Except as expressly set forth herein or as required under applicable law,
the Collateral Agent will have no other duties or obligations with respect to
the Pledged Collateral. 

- 11 - 

            3.9.       
Indemnity and Expenses. The Pledgor hereby indemnifies and holds
harmless the Collateral Agent, each Secured Party, and each of their respective
officers, directors, employees, agents and Affiliates (collectively, the
“Indemnified Persons”) from and against any and all claims (including
environmental claims), losses, and liabilities arising out of or resulting from
this Agreement (including enforcement of this Agreement), except claims, losses,
or liabilities resulting from the gross negligence or willful misconduct of any
Indemnified Person. Within ten (10) days after receipt of an invoice, the
Pledgor shall pay to the Collateral Agent or such Secured Party the amount of
any and all documented expenses, including fees and disbursements of its counsel
and of any experts and agents (including attorneys’ fees and costs) which the
Collateral Agent or such Secured Party may incur in connection with (a) the
custody, preservation, use, or operation of, or the sale of, collection from, or
other realization upon, any of the Pledged Collateral, (b) the exercise or
enforcement of any of the rights of the Collateral Agent or the Secured Parties
hereunder, or (c) the failure by the Pledgor to perform or observe any of the
provisions hereof. This Section 3.9 shall survive the termination of this
Agreement and the earlier resignation or removal of the Collateral Agent. 

ARTICLE IV. 

GENERAL PROVISIONS 

           
4.1.        Further Assurances.

                          (a)       
At any time and from time to time, including upon the request of the Collateral
Agent (acting at the direction of the Required Holders) or the Required Holders,
the Pledgor will, at the Pledgor’s expense, execute and deliver and/or file such
further documents, financing statements, continuation statements, amendments and
instruments and do such other acts as are, in each case, necessary or required
by applicable law in order to create, perfect, maintain and preserve
first-priority Liens on the Pledged Collateral in favor of the Collateral Agent
for the benefit of the Secured Parties and to facilitate any sale of or other
realization upon Pledged Collateral, to make any sale of or other realization
upon Pledged Collateral valid, binding and in compliance with applicable law,
and to provide for the payment of the Secured Obligations in accordance with the
terms of the Financing Documents and this Agreement. 

                          (b)       
The Pledgor shall pay all filing, registration and recording fees or re-filing,
re-registration and re-recording fees, and all expenses incident to the
execution and acknowledgment of this Agreement, and any instruments of further
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imports, assessments and charges arising out of or in connection
with the execution and delivery of this Agreement, any agreement supplemental
hereto and any instruments of further assurance. 

                          (c)       
The Collateral Agent shall (at the direction of the Required Holders)
execute and deliver all such proxies, powers of attorney, distribution and other
orders and instruments as the Pledgor may reasonably require for the purpose of
enabling the Pledgor to exercise the voting rights to which it is entitled and
to receive the distributions to which it is entitled to receive prior to the
occurrence of an Event of Default. 

- 12 - 

            4.2.       
Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. The Pledgor may not assign or otherwise transfer any of
its rights under this Agreement. The Collateral Agent may only assign or
otherwise transfer and assign its rights and interests under this Agreement to a
successor in accordance with Section 2.7 of the Collateral Agency
Agreement. The holders of the Notes will have the right to transfer, assign,
pledge and grant participations in their rights and interests under this
Agreement in accordance with the terms of the Note Agreement. 

            4.3.       
Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision. 

            4.4.       
Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. The rules of interpretation set forth in
Schedule B of the Note Agreement shall apply to this Agreement. 

            4.5.       
Counterparts. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties shall constitute a
single binding agreement. A facsimile or electronic transmission of the
signature page to this Agreement by any party hereto shall be effective as the
signature page of such party and shall be deemed to constitute an original
signature of such party to this Agreement and shall be admissible into evidence
for all purposes. 

            4.6.       
Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS
PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OR REMEDIES
HEREUNDER IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL IS GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. 

            4.7.       
Waiver of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER
INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT. 

- 13 - 

           
4.8.        Consent to
Jurisdiction. 

                          (a)       
The parties agree that any legal action or proceeding by or against the Pledgor
or with respect to or arising out of this Agreement or any other Financing
Document may be brought in or removed to the courts of the State of New York, in
and for the County of New York, or of the United States of America for the
Southern District of New York, in each case, in the Borough of Manhattan. By
execution and delivery of this Agreement, each party accepts, for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Pledgor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Each of the parties
hereto irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, return receipt requested to such party at its address
for notices as specified herein. Each of the parties agrees that such service
upon receipt (i) shall be deemed in every respect effective service of process
upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by applicable law, be taken and held to be valid personal
service upon and personal delivery to it. Notices under this Section
4.8(a) shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service. 

                          (b)        In
addition to and notwithstanding the provisions of Section 4.8(a) above,
the Pledgor hereby irrevocably appoints C T Corporation System as its agent to
receive on its behalf and its property service of copies of the summons and
complaint and any other process which may be served in any action or proceeding.
Such service may be made by mailing or delivering a copy of such process to the
Pledgor, in care of the process agent at 111 Eighth Avenue, New York, NY 10011,
and the Pledgor hereby irrevocably authorizes and directs the process agent to
accept such service on its behalf. Nothing in this Agreement will affect the
right of any party hereto to serve legal process in any other manner permitted
by law or affect the right of any party hereto to bring any action or proceeding
in the courts of any other jurisdiction. If for any reason the process agent
ceases to be available to act as process agent, the Pledgor agrees to
immediately appoint a replacement process agent satisfactory to the Collateral
Agent. Each of the parties hereby waives any right to stay or dismiss any action
or proceeding under or in connection with any or all of this Agreement or any
other Financing Document brought before the foregoing courts on the basis of
forum non conveniens. 

            4.9.       
Release of Liens. Upon the payment in cash and satisfaction in full
of all Secured Obligations, the Collateral Agent will, upon the written request
of the Pledgor and at the Pledgor’s expense, execute documents necessary to
effect or evidence the release of the Pledged Collateral from the Lien of this
Agreement and return to the Pledgor all certificates evidencing the Pledged
Collateral and any transfer powers with respect to such certificates. 

           
4.10.      No Waiver by the
Collateral Agent, Amendments. 

                          (a)       
Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the parties
hereto, with the consent of the Required Holders, and then any such waiver,
amendment or modification shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment or modification shall release all or substantially all of the
Pledged Collateral in any transaction or series of related transactions, without
the written consent of each holder. 

- 14 - 

                          (b)       
The Collateral Agent shall not be deemed to have waived any of its rights and
remedies in respect of the Secured Obligations or the Pledged Collateral unless
such waiver shall be in accordance with paragraph (a) above. No delay or
omission on the part of the Collateral Agent in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or remedy.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion. All rights and remedies of the
Collateral Agent with respect to the Secured Obligations or the Pledged
Collateral, whether evidenced hereby or by any other instrument or papers, shall
be cumulative and may be exercised singularly, alternatively, successively or
concurrently at such time or at such times as the Collateral Agent deems
expedient. 

            4.11.     
Overdue Amounts. Until paid, all amounts due and payable by the
Pledgor under this Agreement shall be a debt secured by the Pledged Collateral
and shall bear, whether before or after judgment, interest at the Default Rate.

            4.12.     
Notice, etc. All notices and communications provided for hereunder
shall be in writing and sent (a) by facsimile with confirmation of receipt, (b)
by registered or certified mail with return receipt requested (postage prepaid),
(c) by a recognized overnight delivery service (with charges prepaid) or (d) as
a .pdf attachment to an email. Any such notice must be sent to the address set
forth under the intended recipient’s name set forth on the signature pages
hereto or at such other address as such Person shall have specified to the other
party hereto in writing. Notices will be deemed given only when received. 

           
4.13.      Collateral Agency Agreement. The
Collateral Agent shall act hereunder only in accordance with the terms and
conditions of this Agreement and the Collateral Agency Agreement. Any and all
actions the Collateral Agent takes or omits to take hereunder shall be covered
by the indemnity provisions of the Collateral Agency Agreement which shall be
deemed to be incorporated by reference herein. In the case of a conflict between
this Agreement (including Section 3.8), and the Collateral Agency
Agreement, the Collateral Agency Agreement shall govern the rights and
obligations of the Collateral Agent.

            4.14.     
Waiver of Suretyship Defenses. The obligations of the Pledgor shall
not be subject to any counterclaim, setoff, deduction or defense based upon any
claim the Pledgor may have against the Issuer or any holder or otherwise, and
shall remain in full force and effect without regard to, and (except by
indefeasible payment in full in cash of all of the Secured Obligations) shall
not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Pledgor shall have any knowledge or
notice thereof), including, without limitation: (a) any amendment, modification
of or supplement to the Notes, the Note Agreement or any other Financing
Document or any assignment or transfer of any thereof or of any interest
therein, or any furnishing, acceptance or release of any security for the
Secured Obligations; (b) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of the Notes or in respect of the Note
Agreement or any other Financing Document; (c) any bankruptcy, insolvency, readjustment,
composition, liquidation or similar proceeding with respect to the Issuer or its
property; (d) any merger, amalgamation or consolidation of the Pledgor or of the
Issuer into or with any other Person or any sale, lease or transfer of any or
all of the assets of the Issuer to any Person; (e) any failure on the part of
the Issuer for any reason to comply with or perform any of the terms of any
other agreement with the Pledgor; or (f) any other circumstance which might
otherwise constitute a legal or equitable discharge, suretyship defense or other
defense of a guarantor (whether or not similar to the foregoing). To the extent
permitted by law, the Pledgor irrevocably and unconditionally waives any defense
it might have to its performance hereunder, based on any of the foregoing. 

