Document:

cala-ex1019_75.htm

Exhibit 10.19 

 

 

 

April 21, 2016

Keith Orford

c/o Calithera Biosciences, Inc.

343 Oyster Point Boulevard, Suite 200

South San Francisco, CA 94080

 

Re: Amended and Restated Offer Letter 

Dear Keith:

On behalf of Calithera Biosciences, Inc. (“Calithera Biosciences” or the “Company”), I am pleased to offer you continuing employment with the Company on the terms set forth below.   This offer letter will supersede and replace in full the prior offer letter entered into by and between you and the Company dated January 14, 2015 (the “Prior Offer Letter”) (excluding that certain Proprietary Information and Inventions Agreement dated January 30, 2015 (the “Proprietary Information Agreement”), which shall remain in full force and effect).

1.Position and Employment Start Date.  Effective as of May 2, 2016, your position with the Company will be as Senior Vice President, Clinical Development, reporting to Susan Molineaux, Ph.D., CEO.

During the term of your employment with the Company, you will devote your best efforts and substantially all of your business time and attention to the business of the Company, except for approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies.

Throughout your employment with the Company, you may engage in civic and not-for-profit activities so long as such activities do not interfere with the performance of your duties hereunder or present a conflict of interest with the Company.  Subject to the restrictions set forth herein and with the prior written consent of the Company’s Board of Directors (the “Board”), you may serve as a director of other corporations and may devote a reasonable amount of your time to other types of business or public activities not expressly mentioned in this paragraph.  The Board may rescind its consent to your service as a director of all other corporations or participation in other business or public activities, if the Board, in its sole discretion, determines that such activities compromise or threaten 

343 Oyster Point Boulevard, Suite 200

South San Francisco, CA 94080

Main: 650 870-1000

Fax:  650 588-5272

www.calithera.com

129062167 v1 

 

 

 

 

to compromise the Company’s business interests or conflict with your duties to the Company. 

2.Compensation.  

(a)Base Salary.  In your position, you will be paid at the rate of $14,166.67 on a semi-monthly basis (or $340,000.00 on an annualized basis), less payroll deductions and all required withholdings.  You also will be entitled to participate in the employee benefit plans (including the employee stock purchase plan) currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, subject to the terms and conditions of such plans.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

(b)Annual Performance Bonus.  Effective as of May 2, 2016, you will be eligible to earn an annual performance bonus (“Management Bonus”), up to a target bonus amount of thirty five percent (35%) of your base salary in effect during the bonus period, contingent upon the achievement of corporate and individual milestones to be established by the Company.  You understand and agree that the determinations of milestone criteria (both the criteria and your performance of such criteria) and the amount, if any, of your Management Bonus shall be within the sole and absolute discretion of the Company.  Any Management Bonus earned shall be paid on or prior to March 15 of the year following the year in which it became earned and vested.  Except as provided in Section 7 below, no Management Bonus will be earned or payable in the event your employment terminates, for any reason, before the end of the applicable performance period.

3.Stock Options.  Subject to approval by the Board (or the Compensation Committee of the Board), in connection with your new position you will receive a stock option to purchase 5,000 shares of the common stock of Calithera Biosciences at a per-share price equal to the fair market value of such stock on the date of grant (the “Option”).  The Option will be an incentive stock option to the maximum extent permitted under the applicable tax rules and will subject to a four-year vesting schedule and other terms and conditions set forth in the Calithera Biosciences 2014 Equity Incentive Plan, and the applicable stock option agreement and grant notice to be approved by the Board (or the Compensation Committee of the Board) and executed by you and Calithera Biosciences.  In addition, in future years you will be eligible to participate in the annual equity grant program to be established by the Board (or the Compensation Committee of the Board).

4.Vacation.  You will be entitled to paid vacation in accordance with the Company’s vacation policy, with the timing and duration of specific vacations mutually and reasonably agreed to by the parties hereto.  Upon your termination of 

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employment, you will be entitled to receive your accrued but unpaid vacation through the date of your termination. 

5.Expenses.  The Company will reimburse you for reasonable travel, entertainment or other expenses incurred by you in the furtherance of or in connection with the performance of your duties hereunder, in accordance with the Company’s expense reimbursement policy to be established and as in effect from time to time.

6.Travel Expenses.  You are expected to work at the Company’s offices in South San Francisco, CA at least four (4) days every other week, with the remainder of your work being done out of your home office in Pennsylvania.  The Company will reimburse you for reasonable out-of-pocket expenses incurred by you in connection with your travel to South San Francisco, in accordance with the Company’s travel policy.  Your right to reimbursement is subject to timely submission of appropriate documentary evidence of expenses incurred as set forth below.  In addition, if any travel expenses paid to you are determined to be taxable as ordinary income to you, the Company will pay an additional payment directly to the applicable taxing authorities (the “Gross-Up Payment”) at the time of reimbursement in an amount equal to the minimum statutory withholding amounts of the ordinary state and federal income and employment taxes (the “Taxes”) due by you, if any, on the travel payments at that time and on the Taxes paid for you.  For the avoidance of doubt, this Gross-Up Payment will be calculated and paid at the applicable minimum statutory tax withholding rates.

Any reimbursements or expenses payable under this letter agreement will be paid to you within 30 days after the date you submit receipts for the expenses, provided you submit those receipts within 45 days after you incur the expense. For the avoidance of doubt, if any reimbursements payable to you are subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) to be eligible to obtain reimbursement for such expenses you must submit expense reports within 45 days after the expense is incurred, (b) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (c) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (d) the right to reimbursement under this letter agreement will not be subject to liquidation or exchange for another benefit.

7.Employment Termination.  In the event that your employment is terminated by the Company without Cause (as defined below) or you resign your employment for Good Reason (as defined below), and provided such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a “Separation from Service”), and further provided that you remain in compliance with this Agreement and provide the Company with an 

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executed and effective Separation Agreement (as defined below), the Company shall: 

 

	
 
	
(a)
	
Pay you cash severance in the form of continuing payments, subject to payroll withholdings and applicable deductions and payable in accordance with the Company’s regular payroll schedule, of your base salary in effect as of the Separation from Service (the “Severance Payments”) for a period of six (6) months following your Separation from Service date; provided, however, that no payments will be made prior to the 60th day following your Separation from Service date, and on that 60th date, the Company will pay you a lump sum payment equal to the payments that would have been paid earlier but for the delay due to this paragraph, with the balance paid thereafter as originally scheduled;

	
 
	
(b)
	
Pay you cash severance in an amount equal to a prorated amount of your target Management Bonus for the year in which your employment terminates, calculated based on the amount of time during such year that you were employed by the Company (the “Bonus Severance Payment”), and paid in a lump sum on the sixtieth (60th) day following your Separation from Service, provided the Separation Agreement (as defined below) has become effective; and

	
 
	
(c)
	
Continue to pay the cost of your health care coverage, in effect at the time of your employment termination, for a maximum of six (6) months, either under the Company’s regular health plan (if permitted), or by paying your COBRA premiums (the “COBRA Severance”).  The Company’s obligation to pay the COBRA Severance on your behalf will cease if you obtain health care coverage from another source, unless otherwise prohibited by applicable law (e.g., a new employer, spouse’s benefit plan).  You must notify the Company within two (2) weeks if you obtain coverage from a new source.  This payment of COBRA Severance by the Company would not expand or extend the maximum period of COBRA coverage to which you would otherwise be entitled under applicable law.  Notwithstanding the above, if the Company determines in its sole discretion that it cannot provide the foregoing COBRA Severance without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to you a taxable monthly payment in an amount equal to the monthly COBRA premium that you would be required to pay to continue your group health coverage in effect on the date of your termination (which amount shall be based on the premium for the first month of COBRA coverage), which payments shall be made on the last day of each month regardless of whether you elect COBRA continuation coverage and shall end on the earlier of (x) the date upon which you obtain other employment or (y) 

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the last day of the sixth calendar month following your Separation from Service date. 

In the event that the Company terminates your employment with the Company without Cause (as defined below), or you resign your employment for Good Reason (as defined below), in either case in connection with or within twelve (12) months following the closing of a Change in Control (as defined below), then in addition to the Severance Payments and the COBRA Severance, the vesting of the Option (and any other equity awards granted to you) shall be accelerated such that 100% of the shares subject to the Option (and any other equity awards granted to you) shall be deemed immediately vested and exercisable as of your last day of employment (the “Accelerated Vesting”).

In the event that your employment is terminated by the Company for Cause (as defined below), you resign your employment without Good Reason (as defined below) or your employment terminates upon your death or disability, then (i) you will no longer vest in the Options (and any other equity awards granted to you), (ii) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned), and (iii) you will not be entitled to any severance benefits, including (without limitation) the Severance Payments, Bonus Severance Payment, COBRA Severance, and Accelerated Vesting.

8.Conditions to Receipt of Severance.  The receipt of the Severance Payments, Bonus Severance Payment, COBRA Severance and/or Accelerated Vesting will be subject to your signing and not revoking a separation agreement and release of claims in a form reasonably satisfactory to the Company (the “Separation Agreement”).  No Severance Payments, Bonus Severance Payment, COBRA Severance or Accelerated Vesting will be paid or provided until the Separation Agreement becomes effective.  You shall also resign from all positions and terminate any relationships as an employee, advisor, officer or director with the Company and any of its affiliates, each effective on the date of termination.

9.Definitions.

(a)Cause.  For purposes of this Agreement, “Cause” is defined as (i) your conviction of or plea of nolo contendere to any felony or any crime involving moral turpitude or dishonesty; (ii) your gross misconduct in the performance of your duties which is injurious to the Company; (iii) failure by you to substantially perform your material duties other than a failure resulting from your complete or partial incapacity due to physical or mental illness or impairment; (iv) your material breach of any agreement between you and the Company concerning the terms and conditions of your employment with the Company; (v) your willful violation of a material Company employment policy (including, without limitation, any insider trading policy); or (vi) your willful commission of an act of fraud, breach of trust, or dishonesty including, without limitation, embezzlement, that results in material 

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damage or harm to the business, financial condition, reputation or assets of the Company or any of its subsidiaries.  Grounds for Cause pursuant to clause (iii) of this section shall not be deemed to have occurred until Company has first provided you with written notice of the acts or omissions constituting the grounds for “Cause” under clause (iii) of this section and a cure period of thirty (30) days following the date of such notice. 

(b)Change in Control.  For purposes of this Agreement, “Change in Control” means the occurrence of any of the following events:

(i)Change in Ownership of the Company.  A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or

(ii)Change in Ownership of a Substantial Portion of the Company’s Assets.  A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.  For purposes of this section, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For these purposes, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction shall not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation; (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction; or (iii) it does not constitute a change of control event under Treasury Regulation 1.409A-3(i)(5)(v) or (vii).

(c)Good Reason.  For purposes of this Agreement, “Good Reason” means your resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of 

129062167 v1 

 

 

 

 

the following, without your consent: (i) the assignment to you of any duties, or the reduction of your duties, either of which results in a material diminution of your authority, duties, or responsibilities with the Company in effect immediately prior to such assignment or reduction, or the removal of you from such position and responsibilities; (ii) a material reduction of your base salary except in connection with a general reduction in salary applicable to all of the Company’s executive officers other than in connection with or following a Change in Control; and (iii) any material breach by the Company of any material provision of this Agreement.  You will not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days of the initial existence of the grounds for “Good Reason” and a cure period of thirty (30) days following the date of such notice. 

10.Section 409A.  It is intended that the Severance Payments, Bonus Severance Payment, COBRA Severance and Accelerated Vesting payable under this letter agreement satisfy, to the greatest extent possible, the exemptions from the application of Internal Revenue Code Section 409A provided under Treasury Regulations 1.409A 1(b) (4), 1.409A 1(b)(5) and 1.409A 1(b)(9), and this letter agreement will be construed to the greatest extent possible as consistent with those provisions.  For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A 2(b)(2)(iii)), your right to receive installment payments under this agreement shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.  Notwithstanding any provision to the contrary in this agreement, if you are deemed by the Company at the time of your Separation from Service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), to the extent delayed commencement of any portion of the severance benefits to which you are entitled under this agreement is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i), such portion of your benefits shall not be provided to you prior to the earlier of (i) the expiration of the six-month period measured from the date of your Separation from Service with the Company or (ii) the date of your death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to you, and any remaining payments due under this agreement shall be paid as otherwise provided herein.

11.Parachute Payments.  In the event that the benefits provided for in this letter agreement or otherwise payable to you (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this section, would be subject to the excise tax imposed by Section 4999 of the Code, then your benefits under this letter agreement or otherwise shall be payable either (a) in full, or (b) as to such lesser amount which would result in no portion of such benefits being subject to an excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local 

129062167 v1 

 

 

 

 

income taxes and the excise tax imposed by Section 4999, results in your receipt on an after-tax basis, of the greatest amount of benefits under this agreement or otherwise, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  Unless you and the Company otherwise agree in writing, any determination required under this section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon you and the Company for all purposes.  For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  You and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this section as well as any costs incurred by you with the Accountants for tax planning under Sections 280G and 4999 of the Code. 

12.Dispute Resolution.  To ensure the timely and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, your employment, or the termination of your employment, including but not limited to statutory claims, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Francisco, California, conducted by JAMS, Inc. (“JAMS”) under the then applicable JAMS rules (which can be found at the following web address: http://www.jamsadr.com/rulesclauses, and which will be provided to you on request).  By agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  The Company acknowledges that you will have the right to be represented by legal counsel at any arbitration proceeding.  The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award.  The arbitrator shall be authorized to award any or all remedies that you or the Company would be entitled to seek in a court of law.  The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required of you if the dispute were decided in a court of law.  Nothing in this letter agreement is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

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13.Proprietary Information and Inventions Agreement, Employee Policies and At-Will Employment.  You acknowledge that you have executed, and will continue to abide by, the Proprietary Information Agreement.  In addition, you will continue to comply with Calithera Biosciences’ employee handbook and other policies, as adopted and amended from time to time, which are incorporated into these terms.  Finally, this is an “at-will” employment relationship, which means that either you or the Company may terminate the relationship at any time, with or without cause or advance notice.  This at-will relationship may not be changed except in a written agreement executed by an authorized officer of Calithera Biosciences. 

14.Acceptance of Terms of Employment.  The employment terms in this offer letter, together with your Proprietary Information Agreement, will constitute the complete, final, and exclusive embodiment of the entire agreement between you and Calithera Biosciences with respect to the terms and conditions of your continuing employment, and these terms supersede any other agreements or promises made to you by anyone, whether oral or written, prior to or contemporaneous with this offer letter, including the Prior Offer Letter.  Changes in your employment terms, other than those changes expressly reserved to the Company’s discretion in this letter, require a written modification signed by a duly authorized officer of the Company.  This letter agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns.  If any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law.  This letter agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles.  Any ambiguity in this letter agreement shall not be construed against either party as the drafter.  Any waiver of a breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder.  This letter agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile and electronic image copies of signatures shall be equivalent to original signatures.

Please sign and date this letter agreement if you wish to accept your continuing employment at Calithera Biosciences under the terms described above, and return one original to me by no later than April 27, 2016 (the second original is for your personal records).  

We look forward to continuing our productive and enjoyable work relationship as we build a company and business together.

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Sincerely,

  /s/ Susan Molineaux

Susan Molineaux
President and CEO

 

Accepted by:

  /s/ Keith Orford
Keith Orford

4/27/2016
Date

 

129062167 v1U.S. Geothermal Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

	Execution
      Version 

IDAHO USG HOLDINGS, LLC 

$20,000,000 5.80% Senior Secured Notes due March 31, 2023

______________

NOTE PURCHASE AGREEMENT 

______________ 

Dated May 19, 2016 

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 	2

	 	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 	3

	 	Section 4.12 	Depositary Agreement,
      Security Agreement, Etc 	4 
	 	Section 4.13
      	Reserve
      Accounts 	5

	 	Section 4.14 	Title Policy 	5 
	 	Section 4.15
      	UCC Searches
      and Litigation Searches 	6

	 	Section 4.16 	Insurance 	6 
	 	Section 4.17
      	Financial
      Statements; Pro Forma Balance Sheet 	6

	 	Section 4.18 	Required Approvals 	6 
	 	Section 4.19
      	No Material
      Adverse Effect 	6

	 	Section 4.20 	IE Report 	6 
	 	Section 4.21
      	Geothermal
      Resource Assessment Report 	6

	 	Section 4.22 	Base Case Projections and
      Budget 	7 
	 	Section 4.23
      	Environmental Report 	7

	SECTION 5. 	 REPRESENTATIONS AND WARRANTIES OF THE ISSUER 	7 
	 	Section 5.1
      	Organization; Power and Authority 	7

	 	Section 5.2 	Authorization, Etc 	7 

-i- 

TABLE OF CONTENTS 
(continued) 

	 	Section 5.3 	Disclosure 	7
      
	 	Section 5.4
      	Base Case
      Projections 	8

		Section 5.5
      	Organization
      and Ownership of Interests in Issuer and Issuer Subsidiaries; Affiliates;
      Officers; Issuer Subsidiaries 	8

	 	Section 5.6
      	Financial
      Statements; Material Liabilities 	8

	 	Section 5.7
      	Compliance
      with Laws, Other Instruments, Etc 	9

	 	Section 5.8
      	Governmental
      Authorizations, Etc 	9

	 	Section 5.9
      	Litigation;
      Observance of Agreements, Statutes and Orders 	9

	 	Section 5.10
      	Taxes
	9

	 	Section 5.11
      	Title to
      Property; Leases; Real Estate; Insurance 	10
  
		Section 5.12
      	Material
      Project Documents; Commercial Operation Date; Financing Documents 	10
  
	 	Section 5.13
      	Compliance
      with ERISA 	11
  
	 	Section 5.14
      	Private
      Offering by the Issuer 	12
  
	 	Section 5.15
      	Use of
      Proceeds; Margin Regulations 	12
  
	 	Section 5.16
      	Foreign
      Assets Control Regulations, Etc 	13
  
	 	Section 5.17
      	Status under
      Certain Statutes 	14
  
	 	Section 5.18
      	Environmental Matters 	16
  
	 	Section 5.19
      	Collateral
      	16
  
	 	Section 5.20
      	Labor
      Relations; Force Majeure Events 	16
  
	 	Section 5.21
      	Indebtedness
      	17
  
	 	Section 5.22
      	Capitalization 	17
  
	 	Section 5.23
      	Budget
    	17
  
	 	Section 5.24
      	Firm
      Transmission 	17
  
	 SECTION 6. 	 REPRESENTATIONS OF THE PURCHASERS 	17
  
	 	Section 6.1
      	Purchase for
      Investment 	17
  
	 	Section 6.2
      	Source of
      Funds 	17
  
	 SECTION 7. 	 INFORMATION 	19
  
	 	Section 7.1
      	Financial
      and Business Information 	19
  
	 	Section 7.2
      	Officer’s
      Certificate 	22
  
	 	Section 7.3
      	Visitation
      	23
  

-ii- 

TABLE OF CONTENTS 
(continued) 

	 	  	  	Page 
	 	  	  	  
	 	Section
      7.4 	Electronic
      Delivery 	23
      
	SECTION
      8. 	 PAYMENT
      AND PREPAYMENT OF THE NOTES 	24
      
	 	Section
      8.1 	Amortization;
      Maturity; Mandatory Prepayments 	24
      
	 	Section
      8.2 	Optional
      Prepayments with Make-Whole Amount 	25
      
	 	Section
      8.3 	Allocation
      of Partial Prepayments 	25
      
	 	Section
      8.4 	Maturity;
      Surrender, Etc 	25
      
	 	Section
      8.5 	Purchase
      of Notes 	25
      
	 	Section
      8.6 	Make-Whole
      Amount 	26
      
	SECTION
      9. 	 AFFIRMATIVE
      COVENANTS 	27
      
	 	Section
      9.1 	Compliance
      with Law 	27
      
	 	Section
      9.2 	Insurance
      	27
      
	 	Section
      9.3 	Title,
      Water Rights, Etc 	27
      
	 	Section
      9.4 	Payment
      of Taxes and Claims 	28
      
	 	Section
      9.5 	Existence,
      Etc 	28
      
	 	Section
      9.6 	Books
      and Records 	28
      
	 	Section
      9.7 	Collateral;
      Further Assurances 	28
      
		Section
      9.8 	Material
      Project Documents; Federal Financing Bank Loan Documents; LLC Agreements
      	28
      
	 	Section
      9.9 	Pledged
      Accounts 	29
      
	 	Section
      9.10 	Annual
      Servicing Fee 	29
      
	 	Section
      9.11 	Maintenance
      and Operation 	29
      
	 	Section
      9.12 	Resource
      Review; Budgets 	29
      
	 	Section
      9.13 	DSCR
      Notice on Payment Date 	31
      
	 	Section
      9.14 	Perfection
      Opinion 	31
      
	 	Section
      9.15 	Distributions
      	31
      
	 	Section
      9.16 	Use
      of Proceeds 	32
      
	 	Section
      9.17 	Membership
      Interests in Raft River Project Company 	32
      
		Section
      9.18 	No
      Dilution of Ownership Interest in USG Oregon Holdings and the Raft River
      Project Company 	32
      
	SECTION
      10. 	 NEGATIVE
      COVENANTS 	32
      
	 	Section
      10.1 	Transactions
      with Affiliates 	32
      

-iii- 

TABLE OF CONTENTS 
(continued) 