- 15 - 

            4.15.     
USA PATRIOT Act. The parties hereto acknowledge that in order to help
the United States government fight the funding of terrorism and money laundering
activities, pursuant to federal regulations that became effective on October 1,
2003 (Section 326 of the USA PATRIOT Act) all financial institutions are
required to obtain, verify, record and update information that identifies each
person establishing a relationship or opening an account. The parties to this
Agreement agree that they will provide to the Collateral Agent such information
as it may request, from time to time, in order for the Collateral Agent to
satisfy the requirements of the USA PATRIOT Act, including but not limited to
the name, address, tax identification number and other information that will
allow it to identify the individual or entity who is establishing the
relationship or opening the account and may also ask for formation documents
such as articles of incorporation or other identifying documents to be provided.

            4.16.     
Force Majeure. The Collateral Agent shall not incur any liability for
not performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Collateral Agent
(including but not limited to any act or provision of any present or future law
or regulation or Governmental Authority, any act of God or war, civil unrest,
local or national disturbance or disaster, any act of terrorism, or the
unavailability of the Federal Reserve Bank wire or facsimile or other wire or
communication facility); it being understood that the Collateral Agent shall use
reasonable efforts that are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.

[Remainder of page intentionally left blank] 

- 16 - 

            IN
WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused
this Agreement to be signed on the date first above written. 

NEVADA USG HOLDINGS, LLC 

 

By:_____________________________________
Name: Dennis J. Gilles

Title: Manager 

Address: 
c/o U.S.
Geothermal Inc. 
1505 Tyrell Lane 
Boise, Idaho 83706 
Attention:
Dennis J. Gilles
Fax: 208-424-1030 

[Signature Page to Pledge Agreement] 

	(STATE OF 	) 
	  	       
                 ss. 
	(COUNTY OF 	) 

            On
this ______day of ____________, 2013, before me, the undersigned notary public,
personally appeared ____________________________, as ___________________of
Nevada USG Holdings, LLC, proved to me through satisfactory evidence of
identification, which was ______________________, to be the person whose name is
signed on the preceding or attached document, and acknowledged to me that he/she
signed it voluntarily for its stated purpose as ____________________of Nevada
USG Holdings, LLC. 

__________________________________
Official signature and seal
of notary 

 

My commission expires: 

[Notary Page to Pledge Agreement] 

	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, not in its individual capacity
      but 
	 	solely in its capacity as the Collateral Agent
    
	 	  
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title: 
	 	  
	 	  
	 	       
       By:______________________________ 
	 	         Name: 
	 	         Title: 
	 	  
	 	Address: 
	 	Deutsche Bank Trust Company Americas 
	 	60 Wall Street, 27th Floor 
	 	MS: NYC 60-2710 
	 	New York, New York 10005 
	 	Fax: 732-578-4636 
	 	Attention: Project Finance Team Manager/USG
  
	 	Nevada 

[Signature Page to Pledge Agreement] 

ACKNOWLEDGEMENT AND CONSENT 

            The
undersigned hereby acknowledges receipt of a copy of the foregoing Pledge and
Security Agreement (the “Agreement”) and agrees to be bound thereby and
to comply with the terms thereof, any provisions of its Governing Documents (as
that term is defined in the Agreement) to the contrary notwithstanding. The
undersigned further agrees that the Collateral Agent (as that term is defined in
the Agreement) referred to therein will not have any of the obligations of a
member of the Issuer unless the Collateral Agent affirmatively elects to
undertake such obligations in accordance with the terms of the Agreement. 

	Dated as of _____________, 2013 	USG NEVADA LLC 
	  	  
	  	  
	  	By:_____________________________________ 
	  	Name: Dennis J. Gilles 
	  	Title: Manager 
	  	  
	  	Address: 
	  	c/o U.S. Geothermal Inc. 
	  	1505 Tyrell Lane 
	  	Boise, Idaho 83706 
	  	Attention: Dennis J. Gilles 
	  	Fax: 208-424-1030 

[Acknowledgement Page to Pledge Agreement] 

ANNEX A TO PLEDGE AND SECURITY AGREEMENT 

            The
Issuer has no authorized, issued or outstanding shares of its capital stock,
limited liability company interests, partnership interests or other equity
interests of any class or any commitments to issue any shares of its capital
stock, limited liability company interests, partnership interests or other
equity interests of any class or any securities convertible into or exchangeable
for any shares of its capital stock, limited liability company interests,
partnership interests or other equity interests of any class, except as
otherwise stated in this Annex A. 

	
Issuer 	
Pledgor 	Class of 
Interest 	Certificate No. 
	% Interest 
Held 
	USG Nevada LLC 	Nevada USG Holdings, LLC 	Units 	No. 001 	100%

ANNEX B TO PLEDGE AND SECURITY AGREEMENT 

 

FORM OF TRANSFER POWER 
(TO BE SIGNED IN BLANK)

 

            FOR
VALUE RECEIVED, __________________, a _______________(“Assignor”), hereby sells,
assigns and transfers unto _______________________, all of its ownership
interest(s) in USG Nevada LLC, a Delaware limited liability company (the
“Issuer”), standing in its name on the books of the Issuer and represented by
Certificate No. [__] and does hereby irrevocably constitute and appoint
__________________, its attorney to transfer said ownership interests on the
books of the Issuer with full power of substitution in the premises. 

Dated: ____________ ____, 20___ 

[NAME]

 

By:_________________________________
Name: 
Title: 

 

In the presence of: 

 

_____________________________________
Name: 

ANNEX C TO PLEDGE AND SECURITY AGREEMENT 

Nevada USG Holdings, LLC 
Legal
address/address of principal place
of business and chief executive office:

Nevada USG Holdings, LLC 
c/o U.S. Geothermal Inc. 
1505
Tyrell Lane 
Boise, Idaho 83706 

Organizational number: 5034809 

EIN: 45-3741061 

Exhibit S-5 

Form of Security Agreement

 

 

 

Exhibit S-5 - 1 

Execution Version 

SECURITY AGREEMENT 

            This
SECURITY AGREEMENT (this “Agreement”), dated as of September 26, 2013, is
by and between USG Nevada LLC, a Delaware limited liability company (the
“Issuer”), on the one hand, and Deutsche Bank Trust Company Americas, in
its capacity as collateral agent (together with its successors and permitted
assigns in such capacity, the “Collateral Agent”), for the benefit of
itself, the holders from time to time of the Notes (as defined below) and
Deutsche Bank Trust Company Americas, in its capacity as depositary (together
with its successors and assigns in such capacity, the “Depositary”) under
the Depositary and Security Agreement, dated as of the date hereof, among the
Issuer, the Collateral Agent and the Depositary (as amended, modified or
supplemented from time to time, the “Depositary Agreement”) (the holders,
the Depositary and the Collateral Agent are referred to herein collectively as
the “Secured Parties”). 

RECITALS: 

            The
Issuer has authorized the issue and sale of its 6.75% Senior Secured Notes due
December 31, 2037 (as amended, modified or supplemented from time to time, the
“Notes”), subject to and in accordance with the Note Purchase Agreement,
dated as of the date hereof, among the Issuer and the holders of Notes party
thereto from time to time (as amended, modified or supplemented from time to
time, the “Note Agreement”). 

            It
is a condition precedent to the purchase of the Notes pursuant to the Note
Agreement that the Issuer grant the security interests described in this
Agreement, and Issuer wishes to grant security interests in favor of the
Collateral Agent, for the benefit of the Secured Parties, as herein provided.

         
The Issuer and the Collateral Agent therefore agree as follows: 

ARTICLE I 

DEFINITIONS 

            Capitalized
terms used in this Agreement and not otherwise defined in this Agreement have
the meanings given to those terms in the Note Agreement, or if not defined in
the Note Agreement, in the Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction (the “UCC”). However, if a term is
defined in Article 9 of the UCC differently from another Article of the UCC, the
term has the meaning specified in Article 9. 

ARTICLE II 

ASSIGNMENT AND GRANT OF SECURITY INTEREST 

            2.1.       
Grant. (a) As collateral security for the prompt and complete payment
when due of the principal, interest (including, without limitation, interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), Make-Whole
Amount, if any, and premium, if any, on all of the Notes issued and delivered and outstanding under the Note Agreement, and of all
other sums owing under the Note Agreement and each other Financing Document
(whether at stated maturity, by acceleration, because of mandatory prepayment,
or otherwise, and including the payment of amounts which would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. §362(a)), and the performance of the covenants contained in the
Note Agreement and each of the other Financing Documents (collectively, the
“Secured Obligations”) and to induce the Purchasers to purchase the
Notes, the Issuer hereby assigns, conveys, mortgages, pledges, hypothecates and
transfers to the Collateral Agent, for the benefit of the Secured Parties, and
grants to the Collateral Agent a continuing first priority Lien on and security
interest in, its interests in all of its properties, assets and rights, wherever
located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof (collectively, the “Collateral”), including: all
personal and fixture property of every kind and nature, including all goods
(including inventory, equipment and accessions thereto), instruments (including
promissory notes), timber to be cut, extracted geothermal fluid and other
geothermal substances, including all minerals, gases, salts, chemical,
by-products and other substances in solution in geothermal fluid or otherwise
produced by or from geothermal wells, the waste heat from geothermal fluid,
documents (including, if applicable, electronic documents), accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter of credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, tort
claims and all general intangibles (including payment intangibles), and
including each of the Material Project Documents listed on Schedule 1
hereto and any other contractual obligations entered into from time to time, and
each of the Required Approvals obtained by the Issuer from time to time.
Notwithstanding anything herein to the contrary, the term “Collateral” shall not
include, and the Lien and security interest granted under this Section
2.1 shall not attach to any Required Approval which by its terms or by
operation of law would become void, voidable, terminable or revocable or would
constitute a breach or default thereunder if a security interest therein was
granted hereunder (such Required Approval being expressly excepted and excluded
from the Lien and terms of this Agreement solely to the extent necessary so as
to avoid such voidness, avoidability, terminability, revocability, breach or
default) or any lease, license, contract, property rights or agreement to which
the Issuer is a party or any of its rights or interests thereunder if and for so
long as the grant of such Lien or security interest shall constitute or result
in (i) the abandonment, invalidation or unenforceability of any right, title or
interest of the Issuer therein or (ii) a breach or termination pursuant to the
terms of, or a default under, any such lease, license, contract property rights
or agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law or principles of equity), provided, however, that such Lien and
security interest shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and, to the
extent severable, shall attach immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of
the consequences specified in clauses (i) or (ii) above, including, without
limitation, any proceeds of such lease, license, contract, property rights or
agreement. 

-2- 

                          (b)        Notwithstanding anything to the contrary contained herein, the Issuer
shall remain liable under each of the Material Project Documents and other
contractual obligations and the Required Approvals to which it is a party or by which it is
bound, all in accordance with and pursuant to the terms and provisions thereof,
and the Collateral Agent shall have no obligation or liability under any
Material Project Document, other contractual obligation or Required Approval by
reason of or arising out of this Agreement, nor shall the Collateral Agent be
required or obligated in any manner to perform or fulfill any obligations of the
Issuer thereunder or to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times. 

                          (c)       
If any default by the Issuer under any of the Material Project Documents, other
contractual obligations or Required Approvals shall occur, the Collateral Agent
shall, at the direction of the Required Holders, be permitted (but shall not be
obligated) to the fullest extent permitted by such Material Project Document,
other contractual obligation or Required Approval or by any applicable Consent,
as the case may be, to remedy or cause its designee(s) to remedy any such
default by giving written notice of such intent to the Issuer and to the parties
to the Material Project Document(s) or other contractual obligations or the
issuer of the Required Approval for which the Collateral Agent intends to remedy
the default. Any cure by the Collateral Agent or its designee(s) of the Issuer’s
default under any of the Material Project Documents, other contractual
obligations or Required Approvals shall not be construed as an assumption by the
Collateral Agent or any of the Secured Parties or any of their respective
designee(s) of any obligations, covenants or agreements of the Issuer under such
Material Project Document, other contractual obligation or Required Approval,
and none of the Collateral Agent, any of the Secured Parties or any of their
respective designee(s) shall be liable to the Issuer or any other Person as a
result of any actions undertaken by the Collateral Agent or its designee(s) in
curing or attempting to cure any such default, except to the extent arising out
of such Person’s gross negligence or willful misconduct. This Agreement shall
not be deemed to release or to affect in any way the obligations of the Issuer
under the Material Project Documents, its other contractual obligations or the
Required Approvals. 

            2.2.       
Continuing Security Interest. This Agreement creates a continuing
security interest in the Collateral and will remain in full force and effect
until the indefeasible payment in full in cash and performance of all Secured
Obligations. If, at any time for any reason (including the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Issuer, any
guarantor, or any other Person or the appointment of any intervenor or
conservator of, or agent or similar official for the Issuer, any guarantor or
any other Person or any of their respective properties), any payment received by
the Collateral Agent or any holder of a Note in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by such
Person, this Agreement will continue to be effective or will be reinstated, if
necessary, as if such payment had not been made. 

            2.3.       
Instruments. Notwithstanding any provision herein to the contrary, so
long as no Event of Default has occurred and is continuing, the Issuer may
retain for collection in the ordinary course of business any Instruments (as
defined in Article 9 of the UCC) obtained by it in the ordinary course of
business, and the Collateral Agent will, promptly upon the request of the
Required Holders, and at the expense of the Issuer, make appropriate
arrangements for making any Instruments pledged by the Issuer available to the
Issuer for purposes of presentation, collection or renewal. Any such arrangement shall
be effected, to the extent deemed appropriate by the Collateral Agent, against a
trust receipt or like document. 

-3- 

            2.4.       
Use of Collateral. So long as no Event of Default has occurred and is
continuing, the Issuer shall be entitled to use and possess the Collateral,
subject to the rights, remedies, powers and privileges of the Collateral Agent
hereunder and the terms of the Financing Documents. 

ARTICLE III 

REPRESENTATIONS, WARRANTIES AND COVENANTS 

            3.1.       
Perfection Certificates. The Issuer has delivered to the Collateral
Agent and each Purchaser a Perfection Certificate in the form of the certificate
attached as Exhibit A to this Agreement. The Issuer represents and
warrants to the Collateral Agent and each holder of a Note as of the date of
this Agreement, that: 

                         
(a)        the
Issuer’s exact legal name is stated in its Perfection Certificate and on the
signature page hereof; 

                         
(b)        the Issuer is an
organization of the type, and is organized in the jurisdiction, set forth in its
Perfection Certificate; 

                         
(c)        the Perfection
Certificate accurately sets forth the Issuer’s organizational identification
number or accurately states that the Issuer has none; 

                         
(d)        the Perfection
Certificate accurately sets forth as of the date hereof the Issuer’s place of
business or, if more than one, its chief executive office, and, if different,
its mailing address; and 

                         
(e)        all other
information set forth in the Perfection Certificate is accurate and complete as
of the date hereof. 

           
3.2.        Contractual
Obligations; Authorization to File UCC Statements. 

                         
(a)        The
Issuer agrees that: 

                                        (i)       
it shall maintain the Liens created by this Agreement as first-priority Liens
and, at the sole cost and expense of the Issuer, (i) give, execute, deliver,
file and/or record any financing statement (x) to create, preserve, perfect or
validate and maintain the Liens granted pursuant hereto or (y) to enable the
Collateral Agent to exercise and enforce its rights hereunder with respect to
such Liens; and (ii) in the case of Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, take any actions
necessary to enable the Collateral Agent to obtain “control” (within the meaning
of the applicable UCC) with respect thereto; 

-4- 

                                        (ii)       
its liabilities and obligations under the Material Project Documents to which it
is a party that constitute part of the Collateral will not be released or
terminated by this Agreement or the exercise by the Collateral Agent of its
rights under this Agreement; 

                                       
(iii)        unless
it expressly agrees in writing, neither the Collateral Agent nor any holder of a
Note will have any liabilities or obligations under any contractual obligation
of the Issuer as a result of this Agreement, the exercise by the Collateral
Agent of rights under this Agreement or otherwise, except to the extent arising
out of such Person’s gross negligence or willful misconduct; and 

                                      
(iv)        neither the
Collateral Agent nor any holder of a Note has any obligation to collect or
enforce any contractual obligation or claim which constitutes part of the
Collateral, or to take any other action with respect to the Collateral except as
expressly set forth in this Agreement and the other applicable Financing
Documents. 

                          (b)       
Subject to Section 6.1 hereof, the Issuer authorizes the
Collateral Agent and each holder of a Note, in its own name, at any time and
from time to time, to give notice to any Person of this Agreement and of the
assignment of the Collateral to the Collateral Agent, for the benefit of the
Secured Parties, and of the Collateral Agent’s Lien on and security interest in
the Collateral. The Issuer further irrevocably authorizes the Collateral Agent,
at any time and from time to time, to file, at the expense of the Issuer, in any
UCC jurisdiction any financing statements and amendments thereto that describe
the Collateral as all assets of the Issuer or words of similar effect, or with
greater detail, and contain other information required by the UCC for the
sufficiency of any financing statement or amendment. The Issuer agrees to
promptly furnish any information necessary to prepare such financing statements
and amendments to the Collateral Agent and each holder of a Note upon prior
written request. The Issuer also ratifies its authorization for the Collateral
Agent to have filed in any UCC jurisdiction any like financing statements or
amendments thereto as set forth in this Section 3.2(b) if filed prior to
the date hereof. Notwithstanding the foregoing, nothing herein shall require the
Collateral Agent to file financing statements or continuation statements or be
responsible for maintaining the security interest purported to be created as
described herein, and such responsibility shall be solely the responsibility of
the Issuer. 