		Section
      10.2 	Merger,
      Consolidation 	32
      
		Section
      10.3 	Line
      of Business 	32
      
		Section
      10.4 	Terrorism
      Sanctions Regulations 	33
      
		Section
      10.5 	Liens
      	33
      
		Section
      10.6 	Indebtedness
      	33
      
		Section
      10.7 	Regulatory
      Standing 	33
      
		Section
      10.8 	Loans,
      Advances, Investments and Contingent Liabilities 	34
      
		Section
      10.9 	No
      Subsidiaries 	34
      
		Section
      10.10 	Restricted
      Payments 	34
      
		Section
      10.11 	Sale
      of Assets, Etc 	34
      
		Section
      10.12 	Equity
      Capital 	35
      
		Section
      10.13 	Amendments
      to Constitutive Documents 	35
      
		Section
      10.14 	No
      Employees; No ERISA Plans 	35
      
		Section
      10.15 	No
      Margin Stock 	35
      
		Section
      10.16 	Reporting
      Practices 	35
      
		Section
      10.17 	Material
      Project Documents; Federal Financing Bank Loan Documents; LLC Agreements
      	35
      
		Section
      10.18 	Accounts
      	35
      
		Section
      10.19 	Lease
      Obligations 	36
      
		Section
      10.20 	Material
      Contracts 	36
      
		Section
      10.21 	Raft
      River Project New Development 	36
      
		Section
      10.22 	No
      Voting as Member of USG Oregon Holdings or the Raft River Project Company
      	36
      
	SECTION
      11. 	 EVENTS
      OF DEFAULT 	36
      
	SECTION
      12. 	 REMEDIES
      ON DEFAULT, ETC 	41
      
		Section
      12.1 	Acceleration
      	41
      
		Section
      12.2 	Other
      Remedies 	42
      
		Section
      12.3 	Rescission
      	42
      
		Section
      12.4 	No
      Waivers or Election of Remedies, Expenses, Etc 	42
      
	SECTION
      13. 	 REGISTRATION;
      EXCHANGE; SUBSTITUTION OF NOTES 	43
      
		Section
      13.1 	Registration
      of Notes 	43
      

-iv- 

TABLE OF CONTENTS 
(continued) 

	  	  	  	Page 
	  	  	  	  
		Section
      13.2 	Transfer
      and Exchange of Notes 	43
      
		Section
      13.3 	Replacement
      of Notes 	43
      
	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 	44
      
	 	Section
      15.1 	Transaction
      Expenses 	44
      
	 	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 	46
      
		Section
      17.3 	Binding
      Effect, etc 	47
      
		Section
      17.4 	Notes
      Held by Issuer, etc 	47
      
	SECTION
      18. 	 NOTICES
      	47
      
	SECTION
      19. 	 REPRODUCTION
      OF DOCUMENTS 	48
      
	SECTION
      20. 	 CONFIDENTIAL
      INFORMATION 	48
      
	SECTION
      21. 	 SUBSTITUTION
      OF PURCHASER 	49
      
	SECTION
      22. 	 MISCELLANEOUS
      	49
      
		Section
      22.1 	Successors
      and Assigns 	49
      
		Section
      22.2 	Payments
      Due on Non-Business Days 	49
      
		Section
      22.3 	Accounting
      Terms 	50
      
		Section
      22.4 	Severability
      	50
      
		Section
      22.5 	Construction,
      etc 	50
      
		Section
      22.6 	Counterparts
      	50
      
		Section
      22.7 	Governing
      Law 	50
      
		Section
      22.8 	Jurisdiction
      and Process; Waiver of Jury Trial 	50
      
		Section
      22.9 	Transaction
      References 	51
      

-v- 

TABLE OF CONTENTS 

	 	  	Page 
	SCHEDULE A 	— 	INFORMATION RELATING TO
      PURCHASERS 
	SCHEDULE B 	— 	DEFINED TERMS 
	Schedule 
4.11(b)(ii) 	— 	Consents to be delivered at
      Closing 
	Schedule 
4.11(b)(iii) 	— 	Estoppels to be delivered at Closing 
	Schedule 4.22 	— 	Base Case Projections 
	Schedule 5.5 	— 	Ownership of the Issuer and Issuer
      Subsidiaries; Officers 
	Schedule 5.8 	— 	Required Approvals 
	Schedule 
5.12(a) 	— 	Material Project Documents 
	Schedule 
5.12(d) 	— 	Federal Financing Bank Loan
      Documents 
	Schedule 8.1 	— 	Amortization Schedule 
	Schedule 9.2 	— 	Insurance Requirements 
	 	  	  
	Exhibit 1 	— 	Form of 5.80% Senior Secured
      Note due March 31, 2023 
	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 USG Idaho Pledge
      Agreement 
	Exhibit S-4 	  	Form of Issuer Pledge Agreement 
	Exhibit S-5 	  	Form of Security Agreement
  

-vi- 

	Exhibit S-6 	 	Form of Recapture Indemnity Agreement
  

vii 

Idaho USG Holdings, LLC 
c/o U.S. Geothermal Inc.

390 E Parkcenter Boulevard, Suite 250 
Boise, Idaho 83706 

5.80% Senior Secured Notes due March 31, 2023 

May 19, 2016 

TO EACH OF THE PURCHASERS LISTED IN 
SCHEDULE
A HERETO: 

Ladies and Gentlemen: 

Idaho USG Holdings, 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 $20,000,000
aggregate principal amount of its 5.80% Senior Secured Notes due March 31, 2023
(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. References to a “Section” are, unless otherwise
specified, to a Section of 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 Morgan, Lewis & Bockius LLP, 399
Park Avenue, New York, NY 10022, at 11:00 a.m., New York time, at a closing (the
“Closing”) on May 19, 2016 or on such other Business Day thereafter on or
prior to May 31, 2016 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 $500,000 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 to an account of the Issuer designated in writing by the Issuer prior to
Closing. 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.

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 the Issuer hereby
instructs its counsel to deliver such opinions to the Secured Parties, and (b)
Morgan, Lewis & Bockius 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. 

2 

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, Morgan, Lewis
& Bockius 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% 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 and 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. None of the Issuer or any Issuer Subsidiary shall 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 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, (ii) the Consents listed on Schedule
4.11(b)(ii) , duly executed, authorized and delivered by each party thereto,
(iii) copies of the Material Project Documents, including any amendments or
supplements thereto, and the Estoppels listed on Schedule 4.11(b)(iii)
and (iv) copies of the Federal Financing Bank Loan Documents, including any
amendments or supplements 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;

3 

(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 its incorporation or
formation 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 Financing 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 applicable Secretary of State with respect to each of
each Sponsor, the Issuer, each Issuer Subsidiary and the Operator, certificates
of qualification to do business in Oregon issued by the Secretary of State of
the State of Oregon as to the USG Oregon Project Company, USG Oregon Holdings
and the Operator and certificates of qualification to do business in Idaho
issued by the Secretary of State of the State of Idaho as to the Raft River
Project Company and the Operator; 

(h)       Copies of
reports listing all effective financing statements which name the Issuer or any
Issuer Party 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 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: 

4 

(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 Pledge and Security Agreement in the form of Exhibit S-3, duly
executed by USG Idaho in favor of the Collateral Agent for the benefit of the
Secured Parties (the “USG Idaho Pledge Agreement”) with respect to the
pledge of the USG Idaho’s ownership interests in the Issuer, together with the
certificates representing such ownership interests and executed, undated
transfer powers (in blank) relating thereto;

(d)       A Pledge and
Security Agreement in the form of Exhibit S-4, duly executed by the
Issuer in favor of the Collateral Agent for the benefit of the Secured Parties
(the “Issuer Pledge Agreement”) with respect to the pledge of the
Issuer’s ownership interests in USG Oregon Holdings and the Raft River Project
Company, 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 Sponsors, the Issuer and the Collateral Agent,
in the form of Exhibit S-6 (the “Recapture Indemnity Agreement”);
and 

(g)       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 Permitted Liens). 

Section 4.13
       Reserve Accounts. The Issuer shall deposit the Minimum Debt Service
Reserve Requirement in the Debt Service Reserve Account and $1,807,890 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
$3,000,000 in the Raft River Capital Expenditure Account. 

Section 4.14       
Title Policy. The Secured Parties shall have received copies of (a)
Policy No. 472511487576MN-STORM issued by Chicago Title Insurance Company on
February 23, 2011 with respect to the USG Oregon Site and (b) Policy No.
03207148 issued by Commonwealth Land Title Insurance Company on December 6, 2006
with respect to the Raft River Site (such policies being hereinafter referred to
collectively as the “Title Policies”).

5 

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 each Issuer Subsidiary for the fiscal quarters
ended September 30, 2015 and December 31, 2015, (b) the unaudited monthly
financial statements of each Issuer Subsidiary for the calendar month ended
February 29, 2016, (c) the annual audited financial statements for each Issuer
Subsidiary for the calendar year 2014, (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, (e) to the extent not already provided, copies
of all documents provided by the USG Oregon Project Company to the U.S. DOE
pursuant to (i) Section 6.1(b) of the Federal Financing Bank Loan Guarantee
Agreement for the fiscal quarter ended December 31, 2015 and (ii) Section 6.1(c)
of the Federal Financing Bank Loan Guarantee Agreement for the calendar year
2014, (f) to the extent not already provided, copies of all documents provided
by the Raft River Project Company to the Raft River Members pursuant to (i)
Section 6.4(a) of the Raft River LLC Agreement for the fiscal quarter ended
December 31, 2015 and (ii) Section 6.4(b) of the Raft River LLC Agreement for
the calendar year 2014, and (g) to the extent not already provided, copies of
all documents provided by USG Oregon Holdings to the USG Oregon Holdings Members
pursuant to Section 9.6 of the USG Oregon Holdings LLC Agreement for the fiscal
quarter ended December 31, 2015. 

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 with respect
to each of the Projects, 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 each Project prepared by the Geothermal Resource
Engineer, addressed to the Purchasers and in form and substance satisfactory to
the Purchasers (each, a “Geothermal Resource Assessment Report”). 

6 

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 and each
Issuer Subsidiary through 2023, including each initial Operating Budget, each of
which shall be satisfactory to the Purchasers.

Section
4.23       Environmental Report.
The Purchasers shall have received an environmental report for each Project
prepared by the Environmental Consultant, dated as of a recent date, addressed
to the Purchasers and in form and substance satisfactory to the Purchasers.

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. Each of the Issuer and each Issuer Subsidiary 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 each jurisdiction in which such
qualification is required by law. Each of the Issuer and each Issuer Subsidiary
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, with respect to the Issuer only, to
execute and deliver this Agreement and to execute and deliver 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 or any
Issuer Subsidiary 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 or such Issuer Subsidiary, 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 or such
Issuer Subsidiary, as applicable, enforceable against the Issuer or such Issuer
Subsidiary, as applicable, 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, 2015, there has been no change in the financial condition, operations, business, properties or prospects of the Issuer or
any Issuer Subsidiary 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 Projects as contemplated by the Material Project Documents, the Federal
Financing Bank Loan Documents and the LLC Agreements, as applicable. 

7 

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, the Federal Financing Bank Loan
Documents, other than resource degradation and operating expense assumptions
under the Federal Financing Bank Loan Documents, and the LLC Agreements.

Section
5.5       Organization and Ownership
of Interests in Issuer and Issuer Subsidiaries; Affiliates; Officers; Issuer
Subsidiaries.

(a)       Schedule 5.5
contains a complete and correct list and description of (i) the Sponsors’ direct
ownership interests in the Issuer, (ii) the Issuer’s indirect and direct
ownership interests in, and other members of, the Issuer Subsidiaries and (iii)
the Issuer’s officers and the officers of each of the Issuer Subsidiaries.

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

(c)       USG Idaho is
the only member of the Issuer. 

(d)       The Issuer’s
only direct and indirect subsidiaries are the Issuer Subsidiaries. 

Section 5.6
      Financial Statements; Material
Liabilities. The Issuer has delivered to the Purchasers copies of the
financial statements 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 each Issuer
Subsidiary 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). Each Issuer
Subsidiary has no Indebtedness or other material liabilities, except as
disclosed on such financial statements. The Issuer has no Indebtedness. 

8 

Section
5.7       Compliance with Laws,
Other Instruments, Etc. The execution, delivery and performance by (a) the
Issuer of this Agreement, the Notes and the other Financing Documents to which
it is a party and (b) each Issuer Subsidiary of the 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
Permitted Liens) in respect of any property of the Issuer or such Issuer
Subsidiary 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 or such
Issuer Subsidiary is bound or by which the Issuer or such Issuer Subsidiary 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 or such Issuer Subsidiary, (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Issuer or such Issuer Subsidiary 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. 

Section
5.8       Governmental
Authorizations, Etc. All Required Approvals are listed on Schedule
5.8. Each Required Approval 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. 

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. Each of the
Issuer and each Issuer Subsidiary 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 such Issuer Subsidiary 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 or such Issuer Subsidiary 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 or such Issuer Subsidiary 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 and each Issuer Subsidiary in respect of
Federal, state or other taxes for all fiscal periods are adequate.

9 

Section
5.11       Title to Property;
Leases; Real Estate; Insurance. Each Project Company has good and sufficient
title to, or leasehold interests in, its Project, Site, Geothermal Resource,
Water Rights and all of its other properties that individually or in the
aggregate are material to such Project Company and its Project, free and clear
of Liens (other than Permitted Liens). The applicable Geothermal Leases and all
other leases, easements and real property interests that individually or in the
aggregate are material to each Project Company and its Project are valid and
subsisting and are in full force and effect in all respects. Neither Project
Company is in default under any terms of any Geothermal Lease to which it is a
party, and no event or omission has occurred which with the giving of notice or
lapse of time, or both, would constitute a default under any such Geothermal
Lease. The real property interests, leasehold estates, easements and other
rights of each Project Company set forth in the Title Policy, as supplemented by
the Supplemental Rights: 

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

(b)        are sufficient to enable the applicable Project to be
  located, operated and routinely maintained on the applicable 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
  applicable Project. 

Section
5.12       Material Project
Documents; Commercial Operation Date; Financing Documents.

(a)       The Material
Project Documents listed on Schedule 5.12(a) constitute and include all
contracts and agreements that are necessary for the ownership, operation and
maintenance of each Project and the generation, transmission and sale of energy
generated by such Project. Each Material Project Document is in full force and
effect and constitutes the legal, valid and binding obligation of the Issuer
Subsidiary party thereto as of the date hereof. No Issuer Subsidiary nor, to the
Issuer’s knowledge, any other Person party to a Material Project Document or
other material agreement with the Issuer or any Issuer Subsidiary is in default
under any terms of a Material Project Document or material agreement 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.

10 

(b)       The Operation
Date (as defined in the USG Oregon PPA) of the USG Oregon Project occurred on
November 16, 2012. The Operation Date (as defined in the Raft River PPA) of the
Raft River Project occurred on April 3, 2008.

(c)       The current
term of the Public Utility District Purchase and Sale Agreement will expire in
2034. The current term of the Holy Cross Purchase and Sale Agreement will expire
on December 31, 2017. 

(d)      
The Federal Financing Bank Loan Documents listed on Schedule
5.12(d) constitute and include all contracts and agreements providing
construction or long term financing for the USG Oregon Project. Each Federal
Financing Bank Loan Document is in full force and effect and constitutes the
legal, valid and binding obligation of the Issuer Subsidiary party thereto as of
the date hereof. No Issuer Subsidiary nor, to the Issuer’s knowledge, any other
Person party to a Federal Financing Bank Loan Document is in default under any
terms of a Federal Financing Bank Loan Document 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 Federal Financing Bank Loan Documents.

(e)       The Raft River
LLC Agreement is the only contract or agreement providing capital for the Raft
River Project. The Raft River Project Company has no Indebtedness for borrowed
money. 

 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. 

11 

(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) pay transaction expenses and third party fees, (b) fund the Debt Service
Reserve Account in the amount of the Minimum Debt Service Reserve Requirement,
the Maintenance Reserve Account in the amount of $1,807,890 and the Raft River
Capital Expenditure Account in the amount of $3,000,000 and (c) 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). None of the
Issuer or any Issuer Subsidiary owns or carries 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 nor 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, United States Department of the Treasury (“OFAC”)
(an “OFAC Listed Person”) (ii) an agent, department, or
instrumentality of, or is otherwise beneficially owned by, 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, or (iii) otherwise blocked, subject to sanctions
under or engaged in any activity in violation of other United States economic
sanctions, including but not limited to, the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Comprehensive Iran Sanctions,
Accountability and Divestment Act (“CISADA”) or any similar law or
regulation with respect to Iran or any other country, the Sudan Accountability
and Divestment Act, any OFAC Sanctions Program, or any economic sanctions
regulations administered and enforced by the United States or any enabling
legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other
Person, entity, organization and government of a country described in clause
(i), clause (ii) or clause (iii), a “Blocked Person”). Neither the Issuer
nor any Controlled Entity has been notified that its name appears or may in the
future appear on a state list of Persons that engage in investment or other
commercial activities in Iran or any other country that is subject to U.S.
Economic Sanctions. 

12 

(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 by the
Issuer or any Controlled Entity, directly or indirectly, (i) in connection with
any investment in, or any transactions or dealings with, any Blocked Person, or
(ii) otherwise in violation of U.S. Economic Sanctions. 

(c)      
Neither the Issuer nor any Controlled Entity (i) has been found in violation of,
charged with, or convicted of, money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes under
the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as
the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or
regulation governing such activities (collectively, “Anti-Money Laundering
Laws”) or any U.S. Economic Sanctions violations, (ii) to the Issuer’s
actual knowledge after making due inquiry, is under investigation by any
Governmental Authority for possible violation of Anti-Money Laundering Laws or
any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties
under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has
had any of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws. The Issuer has established procedures and controls which it
reasonably believes are adequate (and otherwise comply with 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 and
U.S. Economic Sanctions. 

(d)       (1) Neither
the Issuer nor any Controlled Entity (i) has been charged with, or convicted of
bribery or any other anti-corruption related activity under any applicable law
or regulation in a U.S. or any non-U.S. country or jurisdiction, including but
not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act
2010 (collectively, “Anti-Corruption Laws”), (ii) to the Issuer’s actual
knowledge after making due inquiry, is under investigation by any U.S. or
non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws,
(iii) has been assessed civil or criminal penalties under any Anti-Corruption
Laws or (iv) has been or is the target of sanctions imposed by the United
Nations or the European Union; 

13 

(2)       To the
Issuer’s actual knowledge after making due inquiry, neither the Issuer nor any
Controlled Entity has, within the last five years, directly or indirectly
offered, promised, given, paid or authorized the offer, promise, giving or
payment of anything of value to a Governmental Official or a commercial
counterparty for the purposes of: (i) influencing any act, decision or failure
to act by such Government Official in his or her official capacity or such
commercial counterparty, (ii) inducing a Governmental Official to do or omit to
do any act in violation of the Governmental Official’s lawful duty, or (iii)
inducing a Governmental Official or a commercial counterparty to use his or her
influence with a government or instrumentality to affect any act or decision of
such government or entity; in each case in order to obtain, retain or direct
business or to otherwise secure an improper advantage in violation of any
applicable law or regulation or which would cause any holder to be in violation
of any law or regulation applicable to such holder; and 

(3)       No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any improper payments, including bribes, to any Governmental
Official or commercial counterparty in order to obtain, retain or direct
business or obtain any improper advantage. The Issuer has established procedures
and controls which it reasonably believes are adequate (and otherwise comply
with 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. 

 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)       Each of the
Issuer and each Issuer Subsidiary 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)       Each Project
is a QF. Those certain “Notices of Self-Certification” that were filed with FERC
in Docket Nos. QF12-389 and QF06-187 on or about January 18, 2013, and September
20, 2007, respectively, are in full force and effect and are factually accurate.
Each Project Company (i) has obtained and maintained status for its Project as a
QF and (ii) has made the requisite QF filings with FERC and any applicable
utility and state regulatory authority.

(d)       Each Project
and Project Company is entitled to the following exemptions: 

(i)       The Raft River
Project and the Raft River Project Company are entitled to (x) 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);
(y) the exemption from PUHCA set forth in 18 C.F.R. § 292.602(b); and (z) the
exemption from certain state laws and regulations set forth in § 292.602(c) .

(ii)      
The USG Oregon Project and the USG Oregon Project Company are entitled
to (x) all of the exemptions from the FPA provided for in 18 C.F.R. § 292.601(c)
except for the exemptions from Sections 205 and 206 of the FPA
set forth in § 292.601(c)(1); (y) the exemption from PUHCA set forth in 18
C.F.R. § 292.602(b); and (z) the exemption from certain state laws and
regulations set forth in § 292.602(c) . 

14 

(e)      
The Issuer is not itself a “public utility” under the FPA. The Issuer holds the
exemption from PUHCA that is provided for by 18 C.F.R. § 366.3(a), to the extent
set forth therein.

           (f)      
The USG Oregon Project Company holds “market-based rate” authority from
FERC under 18 C.F.R. Part 35 Subpart H of its regulations (“MBR
Authority”), which MBR Authority is in full force and effect. The order of
FERC in Docket No. ER13-413-002 is in full force and effect.

(g)       No suit,
action, investigation, inquiry, or other legal or administrative proceeding by
any Governmental Authority, by or before FERC (including the staff thereof), or
by any other Person has been or is pending or threatened which questions or
challenges the validity of, or seeks to enjoin, the status of either of the
Projects as a QF, nor the MBR Authority of the USG Oregon Project Company.