            3.3.       
Negative Covenants. The Issuer covenants and agrees that it will
perform and observe each of the following covenants: 

                         
(a)       
Business, Name and Address. It will not change its name, the address of
its principal place of business or chief executive office, its type of
organization, its jurisdiction of formation or its organizational identification
number without giving the Collateral Agent and the holders of the Notes 30 days’
prior written notice of such change; and 

                         
(b)        Amendment of
Operating Agreement; Transfer of Collateral. It will not permit or agree to
any amendment of its limited liability company operating agreement, except in
connection with the admission of a new member or substitution of an existing
member as permitted under the Note Agreement and the other Financing Documents.
It will not sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions), any or all of its rights, title or interest in the Collateral,
except as permitted under the Note Agreement and the other Financing Documents.

-5- 

ARTICLE IV 

RIGHTS AND REMEDIES 

            4.1.       
Collections Prior to Default. Until the Collateral Agent exercises
its right after the occurrence and during the continuation of an Event of
Default to collect proceeds and amounts in respect of the Collateral, the Issuer
will collect with diligence, and at the Issuer’s own expense, any and all such
proceeds and amounts in the ordinary course. Upon the occurrence and during the
continuation of an Event of Default, or after an exercise of remedies by the
Collateral Agent, any such collections made by the Issuer will be held in trust
for the Collateral Agent for the benefit of the Secured Parties, and the Issuer
will keep all such collections separate and apart from all other funds and
property so as to be capable of identification as the property of the Collateral
Agent and will deliver such collections at such time as the Collateral Agent may
request to the Collateral Agent in the identical form received, properly
endorsed or assigned when required to enable the Collateral Agent to complete
collection thereof. 

            4.2.       
Collateral Agent’s Rights Upon Default. Upon the occurrence and
during the continuation of an Event of Default, the Collateral Agent may, but
shall not be obligated to, in its sole discretion, take any or all of the
following actions, in each case at the Issuer’s expense and without prior notice
to the Issuer except as specifically set forth below and except as required
under applicable law: 

                         
(a)        give notice of
the Event of Default to any Person, collect proceeds and amounts in respect of
the Collateral, and enforce all rights of the Issuer in the Collateral; 

                         
(b)        take possession
of any or all of the Collateral, wherever it may be found, using reasonable
force to the extent permitted under applicable law, to do so, and hold, store,
repair, improve, operate and manage the same; 

                         
(c)        foreclose its
Lien upon any or all of the Collateral; 

                         
(d)        sell, lease,
assign, deliver or otherwise dispose of any or all of the Collateral at public
or private sale, with or without having any or all of the Collateral at the
place of sale, upon terms, in such manner, at such time or times, and at such
place or places as the Collateral Agent may reasonably determine and as required
by law; and 

                         
(e)        exercise any or
all other rights or remedies available to the Collateral Agent under applicable
law, the Financing Documents or any other agreement between the parties. 

The Collateral Agent may, to the fullest extent permitted by
law, exercise the foregoing rights and remedies in such order, at such times and
in such manner as the Collateral Agent may, in its sole and exclusive judgment,
determine from time to time. 

-6- 

            4.3.       
Power of Attorney. The Issuer irrevocably constitutes and appoints
the Collateral Agent and any officer or agent thereof, each with full power of
substitution, as the Issuer’s true and lawful attorney-in-fact, in the Issuer’s
name or in such Person’s name or otherwise, and at the Issuer’s expense, to take
any or all of the following actions upon the occurrence and during the
continuation of an Event of Default, without notice to or the consent of the
Issuer: 

                         
(a)        take any
or all of the actions described in Section 4.2 of this Agreement, and
exercise any other right or power granted to the Collateral Agent and any holder
of a Note under this Agreement or any other Financing Document or by law; 

                         
(b)        endorse or
execute and deliver any check, draft, note, acceptance, or instrument, document,
contract, agreement, receipt, release, bill of lading, invoice, endorsement,
assignment, bill of sale, deed or instrument of conveyance or transfer
constituting or relating to any Collateral; 

                         
(c)        assert,
institute, file, defend, settle, compromise or adjust any claim constituting or
relating to any Collateral; 

              
          
(d)        perform or comply
with any contractual obligation that constitutes part of the Collateral; and

                         
(e)        do any
and all things necessary and proper to carry out the purposes of this Agreement.

The Issuer recognizes and agrees that the power of attorney
granted pursuant to this Section 4.3 is coupled with an interest and is
not revocable until the termination of this Agreement in accordance with its
terms, at which time the power of attorney shall automatically terminate. The
Issuer ratifies and confirms all actions taken by the Collateral Agent or its
agents pursuant to this power of attorney in accordance herewith. 

           
4.4.        Other Rights of
Collateral Agent. 

                          (a)       
The Collateral Agent will have, with respect to the Collateral, in
addition to the rights and remedies set forth in this Agreement: (i) all of the
rights and remedies available to a secured party under applicable law, as if
such rights and remedies were fully set forth in this Agreement, and (ii) all of
the rights, protections and indemnities set forth in the Collateral Agency
Agreement, which provisions are incorporated by reference and made a part of
this Agreement. 

                          (b)       
The Collateral Agent may at any time and from time to time release or
relinquish any right, remedy or Lien it has with respect to a particular item of
Collateral without thereby releasing, relinquishing or in any way affecting its
rights, remedies or Lien with respect to any other item of Collateral. 

-7- 

           
4.5.        Disposition of
Collateral. 

                          (a)       
Upon the written request by the Collateral Agent (acting at the direction of the
Required Holders) or the Required Holders after the occurrence and during the
continuation of an Event of Default, the Issuer agrees, promptly and at its own
expense, to assemble any or all of the Collateral and make it available to the
Collateral Agent. 

                          (b)       
The Collateral Agent will be entitled to sell the Collateral on any
commercially reasonable terms, and the Issuer agrees that a private sale or a
sale on extended payment terms, or in exchange for property, stock or other
consideration will not in and of itself be deemed to be commercially
unreasonable. The Collateral may be sold in one lot as an entirety or in
separate parcels. Any Secured Party may purchase any or all of the Collateral
sold at any public sale and, to the extent permitted by applicable law, may
purchase any or all of the Collateral sold at any private sale, including by a
credit bid. 

                          (c)       
The Collateral Agent may, at the direction of the Required Holders,
restrict the prospective bidders or purchasers at any sale as to their number,
nature of business, financial or business expertise, net worth or financial
resources and investment intention or on the basis of any other factors that are
commercially reasonable. Any sale of Collateral may be subject to the
requirement that any purchase of all or any part of the Collateral constituting
a security for purposes of the Securities Act or the Exchange Act must be for
the purpose of investment and without any intention to make a distribution
thereof. 

                          (d)       
The Issuer expressly agrees that the Collateral Agent need not give more than 10
days’ notice to the Issuer of the time and place of any public sale of
Collateral or of the time after which a private sale of Collateral may take
place, and that such notice will constitute reasonable notice under all
circumstances. The Collateral Agent will not be obligated to hold any sale
pursuant to any such notice and may, without notice or publication, adjourn any
public or private sale by announcement at the time and place fixed for such
sale, and a subsequent sale may be held at the time and place designated in such
announcement without further notice or publication. To the extent permitted by
applicable law, the Issuer irrevocably waives any right it may have to make a
demand of performance or other demand, advertisement, judicial hearing or notice
to it or any other Person in connection with the collection, sale or other
disposition of, or realization upon, any or all of the Collateral. 

                          (e)       
Upon the occurrence and during the continuation of an Event of Default,
before any sale or disposition of Collateral, the Collateral Agent at the
direction of the Required Holders may cause any or all of such Collateral to be
improved, repaired or reconditioned. The Collateral Agent (on behalf of the
Secured Parties) may also settle, pay or discharge any or all taxes, Liens,
claims and other charges with respect to Collateral, and may procure or continue
insurance with respect to Collateral (it being understood that nothing contained
herein shall be construed as requiring the Collateral Agent to expend its own
funds or otherwise incur any financial liability in connection with the
performance of any of its duties hereunder). All sums expended by the Secured
Parties pursuant to this Section 4.5(e) will constitute Secured
Obligations secured by the Liens created by the Financing Documents. Neither the
Collateral Agent, nor any other Secured Party will have any duty to take any
action authorized by this Section 4.5(e) , and no sale of Collateral will be
deemed to have been commercially unreasonable by reason of the decision not to
take any such action. 

-8- 

           
4.6.        No Marshaling or
Right of Redemption. 

                          (a)       
Except to the extent required by applicable law, neither the Collateral Agent
nor any other Secured Party will be required to marshal any Collateral or any
guaranties of the Secured Obligations, or to resort to any item of Collateral or
any guaranty in any particular order, and the Collateral Agent’s rights with
respect to the Collateral and any guaranties will be cumulative and in addition
to all other rights, however existing or arising. To the extent permitted by
applicable law, the Issuer irrevocably waives, and agrees that it will not
invoke or assert, any law requiring or relating to the marshaling of collateral
or any other law which might cause a delay in or impede the enforcement of the
Collateral Agent’s rights under this Agreement or any other Financing Document.

                          (b)       
To the extent permitted by applicable law, the Issuer irrevocably
waives, and agrees that it will not invoke or assert, any rights to equity of
redemption or other rights of redemption, appraisement, valuation, stay,
extension or moratorium that it may have in equity, at law, or otherwise with
respect to any Collateral. The sale or other transfer pursuant to this Agreement
of any right, title or interest of the Issuer in any item of Collateral will
operate to permanently divest the Issuer and all Persons claiming under or
through the Issuer of such right, title or interest, and will be a perpetual
bar, both at law and in equity, to any and all claims by the Issuer or any such
Person with respect to such item of Collateral. 

            4.7.       
Application of Proceeds. After the occurrence and during the
continuation of an Event of Default or after an exercise of remedies by the
Collateral Agent, any cash held by the Collateral Agent and all cash proceeds
received by the Collateral Agent from any realization upon the Collateral may,
at the direction of the Required Holders, be held by the Collateral Agent as
collateral security for the payment of the Secured Obligations or applied by the
Collateral Agent in accordance with the Collateral Agency Agreement. 

           
4.8.        Collateral Agent’s
Duties. 

                          (a)       
The grant to the Collateral Agent under this Agreement of any right or
power does not impose upon the Collateral Agent any duty to exercise such right
or power. The Collateral Agent will have no obligation to take any steps to
preserve any claim or other right against any Person or with respect to any
Collateral. 

                          (b)       
To the extent permitted by applicable law, the Issuer waives all claims
against the Collateral Agent or its agents arising out of the repossession,
taking, retention, storage, operation or sale of the Collateral except to the
extent such actions constitute gross negligence or willful misconduct of such
Person. To the extent permitted by applicable law, the Issuer waives any claim
it may have based on the allegation or fact that the price obtained for
Collateral sold at a private sale made in accordance with this Agreement was
less than could have been obtained for the same Collateral at a public sale.
Subject to the penultimate sentence hereof, all risk of loss, damage, diminution
in value or destruction of the Collateral will be borne by the Issuer. The
Collateral Agent will have no responsibility for any act or omission of any carrier, warehouseman, bailee, forwarding agency, broker,
operator or any other Person. The Collateral Agent will have no responsibility
to the Issuer for any act or omission of the Collateral Agent, except to the
extent such act or failure to act constitutes gross negligence or willful
misconduct by the Collateral Agent. Notwithstanding anything herein to the
contrary, in no event shall the Collateral Agent be liable for special, punitive
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Collateral Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action. 

-9- 

                          (c)       
The Collateral Agent will be accountable only for such proceeds as the
Collateral Agent actually receives as a result of the exercise of its rights
under this Agreement and the other Financing Documents, and delivery or other
accounting of such proceeds or the Collateral by the Collateral Agent to the
Issuer or the assignee of the Secured Obligations will discharge the Collateral
Agent of all liability therefor. 

                          (d)       
The Collateral Agent does not and will not make any express or implied
representations or warranties with respect to any Collateral or other property
released to the Issuer. 

                          (e)       
Except as set forth in this Agreement or as required under applicable law, the
Collateral Agent will have no duties or obligations with respect to the
Collateral. 

ARTICLE V 

OTHER SECURITY DOCUMENTS 

            5.1.       
Relation to Other Security Documents. The provisions of this
Agreement supplement the provisions of any real estate fee or leasehold mortgage
granted by the Issuer, any pledge granted by the holders of the equity interests
of the Issuer under the Pledge Agreement and any other Security Document, in
each case to the Collateral Agent, for the benefit of the Secured Parties, which
secure the payment or performance of any of the Secured Obligations. Nothing
contained in any such real estate fee or leasehold mortgage, Pledge Agreement or
other Security Document shall derogate from any of the rights or remedies of the
Collateral Agent hereunder. 

ARTICLE VI 

GENERAL PROVISIONS 

           
6.1.        Further
Assurances. 

                          (a)       
At any time and from time to time, including upon the request of the
Collateral Agent (acting at the direction of the Required Holders) or the
Required Holders, the Issuer will, at the Issuer’s expense, execute and deliver
and/or file such further documents, financing statements, continuation
statements, amendments and instruments and do such other acts as are in each
case necessary or required by applicable law in order to create, perfect,
maintain and preserve first-priority Liens on the Collateral in favor of the
Collateral Agent for the benefit of the Secured Parties, and to facilitate any sale
of or other realization upon Collateral, to make any sale of or other
realization upon Collateral valid, binding and in compliance with applicable
law, and to provide for the payment of the Secured Obligations in accordance
with the terms of the Financing Documents and this Agreement. 

-10- 

                          (b)       
The Issuer shall pay all filing, registration and recording fees or
re-filing, re-registration and re-recording fees, and all expenses incident to
the execution and acknowledgment of this Agreement, and any instruments of
further assurance, and all federal, state, county and municipal stamp taxes and
other taxes, duties, imports, assessments and charges arising out of or in
connection with the execution and delivery of this Agreement, any agreement
supplemental hereto and any instruments of further assurance. 

            6.2.       
Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. The Issuer may not assign or otherwise transfer any of
its rights under this Agreement. Any holder of a Note will have the right to
transfer, assign, pledge and grant participations in its rights and interests
under this Agreement in accordance with the terms of its Financing Documents.
The Collateral Agent will have the right to transfer and assign its rights and
interests under this Agreement in accordance with the terms of the Collateral
Agency Agreement. 

            6.3.       
Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision. 

            6.4.       
Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. The rules of interpretation set forth in
Schedule B of the Note Agreement shall apply to this Agreement. 

            6.5.       
Counterparts. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties shall constitute a
single binding agreement. A facsimile or electronic transmission of the
signature page to this Agreement by any party hereto shall be effective as the
signature page of such party and shall be deemed to constitute an original
signature of such party to this Agreement and shall be admissible into evidence
for all purposes. 

            6.6.       
Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS
PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OR REMEDIES
HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

-11- 

            6.7.       
Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS
OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER
INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT. 

           
6.8.        Consent to
Jurisdiction. 

                          (a)       
The parties agree that any legal action or proceeding by or against the
Issuer or with respect to or arising out of this Agreement or any other
Financing Document may be brought in or removed to the courts of the State of
New York, in and for the County of New York, or of the United States of America
for the Southern District of New York, in each case, in the Borough of
Manhattan. By execution and delivery of this Agreement, each party accepts, for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Issuer agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each of the parties hereto irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, (or any substantially similar
form of mail) postage prepaid, return receipt requested to such party at its
address for notices as specified herein. Each of the parties agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid
personal service upon and personal delivery to it. Notices under this Section
6.8(a) shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service. 

                          (b)       
In addition to and notwithstanding the provisions of Section 6.8(a)
above, the Issuer hereby irrevocably appoints C T Corporation System as its
agent to receive on its behalf and its property service of copies of the summons
and complaint and any other process which may be served in any action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Issuer, in care of the process agent at 111 Eighth Avenue, New
York, NY 10011, and the Issuer hereby irrevocably authorizes and directs the
process agent to accept such service on its behalf. Nothing in this Agreement
will affect the right of any party hereto to serve legal process in any other
manner permitted by law or affect the right of any party hereto to bring any
action or proceeding in the courts of any other jurisdiction. If for any reason
the process agent ceases to be available to act as process agent, the Issuer
agrees to immediately appoint a replacement process agent satisfactory to the
Collateral Agent. Each of the parties hereby waives any right to stay or dismiss
any action or proceeding under or in connection with any or all of this
Agreement or any other Financing Document brought before the foregoing courts on
the basis of forum non conveniens. 

-12- 

            6.9.       
Release of Liens. Upon the payment in cash of all Secured
Obligations, the Collateral Agent will, upon the written request of the Issuer
and at the Issuer’s expense, execute documentation necessary to effect or
evidence the release of the Collateral from the Lien of this Agreement. The Lien
of this Agreement shall also be automatically released with respect to any
portion of the Collateral that is sold, transferred or otherwise disposed of in
compliance with the terms and conditions of the Financing Documents. Without
limiting the foregoing, the Issuer and the Collateral Agent hereby acknowledge
and agree that the Liens granted hereunder on cash which is distributed by the
Issuer to any Person in accordance with the terms of Section 4.1(i) of the
Depositary Agreement shall be automatically released at the time and the amount
of such distribution. 

           
6.10.      No Waiver by Collateral Agent,
Amendments.

                          (a)       
Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the parties
hereto, with the consent of the Required Holders, and then any such waiver,
amendment or modification shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment or modification shall release all or substantially all of the
Collateral in any transaction or series of related transactions, without the
written consent of each holder of Notes.

                          (b)       
The Collateral Agent shall not be deemed to have waived any of its rights and
remedies in respect of the Secured Obligations or the Collateral unless such
waiver shall be in accordance with paragraph (a) above. No delay or omission on
the part of the Collateral Agent in exercising any right or remedy shall operate
as a waiver of such right or remedy or any other right or remedy. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion. All rights and remedies of the Collateral Agent
with respect to the Secured Obligations or the Collateral, whether evidenced
hereby or by any other instrument or papers, shall be cumulative and may be
exercised singularly, alternatively, successively or concurrently at such time
or at such times as the Collateral Agent deems expedient. 

            6.11.     
Overdue Amounts. Until paid, all amounts due and payable by the
Issuer under this Agreement shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the Default Rate. 

            6.12.     
Notice, etc. All notices and communications provided for hereunder
shall be in writing and sent (a) by facsimile or as a .pdf attachment to an
email with confirmation of receipt, (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent to the
address set forth under the intended recipient’s name set forth on the signature
pages hereto or at such other address as such Person shall have specified to the
other party hereto in writing. Notices will be deemed given only when actually
received. 