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

(i)      
Each Project Company is in compliance with all and is not in violation of any
applicable requirements and rules of the Public Utilities Commission of Oregon
and the Public Utilities Commission of Idaho, as applicable, and FERC, including
but not limited to all requirements applicable to such Project Company under
Section 215 of the FPA. Neither the Issuer or any Issuer Subsidiary requires
permission or authorization from, and is not required to deliver any notice to,
the FERC or the Public Utilities Commission of Oregon, the Public Utilities
Commission of Idaho 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.

(j)       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), by the Public Utilities
Commission of Oregon under Oregon law or by the Public Utilities Commission of
Idaho under Idaho law, except by the exercise 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, any Issuer
Subsidiary, either Site or any of the real properties now or formerly owned,
leased or operated by the Issuer or any Issuer Subsidiary alleging any damage to the
environment or violation of any Environmental Laws. 

15 

(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 either Site or
other real properties now or formerly owned, leased or operated by the Issuer or
any Issuer Subsidiary or to other assets or its use. 

(c)       None of the
Issuer or any Issuer Subsidiary has stored any Hazardous Materials on either
Site or other real properties now or formerly owned, leased or operated by the
Issuer or such Issuer Subsidiary and has not disposed of any Hazardous Materials
in a manner contrary to any Environmental Laws; and 

(d)        All buildings on each
  Site and all other real properties now owned, leased or operated by the Issuer
  or any Issuer Subsidiary are in compliance with applicable Environmental Laws. 

Section
5.19       Collateral. The
Collateral, as described in the Security Documents, includes all of the personal
property of the Issuer. The Issuer has no real property. 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 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, any Issuer
Subsidiary, any contractors of the Issuer or an Issuer Subsidiary or either
Project. Neither the Projects nor the Issuer nor any Issuer Subsidiary 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, none of the Issuer or any Issuer Subsidiary has
any Indebtedness or other material liabilities, other than (a) Indebtedness
under the Financing Documents, and (b) Permitted Indebtedness. 

16 

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 each initial Operating Budget. 

Section
5.24       Firm Transmission.
The Raft River Project Company has obtained firm transmission rights for all
energy to be delivered pursuant to the Raft River PPA. 

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 

17 

(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 and each Issuer
Subsidiary, copies of 

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

(ii)      
profit and loss statements and cash flows statements for the Issuer and
such Issuer Subsidiary 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
and such Issuer Subsidiary, as applicable, as fairly presenting, in all material
respects, the financial position of the Issuer and such Issuer Subsidiary 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 and each Issuer Subsidiary, copies of 

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

(ii)      
statements of income, profit and loss statements and cash flows
statements for the Issuer and such Issuer Subsidiary 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 Moss Adams LLP 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 such Issuer Subsidiary 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 or any Issuer Subsidiary to or with any state or
federal regulatory body; 

19 

(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 or the applicable Issuer
Party 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 or any Issuer
Subsidiary; 

(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 or any Issuer
Subsidiary 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 or any
Issuer Subsidiary;

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

20 

(iii)        copies
of any notice of a violation, breach, default or event of default under any
Material Project Document, Federal Financing Bank Loan Document or LLC
Agreement; 

(iv)        notice
of the occurrence of any condition or event that would restrict the USG Oregon
Project Company from making Restricted Payments (as defined in the Federal
Financing Bank Loan Guarantee Agreement) under the Federal Financing Bank Loan
Documents; 

(v)       
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; 

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

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

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

(ix)       
any notices or communications relating to any Cash Grant Recapture
Liability applicable to either Project; and 

(x)        any
claim of force majeure under any Material Project Document. 

(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 Budgets 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 each 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 Payment Date, the DSCR Notice with respect to such Payment Date required to
be delivered pursuant to Section 9.13 ; 

21 

(m)       
Material Project Documentation — promptly, and in any event
within five Business Days and to the extent not already provided hereunder,
copies of all reports, notices, certificates, projections, budgets and other
documents delivered by (i) the USG Oregon Project Company to the Power Purchaser
pursuant to Sections 8.5.2, 14.3, 14.4, 16.3 and 25.2 of the USG Oregon PPA (and
all notices of a “Material Breach” (as such term is defined in the USG Oregon
PPA); (ii) the Raft River Project Company to the Power Purchaser pursuant to
Sections 7.5.2, 15.3, 15.4, 17.3 and 26.2 (including all notices of a “Material
Breach” (as such term is defined in the Raft River PPA)), of the Raft River PPA;
(iii) the Raft River Project Company to Public Utility District No. 1 of Clallam
County, Washington pursuant to the Public Utility District Purchase and Sale
Agreement (including any Confirmation Letters (as defined therein)); and (iv)
the Raft River Project Company to Holy Cross Energy pursuant to the Holy Cross
Purchase and Sale Agreement. 

(n)       
Project Company Information — concurrently with delivery to the
U.S. DOE or members, as applicable, and to the extent not already provided
hereunder, copies of all documents provided to (i) the U.S. DOE pursuant Article
6 of the Federal Financing Bank Loan Guarantee Agreement, (ii) the Raft River
Members pursuant to Section 6.4 of the Raft River LLC Agreement and (iii) the
USG Oregon Holdings Members pursuant to Section 9.6 of the USG Oregon Holdings
LLC Agreement. 

(o)       
Operator Information — promptly, and in any event within five Business
Days of receipt (or knowledge) thereof and to the extent not already provided
hereunder, copies of all reports, notices, certificates, projections, budgets
and other documents received by (i) the USG Oregon Project Company from the
Operator pursuant to Sections 4.1.1, 4.1.4, 4.1.5, 5.2.1, 5.2.2 and 7.2 of the
USG Oregon O&M Agreement and (ii) the Raft River Project Company from the
Operator pursuant to Sections 4.1(a), 4.1(d), 4.1(e), 5.2(a), 5.2(b), and 8.2 of
the Raft River O&M Agreement. 

(p)       
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 any Issuer Party 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 and each Issuer
Subsidiary 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 or any Issuer
Subsidiary 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. 

22 

Section
7.3       
Visitation. The Issuer shall, and shall cause each Issuer Subsidary to,
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 each of the Issuer and any
Issuer Subsidiary, to discuss consultant reports and the affairs, finances and
accounts of the Issuer or such Issuer Subsidiary with the Issuer or such Issuer
Subsidiary’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 or such Issuer Subsidiary, 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
each of the Issuer and any Issuer Subsidiary, 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 or such Issuer Subsidiary’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 and such Issuer
Subsidiary), all at such times and as often as may be requested. 

Section
7.4        Electronic
Delivery. Financial statements, opinions of independent certified
public accountants, other information and Officer’s Certificates that are
required to be delivered by the Issuer pursuant to Sections 7.1(a), (b) or (c)
and Section 7.2 shall be deemed to have been delivered if the Issuer satisfies
any of the following requirements with respect thereto: 

(i)        such
financial statements satisfying the requirements of Section 7.1(a) or (b) and
related Officer’s Certificate satisfying the requirements of Section 7.2 are
delivered to each holder of a Note by e-mail; 

(ii)        such
financial statements satisfying the requirements of Section 7.1(a) or Section
7.1(b) and related Officer’s Certificate(s) satisfying the requirements of
Section 7.2 are timely posted by or on behalf of the Issuer on IntraLinks or on
any other similar website to which each holder of Notes has free access; or 

(iii)        the
Issuer shall have filed any of the items referred to in Section 7.1(c) with the
SEC on EDGAR and shall have made such items available on its home page on the
internet or on IntraLinks or on any other similar website to which each holder
of Notes has free access; 

provided however, that in the case of any of clauses
(ii) or (iii), the Issuer shall have given each holder of a Note prior written
notice, which may be by e-mail or in accordance with Section 18, of such
posting or filing in connection with each delivery, provided further,
that upon request of any holder to receive paper copies of such forms, financial
statements and Officer’s Certificates or to receive them by e-mail, the Issuer
will promptly e-mail them or deliver such paper copies, as the case may be, to
such holder. 

23 

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 there occurs a Loss or series of related Losses (other
than a Major Loss) and any Loss Proceeds are distributed to the Issuer, the
Issuer shall 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. 

(ii)       
Major Loss. If a Major Loss with respect to the USG Oregon
Project or USG Oregon Site occurs, the Issuer shall, within ten Business Days
following the date on which the Issuer receives the Loss Proceeds with respect
thereto, 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. If a Major Loss
with respect to the Raft River Project or the Raft River Site occurs, the Issuer
shall, within ten Business Days following the date on which the Issuer receives
the Loss Proceeds with respect thereto, repay the Notes in an aggregate
principal amount equal to 15% of the aggregate 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). 

If the Issuer is required to prepay the Notes pursuant to
clauses (i) or (ii) 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) or (ii) 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 the
second sentence of clause (ii)), 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) 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). 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. 

24 

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 $2,000,000 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. 

25 

“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 8.2 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.

26 

“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 and calculated to two
decimal places, 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 8.2 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 8.2 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, and will
cause each Issuer Subsidiary to, 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, and will cause each Issuer
Subsidiary to, obtain and maintain in effect all licenses, certificates,
permits, franchises, Approvals and other governmental authorizations necessary
to the ownership of its properties, the operation and maintenance of its 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.
The Issuer will, and will cause each Issuer Subsidiary, to, maintain,
with financially sound and reputable insurers, insurance meeting the
requirements of Schedule 9.2 and as required under the applicable
Material Project Documents and Federal Financing Bank Loan Documents. The Issuer
will deliver to the holders a final report of the Insurance Consultant prior to
May 31, 2016, in form and substance reasonably satisfactory to the Required
Holders. 

Section
9.3        Title, Water
Rights, Etc. The Issuer shall, and shall cause each Issuer Subsidiary
to, maintain good, valid, marketable and insurable title to, or leasehold
interests in, its properties, including, as applicable, the Projects, the Sites,
the Geothermal Resources, the Water Rights and the 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. 

27 

Section
9.4        Payment of Taxes
and Claims. The Issuer will, and will cause each Issuer Subsidiary to,
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 or an Issuer Subsidiary need not pay any such
tax, assessment, charge, levy or claim if (i) the amount, applicability or
validity thereof is contested by the Issuer or such Issuer Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Issuer or
such Issuer Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Issuer or such Issuer Subsidiary, 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
or such Issuer Subsidiary. 

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

Section
9.6        Books and
Records. The Issuer will, and will cause each Issuer Subsidiary to,
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 or such Issuer Subsidiary and in a manner
consistent with projects similar to the Projects. 

Section
9.7        Collateral;
Further Assurances. The Issuer shall, and shall cause each Issuer
Subsidiary to, 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; Federal Financing Bank Loan Documents; LLC Agreements.
Except as otherwise permitted by Section 10.17, the Issuer shall, and
shall cause each Issuer Subsidiary to, (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, Federal Financing Bank Loan Documents
and the LLC Agreements to which it is a party and (B) other agreements to which
the Issuer or such Issuer Subsidiary 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, the Federal Financing Bank Loan Documents and the LLC Agreements 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,
the Federal Financing Bank Loan Documents or the LLC Agreements to the
Purchasers. The Issuer shall cause any PPA whose term would otherwise expire
prior to the Maturity Date to be renewed or extended to a date that is at least
one year after the Maturity Date. 

28 

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, and the (v) Raft River Capital Expenditure
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 cause each Project Company to operate and
maintain its Project in accordance with Good Utility Practice(s) (as defined in
the applicable PPA), all requirements of law, all Required Approvals and all
requirements of the Material Project Documents, the Federal Financing Bank Loan
Documents and the LLC Agreements.

 Section
9.12        Resource Review;
Budgets.

(a)       
[Reserved.]

(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 Resources (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
Resources characteristics predicted in either Geothermal Resource Assessment
Report, 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 March 31, 2036 to Debt
Service Coverage Ratios that equal or exceed 1.55:1.00 (using the same
assumptions used in preparing the Base Case Projections) (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 March 31,
2036 to Debt Service Coverage Ratios that equal or exceed 1.55:1.00 (using the
same assumptions used in preparing the Base Case Projections) (the “Make-Up
Well Cost”).

29 

(c)       
At least 15 days prior to the end of each calendar year, the Issuer
shall either (i) provide to the holders and the Depositary a new or revised
schedule (“Schedule 9.12 ”) of deposits to be made in the Make-Up Well
Reserve Account on subsequent Payment Dates, 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, in the amounts set forth opposite such
Payment Dates on such schedule (as updated from time to time in accordance with
this Section 9.12(c) , the “Required Make-Up Well Reserve Account
Deposit”) to take into account any Make-Up Well Drill Date and Make-Up Well
Cost or 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
Schedule 9.12 for the approval of the Required Holders, or (ii) certify
to the holders that there is no Schedule 9.12 or update necessary based
upon the most recent Annual Geothermal Resource Report.

(d)        On or
before October 1 of each calendar year, the Issuer shall submit to the holders
and the Independent Engineer a draft proposed annual operating plan and budget
for each Project during each of the following three calendar years (prepared on
a month-by-month basis), and, by October 15 of each calendar year, the final
proposed operating plan and budget. The Required Holders and the Independent
Engineer will have the right to request revisions to or approve each of the
proposed operating plans and budgets promptly and in any event within 15 days
after receipt of the final proposed plan and budget. After an operating plan and
budget for each Project has been approved by the Required Holders and the
Independent Engineer (as approved for the USG Oregon Project, the “USG Oregon
Operating Budget”, as approved for the Raft River Project, the “Raft
River Operating Budget”, each an “Operating Budget” and,
collectively, the “Operating Budgets”), the Issuer shall, and shall cause
the applicable Issuer Subsidiary to, follow and comply with such Operating
Budget. Notwithstanding the foregoing, for each Operating Budget, the Issuer may
incur aggregate costs on an annual basis of up to 110% of total costs detailed
in such Operating Budget for such year 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 a Project for
any calendar year or if an operating plan and budget for such Project has not
yet been approved by the Required Holders and Independent Engineer for any
calendar year, then the Issuer shall, and shall cause each Issuer Subsidiary to,
follow and comply with the applicable 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 for such Project 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
applicable 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 applicable 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.

30 

(e)        On or
before October 1 of each calendar year, the Issuer shall also submit to the
holders and the Independent Engineer a draft of the draft proposed annual
operating plan and budget for the USG Oregon Project to be delivered by the USG
Oregon Project Company to the Federal Financing Bank Loan Servicer pursuant to
the Federal Financing Bank Loan Guarantee Agreement and, by October 15 of each
calendar year, the final proposed operating plan and budget. Each such proposed
operating plan and budget shall demonstrate a Debt Service Coverage Ratio (as
defined in the Federal Financing Bank Loan Guarantee Agreement) of at least
1.25x for the time periods covered in such operating plan and budget. The
Required Holders and the Independent Engineer will have the right to request
revisions to the proposed operating plan and budget promptly and in any event
within 15 days after receipt of the final proposed plan and budget. The Issuer
shall deliver a copy of the final operating plan and budget to the holders and
the Independent Engineer concurrently with delivery to the Federal Financing
Bank Loan Servicer. The Issuer shall not be required to obtain approval from the
Required Holders for any revisions to an operating plan and budget required by
the Federal Financing Bank Loan Servicer or the U.S. DOE. 

Section
9.13        DSCR Notice on
Payment Date. Not later than five Business Days after each 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        Perfection
Opinion. On the fourth anniversary of this Agreement, 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 48 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
9.15        Distributions.
The Issuer shall cause each Issuer Subsidiary to distribute all of its
distributable cash as and when, and to the extent permitted under, the
applicable LLC 

31 

Section
9.16        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
9.17        Membership
Interests in Raft River Project Company. The Issuer acknowledges that
the Purchasers have requested that the Issuer provide security interests in the
membership interests in and assets of the Raft River Project Company to secure
the Obligations, but, although the Issuer is able to provide a security interest
in the membership interests in the Raft River Project Company that it currently
owns (which constitute 95% of the outstanding membership interests in the Raft
River Project Company), it is unable to obtain requisite consents prior to
Closing to provide a security interest in the assets of the Raft River Project
Company or the remaining membership interests. In consideration of the
Purchasers’ purchase of the Notes, the Issuer agrees that, if the Sponsors
obtain direct or indirect ownership of all of the remaining membership interests
in the Raft River Project Company, the Issuer shall take all actions necessary
to create a first priority security interest in favor of the Collateral Agent,
for the benefit of the Secured Parties, in all such remaining membership
interests and all of the assets of the Raft River Project Company to secure the
Obligations.

Section
9.18        No Dilution of
Ownership Interest in USG Oregon Holdings and the Raft River Project Company.
The Issuer shall take reasonable action, including, without limitation,
making capital contributions as necessary, to ensure that it legally and
beneficially owns and controls, indirectly and directly, at least (a) 60% of the
outstanding membership or other equity interests of USG Oregon Holdings
(measured by both economic interest and voting power) and (b) 95% of the
outstanding membership or other equity interests of the Raft River Project
Company (measured by both economic interest and voting power). 

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, and will not cause or permit any Issuer
Subsidiary to, 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 or such Issuer Subsidiary’s business and upon fair
and reasonable terms no less favorable to the Issuer or such Issuer Subsidiary
than would be obtainable in a comparable arm’s-length transaction with a Person
not an Affiliate. The Issuer will not, and will not cause or permit any Issuer
Subsidiary to, amend or waive any provision of a Material Project Document to
which an Affiliate of the Issuer or such Issuer Subsidiary 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, and will not cause or permit any
Issuer Subsidiary to, consolidate or merge with any other Person. 

Section
10.3        Line of
Business. The Issuer will not, and will not cause or permit any Issuer
Subsidiary to, engage in any business other than the direct or indirect
ownership, operation and maintenance of the Projects. 

32 

Section
10.4      Terrorism Sanctions
Regulations. The Issuer will not and will not permit any Controlled
Entity (a) to become (including by virtue of being owned or controlled by a
Blocked Person), own or control a Blocked Person or any Person that is the
target of sanctions imposed by the United Nations or by the European Union, or
(b) directly or indirectly to have any investment in or engage in any dealing or
transaction (including, without limitation, any investment, dealing or
transaction involving the proceeds of the Notes) with any Person if such
investment, dealing or transaction (i) would cause any holder to be in violation
of any law or regulation applicable to such holder, or (ii) is prohibited by or
subject to sanctions under any U.S. Economic Sanctions, or (c) to engage, nor
shall any Affiliate of either engage, in any activity that could subject such
Person or any holder to sanctions under CISADA or any similar law or regulation
with respect to Iran or any other country that is subject to U.S. Economic
Sanctions. 

Section
10.5      Liens. The
Issuer will not, and will not cause or permit any Issuer Subsidiary to, directly
or indirectly create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Lien on the Collateral or its other assets and
properties 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 do not exceed $100,000 and are
not more than 90 days past due and (c) Additional Permitted Debt; provided,
however, that (i) the Issuer may incur Additional Permitted Debt only in a
single issuance of notes within 24 months after Closing, (ii) there is only a
single purchaser of such notes (it being understood and agreed that one or more
accounts managed by a purchaser and/or its affiliates shall qualify as a “single
purchaser” of such notes), and (iii) the terms on which such notes are issued
shall be the same as, or more favorable than, the terms on which the Notes are
issued; and provided further, that, if the terms of such notes are proposed to
be more favorable, or if the covenants proposed to be included are more
restrictive than the covenants contained in this Agreement, then such more
favorable terms and/or such restrictive covenants and any related definitions
shall automatically be deemed to be incorporated into this Agreement by
reference from the time such other agreement becomes binding upon the Issuer.
Promptly but in no event more than 5 Business Days following the execution of
any agreement providing for Additional Permitted Debt, the Issuer shall furnish
each holder with a copy of such agreement. Upon written request of the Required
Holders, the Issuer will enter into an amendment to this Agreement pursuant to
which this Agreement will be formally amended to incorporate more favorable
terms and/or more restrictive covenants. 

Section
10.7      Regulatory Standing.
The Issuer will not, and will not cause or permit any Issuer Subsidiary
to, take or cause to be taken any action which could reasonably be expected to
result in either (a) a Project losing its QF status, (b) the Issuer, either
Project or either Project Company 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, as applicable, set forth in §292.601(c)(1),
292.602(b) and 292.602(c), (c) any disapproval, rejection, suspension, other
action adverse to the continued effectiveness of a PPA or Interconnection
Agreement by the FERC or the Public Utilities Commission of Oregon or Idaho, as
applicable, (d) any termination, revocation, suspension, or other action adverse
to the continued effectiveness of the MBR Authority held by the USG Oregon
Project Company, or (e) 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 Issuer Subsidiary’s or any of their Affiliates’ actions relating to the
ownership, leasing or operation of a 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. 

33 

Section
  10.8      Loans, Advances,
    Investments and Contingent Liabilities. The Issuer will not, and will
  not cause or permit any Issuer Subsidiary to, 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 and capital contributions to
  fund capital improvements to the Projects and other expenditures that are
  permitted hereunder. Notwithstanding the foregoing, the Issuer may make capital
  contributions to USG Oregon Holdings and the Raft River Project Company to the
  extent necessary to fulfill its obligations under Section 9.18
hereto.