            6.13.     
Collateral Agency Agreement. The Collateral Agent shall act hereunder
only in accordance with the terms and conditions of this Agreement and the
Collateral Agency Agreement. Any and all actions the Collateral Agent takes or
omits to take hereunder shall be covered by the indemnity provisions of the Collateral Agency
Agreement which shall be deemed to be incorporated by reference herein. In the
case of a conflict between this Agreement (including Section 4.8), and
the Collateral Agency Agreement, the Collateral Agency Agreement shall govern
the rights and obligations of the Collateral Agent. 

-13- 

            6.14.     
USA PATRIOT Act. The parties hereto acknowledge that in order to help
the United States government fight the funding of terrorism and money laundering
activities, pursuant to federal regulations that became effective on October 1,
2003 (Section 326 of the USA PATRIOT Act) all financial institutions are
required to obtain, verify, record and update information that identifies each
person establishing a relationship or opening an account. The parties to this
Agreement agree that they will provide to the Collateral Agent such information
as it may request, from time to time, in order for the Collateral Agent to
satisfy the requirements of the USA PATRIOT Act, including but not limited to
the name, address, tax identification number and other information that will
allow it to identify the individual or entity who is establishing the
relationship or opening the account and may also ask for formation documents
such as articles of incorporation or other identifying documents to be provided.

            6.15.      Force
Majeure. The Collateral Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Collateral Agent
(including but not limited to any act or provision of any present or future law
or regulation or Governmental Authority, any act of God or war, civil unrest,
local or national disturbance or disaster, any act of terrorism, or the
unavailability of the Federal Reserve Bank wire or facsimile or other wire or
communication facility); it being understood that the Collateral Agent shall use
reasonable efforts that are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.

[Remainder of page intentionally left blank] 

-14- 

            IN
WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused
this Agreement to be signed on the date first above written. 

	 	USG NEVADA LLC 
	 	  
	 	  
	 	By:_____________________________________ 
	 	Name: Dennis J. Gilles 
	 	Title: Manager 
	 	  
	 	Address: 
	 	c/o U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Attention: Dennis J. Gilles 
	 	Fax: 208-424-1030 

	(STATE OF 	) 
	  	       
                 ss. 
	(COUNTY OF 	) 

            On
this ______day of ____________, 2013, before me, the undersigned notary public,
personally appeared ____________________________, as ___________________of USG
Nevada LLC, proved to me through satisfactory evidence of identification, which
was ______________________, to be the person whose name is signed on the
preceding or attached document, and acknowledged to me that he/she signed it
voluntarily for its stated purpose as ____________________of USG Nevada LLC.

__________________________________
Official signature and seal
of notary 

My commission expires: 

	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, not in its individual capacity
      but 
	 	solely in its capacity as the Collateral Agent
    
	 	  
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	  
	 	           
             By:______________________________ 
	 	  
	 	           
             Name: 
	 	           
             Title: 
	 	  
	 	  
	 	  
	 	           
             By:______________________________ 
	 	           
             Name: 
	 	           
             Title: 
	 	  
	 	  
	 	Address: 
	 	Deutsche Bank Trust Company Americas 
	 	60 Wall Street, 27th Floor 
	 	MS: NYC 60-2710 
	 	New York, New York 10005 
	 	Fax: 732-593-4636 
	 	Attention: Project Finance Team Manager/USG
  
	 	Nevada 

Exhibit A

PERFECTION CERTIFICATE 

Dated as of [________], 2013 

            The
undersigned, the [__________] of USG Nevada LLC, a Delaware limited liability
company (the “Issuer”), hereby certifies as follows: 

           
1. Name. The exact legal name of the Issuer is
___________________________. 

           
2. Other Identifying Factors.

                   (a)       
The mailing address of the Issuer is ____________________________. 

                  
(b)        If
different from its mailing address, the Issuer’s place of business or, if more
than one, its chief executive office is located at: 

	 	Address 	County 	State 

 

                   (c)       
The type of organization of the Issuer is a limited liability company.
(d) The jurisdiction of the Issuer’s organization is _____________. 

                  
(e)        The Issuer’s
state issued organizational identification number [state “None” if the state
does not issue such a number] is ________________. 

                  
(f)        The
Issuer’s EIN is _________________. 

           
3.        Other Names.

                   (a)       
The following is a list of all other names (including trade names or
similar appellations) used by the Issuer, or any other business or organization
to which the Issuer became the successor by merger, consolidation, acquisition,
change in form, nature or jurisdiction of organization or otherwise, now or at
any time during the past five years: 

           
4.        Other Current
Locations. 

                   (a)       
The following are all other locations in which the Issuer maintains any
books or records relating to its accounts, instruments, chattel paper, general
intangibles or mobile goods: 

	 	Address 	County 	State 

 

                 
(b)        The following are
all other places of business of the Issuer: 

	 	Address 	County 	State 

 

                   (c)       
The following are all other locations where any of the Issuer’s
inventory or equipment is located: 

	 	Address 	County 	State 

 

                   (d)       
The following are the names and addresses of all persons or entities other than
the Issuer, such as lessees, consignees, warehousemen or purchasers of chattel
paper, which have possession or are intended to have possession of any of the
Issuer’s instruments, chattel paper, inventory or equipment: 

	Name 	Mailing Address 	County 	State 

           
5.        Prior
Locations. 

                   (a)       
Set forth below is each location or place of business maintained by the Issuer
during the past five years: 

	
       
	Address 	County 	State 

 

                   (b)       
Set forth below is each other location at which, or other person or
entity with which, any of the Issuer’s inventory or equipment has been held
during the past twelve months: 

	Name 	Address 	County 	State 

 

            6.       
Fixtures. Set forth below is a description of the real
property on which any of the Collateral consisting of fixtures are or are to be
located (including reference to a book and page number in the applicable
recording office and the name of the record owner of the real property) and
the name and address of each real estate recording office where a mortgage on
the real estate on which such fixtures are or are to be located would be
recorded: 

            7.       
Intellectual Property. Set forth below is a complete
list of all United States and foreign patents, copyrights, trademarks, trade
names and service marks registered or for which applications are pending in the
name of the Issuer: 

            8.       
Securities; Instruments. Set forth below is a complete
list of all stocks, bonds, debentures, notes and other securities and investment
property owned by the Issuer (provide name of Issuer, a description of
security and value): 

            9.       
Bank Accounts. Set forth below is a complete list of
all bank accounts (including securities and commodities accounts) maintained by
the Issuer:

	Depositary Bank 	Bank Address 	Type of Account 	Account No. 

 

            10.    
 Commercial Tort Claims. Set forth below is a
brief written description of each commercial tort claim which the Issuer holds:

[Remainder of page intentionally left blank.]

            IN
WITNESS WHEREOF, the undersigned has signed this Certificate as of the date
first set forth above. 

	 	 
	 	Name: 
	 	Title: 

Schedule 1 

MATERIAL PROJECT DOCUMENTS 

            Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Agreement.

            Engineering,
Procurement and Construction Contract, dated August 27, 2010, between Issuer and
SAIC Constructors, LLC, an Oklahoma limited liability company, formerly known as
Benham Constructors, LLC (the “Construction Lender”), and the following related
Change Orders: Change Order No. 001 dated November 12, 2010 regarding builders
risk insurance premium. 

                          
Change Order No. 002 dated November 12, 2010 regarding technical assistances and
consulting services. 

                          
Change Order No. 003 dated November 18, 2010 regarding early site mobilization
to expedite preliminary site work and installation of new make up water line.

                          
Change Order No. 004 dated December 1, 2010 regarding cooling water pumps,
condenser tubes, cooling tower motors and related equipment. 

                          
Change Order No. 005 dated December 29, 2010 regarding NV Energy
interconnection. 

                          
Change Order No. 006 dated January 14, 2011 regarding enhanced machinery
condition monitoring, control infrastructure upgrades, production well VFDs and
other equipment. 

                          
Change Order No. 007 dated March 11, 2011 regarding scheduling and guaranteed
substantial completion. 

                         
Change Order No. 008 dated May 23, 2011 regarding additional work and
taxes. 

                          
Change Order No. 009 dated June 2, 2011 regarding changes to equipment and
remodel of control room. 

                          
Change Order No. 010 dated July 11, 2011 regarding equipment purchases and
additional labor. 

                          
Change Order No. 011 dated September 1, 2011 regarding repairs to fire water
system, inspections to pipeline and additional work. 

                          
Change Order No. 012 dated September 16, 2011 regarding additional work to
chemical treatment equipment, building permits, and other items. 

                          
Change Order No. 013 dated September 23, 2011 regarding spare parts for power
plant. 

                          
Change Order No. 014 dated October 27, 2011 regarding increase to
interconnection task and chemicals for startup. 

                          
Change Order No. 015 dated November 17, 2011 regarding miscellaneous
out-of-scope costs. 

                          
Change Order No. 016 dated January 27, 2012 regarding credit for E-monitor and
miscellaneous costs. 

                          
Change Order No. 017 dated January 27, 2012 regarding increased project
management and management agreement costs. 

                          
Change Order No. 018 dated May 22, 2012 regarding the adoption of final
performance test procedures. 