Section
10.9      No Subsidiaries.
None of the Issuer or any Issuer Subsidiary shall have any subsidiaries
except, in the case of the Issuer or USG Oregon Holdings, the Issuer
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, and will not cause or permit any Issuer Subsidiary
to, Transfer, or agree or otherwise commit to Transfer, any of its assets, other
than, in the case of the Project Companies only, (a) sales in the ordinary
course of business, (b) sales of Permitted Investments for cash or other
Permitted Investments, (c) sales under the terms of the applicable PPA, (d)
sales under the terms of the applicable REC Purchase and Sale Agreement and (e)
sales of equipment or other assets that are (i) obsolete, (ii) no longer used or
useful in the operation of a Project, or (iii) are replaced by other equipment
of equal value and utility, and in all cases for which the Issuer Subsidiary
shall have received consideration reflecting value that would have been obtained in a transaction
on an arm’s length basis with an unaffiliated third party (unless such assets
only have scrap value). 

34 

Section
  10.12      Equity
    Capital. Except to the extent permitted by Section 10.10, the
  Issuer will not, and will not cause or permit any Issuer Subsidiary to, (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, and will not cause or
permit any Issuer Subsidiary to, amend or waive any provision of its limited
liability company operating agreement 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 limited liability company interest in
the Issuer or such Issuer Subsidiary to the extent such Transfer is permitted
under the terms of (a) this Agreement, and (b) with respect to the membership
interests of the USG Oregon Project Company only, the USG Oregon Pledge
Agreement. 

Section
10.14      No Employees; No ERISA
Plans. The Issuer will not, and will not cause or permit any Issuer
Subsidiary to, (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, and will not cause or permit any Issuer Subsidiary to, or
authorize any investment in, or otherwise purchase or carry, any margin stock.

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

Section
10.17      Material Project
Documents; Federal Financing Bank Loan Documents; LLC Agreements. The
Issuer will not, and will not cause or permit any Issuer Subsidiary to, (a)
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 (other than to correct minor or technical errors that
do not change any Person’s rights or obligations), except that the Issuer may
allow either Project Company to enter into additional well drilling contracts
with the prior written consent of the Required Holders, (b) without the written
consent of the Required Holders (which consent shall not be unreasonably
withheld or delayed), amend, modify, supplement, vary, waive, cancel, terminate,
agree to terminate or agree or purport to do any of the foregoing in relation
to, any Federal Financing Bank Loan Document or (c) amend, modify, supplement,
vary, waive, cancel, terminate, agree to terminate or agree or purport to do any
of the foregoing in relation to, any LLC Agreement. 

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. 

35 

Section
  10.19      Lease Obligations.
  Except for the Geothermal Leases and leases of office space, office
  equipment or motor vehicles with respect to which the aggregate lease payments
  do not exceed $50,000 per year as required in connection with the operation of
  the Project, the Issuer will not, and will not cause or permit any Issuer
  Subsidiary to, enter into, create or suffer to exist any obligations for payment
under any operating lease or agreement to lease. 

Section
10.20      Material Contracts.
The Issuer will not, and will not cause or permit any Issuer Subsidiary
to, execute, enter into or otherwise be bound by any Material Contract, other
than the Material Project Documents in effect on the date hereof and agreements
or contracts contemplated or permitted by the Transaction Documents as in effect
on the date hereof, without the consent of the Required Holders. The Issuer will
deliver to the holders final drafts of such agreements or contracts and, after
execution thereof, copies of the final executed agreements or contracts. 

Section
10.21      Raft River Project New
Development. The Issuer will not initiate or pursue, or cause any
Issuer Subsidiary to initiate or pursue, any new development with respect to the
Raft River Project without the consent of the Required Holders. 

Section
10.22      No Voting as Member of
USG Oregon Holdings or the Raft River Project Company. The Issuer will
not vote as a member of USG Oregon Holdings or the Raft River Project Company on
any matter if the outcome of such vote could result in a violation of a
provision of any Financing Document, Federal Financing Bank Loan Document or
Material Project Document. 

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 9.5 or Section
10; or 

(d)      (i)
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 to which it is a party or (ii) any
Issuer Party defaults in the performance of or compliance with any term
contained in any Financing Document or any Material Project Document to which it is a party (other than the PPAs) 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 such longer period (but not to
exceed an additional 30 days) as may be required to remedy the default so long
as the Issuer is diligent by pursuing the remedy throughout the cure period (or,
if earlier, within any applicable cure period provided in a Material Project
Document); or 

36 

(e)      (i)
  either Project Company defaults in the performance of or compliance with any
  term contained in its PPA and such default is not remedied within any applicable
  cure period under such PPA; (ii) the USG Oregon Project Company defaults in the
  performance of or compliance with any term contained in any Federal Financing
  Bank Loan Document and such default is not remedied within any applicable cure
  period under such Federal Financing Bank Loan Document; provided, however, that
  a failure to remedy any such default (other than a payment or bankruptcy-related
  default) shall not result in an Event of Default if, within the applicable cure
  period, (if any), the USG Oregon Project Company has requested in writing a
  waiver of such default, such waiver has not been denied and none of the Federal
  Financing Bank Loan Collateral Agent, U.S. DOE or the Depositary (as defined in
  the Federal Financing Bank Loan Documents) has commenced the exercise of any
  remedy with respect thereto or blocked withdrawals from the accounts held by the
  Depositary and, within 180 days of the request for waiver, the DOE grants the
  waiver; or (iii) any Issuer Subsidiary defaults in the performance of or
  compliance with any term contained in its LLC Agreement and such default is not
remedied within any applicable cure period under such LLC Agreement; or 

(f)      any
representation or warranty made in writing by or on behalf of the Issuer or any
Issuer Subsidiary or either Sponsor or by any officer of the Issuer or any
Issuer Subsidiary or either Sponsor 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 or any Issuer Subsidiary 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 (other than the Indebtedness under the Federal Financing Bank
Loan Documents) 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 or
any Issuer Subsidiary is in default in the performance of or compliance with any
term of any evidence of any Indebtedness (other than the Indebtedness under the
Federal Financing Bank Loan Documents) 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 or any Issuer Subsidiary 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 or any Issuer Subsidiary to purchase or repay such
Indebtedness; or 

37 

(i)      the
  Issuer or any Issuer Subsidiary or USG Idaho (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 any Issuer Subsidiary or USG Idaho,
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 such Issuer
Subsidiary or USG Idaho or any such petition shall be filed against the Issuer
or such Issuer Subsidiary or USG Idaho and such petition shall not be dismissed
within 60 days; or 

(k)      (i)
any 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 PPAs, no Event of Default
shall be deemed to have occurred under this clause (k)(i) if, within 60 days
following such event, the Issuer or the applicable Issuer Party enters into a
replacement for such Material Project Document that has substantially similar or
more favorable terms to the Issuer or such Issuer Subsidiary 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 (ii) the Issuer or any Issuer Subsidiary 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 either 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 either PPA
addressed in clause (i) above) which continues for more than 90 consecutive
days, unless, within 60 days, the Issuer or the applicable Issuer Subsidiary
enters into a replacement for such Material Project Document that has
substantially similar or more favorable terms to the Issuer or such Issuer
Subsidiary 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 

38 

(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 or applicable Issuer
  Subsidiary 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 or any Issuer Subsidiary, 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)      either
Project Company (i) abandons its Project or (ii) suspends operation of its
Project, except if such suspension is due to (A) a default by the Operator under
the applicable O&M Agreement which is remedied within 90 days,
or (B) a Force Majeure (as defined in the applicable PPA) event that continues
for less than 180 consecutive days; or 

39 

(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)
the Sponsors and their 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) the Issuer ceases to legally and
beneficially own and control, indirectly and directly, at least 60% of the
outstanding membership or other equity interests of USG Oregon Holdings
(measured by both economic interest and voting power) or ceases to be the
managing member or the manager of USG Oregon Holdings, (iii) the Issuer ceases
to legally and beneficially own and control, indirectly and directly, at least
95% of the outstanding membership or other equity interests of the Raft River
Project Company (measured by both economic interest and voting power) or ceases
to be the managing member or the manager of the Raft River Project Company, or
(iv) USG Oregon Holdings ceases to legally and beneficially own and control,
indirectly and directly, 100% of the outstanding membership or other equity
interests of the USG Oregon Project Company (measured by both economic interest
and voting power) or ceases to be the managing member or the manager of the USG
Oregon Project Company; or 

(s)      (i)
a Project loses its QF status or either Project Company 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), if
applicable, and the exemptions set forth in §§292.602(b) and 292.602(c); (ii)
the Issuer becomes subject to regulation as a “public utility” under the FPA, or
ceases to hold the exemption from PUHCA that is provided under 18 C.F.R. §
366.3(a); (iii) the USG Oregon Project Company’s MBR Authority is terminated,
revoked, suspended, or subject to other action adverse to its continued
effectiveness; (iv) the Issuer or any Issuer Subsidiary suffers any regulatory
disapproval, rejection, suspension, or other action adverse to the continued
effectiveness of a PPA or an Interconnection Agreement or to the ability of the
Issuer or any Issuer Subsidiary to (A) inject all of a Project’s electric
energy, capacity and ancillary services up to the point of interconnection
specified in the applicable Interconnection Agreement or (B) satisfy all of the
Issuer Subsidiary’s electrical delivery obligations under its PPA; or (v) the
Collateral Agent or any of the holders or any Affiliates thereof become subject
to or not exempt from regulation either by the FERC (under either of the FPA or
PUHCA) or by the Public Utilities Commission of Oregon or Idaho 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
Well Permit (other than a Well Permit for a well that has been permanently
abandoned and such abandonment could not reasonably be expected to have a
Material Adverse Effect) 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 such
longer period (but not to exceed an additional 30 days) as may be required to obtain a replacement well permit so long as
the Issuer is diligent by pursuing the replacement permit throughout the cure
period; or 

40 

(u)      any
  Cash Grant Recapture Liability has been claimed against the Issuer or an Issuer
  Subsidiary or any of their 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 Issuer Subsidiary 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)      either
Sponsor or any of its 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 either Project Company 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 a Site, unless the applicable Project
Company first demonstrates to the reasonable satisfaction of the Required
Holders, 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 applicable 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. 

41 

(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. 

42 

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 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 

43 

(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. 

44 

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 either 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 either Project or either 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 such
Project or such Site is in compliance, and causing such Project or such 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.

45 

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. 

46 

(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 

47 

(C)      if
to the Issuer, to the Issuer at c/o U.S. Geothermal Inc., 390 E Parkcenter
Boulevard, Suite 250, Boise, Idaho 83706, Fax No. 208-424-1030, to the attention
of Kerry Hawkley, Chief Financial Officer, 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 auditors, 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. 

48 

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. 

49 

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. 

50 

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 CT 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. 

51 

(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 either 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 either 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. 

* * * * * 

52 

	SCHEDULE A 
	 
	INFORMATION RELATING TO PURCHASERS 
	 
	Idaho USG Holdings, LLC 
	5.80% Senior Secured Notes due March 31, 2023
  

	 	  	 	Aggregate 	 	 	  	 
	 	  	 	Principal 	 	 	Note Registration
    	 
	 	  	 	Amount of Notes
    	 	 	Number(s): Note
    	 
	 	  	 	to be Purchased
      	 	 	Denomination(s)
      	 
	 	  	 	  	 	 	  	 
	 	THE PRUDENTIAL INSURANCE
      COMPANY OF AMERICA 		$18,880,000
      	 	 	R-1;
      $10,870,000 	 
	 	  	 	  	 	 	R-2; $8,010,000 	 

	(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 $10,870,000)
	 	 
		
      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 $8,010,000)
	 	 
		
      Each such wire transfer shall set forth the name of the
      Company, a 

	 	reference to "5.80% Senior Secured Notes due March 31, 2023, 
	 	Security No. INV11986, PPN: 45148@ AA4" and the due date 
	 	and application (as among principal, interest and Make-Whole 
	 	Amount) of the payment being made.
	 	 
	(2) 	
      Address for all 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

	 	 
		
      and for all notices relating solely to scheduled
      principal and 

	 	interest payments to:
	 	 
		
      The Prudential Insurance Company of America 

	 	c/o PGIM, Inc.
		
      Prudential Tower

Schedule A - 1 

		
      655 Broad Street 

	 	14th Floor - South Tower 
	 	Newark, NJ 07102
		
      Attention: PIM Private Accounting Processing
  Team

		
      Email:
      Pim.Private.Accounting.Processing.Team@prudential.com

	 	 
	(3) 	
      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: M. Jaya McClure 

	 	Telephone: (214) 720-6207
	 	 
	(4) 	
      Tax Identification No.:
22-1211670

Schedule A - 2 

	 	  	 	Aggregate 	 	 	  	 
	 	  	 	Principal 	 	 	Note Registration
    	 
	 	  	 	Amount of Notes
    	 	 	Number(s): Note
    	 
	 	  	 	to be Purchased
      	 	 	Denomination(s)
      	 
	 	  	 	  	 	 	  	 
	 	PRUDENTIAL ANNUITIES LIFE
      ASSURANCE CORPORATION 		$1,120,000
      	 	 	R-3; $1,120,000
    	 

	(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: American Skandia Life - Private Placements 
		
      Account No.: P86259 (please do not include
  spaces)

	 	 
		
      Each such wire transfer shall set forth the name of the
      Company, a 

	 	reference to "5.80% Senior Secured Notes due March 31,
      2023, 
	 	Security No. INV11986, PPN: 45148@ AA4" and the due date
    
	 	and application (as among principal, interest and
      Make-Whole 
	 	Amount) of the payment being made.
	 	 
	(2) 	
      Address for all communications and notices:

	 	 
		
      Prudential Annuities Life Assurance Corporation

	 	c/o Prudential Capital Group 
	 	2200 Ross Avenue, Suite 4300 
	 	Dallas, TX 75201
	 	 
		
      Attention: Managing Director, Energy Finance Group -
      Power

	 	 
		
      and for all notices relating solely to scheduled
      principal and 

	 	interest payments to:
	 	 
		
      Prudential Annuities Life Assurance Corporation

	 	c/o PGIM, Inc.
		
      Prudential Tower 

	 	655 Broad Street 
	 	14th Floor - South Tower 
	 	Newark, NJ 07102
		
      Attention: PIM Private Accounting Processing
  Team

		
      Email:
      Pim.Private.Accounting.Processing.Team@prudential.com

	 	 
	(3) 	
      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: M. Jaya McClure 
	 	Telephone: (214) 720-6207
	 	 
	(4) 	
      Tax Identification No.:
06-1241288

Schedule A - 3 

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.

“Additional Permitted
Debt” means Indebtedness of the Issuer in an amount equal to the lesser of
(a) $50,000,000 minus the principal amount of Notes issued at Closing and (b)
the maximum amount of Indebtedness that, if incurred by the Issuer, (i) would
result in a minimum trailing twelve month consolidated Debt Service Coverage
Ratio equaling or exceeding 1.50:1.00 from the Closing Date through 2023, and
(ii) would result in a trailing twelve month consolidated Debt Service Coverage
Ratio equaling or exceeding 1.55:1.00 beginning 2024 through 2036 in an update
of the Base Case Projections calculated using the same assumptions used in
preparing the Base Case Projections but taking into account only contracted
revenues and assuming an interest rate that is 1% higher than the weighted
average interest rate of the Notes after taking into account the contemplated
Additional Permitted Debt; provided that the maturity date of Additional
Permitted Debt is the Maturity Date and Additional Permitted Debt is secured by
the Collateral and otherwise ranks pari passu with the Notes.

“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) . 

“Anti-Corruption Laws” is
defined in Section 5.16(d)(1) . 

“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. 

Schedule B - 1 

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

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

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

“Business Day” means 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. 

“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 a 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 a Project. 

“Cash Grant Recapture
Liability” means any loss or liability to the Issuer or an Issuer Subsidiary
or any of their respective Affiliates 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
Comprehensive Iran Sanctions, Accountability and Divestment Act. 

“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 $12,834,961.46 made to
USG Idaho on the Closing Date. 

“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 limited liability company interests and any
other equity interests in each of USG Oregon Holdings and the Raft River Project
Company, and the limited liability company interests and any other equity
interests in the Issuer. 

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

“Collateral Agent” means
Wilmington Trust, National Association, a national banking association, 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. 

Schedule B - 2 

“Confidential Information”
is defined in Section 20. 

“Consents” means the
consents listed on Schedule 4.11(b)(ii) 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
(a) any of the Subsidiaries of the Issuer and any of their or the Issuer’s
respective Controlled Affiliates and (b) if the Issuer has a parent company,
such parent company and its 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.

“CPI Adjustment” means, at
any time, with respect to each of the most recent Operating Budgets 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 (a) the sum of (i)
Operating Cash Flow Available for Debt Service for such period and (ii) Project
Company Actual Debt Service for such period, minus (iii) the Required Make-Up
Well Reserve Account Deposits for such period to (b) the sum of (i) Debt Service
for such period, and (ii) the greater of (x) Project Company Scheduled Debt
Service for such period and (y) Project Company Actual 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. 

“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 (a) 7.80%,
and (b) 2.00% 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. 

Schedule B - 3 

“Depositary” means
Wilmington Trust, National Association, a national banking association, 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 any
(i) distribution of any nature or 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 the Operator
pursuant to Section 6.1 and 6.2 of the USG O&M Agreement or the Operator
pursuant to Sections 6.1, 6.2, and 6.3 of the Raft River O&M Agreement. 

“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 Consultant”
means Full Circle Geoscience, LLC. 

“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. 

Schedule B - 4 

“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. 

“Estoppels” means the
estoppels listed on Schedule 4.11(b)(iii) and any additional estoppel
delivered to Collateral Agent. 

“Event of Default” is
defined in Section 11. 

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

“Federal Financing Bank”
means The Federal Financing Bank, a body corporate and instrumentality of the
United States of America. 

“Federal Financing Bank Loan
Collateral Agent” means PNC Bank, National Association, doing business as
Midland Loan Services, a division of PNC Bank, National Association. 

“Federal Financing Bank Loan
Documents” means the Federal Financing Bank Loan Guarantee Agreement, the
USG Oregon Pledge Agreement, the other Loan Documents (as defined in the Federal
Financing Bank Loan Guarantee Agreement) and any other documents listed on
Schedule 5.12(d), and any agreement that replaces any of the foregoing. 

“Federal Financing Bank Loan
Guarantee Agreement” means that Loan Guarantee Agreement, dated as of
February 23, 2011, among the USG Oregon Project Company, the Secretary of
Energy, acting through the U.S. DOE, the Federal Financing Bank Loan Servicer
and the Federal Financing Bank Loan Collateral Agent. 

“Federal Financing Bank Loan
Servicer” means the U.S. DOE or its successor, as appointed pursuant to the
Federal Financing Bank Loan Guarantee Agreement. 

“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. 

Schedule B - 5 

“Geothermal Lease” means
each of the USG Oregon Geothermal Lease and Raft River Geothermal Lease
(collectively, the “Geothermal Leases”).

“Geothermal Resource”
means each of the USG Oregon Geothermal Resource and Raft River Geothermal
Resource (collectively, the “Geothermal Resources”).

“Geothermal Resource
Assessment Report” is defined in Section 4.21. 

“Geothermal Resource
Engineer” means Geothermal Science, Inc., a California corporation, or a
substitute resource engineer mutually acceptable to the Purchasers and the
Issuer. 

“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. 

“Governmental Official”
means any governmental official or employee, employee of any
government-owned or government-controlled entity, political party, any official
of a political party, candidate for political office, official of any public
international organization or anyone else acting in an official capacity. 

“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; 

(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 

Schedule B - 6 

(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.

“Holy Cross Purchase and Sale
Agreement” means the Renewable Energy Credit Purchase and Sale Agreement,
dated as of July 29, 2006, between the Raft River Project Company and Holy Cross
Energy, as amended by the First Amendment to Renewable Energy Credit Purchase
and Sale Agreement, dated as of December 3, 2008 and the Second Amendment to
Renewable Energy Credit Purchase and Sale Agreement, dated as of December 15,
2010. 

“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); 

(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); 

Schedule B - 7 

(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, prior to the Closing Date, Luminate LLC, or, after the Closing Date, any
other 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 or any
Issuer Subsidiary. 

“Interconnection
Agreement” means each of the USG Oregon Interconnection Agreement and the
Raft River Interconnection Agreement (collectively, the “Interconnection
Agreements”).

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

“Issuer Party” means each
of each Issuer Subsidiary, the Operator and each Sponsor (collectively, the
“Issuer Parties”). 

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

Schedule B - 8 

“Issuer Subsidiary” means
each of each Project Company and USG Oregon Holdings (collectively, the “Issuer
Subsidiaries”). 

“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). 

“LLC Agreement” means each
of the USG Oregon LLC Agreement, the Raft River LLC Agreement and the USG Oregon
Holdings LLC Agreement (collectively, the “LLC Agreements”).

“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
Account Control Agreement. 

“Local Account 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
either Project or any part thereof. 

“Loss Proceeds” means the
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 or any Issuer
Subsidiary in connection with any Loss. 

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

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

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

Schedule B - 9 

“Material Adverse Effect”
means a material adverse effect on (a) the business, assets, liabilities,
operations, prospects or condition, financial or otherwise, of the Issuer, any
Issuer Subsidiary or either Project, (b) the Issuer’s ability to perform any of
its obligations under the Notes or the other Financing Documents, (c) the
ability of the Issuer or any Issuer Subsidiary to perform its obligations under
any Material Project Document, (d) the rights or remedies of the Collateral
Agent or any holder of the Notes under any Financing Document, or (e) 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
(a) any energy purchase or sale agreement entered into after the Closing Date,
(b) any other Contractual Obligation of the Issuer or any Issuer Subsidiary that
is material to development, financing, construction, operation or maintenance of
either Project, or (c) 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 or any Issuer Subsidiary thereunder exceed $250,000 in
any calendar year or $500,000 during the term thereof. 

“Material Project
Document” means the PPAs, the Geothermal Leases, the Interconnection
Agreements, the O&M Agreements, the Recapture Indemnity Agreement, the Holy
Cross Purchase and Sale Agreement, the Public Utility District Purchase and Sale
Agreement and any other documents listed on Schedule 5.12(a) , and any
agreement that replaces any of the foregoing.

“Maturity Date” means
March 31, 2023. 

“MBR Authority” is defined
in Section 5.17(f) . 

“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. 

“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. 

Schedule B - 10 

“O&M Agreement” means
each of the USG Oregon O&M Agreement and the Raft River O&M Agreement
(collectively, the O&M Agreements).

“O&M Costs” means, for
any period, actual cash maintenance, administration and operation costs related
to either Project (including amounts payable under Section 6.2 of the USG
O&M Agreement and Section 6.2 of the Raft River O&M Agreement) and for
the purchase of goods and services in connection therewith, or required by any
requirement of law incurred and paid by a Project Company for such 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 such 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 such 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 such 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
Budgets 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.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“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, all Project Company Distributions
received during such period minus all operating expenses of the Issuer for such
period. 

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

Schedule B - 11 

“Payment Date” means March
31 and September 30, commencing with September 30, 2016 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 Indebtedness”
means (a) with respect to the USG Oregon Project Company only, Indebtedness
incurred pursuant to or in accordance with the Federal Financing Bank Loan
Documents, (b) with respect to USG Oregon Holdings only, Indebtedness incurred
pursuant to the USG Oregon Pledge Agreement, and (c) with respect to the Issuer
only, Additional Permitted Debt. 

“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, (h) marketable security rated not less than “A-1” by S&P
or not less than “Prime-1” by Moody’s, and (i) with respect to the USG Oregon
Project Company only, Permitted Investments (as such term is defined in the
Federal Financing Bank Loan Guarantee Agreement). 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:
(a) Liens created pursuant to any Financing Document; (b) with respect to the
USG Oregon Project Company only, Liens created pursuant to any Federal Financing
Bank Loan Document, (c) with respect to USG Oregon Holdings only, Liens created
pursuant to the USG Oregon Pledge Agreement, (d) 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; (e) Liens in respect of property or
assets of a Project Company 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 (i) do not individually or in the aggregate materially detract from
the value of the property or assets of such Project Company and do not
materially impair the use thereof in the operation of the business of such
Project Company or (ii) 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; (f) Liens in respect of property or assets of a
Project Company set forth in Schedule B of the applicable Title Policy and other
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 or any Issuer
Subsidiary; (g) 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; (h) 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 (i) Liens on assets (real
or personal) of either Project Company or either 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. 

“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, and (v) the
Raft River Capital Expenditure Account. 

“Power Purchaser” means
the Idaho Power Company, an Idaho corporation.

“PPA” means each of the
USG Oregon PPA and the Raft River PPA (collectively, the “PPAs”).

“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. 

“Project” means each of
the USG Oregon Project and the Raft River Project (collectively, the
“Projects”). 

“Project Company” means
each of the USG Oregon Project Company and the Raft River Project Company
(collectively, the “Project Companies”). 

Schedule B - 13 

“Project Company Actual Debt
Service” means, for any period, (a) all payments actually made of principal
and payments actually made of interest, fees, expenses or other charges due and
payable by the USG Oregon Project Company pursuant to the terms of the Federal
Financing Bank Loan Documents in such period, multiplied by (b) 0.6. 

“Project Company Scheduled
Debt Service” means, for any period, (a) all scheduled payments of principal
and payments of interest, fees, expenses or other charges due and payable by the
USG Oregon Project Company pursuant to the terms of the Federal Financing Bank
Loan Documents in such period, multiplied by (b) 0.6. 

“Project Company
Distributions” means all distributions of available cash made to the Issuer
under the USG Oregon Holdings LLC Agreement or the Raft River LLC Agreement.

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

“Projected Debt Service
Coverage Ratio” means as of any Payment Date for the four consecutive
quarters commencing on such Payment Date, the ratio of (a) the sum of (i)
projected Operating Cash Flow Available for Debt Service for such period, and
(ii) Project Company Scheduled Debt Service for such period, minus (iii) the
Required Make-Up Well Reserve Deposits for such period calculated using the same
assumptions used in preparing the Base Case Projections, to (b) the sum of (i)
scheduled principal, interest and fees in respect of the Obligations for such
period and (ii) Project Company Scheduled Debt Service 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) . 

“Public Utility District
Purchase and Sale Agreement” means the Renewable Energy Certificate Purchase
and Sale Agreement, dated as of December 15, 2010, between the Raft River
Project Company and Public Utility District No. 1 of Clallam County, Washington.

“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).

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

Schedule B - 14 

“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.

“Raft River Capital
Expenditure Account” is defined in the Depositary Agreement. 

“Raft River Geothermal
Lease” means each of the (a) Raft River Geothermal Lease and Agreement,
dated as of June 28, 2003, among Janice Crank and the children of Paul Crank and
USG Idaho, as amended by that Agreement for Ratification and Amendment of
Geothermal Lease Agreement, dated August 18, 2005, among USG Idaho and Julie
Crank, Judson Crank, Joshua Crank, Jarred Crank and Jason Crank and that Second
Amendment to Geothermal Lease Agreement, dated August 11, 2006, as assigned by
USG Idaho to the Raft River Project Company pursuant to that Assignment,
Assumption and Indemnity Agreement, dated September 1, 2006, (b) Geothermal
Lease and Agreement, dated April 3, 2015, between Ronda B. Doman and the Raft
River Project Company, (c) Geothermal Lease and Agreement, dated as of January
25, 2006, between Philip Glover and USG Idaho, as assigned by USG Idaho to the
Raft River Project Company pursuant to that Assignment, Assumption and Indemnity
Agreement, dated September 1, 2006, (d) Geothermal Lease and Agreement, dated as
of April 30, 2015, between Jensen Investments, Inc. and the Raft River Project
Company, (e) Geothermal Lease and Agreement, dated as of March 1, 2004, between
Jay Newbold and USG Idaho, as assigned by USG Idaho to the Raft River Project
Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated
September 1, 2006, (f) Raft River Geothermal Lease and Agreement, dated as of
October 19, 2006, between USG Idaho and the Raft River Project Company, and (g)
Geothermal Lease and Agreement, dated as of December 1, 2004, among Reid S.
Stewart and Ruth O. Stewart and USG Idaho, as assigned by USG Idaho to the Raft
River Project Company pursuant to that Assignment, Assumption and Indemnity
Agreement, dated September 1, 2006 (collectively, the “Raft River Geothermal
Leases”). 

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

“Raft River Interconnection
Agreement” means (i) the Interconnection and Wheeling Agreement, dated as of
March 9, 2006, between Raft River Rural Electric Cooperative and the Raft River
Project Company; and (ii) the Service Agreement for Point-to-Point Transmission
Service, dated as of October 25, 2006, between the United States of America
acting by and through the Bonneville Power Administration and the Raft River
Project Company, as amended by three documents styled Exhibit A, Table 1A,
Revision No. 1, Exhibit A, Table 1B, Revision No. 1, and Exhibit A, Table 1C,
Revision No. 1, each dated as of April 6, 2006, and each between the United
States of America acting by and through the Bonneville Power Administration and
the Raft River Project Company. 

“Raft River LLC Agreement”
means the Second Amended and Restated Operating Agreement of Raft River Energy I
LLC, dated as of December 14, 2015.

“Raft River Members” means
the Issuer and Raft River I Holdings, LLC, as members of the Raft River Project
Company. 

Schedule B - 15 

“Raft River O&M
Agreement” means the Management Services Agreement, dated as of August 9,
2006, between the Raft River Project Company and the Operator. 

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

“Raft River PPA” means the
Power Purchase Agreement, dated September 24, 2007, between the Raft River
Project Company and the Power Purchaser, as supplemented by the letter, dated
April 14, 2008 from the Power Purchaser to the Raft River Project Company and as
amended by the First Amendment to the Firm Energy Sales Agreement, dated
February 20, 2015. 

“Raft River Project” means
the 13 MW (net) geothermal electric generating facility located in Cassia
County, Idaho utilizing a water cooled binary generating unit manufactured by
Ormat. 

“Raft River Project
Company” means Raft River Energy I LLC, a Delaware limited liability
company. 

“Raft River Site” means
the real property on which the Raft River Project or the Raft River Geothermal
Resource is located, the legal description of which is set forth in the Title
Policy for the Raft River Site and all related easements, rights-of-way and
other rights and interests. 

“REC Purchase and Sale
Agreement” means each of the Public Utility District Purchase and Sale
Agreement and the Holy Cross Purchase and Sale Agreement (collectively, the REC
Purchase and Sale Agreements) 

“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. 

“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 ownership or
operation and maintenance of the Projects, and/or (c) the generation,
transmission and sale of energy generated by the Projects 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 Deposit” is defined in Section 9.12(a) . 

Schedule B - 16 

“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.

“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
the holders, the Collateral Agent and the Depositary. 

“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” means
the Security Agreement, the USG Idaho Pledge Agreement, the Issuer Pledge
Agreement, any future security agreements, the Depositary Agreement, the Local
Account Control Agreement, if any, the Recapture Indemnity Agreement, the
Estoppels, 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.

“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. 

“Sites” means,
collectively, the USG Oregon Site and the Raft River Site. 

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

“Sponsor” means each of
USG Idaho and USG Delaware (collectively, the “Sponsors”). 

“Supplemental Rights”
means (a) with respect to the Raft River Site, the easement granted pursuant to
Easement from USG Idaho to Raft River Project Company, dated December 5, 2006,
and recorded as Instrument No. 312473 with the Recorder of Cassia County, Idaho,
Raft River Energy Geothermal Unit Agreement, by Raft River Project Company,
dated December 1, 2015 (Corrected Memorandum of Geothermal Unit Agreement dated
April 7, 2016, recorded on April 18, 2016 as #2016-00157), and (b) with respect
to the USG Oregon Site, mineral rights granted pursuant to Quitclaim Deed from
BRP LLC to USG Oregon Project Company, dated December 18, 2012, and recorded as
Instrument No. 2013-4885 with the records of Malheur County, Oregon. 

Schedule B - 17 

“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. 

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

“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. 

“U.S. DOE” means the U.S.
Department of Energy, an agency of the United States of America, acting by and
through the Secretary of Energy. 

“U.S. Economic Sanctions”
is defined in Section 5.16(a) . 

“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. 

Schedule B - 18 

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

“USG Idaho Pledge
Agreement” is defined in Section 4.12(c) . 

“USG Oregon Geothermal
Lease” means each of the (a) Hot Springs Ranch Geothermal Lease and
Agreement, dated as of January 24, 2007, between Cyprus Gold Exploration
Corporation and USG Delaware, as assigned by USG Delaware to the USG Oregon
Project Company pursuant to that Assignment, Assumption and Indemnity Agreement,
dated February 16, 2010 (as evidenced by that certain Memorandum of Geothermal
Lease Assignment, dated February 17, 2010, executed by USG Delaware and the USG
Oregon Project Company), such assignment being consented to by Cyprus Gold
Exploration Corporation pursuant to that Consent to Assignment, dated January
29, 2010, (b) Hot Spring Ranch Geothermal Lease and Agreement, dated as of May
24, 2006, between JR Land and Livestock Inc. and USG Delaware, as assigned to
the USG Oregon Project Company pursuant to the Assignment, Assumption and
Indemnity Agreement, dated February 16, 2010 (as evidenced by that certain
Memorandum of Geothermal Lease Assignment, dated February 17, 2010, executed by
USG Delaware and the USG Oregon Project Company), such assignment being
acknowledged by JR Land and Livestock Inc. pursuant to that Acknowledgement of
Lease Assignment/Waiver of Notice, dated September 1, 2010, and (c) Geothermal
Lease and Agreement, dated as of November 1, 2009, among John and Kathy Jordan
and USG Idaho, as assigned to the USG Oregon Project Company pursuant to
Assignment, Assumption and Indemnity Agreement, dated February 16, 2010 (as
evidenced by that certain Memorandum of Geothermal Lease Assignment, dated
February 17, 2010, executed by USG Idaho and the USG Oregon Project Company),
such assignment being acknowledged by John and Kathy Jordan pursuant to that
Acknowledgement of Lease Assignment/Waiver of Notice, dated August 31, 2010
(collectively, the “USG Oregon Geothermal Leases”). 

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

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

“USG Oregon Holdings LLC
Agreement” means the Amended and Restated Liability Company Agreement of USG
Oregon Holdings, dated as of September 8, 2010, as amended by the Written
Consent and Amendment, dated August 5, 2011, the Second Written Consent and
Amendment, dated January 11, 2012, the Third Written Consent and Amendment,
dated April 23, 2012 and the Fourth Amendment and Release Agreement, dated as of
February 20, 2014. 

“USG Oregon Holdings
Members” mean the Issuer and Enbridge (U.S.) Inc., as members of USG Oregon
Holdings.

“USG Oregon Interconnection
Agreement” means the Standard Large Generator Interconnection Agreement,
dated December 16, 2009, between USG Idaho and the Power Purchaser, following
FERC approved format, and assigned by USG Idaho to the USG Oregon Project
Company as of October 15, 2010. 

Schedule B - 19 

“USG Oregon LLC Agreement”
means the USG Oregon LLC Limited Liability Company Agreement, dated as of August
12, 2009, as amended by the First Amendment to Limited Liability Company
Agreement, dated as of December 31, 2009.

“USG Oregon O&M
Agreement” means the Management Services Agreement, dated as of February 1,
2011, between the USG Oregon Project Company and the Operator. 

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

“USG Oregon Pledge
Agreement” means the Equity Pledge Agreement, dated as of February 23, 2011,
among USG Oregon Holdings, the USG Oregon Project Company and the Federal
Financing Bank Loan Collateral Agent. 

“USG Oregon PPA” means the
Power Purchase Agreement, dated December 11, 2009, between the USG Oregon
Project Company and the Power Purchaser. 

“USG Oregon Project” means
the approximately 22 MW (net) geothermal electric generating facility located in
Malheur County, Oregon utilizing an air cooled binary generating unit
manufactured by TAS Energy Systems, Inc. 

“USG Oregon Project
Company” means USG Oregon LLC, a Delaware limited liability company.

“USG Oregon Site” means
the real property on which the USG Oregon Project or the USG Oregon Geothermal
Resource is located, the legal description of which is set forth in the Title
Policy for the USG Oregon Site and all related easements, rights-of-way and
other rights and interests. 

“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 either the Oregon Water Resources Department or the Idaho Department 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 either Project Company, or are otherwise relating to, appurtenant
to, or used in connection with, all or any part of either Site or either
Project, or the use and enjoyment thereof, including, without limitation, the
following water rights permits: those certain water rights leased by the Raft
River Project Company from USG Idaho under that certain Water Lease Agreement,
dated November 2, 2006, between USG Idaho and Raft River Project Company. 

“Well Permits” means (a)
36-045-90027 (NHS-1), 36-045-90028 (NHS-2), 36-045-90030 (NHS-4), 36-045-90031
(NHS-5), 36-045-90032 (NHS-8), 36-045-90034 (NHS-10), 36-045-90035 (NHS-11) and
36-045-90037 (NHS-13) with respect to the USG Oregon Site, and (b) 43-GR-19
(RRGE-1), 43-GR-20 (RRGE-2), 43-GR-31 (RRG-3), 43-GR-22 (RRGP-4), 43-GR-24
(RRGI-6), 43-GR-32 (RRG-7) and 43-GR-33 (RRG-11) with respect to the Raft River
Site.

Schedule B - 20 

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 - 21 

Schedule 4.11(b)(ii) 

Consents 

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

	1. 	
      Eleventh Omnibus Consent and Agreement, dated May 17,
      2016, of U.S. Department of Energy, as DOE Guarantee provider and Loan
      Servicer, USG Oregon, LLC and PNC Bank, National Association, as
      Collateral Agent and Administrative Agent

	 	 
	2. 	
      Letter Agreement, dated as of April 18, 2016, among U.S.
      Geothermal Inc., Enbridge (U.S.) Inc. and Idaho USG Holdings,
  LLC

Schedule 4.11(b)(ii) - 1 

Schedule 4.11(b)(iii) 

Estoppels 

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

	1. 	
      Estoppel Certificate, dated as of the date hereof,
      executed by the Power Purchaser and the Collateral Agent with respect to
      the Raft River PPA

	 	 
	2. 	
      Estoppel Certificate, dated as of the date hereof,
      executed by the Power Purchaser and the Collateral Agent with respect to
      the USG Oregon PPA

	 	 
	3. 	
      Letter to Sponsor, dated as of April 5, 2016, executed by
      Holy Cross Energy with respect to the Holy Cross Purchase and Sale
      Agreement

	 	 
	4. 	
      Estoppel Certificate, dated as of March 10, 2016,
      executed by Public Utility District No. 1 of Clallam County, Washington
      and the Collateral Agent with respect to the Public Utility District
      Purchase and Sale Agreement

Schedule 4.11(b)(iii) - 1 ) 

	Schedule 4.22 
	 
	Base Case Projections 
	 
	  
	See Attached. 

Schedule 4.22 

	Schedule 5.5 
	 
	Organization and Ownership of Interests in Issuer
      and Issuer Subsidiaries; Affiliates; 
	Officers; Issuer Subsidiaries. 
	  
	 
	See Attached. 

Schedule 5.5 

	Schedule 5.8 
	 
	Required Approvals 
	 
	RAFT RIVER ENERGY I LLC 
	REQUIRED APPROVALS AND PERMIT SUMMARY1
    

	Authorization 	Number 	Agency 	Status 
	Geothermal Well Permit 	RRG-1 
43-GR-19 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-2 
43-GR-20 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-3 
43-GR-31 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-4 
43-GR-22 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-6 
43-GR-24 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-7 
43-GR-32 	Idaho Department of 
Water Resources 	Issued & Active 
	Geothermal Well Permit 	RRG-11 
43-GR-33 	Idaho Department of 
Water Resources 	Issued & Active 
	Water Rights -- 
Cooling Water 
Wells 1, 2, 3, 4
      & 
Surface Water 	43-02534B 
43-10069 
43-2167B
      
43-120 	Idaho Department of 
Water Resources 	Issued & Active 
	Waste Water Reuse 
Permit 	I-210-02 	Idaho Department of 
Environmental Quality
    	Issued & Active 

___________________________________

1

	RRGE-1 	43-GR-19 Raft River Energy, LLC 	transferred from USG to RRE - 10/23/2006 
	RRGE-2 	43-GR-20 Raft River Energy, LLC 	transferred from USG to RRE - 10/23/2006 
	RRG-3 	43-GR-31 Raft River Energy, LLC 	converted to injection well (43-GR-31); the
      permit number was updated 9/24/2007 
	RRGP-4 	43-GR-22 Raft River Energy, LLC 	transferred from USG to RRE - 10/23/2006 
	RRG-5 	43-GR-34 Raft River Energy, LLC 	converted to injection well 
	RRGI-6 	43-GR-24 Raft River Energy, LLC 	transferred from USG to RRE - 10/23/2006 
	RRG-7 	43-GR-32 Raft River Energy, LLC 	convert from injection to production well
      (43-GR-32); the permit number was updated 
	RRG-11 	43-GR-33 Raft River Energy, LLC 	Converted to injection permit #43GR33
  

Schedule 5.8 - 1 

USG OREGON LLC 
REQUIRED APPROVALS AND PERMIT
SUMMARY 

	Authorization 	Number 	       
                 Agency 	Status 
	Geothermal Well Permit 	36-045-90027 
NHS-1 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90028 
NHS-2 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90030 
NHS-4 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90031 
NHS-5 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90032
      NHS-8 
	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90034 
NHS-10 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90035 
NHS-11 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Geothermal Well Permit 	36-045-90037 
NHS-13 	Oregon Department of
      
Geology and Mineral 
Industries 	Issued & Active 
	Right-of-Way 	OR-66537 	Bureau of Land 
Management
    	Issued & Active 
	Underground Injection 
Control Permit
	13281-8 	Oregon Department of
      
Environmental Quality 	Issued & Active

Schedule 5.8 - 2 

Schedule 5.12(a) 

Material Project Documents 

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

	 	1. 	USG Oregon PPA 
	 	 	 
	 	2. 	Raft River PPA 
	 	 	 
	 	3. 	USG Oregon Geothermal Lease 
	 	 	 
	 	4. 	Raft River Geothermal Lease 
	 	 	 
	 	5. 	USG Oregon Interconnection Agreement 
	 	 	 
	 	6. 	Raft River Interconnection Agreement 
	 	 	 
	 	7. 	USG Oregon O&M Agreement 
	 	 	 
	 	8. 	Raft River O&M Agreement 
	 	 	 
	 	9. 	Recapture Indemnity Agreement 
	 	 	 
	 	10. 	Holy Cross Purchase and Sale Agreement 
	 	 	 
	 	11. 	Public Utility District Purchase and Sale
      Agreement 
	 	 	 
	 	12. 	Fluid Injection Agreement, dated as of April
      15, 2016, between USG Idaho and the Issuer 
	 		  
	 	13. 	Office Lease between USG Idaho and the Raft
      River Project Company 

Schedule 5.8 - 3 

Schedule 5.12(d) 

Federal Financing Bank Loan Documents 

Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Federal Financing
Bank Loan Guarantee Agreement.