                          
Change Order No. 019 dated October 16, 2012 regarding installation of operator
access and safety equipment. 

            Management
Services Agreement dated as of September 30, 2010 between the Issuer and the
Operator. 

            Amended
and Restated Long-Term Portfolio Energy Credit and Renewable Power Purchase
Agreement between Issuer and Sierra Pacific Power Company, dated May 31, 2011
(subject to approval by the Public Utilities Commission of Nevada; upon approval
by PUCN, the 1987 PPA will be terminated). 

            Long
Term Agreement for Purchase and Sale of Electricity dated December 31, 1986
between Sierra Pacific Power Company and Issuer, as successor in interest to
Michael D. Steward, dba Empire Farms, as amended by the Amendment to Long Term
Agreement for Purchase and Sale of Electricity executed as of December 28, 1987.

            Small
Generator Interconnection Agreement (Service Agreement No. #10-01277), dated as
of December 28, 2010 between Sierra Pacific Power Company d/b/a NV Energy and
Issuer. 

            Office
and Land Lease Agreement dated as of August 27, 2010 between USG Idaho, as
lessor, and the Issuer, as lessee, as amended in conjunction with the
transactions described in the Agreement. 

            Extended
Warranty and Design Agreement – San Emidio Project dated as of December 10, 2012
between Atlas Copco Mafi-Trench Company LLC, a Delaware limited liability
company, and Turbine Air Systems, Ltd., a Texas limited partnership, as
subsequently assigned by Turbine Air Systems, Ltd. to the EPC Contractor and by
the EPC Contractor to the Issuer pursuant to that certain Assignment of Warranty
and Consent dated September 16, 2013. 

            The
Recapture Indemnity Agreement dated as of the date of the Agreement among the
Sponsor, the Issuer and the Collateral Agent. 

            The
Geothermal Lease dated as of October 14, 1987 between The Kosmos Company, as
lessor, and Michael B. Stewart, as lessee, recorded October 16, 1987 in Book
2633, Page 282, as Document No. 1200497 of Official Records, as assigned to
Empire Farms, a Nevada Partnership, by that certain Assignment of Lease dated
September 18, 1995 and recorded October 13, 1995 as Document No. 1933483 of
Official Records, and as further assigned to Empire Energy, LLC, a Nevada
limited liability company, by that certain Assignment and Assumption Agreement
dated November 24, 1999, as evidenced by that certain Memorandum of Assignment
recorded May 11, 2000 as Document No. 2446152 of Official Records, and as
further assigned to Empire Geothermal Power, LLC by that certain Assignment of
Geothermal Project Rights and Leasehold Estates dated August 31, 2003, and
recorded on October 3, 2003 as Document No. 2934363 of Official Records, and as
further assigned to Issuer by that certain Assignment and Acceptance of
Assignment of Kosmos Geothermal Lease dated April 2008 and recorded on April 30,
2008 as Document No. 3645581 of Official Records, as amended by that certain
First Amendment to Geothermal Lease dated March 15, 2008 for reference purposes
and that certain Second Amendment to Geothermal Lease dated as of May 5, 2007
for reference purposes. 

            The
leases for geothermal resources issued by the United States Bureau of Land
Management on land located in Washoe County, Nevada with serial numbers
NVN-42707, NVN-63004, NVN-63006, NVN-63007, NVN-75555, NVN-75557 and NVN-75558.

            The
power plant lease and site license issued by the United States Bureau of Land
Management on land located in Washoe County, Nevada with serial number
NVN-47169. 

            The
right-of-way grants / temporary use permits granted by the United States Bureau
of Land Management with serial numbers NVN-47395, NVN-49240, NVN-57441,
NVN-43284 and NVN-57909. 

Exhibit S-6 

Form of Recapture Indemnity Agreement

 

 

Exhibit S-6 - 1 

Execution Version 

INDEMNITY AGREEMENT 

            This
INDEMNITY AGREEMENT, dated as of September 26, 2013 (this “Agreement”),
is made and entered into by U.S. GEOTHERMAL INC., a Delaware corporation
(“USG Delaware”), and U.S. GEOTHERMAL INC., an Idaho corporation
(“USG Idaho” and, together with USG Delaware, each a “Sponsor” and
collectively, the “Sponsors”), in favor of USG NEVADA LLC, a Delaware
limited liability company (the “Issuer”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent for the Secured Parties (as defined in the Note
Agreement referred to below) (together with its successors and permitted assigns
in such capacity, the “Collateral Agent”, and together with the Issuer
and the Secured Parties, the “Beneficiaries”). 

PRELIMINARY STATEMENTS 

            The
Issuer has authorized the issue and sale of its 6.75% Senior Secured Notes due
December 31, 2037 (the “Notes”), subject to and in accordance with the
Note Purchase Agreement, dated as of the date hereof, among the Issuer and the
holders of the Notes party thereto from time to time (as amended, modified or
supplemented from time to time, the “Note Agreement”).

            It
is a condition precedent to the obligations of the holders under the Note
Agreement that the parties enter into this Agreement. 

            In
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each
Sponsor hereby agrees with the Beneficiaries, as follows: 

AGREEMENT 

            SECTION
1. Definitions. Capitalized terms not otherwise defined in this
Agreement have the meanings given to them in the Note Agreement. As used in this
Agreement, the following terms shall have the following meanings: 

           
“Indemnified Person” has the meaning given in Section 2
hereof. 

           
“Losses” has the meaning given in Section 2 hereof. 

            “Recapture
Liability” means any loss or liability of the Issuer resulting, directly or
indirectly, from all or any portion of the Cash Grant being required to be
repaid to the U.S. Treasury Department or any other Governmental Authority,
including any interest and penalties related thereto. The term “Recapture
Liabilities” has a correlative meaning. 

            SECTION
2. Recapture Indemnity. (a) Each Sponsor absolutely,
irrevocably and unconditionally agrees to jointly and severally indemnify and
hold harmless the Beneficiaries, their Affiliates and their officers, directors,
employees, agents and controlling persons (each, an
“Indemnified Person”) from and against any and all (i) Recapture
Liabilities and (ii) demands, claims, suits, actions, causes of action,
judgments, fines, penalties, assessments, taxes, out of pocket losses, damages, liabilities, settlement amounts, out of
pocket costs and expenses, including without limitation attorneys’ fees and
expenses incurred by any Beneficiary in the enforcement and/or preservation of
any rights under this Agreement (collectively, “Losses”). 

                   (b)
Promptly after receipt by any Indemnified Person of notice of any claim,
liability or the commencement of any action in respect of Losses under this
Section 2, such Indemnified Person shall notify Sponsors in writing of
the claim, liability or the commencement of such action; provided,
however, that the failure by the Indemnified Person to so notify Sponsors
shall not relieve either Sponsor from any liability which it may have under this
Section 2. Sponsors shall reimburse each Indemnified Person for any and
all Losses promptly and in any event no later than ten (10) Business Days after
receiving demand therefor. Each Indemnified Party shall be entitled to make
demand upon Sponsors at any time upon the incurrence of any Loss. The Issuer
hereby directs Sponsors to make all payments to be made by Sponsors under this
Agreement to the Issuer directly to the account specified in Exhibit A
attached hereto or as otherwise directed by the Collateral Agent. 

                   (c)
The obligations of each Sponsor under this Section 2 are absolute and
unconditional, irrespective of the value, genuineness, validity or
enforceability of any Financing Document or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of, or security for, any of the Obligations, and, to the fullest
extent permitted by law, irrespective of any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of their
undertakings hereunder, it being the intent of this Section 2 that the
obligations of each Sponsor hereunder shall be absolute and unconditional, under
any and all circumstances. Without limiting the generality of the foregoing, it
is agreed that the occurrence of one or more of the following shall not alter or
impair the liability of either Sponsor hereunder which shall remain absolute and
unconditional as described above: 

           
(i)        at any
time or from time to time, without notice to either Sponsor, the time for any
performance of, or compliance with, any of the Obligations or any of the
obligations of any Issuer Party under any Financing Document shall be extended,
or such performance or compliance shall be waived; 

           
(ii)        any failure or
omission to assert or enforce or agreement or election not to assert or enforce,
or the stay or enjoining, by order of court, by operation of law or otherwise,
of the exercise or enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Financing Documents, at law, in equity or
otherwise) with respect to the Obligations or any agreement relating thereto, or
with respect to any other guaranty of or security for the payment of the
Obligations; 

           
(iii)        any of the acts
mentioned in any of the provisions of any Financing Document or any other
agreement or instrument referred to herein or therein shall be done or omitted;

           
(iv)        any rescission,
waiver, amendment or modification of, or any consent to departure from, any of
the terms or provisions (including provisions relating to events of default) hereof,
any of the other Financing Documents or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the Obligations, in
each case whether or not in accordance with the terms hereof or such Financing
Document or any agreement relating to such other guaranty or security; 

2 

           
(v)        the maturity of
any of the Obligations shall be accelerated, or any of the Obligations shall be
modified, waived, supplemented or amended in any respect, or shall at any time
be found to be illegal, invalid or unenforceable in any respect, or any right
under any Financing Document or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; 

           
(vi)        any lien or
security interest granted to, or in favor of, the Collateral Agent or any other
Secured Party or any party to a Financing Document as security for any of the
Obligations (including without limitation Liens intended to be created by the
Security Documents) shall fail to be perfected or shall be released; 

           
(vii)        the performance
or failure to perform by either Sponsor of its obligations hereunder or by the
Issuer of its obligations under any other agreement, or by the condition
(financial, legal or otherwise), affairs, status, nature or actions of the
Issuer; 

           
(viii)        any change in
ownership of the Issuer; 

           
(ix)     the voluntary or
involuntary liquidation, dissolution, sale of assets, marshaling of assets and
liabilities, receivership, conservatorship, custodianship, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, readjustment or similar proceeding affecting any Person; 

           
(x)       any
defenses, set offs or counterclaims which either Sponsor or the Issuer may
allege or assert against any Beneficiary in respect of the Obligations,
including failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury; or 

           
(xi)      any other act
or thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of either Sponsor as an obligor
under this Agreement. 

                   (d)
Each Sponsor hereby expressly waives, for the benefit of the Beneficiaries,
diligence, presentment, demand of payment, protest and all notices whatsoever
(other than any notices required under this Agreement, but subject to the
provisions hereof) and any requirement that the Collateral Agent or any other
Secured Party or any party to a Financing Document exhaust any right, power or
remedy or proceed against the Issuer under any Financing Document or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Obligations, or
pursue any other remedy in the power of the Collateral Agent or such other Secured
Party whatsoever. Each Sponsor hereby further expressly waives, for the benefit
of the Beneficiaries, (i) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of the Issuer including any
defense based on or arising out of the lack of validity or the unenforceability
of the Obligations or any agreement or instrument relating thereto or by reason
of the cessation of the liability of the Issuer from any cause other than
payment in full of the Obligations, (ii) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal, (iii) any defense based upon any Beneficiary's errors or omissions in
the administration of the Obligations, except behavior which amounts to gross
negligence or willful misconduct (iv) (A) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms hereof
and any legal or equitable discharge of either Sponsor's obligations hereunder,
(B) any rights to set offs, recoupments and counterclaims, and (C) promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto, (v)
notices, demands, presentments protests, notices of protest, notices of dishonor
and notices of any action or inaction, including acceptance hereof, notices of
default hereunder, under the other Financing Documents or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Obligations or any agreement related thereto, notices of any extension of
credit to the Issuer and any right to consent to any thereof, and (vi) any
defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms hereof.

3 

                   (e)
The obligations of each Sponsor under this Section 2 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of either Sponsor under this Agreement is rescinded or must be
otherwise restored by any Beneficiary to such Sponsor as a result of any
proceedings in bankruptcy, and each Sponsor agrees that it will indemnify each
Beneficiary on demand for all reasonable costs and expenses (including
reasonable and documented fees and expenses of counsel) incurred by such
Beneficiary in connection with such rescission or restoration. This Section
2(e) shall survive the termination of this Agreement.

                   (f)
This Agreement is a primary obligation of each Sponsor and not merely a contract
for surety. 

            SECTION
3. Representations and Warranties. Each Sponsor represents and
warrants to the Beneficiaries that, as of the date of this Agreement: 

                  
(a) Such Sponsor is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation. Such
Sponsor is not subject to any current orders for winding up, or appointment of a
receiver or liquidator or to any notice of any proposed deregistration. 

                   (b)
The execution, delivery and performance by such Sponsor of this Agreement are
within such Sponsor’s corporate powers, have been duly authorized by all
necessary corporate action and do not conflict with or result in a breach of its
organizational documents, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or any material agreement or
instrument to which such Sponsor is a party or by which such Sponsor is bound or
to which such Sponsor is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any of such Sponsor’s revenues or assets
pursuant to the terms of any such agreement or instrument. 

4 

                   (c)
No consent, action of authorization or approval or registration, declaration or
filing with, any governmental authority or regulatory body or any other third
party is required for the due execution, delivery and performance by such
Sponsor of this Agreement. 

                   (d)
This Agreement has been duly executed and delivered by such Sponsor. This
Agreement is a legal, valid and binding obligation of such Sponsor, enforceable
against such Sponsor in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency or other laws affecting
creditors’ rights generally. 

                   (e)
There is no action, suit or proceeding now pending before any court,
administrative body or arbitral tribunal, or, to the best of such Sponsor’s
knowledge, threatened against such Sponsor, which could reasonably be expected
to have an adverse effect on such Sponsor’s ability to perform its obligations
under this Agreement. 

                  
(f) The obligations of such Sponsor under this Agreement rank
pari passu with all other unsecured unsubordinated indebtedness of
such Sponsor. 

            SECTION
4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED
STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION
5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 

            SECTION
5. Refunds. If either Sponsor pays any Losses hereunder and the U.S.
Treasury Department refunds all or a portion of the Losses, the amount refunded
shall be paid to such Sponsor together with any interest thereon paid by the
U.S. Treasury Department. 

           
SECTION 6. Consent to Jurisdiction; Waiver of Immunity; Joinder. 

                   (a)
Each party hereto irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State or federal
court sitting in the Borough of Manhattan, The City of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such court. Each of the parties agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing herein shall affect the right of a party to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the other party in any other jurisdiction. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to the laying of venue of
any action or proceeding arising out of this Agreement in any New York State or federal court sitting
in the Borough of Manhattan, The City of New York, and any claim that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum. 

5 

                   (b)
To the extent that a party hereto has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, such party hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement. 

            SECTION
7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ANY RIGHT IT MAY NOW OR
HEREAFTER HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED HEREIN, OR ARISING OUT
OF, UNDER, OR IN RESPECT OF THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE BENEFICIARIES OR
EITHER SPONSOR. 

            SECTION
8. Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each party
hereto. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. 

            SECTION
9. Addresses for Notices. All notices, requests and other
communications provided for hereunder shall be in writing (including facsimile)
and will be deemed to have been duly given if delivered personally, by facsimile
transmission or as a .pdf attachment to an email with confirmation of receipt,
by overnight courier service or by certified mail (postage prepaid) to each of
the parties at the “Address for Notices” specified below each party’s name on
the signature pages hereof. 

            SECTION
10. No Waiver; Remedies. No failure on the part of a party to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by a party of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law. 

            SECTION
11. Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. 

            SECTION
12. Counterparts. This Agreement may be executed in one or more
counterparts. Delivery of an executed signature page of this Agreement by
facsimile or electronic transmission shall be effective as delivery of a
manually executed counterpart thereof. 

            SECTION
13. Entire Agreement. This Agreement and any agreement, document or
instrument referred to herein integrate all the terms and conditions mentioned
herein or incidental hereto and supersede all oral negotiations and prior
writings in respect of the subject matter hereof. 

6 

           
SECTION 14. Benefit; Successors and Permitted Assigns.

                   (a)
This Agreement is intended solely for the benefit of and is enforceable by the
Beneficiaries and their respective successors or permitted assigns and is not
for the benefit of or enforceable by any other Person. This Agreement shall be
binding upon each Sponsor and its successors and permitted assigns and shall
inure to the benefit of the successors and permitted assigns of the
Beneficiaries. 

                   (b)
This Agreement and all obligations of each Sponsor hereunder to the
Beneficiaries shall be assignable by such Sponsor only with the prior written
consent of each Beneficiary. 

[Signature pages follow] 

7

       
    IN WITNESS WHEREOF, each of the parties, intending to be
legally bound, has caused this Agreement to be signed on the date first above
written. 

	 	U.S. GEOTHERMAL INC., 
	 	a Delaware corporation 
	 	  
	 	  
	 	By: __________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	Address for Notices: 
	 	U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Telephone: 208-424-1027 
	 	Facsimile: 208-424-1030 
	 	Attention: Dennis J. Gilles 
	 	  
	 	  
	 	U.S. GEOTHERMAL INC., 
	 	an Idaho corporation 
	 	  
	 	  
	 	By: __________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	  
	 	Address for Notices: 
	 	U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Telephone: 208-424-1027 
	 	Facsimile: 208-424-1030 
	 	Attention: Douglas J. Glaspey

	 	USG NEVADA LLC 
	 	  
	 	  
	 	By: __________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	  
	 	Address for notices: 
	 	c/o U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Telephone: 208-424-1027 
	 	Facsimile: 208-424-1030 
	 	Attention: Dennis J. Gilles

	 	DEUTSCHE BANK TRUST COMPANY 
	 	AMERICAS, solely in its capacity as
      Collateral 
	 	Agent and not individually 
	 	  
	 	By: Deutsche Bank National Trust Company 
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	By__________________________________ 
	 	Name: 
	 	Title: 
	 	  
	 	Address for notices: 
	 	Deutsche Bank Trust Company Americas 
	 	60 Wall Street, 27th Floor 
	 	MS: NYC 60-2710 
	 	New York, New York 10005 
	 	Attn: Project Finance Team Manager/USG Nevada
    
	 	Fax: (732) 578-4636 

Exhibit A 

Account Information 

Deutsche Bank Trust Company Americas 
New York, New York
10005
Swift: BKTRUS33
ABA: 021001033
Account #: 01419647 
For the
Account of: NYLTD Funds Control New York
Reference: USG Nevada Revenue A/C,
Attn: N. Luke/L. Jiang 
FFC. PORT: Account No. S79352.1

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