	 	1. 	
      Federal Financing Bank Loan Guarantee Agreement

	 	 	 
	 	2. 	
      USG Oregon Pledge Agreement

	 	 	 
	 	3. 	
      Note Purchase Agreement, dated as of February 23, 2011,
      by and among the Federal Financing Bank, the USG Oregon Project Company
      and the U.S. DOE

	 	 	 
	 	4. 	
      Future Advance Promissory Note, dated February 23, 2011,
      by the USG Oregon Project Company in favor of the Federal Financing Bank
      and guaranteed by the U.S. DOE

	 	 	 
	 	5. 	
      Equity Funding and Recapture Obligation Agreement, dated
      as of February 23, 2011, among USG Delaware, Enbridge (U.S.), Inc., the
      USG Oregon Project Company and the U.S. DOE

	 	 	 
	 	6. 	
      Leasehold Trust Deed, Security Agreement, Financing
      Statement, Fixture Filing and Assignment of Leases, Rents and Security
      Deposits, dated as of February 23, 2011, made by the USG Oregon Project
      Company to Chicago Title Company of Oregon for the benefit of the Federal
      Financing Bank Loan Collateral Agent

	 	 	 
	 	7. 	
      Security Agreement, dated as of February 23, 2011,
      between the USG Oregon Project Company and the Federal Financing Bank Loan
      Collateral Agent

	 	 	 
	 	8. 	
      Depositary Agreement, dated as of February 23, 2011,
      among the USG Oregon Project Company, the Federal Financing Bank Loan
      Collateral Agent and PNC Bank, National Association, doing business as
      Midland Loan Services, a division of PNC Bank, National Association (as
      administrative agent under the Federal Financing Bank Loan Guarantee
      Agreement)

	 	 	 
	 	9. 	
      Depositary Accounts Control Agreement, dated as of
      February 23, 2011, among the USG Oregon Project Company, PNC Bank,
      National Association and the Federal Financing Bank Loan Collateral
      Agent

	 	 	 
	 	10. 	
      Each Direct Agreement

	 	 	 
	 	11. 	
      Warrant Agreement, dated August 2, 2011, between USG
      Delaware and the U.S. DOE

	 	 	 
	 	12. 	
      Omnibus Waiver and Consent Letter Agreement, dated as of
      April 19, 2012, among the USG Oregon Project Company, USG Delaware, the
      U.S. DOE and the Federal Financing Bank Loan
Servicer.

Schedule 5.12(d) - 1 

	 	13. 	
      Second Omnibus Waiver and Consent Letter Agreement, dated
      as of August 22, 2012, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	14. 	
      Third Omnibus Waiver and Consent Letter Agreement, dated
      as of December 20, 2012, 2012, among the USG Oregon Project Company, USG
      Delaware, the U.S. DOE and the Federal Financing Bank Loan
  Servicer.

	 	 	 
	 	15. 	
      Fourth Omnibus Waiver and Consent Letter Agreement, dated
      as of April 5, 2013, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	16. 	
      Agreement Modifying Note, dated as of April 5, 2013,
      among the USG Oregon Project Company, the Federal Financing Bank and the
      U.S. DOE.

	 	 	 
	 	17. 	
      Fifth Omnibus Waiver and Consent Letter Agreement, dated
      as of June 4, 2013, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	18. 	
      Sixth Omnibus Waiver and Consent Letter Agreement, dated
      as of July 25, 2013, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	19. 	
      Seventh Omnibus Waiver and Consent Letter Agreement,
      dated as of August 8, 2013, among the USG Oregon Project Company, USG
      Delaware, the U.S. DOE and the Federal Financing Bank Loan
  Servicer.

	 	 	 
	 	20. 	
      Eighth Omnibus Waiver and Consent Letter Agreement, dated
      as of November 7, 2013, among the USG Oregon Project Company, USG
      Delaware, the U.S. DOE and the Federal Financing Bank Loan
  Servicer.

	 	 	 
	 	21. 	
      Ninth Omnibus Waiver and Consent Letter Agreement, dated
      as of April 13, 2015, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	22. 	
      Tenth Omnibus Waiver and Consent Letter Agreement, dated
      as of March 24, 2016, among the USG Oregon Project Company, USG Delaware,
      the U.S. DOE and the Federal Financing Bank Loan Servicer.

	 	 	 
	 	23. 	
      All other documents, certificates and instruments
      required to be delivered on or before the Financial Closing Date (as
      defined in the Federal Financing Bank Loan Guarantee Agreement) in
      connection with the foregoing.

Schedule 5.12(d) - 2 

	Schedule 8.1 
	 
	Amortization Schedule 
	 
	  
	See Attached. 

Schedule 8.1 - 1 

Schedule 9.2 

Insurance Requirements 

	 	(a) 	
      Issuer shall (and Issuer shall cause the Project
      Companies to), without cost to the Secured Parties, maintain or cause to
      be maintained on its (or each 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 or Federal Financing
      Bank Loan Document, 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 and until all of the Obligations have been
      paid in full:

	 	(i) 	
      Commercial General Liability insurance for Issuer, each
      Project Company and each 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)
      shall be included 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, each Project
      Company and each 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 Issuer or a Project Company 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, and shall cause
      the Project Companies to, take immediate steps to restore such aggregate
      limits or shall provide other equivalent insurance protection to cover
      such reduced aggregate limits.

	 	 	 
	 	(v) 	
      Aircraft Liability, to the extent exposure exists, for
      the use of any owned, non-owned or hired aircraft used in the operation of
      a Project with a limit of not less than $10,000,000.

	 	 	 
	 	(vi) 	
      Pollution liability covering sudden and accidental
      release of pollutants shall be provided to protect against claims brought
      by third parties against Issuer, the USG Oregon Project Company, the
      Collateral Agent or the Secured Parties, as appropriate, and arising from
      activities of the USG Oregon Project, with a policy limit of not less than
      $5,000,000 for any one occurrence. Such coverage may be insured under the
      commercial general liability policy in lieu of a separate pollution legal
      liability policy, and shall be renewed as required to maintain insurance
      coverage in full force and effect. 

Schedule 9.2 - 2 

	 	(vii) 	
      “All-risk” Property insurance covering against physical
      loss or damage to the Issuer, the Project Companies and Project assets
      (including (i) buried cables of either Project site and (ii) transmission
      lines of which any of Issuer, either Project Company or either Project has
      ownership 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 both Projects or a blanket policy limit (or loss limit)
      reasonably acceptable to the Required Holders, if accompanied by
      supporting independent loss studies, and
providing:

	 	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. If
      transit conveyances contemplate any portion via ocean transit, the
      coverage will be amended or a separate policy will be purchased, to
      include both Projects’ property and equipment being shipped (as
      applicable) 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 applicable 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)(vii)(F) below,
if not already provided by insurance required to be obtained in paragraph
(b)(vii)(F) below;

Schedule 9.2 - 3 

	 	D. 	
      with respect to USG Oregon Project, earth movement and
      flood coverage may be written with a sublimit of not less than 25% of the
      Total Insured Value to the extent commercially available but in no event
      less than 125% of the probable maximum loss (the “PML”) as
      supported by a qualified PML report specific to the USG Oregon Project and
      other assets that could reasonably be damaged by the same occurrence. With
      respect to the Raft River Project, coverage may be written with a sublimit
      of not less than $5,000,000 for earth movement and $25,000,000 for flood
      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, coastal windstorm (to the extent applicable) and cleanup of
      hazardous material and pollution, which shall apply on an annual aggregate
      basis;

	 	 	 
	 	F. 	
      with respect to each Project, business interruption
      insurance covering against the same perils as set forth in this Section
      (b)(vii), 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 each Project as set
      forth in this Section (b)(vii). For each Project, 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 6 months of projected revenues less non continuing expenses,
      including a provision for debt servicing (subject to commercial
      availability) or such other amount acceptable to the Required Holders.
      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 may have deductibles of not greater
      than $50,000 per loss for the USG Oregon Project and $100,000
  for the Raft River Project, except two percent (2%) of the total
insured value of either Project with respect to earth movement and Business
Interruption coverage shall have a deductible not greater than a thirty (30) day
waiting period for business interruption coverage, unless otherwise approved by
the Required Holders. 

Schedule 9.2 - 4 

	 	(viii) 	
      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 each Project, which the Required Holders may reasonably
      require in consultation with the Insurance Consultant and
  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, the Project Companies, the Collateral
      Agent and the Secured Parties as additional insureds;

	 	 	 
	 	(ii) 	
      be primary and non-contributory as respects insurance
      provided by the Issuer, the Project Company, the Collateral Agent and the
      Secured Parties;

	 	 	 
	 	(iii) 	
      waive rights of subrogation against the Issuer, the
      Project Companies, the Collateral Agent and the Secured Parties;

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

	 	 	 
	 	(v) 	
      continue in force until all obligations of contractors
      and sub- contractors are fulfilled with respect to the Projects;
  and

	 	 	 
	 	(vi) 	
      provide that contractors and sub-contractors shall be
      responsible for tools and equipment brought onto either Project
    site.

	 	(d) 	
      With respect to the Raft River Project, all policies
      covering real or personal property or business interruption shall name the
      Collateral Agent as the sole loss payee in accordance with lender’s loss
      payable wording 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, either Project Company, either 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 or terminated for any
      reason whatsoever, the insurers (or their
  representatives) will promptly notify Issuer and the Collateral Agent on behalf
of the Secured Parties, and any such cancellation or termination shall not be
effective until forty-five (45) days (10 days with regard to non-payment) after
receipt of such notice by the Collateral Agent, and that appropriate
certification shall be made to Issuer by each insurer with respect thereto.

Schedule 9.2 - 5 

	 	(D) 	
      All policies covering real and personal property or
      business interruption shall be endorsed so that interests of the
      Collateral Agent and the Secured Parties shall be insured regardless of
      any breach or violation by Issuer, either Project Company, either Project
      or any other Person, of any warranties, declarations or conditions
      contained in such insurance policies.

	 	(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 either Project Company or
      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, a Project Company or a the Project; provided
      that Issuer shall (and Issuer shall cause each Project Company and
      Project to), upon Collateral Agent’s request (made at the direction of the
      Required Holders) and at Issuer’s (or the Project Company’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 Secured Parties shall have the
      right to participate and receive information with respect to all claims
      and losses.

	 	 	 
	 	(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 Secured Parties 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, the Project Companies
      and the Projects 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 Secured Party 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
the Secured Parties 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 Default
Rate, but in no event shall the rate of interest exceed the maximum rate
permitted by law. 

Schedule 9.2 - 6 

	 	(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 or Material Contract or
      Federal Financing Bank Loan 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 a Project Company
      or a 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 to the Projects (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 Secured Parties 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 - 7 

	 	(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 Secured Parties 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 - 8 

EXHIBIT 1 

[FORM OF NOTE]

IDAHO USG HOLDINGS, LLC 

5.80% SENIOR SECURED NOTE
DUE MARCH 31, 2023 

	No. [_____] 	[____ __], 20__ 
	$[_______] 	PPN: 45148@ AA4 

For Value Received, the
undersigned, Idaho USG Holdings, 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 March 31, 2023 (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 5.80% per annum from the date
hereof, payable semiannually, on March 31 and September 30 in each year,
commencing with September 30, 2016, 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) 7.80% per annum, and (ii) 2.00% 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 May 19, 2016 (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. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	By 	 
	Name: 	 
	Title: 	 

Exhibit 1 - 2 

	Exhibit 4.10 
	 
	Form of Funding Instruction Letter 
	  
	 
	Idaho USG Holdings, LLC 
	c/o U.S. Geothermal Inc. 
	390 E Parkcenter Boulevard, Suite 250 
	Boise, Idaho 83706 
	 
	Funding Instruction Letter 
	  
	____________, 20162 

TO EACH OF THE PURCHASERS LISTED IN 
SCHEDULE
A HERETO: 

Ladies and Gentlemen: 

The undersigned, a Responsible Officer of Idaho USG Holdings,
LLC, a Delaware limited liability company (the “Issuer”), hereby confirms, in
accordance with Section 4.10 of the Note Purchase Agreement, dated as of May 19,
2016, among the Issuer and the Purchasers (the “Note Purchase Agreement”), that
you are to pay the purchase price for the Issuer’s 5.80% Senior Secured Notes
due March 31, 2023 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, 
	  	 
	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	By 	 
	Name 	 
	Title 	 

___________________________
2 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 

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 May 19, 2016, is by and among
(i) IDAHO USG HOLDINGS, LLC, a Delaware limited liability company (the
“Issuer”), (ii) WILMINGTON TRUST, NATIONAL ASSOCIATION, 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) WILMINGTON TRUST,
NATIONAL ASSOCIATION, 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 Wilmington Trust, National Association, 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 the Issuer or an Issuer
Subsidiary, 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. 

“Capital Call” means a
capital call made by either USG Oregon Holdings or the Raft River Project
Company pursuant to its LLC Agreement.

“Capital Contribution”
means the proceeds of any capital contribution made by USG Idaho to the Issuer
in response to a Capital Call.

“Collateral” is defined in
Section 2.2. 

“Collateral Agency
Agreement” is defined in Recital B. 

“Collateral Agreement
Account” is defined in Section 2.1(b)(vii) . 

“Debt Service” means, for
any period, all scheduled payments of principal and all payments of 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) . 

“Depositary Agreement
Account” is defined in Section 2.1(b)(vi) . 

“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) . 

2 

“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 an amount equal to scheduled principal and interest
payments on the Notes for (a) prior to the successful extension of the RRG-2
Well, the 12-month period following such date, and (b) following the successful
extension of the RRG-2 Well, the 6-month period following such date; provided
that at the Closing the amount shall equal $1,799,841. For the purposes of the
Minimum Debt Service Reserve Requirement, a successful extension of the RRG-2
Well means that the RRG-2 Well contributes at least an additional $500,000 to
the annual cash flow of the Raft River Project Company. 

“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 $1,807,890. 

“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 March
31 and September 30, commencing with September 30, 2016, through the Maturity
Date, and the Maturity Date, provided that if any such date is not a
Business Day, the provisions of Section 22.2 of the Note Agreement shall apply
(as specified in the applicable Payment Requisition). 

“Payment Requisitions”
means, collectively, the Disbursement Requisitions, Maintenance Reserve
Requisitions, the Make-Up Well Requisitions and the Raft River Capital
Expenditure Requisitions. 

“Permitted Investment”
means any of the following investments: 

(i)      Marketable securities
issued by the U.S. Government and supported by the full faith and credit of the
U.S. Treasury, either by statute or an opinion of the Attorney General of the
United States; 

(ii)      Marketable debt securities
issued by U. S. Government-sponsored enterprises, U. S. Federal agencies, U. S.
Federal financing banks, and international institutions whose capital stock has
been subscribed for by the United States; 

3 

(iii)      Certificates of Deposit,
Time Deposits, and Bankers Acceptances of any bank or trust company incorporated
under the laws of the United States or any state, provided that, at the date of
acquisition, such investment, and/or the commercial paper or other short term
debt obligation of such bank or trust company has a short-term credit rating or
ratings from Moody’s and/or S&P, each at least P-1 or A-1; 

(iv)      Deposit accounts with any
bank that is insured by the Federal Deposit Insurance Corporation and whose
long-term obligations are rated A2 or better by Moody’s and/or A or better by
S&P 

(v)      Commercial paper of any
corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition is rated by Moody’s and/or S&P,
provided each such credit rating is least P-1 and/or A-1; 

(vi)      Money market mutual funds
that are registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, and operated in accordance with Rule
2a-7 and that at the time of such investment are rated Aaa-mf by Moody’s and/or
AAAm by S&P, including such funds for which the Trustee or an affiliate
provides investment advice or other services; 

(vii)      Tax-exempt variable rate
commercial paper, tax-exempt adjustable rate option tender bonds, and other
tax-exempt bonds or notes issued by municipalities in the United States, having
a short-term rating of “MIG-1” or “VMIG-1” or a long term rating of “Aa2”
(Moody’s), or a short-term rating of “A-1” or a long term rating of “AA”
(S&P); 

(viii)      Repurchase obligations
with a term of not more than thirty days, 102 percent collateralized, for
underlying securities of the types described in clauses (i) and (ii) above,
entered into with any bank or trust company or its respective affiliate meeting
the requirements specified in clause (iii) above; and 

(ix)      All rating requirements
are based on the time of purchase. 

“Pledged Accounts” is
defined in Section 2.2. 

“Purchasers” is defined in
Recital A. 

“Raft River Capital
Expenditure Account” is defined in Section 2.1(b)(v) . 

“Raft River Capital
Expenditure Requisition” means a requisition in the form attached hereto as
Exhibit D. 

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

“RRG-2 Well” means that
certain production well owned by the Raft River Project Company that is located
on the Raft River Site and designated as RRG-2. 

4 

ARTICLE 2 

ESTABLISHMENT OF THE ACCOUNTS; GRANT OF SECURITY INTEREST

2.1      Creation
of the Pledged Accounts. 

(a)      The
Issuer hereby appoints Wilmington Trust, National Association, to act as the
Depositary under this Agreement. Wilmington Trust, National Association, 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
trust accounts which shall be maintained at all times until the termination of
this Agreement: 

(i)      a
special account entitled “Idaho USG Holdings, LLC Revenue Account” (the
“Revenue Account”); 

(ii)      a
special account entitled “Idaho USG Holdings, LLC Debt Service Reserve Account”
(the “Debt Service Reserve Account”); 

(iii)      a
special account entitled “Idaho USG Holdings, LLC Maintenance Reserve Account”
(the “Maintenance Reserve Account”); 

(iv)      a
special account entitled “Idaho USG Holdings, LLC Make-Up Well Reserve Account”
(the “Make-Up Well Reserve Account”); and 

(v)      a
special account entitled “Idaho USG Holdings, LLC Raft River Capital Expenditure
Account” (the “Raft River Capital Expenditure Account”); 

(vi)      a
special account entitled “Idaho USG Holdings, LLC Depositary Agreement Account”
(the “Depositary Agreement Account”); and 

(vii)      a
special account entitled “Idaho USG Holdings, LLC Collateral Agreement Account”
(the “Collateral Agreement Account”). 

(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 Raft River Capital
Expenditure Account, the Depositary Agreement Account and the Collateral
Agreement Account (the Revenue Account, the Debt Service Reserve Account, the
Maintenance Reserve Account, the Make-Up Well Reserve Account, the Raft River
Capital Expenditure Account, the Depositary Agreement Account and the Collateral
Agreement 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, all amounts distributed to the Issuer
pursuant to the USG Oregon Holdings LLC Agreement or the Raft River LLC
Agreement, and all other amounts received by the Issuer from any source, 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”). 

5 

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
  Subsidiary 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
Subsidiary 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. 

6 

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.

7 

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
the managers of USG Oregon Holdings and the Raft River Project Company that, all
Project Company Distributions are to be made directly to the Depositary for
deposit into the Revenue Account. In the event that Project Company
Distributions are remitted directly to the Issuer or either Sponsor, the Issuer
or such Sponsor 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 shall be deposited promptly into the
Revenue Account, except for Capital Contributions, which the Issuer shall
promptly contribute to USG Oregon Holdings or the Raft River Project Company, as
applicable, to be applied to the stated purpose of the applicable Capital Call.
Until so deposited, the Issuer shall hold such amounts (excluding Capital
Contributions) in trust for the Depositary.

3.2      Debt
Service Reserve Account. 

(a)      On
the Closing Date, the Issuer will deposit $1,703,174 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. 

(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. 

8 

3.3      Maintenance
Reserve Account. 

(a)      On
the Closing Date, the Issuer will deposit $1,807,890 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. 

9 

3.4      Make-Up
Well Reserve Account. 

(a)      On
each Payment Date set forth in the most recent Schedule 9.12, if any, 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 Required Make-Up Well Reserve Account Deposit for such date
plus the amount of any Required Make-Up Well Reserve Account Deposits for prior
Payment Dates that have not yet been deposited in the MakeUp Well Reserve
Account, all as set forth in a Disbursement Requisition. 

3.5      Raft
River Capital Expenditure Account. On the Closing Date, the Issuer will
deposit $3,000,000 into the Raft River Capital Expenditure Account. 

ARTICLE 4 

WITHDRAWALS FROM ACCOUNTS 

4.1      Withdrawals
from the Revenue Account. 

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 administration and
operating costs of the Issuer, as set forth in the Disbursement Requisition;

10 

(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, as set forth in the Disbursement Requisition; 

(d)      FOURTH:
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; 

(e)      FIFTH:
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; 

(f)      SIXTH:
on each Payment Date, to the extent a Required Make-Up Well Reserve Deposit is
scheduled, 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; 

(g)      SEVENTH:
on a date specified in a Disbursement Requisition that is at least 15 days but
no more than 30 days following the most recent Payment Date, unless the
Depositary has been notified in accordance with this Agreement that any
Restricted Payment Condition has not been met on such date, the Depositary shall
withdraw any remaining funds in the Revenue Account as of the most recent
Payment Date 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. 

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 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 Projects. 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. 

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(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 Sites. 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). 

4.5      Withdrawals
from the Raft River Capital Expenditure Account. 

(a)      The
Issuer is authorized to submit Raft River Capital Expenditure Requisitions to
request transfers of funds to pay costs of extending the RRG-2 Well. Within
three Business Days after the Depositary receives a Raft River Capital
Expenditure Requisition, the Depositary will withdraw from the Raft River
Capital Expenditure Account and transfer to the accounts or payees specified in
the Raft River Capital Expenditure 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 Raft River Capital Expenditure Account, other than those made in
accordance with Sections 4.5(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). Upon final completion of the extension of
the RRG-2 Well, all funds remaining in the Raft River Capital Expenditure
Account shall be released to the account(s) or payee(s) designated by the Issuer
in writing to the Depositary. 

4.6      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). 

4.7      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. 

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4.8      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.

4.9      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) . 

4.10      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 and SEVENTH of Section
4.1 and so long as there is no Default or Event of Default, as otherwise
directed by the Issuer in writing. 

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. 

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(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 remain uninvested until a direction is received from the Issuer. 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. 

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. 

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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 and the transaction hereunder;
provided, however, that the Issuer will not be liable to the Depositary, for any
portion of such claims, liabilities, obligations, losses, damages, penalties,
judgments, costs, expenses or disbursements resulting from the Depositary’s,
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. 

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 8.11 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.

15 

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. 

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 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. 

16 

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. 

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. 

17 

8.8      Appointment
  of Process Agent. In addition to and notwithstanding the provisions of
  Section 8.7 above, the Issuer hereby irrevocably appoints CT 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. 

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. 

18 

8.11      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 shall be
  determined to be the 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 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
  Material 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. 

19 

8.12      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
  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. 

8.13      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. 

8.14      Amendments.
This Agreement may be amended, modified or waived only by a writing
signed by all of the parties. 

8.15      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. 

20 

8.16      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. 

8.17      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. 

8.18      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.] 

21 

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. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	By: 	 
	Name: 	Douglas J. Glaspey  
	Title: 	President  

Address for notices: 
c/o
U.S. Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID
83706 
Attention: Kerry Hawkley, Chief Financial Officer
Telephone:
208-424-1027 
Fax: 208-424-1030
Email: Khawkley@usgeothermal.com

[Signature Page to Depositary and Security Agreement] 

	WILMINGTON TRUST, NATIONAL 
	ASSOCIATION, solely in its capacity as
      Collateral 
	Agent and not individually 
	  	 
	  	 
	  	 
	By	 
	Name: 	 
	Title: 	 

Address for notices:

Wilmington Trust, National Association 
1100 North Market Street

Wilmington, DE 19890 
Attention: Administrator for Idaho USG Holdings,
LLC 
Facsimile: 302-636-4149 
Email: avogelsong@wilmingtontrust.com

	WILMINGTON TRUST, NATIONAL 
	ASSOCIATION, solely in its capacity as
      Depositary 
	and not individually 
	  	 
	  	 
	  	 
	By	 
	Name: 	 
	Title: 	 

Address for notices:

Wilmington Trust, National Association 
1100 North Market Street

Wilmington, DE 19890 
Attention: Administrator for Idaho USG Holdings,
LLC 
Facsimile: 302-636-4149 
Email: avogelsong@wilmingtontrust.com

[Signature Page to Depositary and Security Agreement] 

SCHEDULE 1 
PLEDGED ACCOUNTS 

	Pledged Account 	Pledged Account Number 
	 	 
	Idaho USG Holdings, LLC - Collateral
      Agreement Account 	Account No. 115684-000 
	 	 
	Idaho USG Holdings, LLC - Depositary
      Agreement Account 	Account No. 115683-000 
	 	 
	Idaho USG Holdings, LLC Revenue Account 	Account No. 115-683-001 
	 	 
	Idaho USG Holdings, LLC Debt Service Reserve
      Account 	Account No. 115683-002 
	 	 
	Idaho USG Holdings, LLC Maintenance Reserve
      Account 	Account No. 115683-003 
	 	 
	Idaho USG Holdings, LLC Make-Up Well Reserve
      Account 	Account No. 115683-004 
	 	 
	Idaho USG Holdings, LLC Raft River Capital
      Expenditure Account 	Account No. 115683-005 

Wiring Instructions for Depositary: 
Wilmington Trust
Company 
ABA #031100092 
Credit: (See above) 
A/C#: (See above)

Attn: Adam Vogelsong 

S-2 

EXHIBIT A TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF DISBURSEMENT REQUISITION 

	Depositary 	[Date] 
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  
	  	  
	Collateral Agent 	  
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  

	 	Re: 	Disbursement Requisition - Idaho USG Holdings,
      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 May 19, 2016 (as amended, restated or otherwise
modified from time to time, the “Depositary Agreement”), by and among (i)
Idaho USG Holdings, LLC, a Delaware limited liability company (the
“Issuer”), (ii) Wilmington Trust, National Association, 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) Wilmington Trust, National Association, 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 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__. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	By: 	 
		Name: 
		Title:

	cc: 	
      Holders of the Notes

A-1 

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 
         Secured
      Parties 		[(may include
      Local Account)] 	

	
      (2) SECOND – Section 
4.1(b) 

      Transfers from Revenue 
Account on Monthly
      
Dates: 
	

	         Administration
      and 
         operating
      costs of
      the 
         Issuer
    		[(may include
      Local Account)] 	

	
      (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 			

	
      (4) FOURTH – Section 
4.1(d) 

      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: 
         $_____________
    	-- 		

A-2 

		Transfer
      
Amount 	Transfer to 	Wire Instructions / Address
  

	         Minimum
      Debt 
         Service
      Reserve 
         Requirement: 
         $1,799,841
    	-- 		

	         Amount to
      be 
         transferred
      to
      Debt 
         Service
      Reserve 
         Account
    		Debt Service Reserve Account 	

	
      (5) FIFTH – Section 4.1(e) 

      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 
         transferred
      to 
         Maintenance
      Reserve 
         Account
    		Maintenance Reserve Account 	

	
      (6) SIXTH - Section 4.1(f) 

      Transfers from Revenue 
Account on Payment Dates:
    
	

	         Amount to
      be 
         Transferred
      to
      Make-Up 
         Well
      Reserve Account 		Make-Up Well Reserve 
Account 	

	
      (7) SEVENTH - Section 
4.1(g) 

      Distributions from Revenue 
Account on [specify date
      at 
least 15 but not more than 
30 days after
      Payment 
Date]: 
	

	         Remaining
      funds
      on 
         Payment
      Date 			

	Total transfers 	 	  	  

A-3 

EXHIBIT B TO
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF MAINTENANCE RESERVE REQUISITION 

	Depositary 	[Date] 
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  
	  	  
	Collateral Agent 	  
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  

	 	Re: 	Maintenance Reserve Requisition - Idaho USG
      Holdings, 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 May 19, 2016, by and among (i) Idaho USG
Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii)
Wilmington Trust, National Association, 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)
Wilmington Trust, National Association, 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 Projects, 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__. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	  	 
	By: 	 
		Name: 
		Title:

	cc: 	
      Holders of the Notes

B-2 

SCHEDULE I 
MAINTENANCE RESERVE REQUISITION

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions)1 	  

____________________________________
1 May
include a Local Account 

B-3 

EXHIBIT C TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF MAKE-UP WELL REQUISITION 

	Depositary 	[Date] 
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  
	  	  
	Collateral Agent 	  
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  

	 	Re: 	Make-Up Well Requisition - Idaho USG Holdings,
      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 May 19, 2016, by and among (i) Idaho USG
Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii)
Wilmington Trust, National Association, 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)
Wilmington Trust, National Association, 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 Sites, 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__. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	  	 
	By: 	 
		Name: 
		Title:

	cc: 	
      Holders of the Notes

C-2 

SCHEDULE I 
MAKE-UP WELL REQUISITION 

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions)2 	  

________________________________________
2 May
include accounts of Raft River Energy I, LLC 

C-3 

EXHIBIT D TO 
DEPOSITARY AND SECURITY AGREEMENT 

FORM OF RAFT RIVER CAPITAL EXPENDITURE REQUISITION 

	Depositary 	[Date] 
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  
	  	  
	Collateral Agent 	  
	Wilmington Trust, National Association 	  
	1100 North Market Street 	  
	Wilmington, DE 19890 	  
	Attention: Administrator for Idaho USG Holdings, LLC 	  

	 	Re: 	Raft River Capital Expenditure Requisition -
      Idaho USG Holdings, 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 May 19, 2016, by and among (i) Idaho USG
Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii)
Wilmington Trust, National Association, 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)
Wilmington Trust, National Association, 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 Raft River Capital Expenditure 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 pay costs of extending the RRG-2 Well, as indicated in Schedule I.

C-1 

The Issuer has caused this Raft
River Capital Expenditure Requisition to be executed and delivered by its duly
authorized signatory this ______day of ____________, 20__. 

	IDAHO USG HOLDINGS, LLC 
	  	 
	  	 
	  	 
	By: 	 
		Name: 
		Title:

	cc: 	
      Holders of the Notes

C-2 

SCHEDULE I 
RAFT RIVER CAPITAL EXPENDITURE
REQUISITION 

	Amount 	Transferee Information 	Purpose 
	  	(including wire instructions)3 	  

_______________________________________
3 May
include accounts of Raft River Energy I, LLC 

C-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 May 19, 2016, is by and among (a)
Wilmington Trust, National Association, in its capacity as collateral agent for
the Secured Parties (together with its successors and assigns in such capacity,
the “Collateral Agent”), (b) Idaho USG Holdings, 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) Wilmington Trust, National Association, 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 5.80% Senior Secured Notes
due March 31, 2023 (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 U.S. Geothermal Inc., an Idaho corporation,
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. 

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,
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 

2.2      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 as determined in a final non-appealable judgment from a court
of competent jurisdiction. 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) 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
it has received written notice thereof. 

3 

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, the
Transaction 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; 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
determined to have been caused solely by such Person’s gross negligence or
willful misconduct. 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 Collateral Agent and the Depositary as
if they were fully set forth herein. 

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. 

4 

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 determined to have been caused solely by such Person’s
gross negligence or willful misconduct. 

2.10   
 Collateral Agent Fees. The Issuer agrees to pay to the
Collateral Agent its expenses (including counsel fees and expenses) 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. 

5 

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, 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. 

 6 

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 all 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. 

7 

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. 

8 

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 Wilmington Trust, National Association, 1100 North Market
Street, Wilmington, DE 19890, Attention: Administrator for Idaho USG Holdings,
LLC, Facsimile: 302-636-4149, Email: avogelsong@wilmingtontrust.com 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., 390 E Parkcenter Boulevard, Suite 250, Boise, ID 83706,
Attention: Jonathan Zurkoff, Facsimile: (760)-348-2315, E-mail:
jzurkoff@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 

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 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. 

10 

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 the
successors and assigns of the holders 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. 

11 

ARTICLE XVII 

COUNTERPARTS; 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. 

12 

19.2    
Appointment of Process Agent. In addition to and notwithstanding the
provisions of Section 19.1 above, the Issuer hereby irrevocably appoints
CT 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.

13 

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.] 

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. 

	 	Issuer: 
	 	 
	 	IDAHO USG HOLDINGS, LLC 
	 	  	  
	 	  	  
	 	By:	
	 	Name: 	Douglas J. Glaspey 
	 	Title: 	President 

[Signature Page to Collateral Agency Agreement] 

	 	Purchasers: 
	 	 
	 	THE PRUDENTIAL INSURANCE

	 	 COMPANY OF AMERICA

	 	  	  
	 	By: 	  
	 	  	Vice President 
	 	  	  
	 	PRUDENTIAL ANNUITIES LIFE
  
	 	 ASSURANCE CORPORATION
  
	 	 
	 	By: 	PGIM, Inc., as investment manager
  
	 	  	  
	 	 	 
	 	  	By:	 
	 	  		Vice President 

[Signature Page to Collateral Agency Agreement] 

Collateral Agent: 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, not in its 
individual capacity but solely in its
capacity as the 
Collateral Agent 

	 	By:	 
	 	Name: 	 
	 	Title: 	 

Depositary: 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, not in its individual capacity but 
solely in its
capacity as the Depositary 

	 	By:	 
	 	Name: 	 
	 	Title: 	 

[Signature Page to Collateral Agency Agreement] 

Exhibit A 

FORM OF JOINDER AGREEMENT 

Reference is made to the
Collateral Agency Agreement (the “Collateral Agency Agreement”), dated as
of May 19, 2016, by and among Wilmington Trust, National Association, in its
capacity as collateral agent for the Secured Parties and as depositary, Idaho
USG Holdings, 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 USG Idaho Pledge Agreement

Exhibit S-3 - 1 

Execution Version 

PLEDGE AND SECURITY AGREEMENT 

This PLEDGE AND SECURITY
AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among
U.S. Geothermal Inc., an Idaho corporation (the “Pledgor”), and
Wilmington Trust, National Association, 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 Wilmington Trust, National Association,
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 Idaho USG Holdings, LLC, a Delaware limited liability company (the
“Issuer”). 

RECITALS: 

The Issuer has authorized the
issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (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) and Make-Whole Amount 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: 

(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 limited liability company
operating agreement or other constitutive document 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 (collectively, the “Pledged Collateral”). 

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
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Pledgor, the Issuer, any Issuer Subsidiary, any guarantor, or any other Person
or the appointment of any intervenor or conservator of, or agent or similar
official for the Pledgor, the Issuer, any Issuer Subsidiary, 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. 

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 all Secured
Obligations have been paid in case and satisfied. 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 incorporation,
by-laws and other constitutive documents or the limited liability company
operating agreement or other constitutive document of the Issuer 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. 

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. 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 corporation duly organized,
validly existing, and in good standing under the laws of the State of Idaho, is
duly qualified to do business as a foreign corporation 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 corporate power and
authority to execute, deliver and perform this Agreement and to act as a member
of the Issuer. It has taken all necessary corporate 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 by-laws or other constitutive document
or the Issuer’s limited liability company operating agreement or other
constitutive document, (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; (ii) none of the Pledged
Collateral is subject to any Lien (except the Lien of this Agreement); and (iii)
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 as set forth below its name on
Annex C hereto; its type of organization is a corporation, its
jurisdiction of incorporation is Idaho; 

(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, United States Department of the Treasury (“OFAC”)
(an “OFAC Listed Person”) (ii) an agent, department, or instrumentality
of, or is otherwise beneficially owned by, 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, or (iii) otherwise blocked, subject to sanctions under or engaged in
any activity in violation of other United States economic sanctions, including
but not limited to, the Trading with the Enemy Act, the International Emergency
Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and
Divestment Act (“CISADA”) or any similar law or regulation with respect
to Iran or any other country, the Sudan Accountability and Divestment Act, any
OFAC Sanctions Program, or any economic sanctions regulations administered and
enforced by the United States or any enabling legislation or executive order
relating to any of the foregoing (collectively, “U.S. Economic
Sanctions”) (each OFAC Listed Person and each other Person, entity,
organization and government of a country described in clause (i), clause (ii) or
clause (iii), a “Blocked Person”). The Pledgor has not been notified that
its name appears or may in the future appear on a state list of Persons that
engage in investment or other commercial activities in Iran or any other country
that is subject to U.S. Economic Sanctions; 

- 4 - 

(i)    
Anti-Money Laundering Laws. It (i) has not been found in violation of,
charged with, or convicted of, money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes under
the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as
the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or
regulation governing such activities (collectively, “Anti-Money Laundering
Laws”) or any U.S. Economic Sanctions violations, (ii) to the Pledgor’s
actual knowledge after making due inquiry, is not under investigation by any
Governmental Authority for possible violation of Anti-Money Laundering Laws or
any U.S. Economic Sanctions violations, (iii) has not been assessed civil
penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions,
or (iv) has not had any of its funds seized or forfeited in an action under any
Anti-Money Laundering Laws. The Pledgor has established procedures and controls
which it reasonably believes are adequate (and otherwise comply with applicable
law) to ensure that the Pledgor is and will continue to be in compliance with
all applicable current and future Anti-Money Laundering Laws and U.S. Economic
Sanctions. 

(j)                (1)     The Pledgor (i) has not been charged with, or
convicted of bribery or any other anti-corruption related activity under any
applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction,
including but not limited to, the U.S. Foreign Corrupt Practices Act and the
U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the
Pledgor’s actual knowledge after making due inquiry, is not under investigation
by any U.S. or non-U.S. Governmental Authority for possible violation of
Anti-Corruption Laws, (iii) has not been assessed civil or criminal penalties
under any Anti-Corruption Laws or (iv) has not been or is not the target of
sanctions imposed by the United Nations or the European Union; 

(2)    
To the Pledgor’s actual knowledge after making due inquiry, the Pledgor has not,
within the last five years, directly or indirectly offered, promised, given,
paid or authorized the offer, promise, giving or payment of anything of value to
a Governmental Official or a commercial counterparty for the purposes of: (i)
influencing any act, decision or failure to act by such Government Official in
his or her official capacity or such commercial counterparty, (ii) inducing a
Governmental Official to do or omit to do any act in violation of the
Governmental Official’s lawful duty, or (iii) inducing a Governmental Official
or a commercial counterparty to use his or her influence with a government or
instrumentality to affect any act or decision of such government or entity; in
each case in order to obtain, retain or direct business or to otherwise secure
an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or
regulation applicable to such holder; and 

- 5 - 

(3)    
The Pledgor has established procedures and controls which it reasonably believes
are adequate (and otherwise comply with applicable law) to ensure that the
Pledgor is and will continue to be in compliance with all applicable current and
future Anti-Corruption 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
incorporation, 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 by-laws
or other constitutive document 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 incorporation or its organizational
identification number without giving the Collateral Agent and the holders of the
Notes 30 days’ prior written notice of such change; 

(b)    
Governing Documents. It will not permit or agree to any amendment of its
by-laws or other constitutive document or the limited liability company
operating agreement or other constitutive document 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) ; 

- 6 - 

(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 or any Issuer Subsidiary. 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 Issuer Subsidiary or any
of its or their respective 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. 

2.4.    
Protection of Secured Parties. The Pledgor agrees that: 

(a)   
 its liabilities and obligations under its by-laws or other constitutive
document or the Issuer’s limited liability company operating agreement or other
constitutive document 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;

- 7 - 

(b)   
 no Secured Party, unless it expressly agrees in writing, will have any
liabilities or obligations under the Issuer’s limited liability company
operating agreement or other constitutive document 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, any
Issuer Subsidiary 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. 

- 8 - 

3.2.    
Collateral Agent’s Rights Upon Default. Upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent, acting at the direction of the Required Holders, 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, acting
at the direction of the Required Holders, may determine; and 

(f)   
 exercise any or all other rights or remedies available to the Collateral
Agent, acting at the direction of the Required Holders, 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, acting at the direction of the Required
Holders, 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: 

(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; 

- 9 - 

(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. 

(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. 

- 10 - 

(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 Collateral Agent’s 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 could reasonably be expected to
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. 

- 11 - 

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 shall be determined to amount to gross negligence or willful
misconduct on the part of the Collateral Agent. 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. All risk of loss, damage, diminution in value, or destruction of
the Pledged Collateral will be borne by the Pledgor. Notwithstanding anything
contained herein to the contrary, 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 shall be determined to be gross
negligence or willful misconduct on the part of 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 under this
Agreement or with respect to the Pledged Collateral. 

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 determined to have been caused by the gross negligence or willful
misconduct of any such 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. 

- 12 - 

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. 

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. 

- 13 -

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. 

- 14 - 

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 CT 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. 

- 15 - 

(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, any
Issuer Subsidiary or their 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. 

- 16 - 

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] 

- 17 - 

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. 
	 	  
	 	By: 	 
	 	Name: 	Jonathan Zurkoff 
	 	Title: 	Treasurer 

Address for notices: 
c/o
U.S. Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID
83706 
Attention: Kerry Hawkley, Chief Financial Officer
Phone:
208-424-1027 
Fax: 208-424-1030
E-mail: Khawkley@usgeothermal.com

[Signature Page to Sponsor Pledge Agreement] 

	(STATE OF 	) 
	  	           
                         
                         
                         
               ss. 
	(COUNTY OF 	) 

On this ______day of
____________, 2016, before me, the undersigned notary public, personally
appeared Jonathan Zurkoff, as Treasurer of U.S. Geothermal Inc., 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 signed it voluntarily for
its stated purpose as Treasurer of U.S. Geothermal Inc. 

__________________________________
Official signature and seal
of notary 

My commission expires: 

[Notary Page to Sponsor Pledge Agreement] 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, not in its individual capacity but 
solely in its
capacity as the Collateral Agent 

	 	By:	 
	 	Name: 	 
	 	Title: 	 

Address: 
Wilmington Trust,
National Association 
1100 North Market Street 
Wilmington, DE 19890

Attention: Administrator for Idaho USG Holdings, LLC 
Facsimile:
302-636-4149 
Email: avogelsong@wilmingtontrust.com 

[Signature Page to Sponsor 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 limited liability company operating
agreement or other constitutive document 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 May 19, 2016 

[Acknowledgement Page to Pledge Agreement] 

IDAHO USG HOLDINGS, LLC 

	 	By: 	 
    
	 	Name: 	Douglas J. Glaspey 
	 	Title: 	President 

Address for notices: 
c/o
U.S. Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID
83706 
Attention: Kerry Hawkley, Chief Financial Officer
Phone:
208-424-1027 
Fax: 208-424-1030
E-mail: Khawkley@usgeothermal.com

[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 	Certificate No. 	% Interest 
Held 
	Idaho USG 
Holdings, LLC 	U.S. Geothermal Inc. 	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
Idaho USG Holdings, 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 

U.S. Geothermal Inc. 
Legal
address/address of principal place
of business and chief executive office:

390 E Parkcenter Boulevard, Suite 250 
Boise, ID 83706

Organizational number: C142711 

EIN: 75-3017392 

Exhibit S-4 

Form of Issuer Pledge Agreement

Exhibit S-4 - 1 

Execution Version 

PLEDGE AND SECURITY AGREEMENT 

This PLEDGE AND SECURITY
AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among
Idaho USG Holdings, LLC, a Delaware limited liability company (the
“Pledgor”), and Wilmington Trust, National Association, 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 Wilmington Trust, National
Association, 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 Pledgor, 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 Oregon USG Holdings LLC, a Delaware limited liability company (“USG Oregon
Holdings”), and Raft River Energy I LLC, a Delaware limited liability
company (the “Raft River Project Company” and, together with USG Oregon
Holdings, each a “Pledged Subsidiary” and collectively the “Pledged
Subsidiaries”). 

RECITALS: 

The Pledgor, as issuer, has
authorized the issue and sale of its 5.80% Senior Secured Notes due March 31,
2023 (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 Pledgor 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 60% of the
outstanding limited liability company interests of USG Oregon Holdings (the
“USG Oregon Holdings Interests”) and 95% of the outstanding limited
liability company interests of the Raft River Project Company (the “Raft
River Interests”). 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) and Make-Whole Amount 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: 

(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 each Pledged Subsidiary, 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 each Pledged Subsidiary, whether arising under the limited liability
company operating agreement or other constitutive document of such Pledged
Subsidiary, 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 such Pledged Subsidiary; 

(c)   
 all additional limited liability company interests or other ownership or
equity interests in each Pledged Subsidiary, 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 (collectively, the “Pledged Collateral”). 

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
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Pledgor, any Issuer Subsidiary, any guarantor, or any other Person or the
appointment of any intervenor or conservator of, or agent or similar official
for the Pledgor, either Pledged Subsidiary, any other Issuer Subsidiary, 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. 

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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 all Secured Obligations have been paid in case and satisfied.
The Pledgor will not cause or permit any of the Securities relating to the Raft
River Interests 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.
The Pledgor will not cause or permit any of the Securities relating to the USG
Oregon Holdings Interests to be or become certificated or to constitute a
security governed by Article 8 of the Uniform Commercial Code of the State of
Delaware. 

1.4.    
Waiver of Certain Operating Agreement Provisions. The Pledgor
irrevocably waives any and all provisions of its certificate of formation,
limited liability company operating agreement and other constitutive documents
or the limited liability company operating agreement or other constitutive
document of either Pledged Subsidiary 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 such Pledged Subsidiary following an Event of Default, or
(c) otherwise conflict with the terms of this Agreement. Each Pledged Subsidiary
agrees that it shall not (and the Pledgor agrees that it shall not cause or
permit such Pledged Subsidiary to) issue any equity interests to any Person
other than the holders of its equity interests on the date hereof. 

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. 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: 

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(a)
Existence and Authority. It is a limited liability company duly formed,
validly existing, and in good standing under the laws of the State of 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 power and authority to execute, deliver and perform this
Agreement and to act as a member of each Pledged Subsidiary. 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; 

(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 limited liability company operating
agreement or other constitutive document or either Pledged Subsidiary’s limited
liability company operating agreement or other constitutive document, (iii)
violate, or result in a default under, any contractual obligation to which it or
such Pledged Subsidiary 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, and all of the Securities
relating to the Raft River Interests are certificated and constitute securities
governed by Article 8 of the Uniform Commercial Code of the State of Delaware;
the certificates representing such Securities have 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 each Pledged Subsidiary; 

(d)    
No Liens. (i) It is the sole, direct, legal and beneficial owner of, and
has good and valid title to, the Pledged Collateral; (ii) none of the Pledged
Collateral is subject to any Lien (except the Lien of this Agreement); and (iii)
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 as set forth below its name on
Annex C hereto; its type of organization is a limited liability
company, its jurisdiction of incorporation 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 relating to the Raft River Interests constituting Pledged Collateral
by the Collateral Agent. 

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(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, United States Department of the Treasury (“OFAC”)
(an “OFAC Listed Person”) (ii) an agent, department, or instrumentality
of, or is otherwise beneficially owned by, 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, or (iii) otherwise blocked, subject to sanctions under or engaged in
any activity in violation of other United States economic sanctions, including
but not limited to, the Trading with the Enemy Act, the International Emergency
Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and
Divestment Act (“CISADA”) or any similar law or regulation with respect
to Iran or any other country, the Sudan Accountability and Divestment Act, any
OFAC Sanctions Program, or any economic sanctions regulations administered and
enforced by the United States or any enabling legislation or executive order
relating to any of the foregoing (collectively, “U.S. Economic
Sanctions”) (each OFAC Listed Person and each other Person, entity,
organization and government of a country described in clause (i), clause (ii) or
clause (iii), a “Blocked Person”). The Pledgor has not been notified that
its name appears or may in the future appear on a state list of Persons that
engage in investment or other commercial activities in Iran or any other country
that is subject to U.S. Economic Sanctions; 

(i)    
Anti-Money Laundering Laws. It (i) has not been found in violation of,
charged with, or convicted of, money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes under
the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as
the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or
regulation governing such activities (collectively, “Anti-Money Laundering
Laws”) or any U.S. Economic Sanctions violations, (ii) to the Pledgor’s
actual knowledge after making due inquiry, is not under investigation by any
Governmental Authority for possible violation of Anti-Money Laundering Laws or
any U.S. Economic Sanctions violations, (iii) has not been assessed civil
penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions,
or (iv) has not had any of its funds seized or forfeited in an action under any
Anti-Money Laundering Laws. The Pledgor has established procedures and controls
which it reasonably believes are adequate (and otherwise comply with applicable
law) to ensure that the Pledgor is and will continue to be in compliance with
all applicable current and future Anti-Money Laundering Laws and U.S. Economic
Sanctions. 

(j)    
(1)     The Pledgor (i) has not been charged with, or
convicted of bribery or any other anti-corruption related activity under any
applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction,
including but not limited to, the U.S. Foreign Corrupt Practices Act and the
U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Pledgor’s actual knowledge
after making due inquiry, is not under investigation by any U.S. or non-U.S.
Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has
not been assessed civil or criminal penalties under any Anti-Corruption Laws or
(iv) has not been or is not the target of sanctions imposed by the United
Nations or the European Union; 

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(2)    
To the Pledgor’s actual knowledge after making due inquiry, the Pledgor has not,
within the last five years, directly or indirectly offered, promised, given,
paid or authorized the offer, promise, giving or payment of anything of value to
a Governmental Official or a commercial counterparty for the purposes of: (i)
influencing any act, decision or failure to act by such Government Official in
his or her official capacity or such commercial counterparty, (ii) inducing a
Governmental Official to do or omit to do any act in violation of the
Governmental Official’s lawful duty, or (iii) inducing a Governmental Official
or a commercial counterparty to use his or her influence with a government or
instrumentality to affect any act or decision of such government or entity; in
each case in order to obtain, retain or direct business or to otherwise secure
an improper advantage in violation of any applicable law or regulation or which
would cause any holder to be in violation of any law or regulation applicable to
such holder; and 

(3)    
The Pledgor has established procedures and controls which it reasonably believes
are adequate (and otherwise comply with applicable law) to ensure that the
Pledgor is and will continue to be in compliance with all applicable current and
future Anti-Corruption 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
limited liability company operating agreement or other constitutive document 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. 

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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 written notice of such change; 

(b)    
Governing Documents. It will not permit or agree to any amendment of its
limited liability company operating agreement or other constitutive document or
the limited liability company operating agreement or other constitutive document
of either Pledged Subsidiary, except in connection with the admission of a new
member or substitution of an existing member of such Pledged Subsidiary 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, either Pledged Subsidiary or any other Issuer
Subsidiary. 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 either Pledged
Subsidiary or any other Issuer Subsidiary or any of its or their respective
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 either Pledged Subsidiary, 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 either Pledged Subsidiary 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 such Pledged
Subsidiary) 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. 

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2.4.    
Protection of Secured Parties. The Pledgor agrees that: 

(a)   
 its liabilities and obligations under its limited liability company
operating agreement or other constitutive document or either Pledged
Subsidiary’s limited liability company operating agreement or other constitutive
document 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 either Pledged Subsidiary’s limited liability
company operating agreement or other constitutive document 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 either Pledged Subsidiary, any other Issuer Subsidiary 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 either Pledged Subsidiary 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. 

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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. 

3.2.    
Collateral Agent’s Rights Upon Default. Upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent (acting at the direction of the Required Holders) 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 either Pledged Subsidiary; 

(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 (acting at the
direction of the Required Holders) may determine; and 

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(f)   
 exercise any or all other rights or remedies available to the Collateral
Agent (acting at the direction of the Required Holders) 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 (acting at the direction of the Required
Holders) 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: 

(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. 

- 10 - 

(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. 

(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 Collateral Agent’s decision not to
take any such action. 

- 11 - 

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
could reasonably be expected to 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. 

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 shall be determined to amount to gross negligence or
willful misconduct on the part of the Collateral Agent. 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. All risk of loss, damage, diminution in value, or destruction
of the Pledged Collateral will be borne by the Pledgor. Notwithstanding anything
contained herein to the contrary, 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 shall be determined to be gross
negligence or willful misconduct on the part of 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. 

- 12 - 

(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
under this Agreement or with respect to the Pledged Collateral. 

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 determined to have been caused by the gross negligence or willful
misconduct of such 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. 

- 13 - 

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. 

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. 

- 14 - 

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. 

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. 

- 15 - 

(b)    
In addition to and notwithstanding the provisions of Section 4.8(a)
above, the Pledgor hereby irrevocably appoints CT 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 relating to the Raft River Interests 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. 

(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. 

- 16 - 

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 either Pledged Subsidiary 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
either Pledged Subsidiary, any other Issuer Subsidiary or their property; (d)
any merger, amalgamation or consolidation of the Pledgor or of either Pledged
Subsidiary into or with any other Person or any sale, lease or transfer of any
or all of the assets of such Pledged Subsidiary to any Person; (e) any failure
on the part of either Pledged Subsidiary 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. 

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. 

- 17 - 

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] 

- 18 - 

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. 

IDAHO USG HOLDINGS, LLC 

	 	By:	 
	 	Name: 	Douglas J. Glaspey 
	 	Title: 	President 

Address for notices: 
c/o U.S.
Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID 83706

Attention: Kerry Hawkley, Chief Financial Officer
Telephone: 208-424-1027

Fax: 208-424-1030 
Email: Khawkley@usgeothermal.com 

[Signature Page to Issuer Pledge Agreement] 

	(STATE OF 	) 
	  	           
                         
                         
                         
               ss. 
	(COUNTY OF 	) 

On this ______day of
____________, 2016, before me, the undersigned notary public, personally
appeared Douglas J. Glaspey, as President of Idaho 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 signed it voluntarily for
its stated purpose as President of Idaho USG Holdings, LLC. 

__________________________________
Official signature and seal
of notary 

My commission expires: 

[Notary Page to Issuer Pledge Agreement] 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, not in its individual capacity but 
solely in its
capacity as the Collateral Agent 

	 	By:	 
	 	Name: 	 
	 	Title: 	 

Address: 
Wilmington Trust,
National Association 
1100 North Market Street 
Wilmington, DE 19890

Attention: Administrator for Idaho
     USG Holdings,
LLC 
Facsimile: 302-636-4149 
Email: avogelsong@wilmingtontrust.com 

[Signature Page to Issuer Pledge Agreement] 

ACKNOWLEDGEMENT AND CONSENT 

Each of 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 limited liability company operating
agreement or other constitutive document to the contrary notwithstanding. Each
of 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 applicable Pledged Subsidiary unless the
Collateral Agent affirmatively elects to undertake such obligations in
accordance with the terms of the Agreement. 

Dated as of May 19, 2016 

[Acknowledgement Page to Issuer Pledge Agreement] 

OREGON USG HOLDINGS LLC 

	 	By:	 
	 	Name: 	Dennis J. Gilles 
	 	Title: 	President and CEO 

Address for notices: 
c/o U.S.
Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID 83706

Attention: Kerry Hawkley, Chief Financial Officer
Telephone: 208-424-1027

Fax: 208-424-1030 
Email: Khawkley@usgeothermal.com 

RAFT RIVER ENERGY I LLC 

	 	By:	 
	 	Name: 	Dennis J. Gilles 
	 	Title: 	President and CEO 

Address: 
c/o U.S.
Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID 83706

Attention: Kerry Hawkley, Chief Financial Officer
Telephone: 208-424-1027

Fax: 208-424-1030 
Email: Khawkley@usgeothermal.com 

[Acknowledgement Page to Issuer Pledge Agreement] 

ANNEX A TO PLEDGE AND SECURITY AGREEMENT 

Neither Pledged Subsidiary has
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. 

	Pledged 
Subsidiary 
	
Pledgor 	Certificate No. 

	% Interest 
Held 

	Oregon USG 
Holdings LLC 	Idaho USG Holdings, 
LLC 	Not Applicable 	60% 
	Raft River 
Energy I LLC 	Idaho USG Holdings, 
LLC 	Nos. B-001 and 
C-001 	95%

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 Raft
River Energy I LLC, a Delaware limited liability company (the “Pledged
Subsidiary”), standing in its name on the books of the Pledged Subsidiary and
represented by Certificate No. [__] and does hereby irrevocably constitute and
appoint __________________, its attorney to transfer said ownership interests on
the books of the Pledged Subsidiary 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 

Idaho USG Holdings, LLC 
Legal
address/address of principal place
of business and chief executive office:

390 E Parkcenter Boulevard, Suite 250
Boise, ID 83706 

Organizational number: 5892913 

EIN: 81-1487056 

Exhibit S-5 

Form of Security Agreement

Exhibit S-5 - 1 

Execution Version 

SECURITY AGREEMENT 

This SECURITY AGREEMENT (this
“Agreement”), dated as of May 19, 2016, is by and between Idaho USG
Holdings, LLC, a Delaware limited liability company (the “Issuer”), on
the one hand, and Wilmington Trust, National Association, 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 Wilmington Trust, National
Association, 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 5.80% Senior Secured Notes due March 31, 2023 (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) and Make-Whole Amount 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, 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 any contractual obligations entered into from time to time
(collectively, the “Collateral”). 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 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. 

(b)    
Notwithstanding anything to the contrary contained herein, the Issuer shall
remain liable under its contractual obligations, all in accordance with and
pursuant to the terms and provisions thereof, and the Collateral Agent shall
have no obligation or liability under any contractual obligation 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. 

-2- 

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 Issuer
Subsidiary, any guarantor, or any other Person or the appointment of any
intervenor or conservator of, or agent or similar official for the Issuer, any
Issuer Subsidiary, 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. 

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; 

-3- 

(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; 

(ii)   
 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; and 

(iii)   
 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. 

-4- 

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. 

ARTICLE IV 

RIGHTS AND REMEDIES 

4.1.    
Collections Prior to Default. Unless the Collateral Agent (acting at
the direction of the Required Holders) 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 (acting at the
direction of the Required Holders) 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 (acting at the direction of the Required Holders) 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; 

-5- 

(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 (acting at the
direction of the Required Holders) may reasonably determine and as required by
law; and 

(e)    
 
exercise any or all other rights or remedies available to the Collateral Agent
(acting at the direction of the Required Holders) 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 (acting at the direction of the Required
Holders) may, in its sole and exclusive judgment, determine from time to time.

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. 

-6- 

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. 

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. 

-7- 

(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 Collateral Agent’s decision not to
take any such action. 

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 could reasonably be expected to 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. 

-8- 

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 claims shall be determined to be caused by the gross negligence or willful
misconduct of the Collateral Agent. 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. All risk of loss, damage, diminution in value or destruction of
the Collateral will be borne by the Issuer. Notwithstanding anything contained
herein to the contrary, 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 shall be determined to be gross negligence or
willful misconduct on the part of 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 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 the Collateral Agency 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 other Security Document that secures
the payment or performance of any of the Secured Obligations. Nothing contained
in any such Security Document shall derogate from any of the rights or remedies
of the Collateral Agent hereunder. 

-9- 

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. 

(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 the 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. 

-10- 

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. 

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 CT 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. 

-11- 

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(g) 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. 

-12- 

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. 

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] 

-13- 

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. 

IDAHO USG HOLDINGS, LLC 

	 	By: 	 
    
	 	Name: 	Douglas J. Glaspey 
	 	Title: 	President 

Address for notices: 
c/o
U.S. Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID
83706 
Attention: Kerry Hawkley, Chief Financial Officer
Telephone:
208-424-1027 
Fax: 208-424-1030
Email: Khawkley@usgeothermal.com

[Signature Page to Security Agreement] 

	(STATE OF 	) 
	  	           
             ss. 
	(COUNTY OF 	) 

On this ______day of
____________, 2016, before me, the undersigned notary public, personally
appeared Douglas J. Glaspey, as President of Idaho 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 signed it voluntarily for
its stated purpose as President of Idaho USG Holdings, LLC. 

________________________________
Official signature and seal of
notary 

My commission expires: 

[Notary Page to Security Agreement] 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, not in its individual capacity but 
solely in its
capacity as the Collateral Agent 

	 	By:	 
	 	  	 
	 	Name: 	 
	 	Title: 	 

Address: 
Wilmington Trust,
National Association 
1100 North Market Street 
Wilmington, DE 19890

Attention: Administrator for Idaho USG Holdings, LLC 
Facsimile:
302-636-4149 
Email: avogelsong@wilmingtontrust.com 

[Signature Page to Security Agreement] 

) 

Exhibit A 

PERFECTION CERTIFICATE 

Dated as of [________], 2016 

The undersigned, the [__________]
of Idaho USG Holdings, 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 _______________. 

(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: 

eement] 

) 

 

) 

) 

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: 

] 

) 

 

 

) 

 

 

) 

) 

Exhibit S-6 

Form of Recapture Indemnity Agreement

Exhibit S-6 - 1 

Execution Version 

INDEMNITY AGREEMENT 

This INDEMNITY AGREEMENT, dated
as of May 19, 2016 (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 IDAHO USG HOLDINGS, LLC, a Delaware limited liability company (the
“Issuer”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral
Agent (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 5.80% Senior Secured Notes due March 31, 2023 (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 or any Issuer Subsidiary resulting,
directly or indirectly, from all or any portion of a 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.

(c)     The
obligations of each Sponsor under this Section 2 are absolute and
unconditional, irrespective of the value, genuineness, validity or
enforceability of any Transaction 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 Transaction
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
Transaction 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
Transaction 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 Transaction
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 Transaction 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
Transaction 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 Transaction 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 or any
Issuer Subsidiary of its obligations under any other agreement, or by the
condition (financial, legal or otherwise), affairs, status, nature or actions of
the Issuer or any Issuer Subsidiary; 

(viii)     any change in ownership of the
Issuer or any Issuer Subsidiary; 

(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 or any Issuer Subsidiary 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 Transaction Document exhaust any right, power or
remedy or proceed against the Issuer or any Issuer Subsidiary under any
Transaction 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 or any Issuer Subsidiary 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 or any Issuer Subsidiary 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
Transaction 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 or any Issuer
Subsidiary 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)     The
parties agree that any legal action or proceeding by or against either Sponsor
or the Issuer or with respect to or arising out of this Agreement or any other
Transaction 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. Each of each Sponsor and 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(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.

5 

(b)     In
addition to and notwithstanding the provisions of Section 6(a) above, each of
each Sponsor and the Issuer hereby irrevocably appoints CT 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 such Sponsor, the Issuer or such Issuer Subsidiary, in care of the
process agent at 111 Eighth Avenue, New York, NY 10011, and each of such Sponsor
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, each of each Sponsor and 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 Transaction Document brought before the foregoing courts
on the basis of forum non conveniens. 

(c)     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. 

6 

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.

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: 	Dennis J. Gilles 
	 	Title: 	CEO 

Address for Notices: 
390 E
Parkcenter Boulevard, Suite 250 
Boise, ID 83706 
Attention: Kerry
Hawkley, Chief Financial Officer 
Telephone: 208-424-1027 
Facsimile:
208-424-1030 
Email: Khawkley@usgeothermal.com 

U.S. GEOTHERMAL INC., 
an
Idaho corporation 

	 	By: 	 
	 	Name: 	Jonathan Zurkoff 
	 	Title: 	Treasurer 

Address for Notices: 
390 E
Parkcenter Boulevard, Suite 250 
Boise, ID 83706 
Telephone: 208-424-1027

Facsimile: 208-424-1030 
Attention: Kerry Hawkley 

[Signature Page to Indemnity Agreement] 

IDAHO USG HOLDINGS, LLC 

	 	By: 	  
	 	Name: 	Douglas J. Glaspey 
	 	Title: 	President 

Address for notices: 
c/o
U.S. Geothermal Inc. 
390 E Parkcenter Boulevard, Suite 250 
Boise, ID
83706 
Attention: Kerry Hawkley, Chief Financial Officer
Telephone:
208-424-1027 
Fax: 208-424-1030
Email: Khawkley@usgeothermal.com

[Signature Page to Indemnity Agreement] 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, solely in its 
capacity as Collateral Agent and
not individually 

	 	By	 
	 	Name: 	 
	 	Title: 	 

Address for notices:

Wilmington Trust, National Association 
1100 North Market Street

Wilmington, DE 19890 
Attention: Administrator for Idaho USG Holdings,
LLC 
Facsimile: 302-636-4149 
Email: avogelsong@wilmingtontrust.com

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