Document:

Security Agreement

 Exhibit 10.74 
 SECURITY AGREEMENT 
 THIS SECURITY
AGREEMENT (this “Agreement”) is made and is entered into as of the 20th day of December, 2012, by ACCENTIA BIOPHARMACEUTICALS, INC., a Florida corporation (the “Borrower”), in favor of
PABETI, INC., an Illinois limited liability company (the “Secured Party”). 
 Recitals

 WHEREAS, pursuant to that certain Secured Promissory Note of even date herewith made by Borrower for the benefit of
Secured Party (the “Note”), Secured Party has agreed to advance to Borrower funds in the maximum principal amount of up to $125,000; and 
 WHEREAS, in order to more fully secure Borrower’s obligations under the Note, Borrower has agreed to grant to Secured Party a lien on and security interest in all property listed as
“Collateral” on the attached Schedule A; 
 NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound thereby, agree as follows: 

Section 1. Security Interest. Borrower hereby grants to Secured Party a first security interest (the “Security
Interest”) in the items of collateral described on Exhibit A hereto and in all attachments, additions, replacements, substitutions, and accessions and in all proceeds thereof in any form now existing, after acquired and hereafter
arising (the “Collateral”). 
 Section 2. Indebtedness Secured. This
Agreement and the Security Interest created by it secures payment of the Note owing by Borrower to Secured Party (the “Indebtedness”). The Indebtedness includes any credit extended, sums advanced, and any expenses incurred by
Secured Party under the Note. 
 Section 3. Covenants and Warranties. 

3.1. Borrower. Borrower hereby covenants and warrants that, at the execution hereof and at all times throughout the duration hereof:

 (a) Borrower will join with Secured Party to file, wherever Secured Party deems appropriate, financing statements in the form
and content required by Secured Party, describing the Collateral in the same manner as it is described herein and Borrower will pay all costs of such filing. From time to time at the request of Secured Party, Borrower shall execute one or more
financing statements and such other documents and do such other acts and things, all as Secured Party may reasonably request, regarding the Security Interest in the Collateral. 
 (b) Borrower has the requisite corporate authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by Borrower of this Agreement
and the filings contemplated therein have been duly authorized by all necessary action on the part of Borrower and no further action is required by Borrower. This Agreement has been duly executed by Borrower. This Agreement constitutes the legal,
valid and binding obligation of Borrower, enforceable against 

 
Borrower in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or
affecting the rights and remedies of creditors and by general principles of equity. Borrower is the sole owner of the Collateral, free and clear of any liens, security interests, encumbrances, rights or claims, and is fully authorized to grant the
Security Interests. Borrower shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Party until this Agreement
and the Security Interest hereunder shall be terminated. 
 (c) Secured Party may examine and inspect the Collateral at any time,
wherever located. 
 (d) Borrower shall deliver to an escrow agent selected by mutual agreement of Lender and Borrower a
certificate representing Six Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six (6,666,666) shares of Biovest common stock, to be held in pledge for the benefit of Lender as Collateral hereunder. 

3.2 Secured Party. Representations and Warranties of the Secured Party. Secured Party represents and warrants as of the date hereof
and as of the Closing Date to the Borrower as follows: 
 (a) Organization; Authority. Secured Party is an entity duly
organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the transaction
documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by Secured Party of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or
similar action on the part of Secured Party. 
 (b) Own Account. Secured Party understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling
such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law
and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting Secured Party’s right to sell the Securities
pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law. Secured Party is acquiring the Securities hereunder in
the ordinary course of its business. Secured Party is a resident of set forth in the “Notice” section hereto. 
 (c)
Secured Party Status. At the time Secured Party was offered the Securities, it was, and at the date hereof it is, and on each date on which it exercises any Warrants or converts any portion of the Note it will be either: (i) an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Secured Party is
not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 

  
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 (d) Experience of Secured Party. Secured Party, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of
such investment. Secured Party is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 

(e) General Solicitation. Secured Party is not purchasing the Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement, or any outstanding
registration statement of the Borrower. 
 Section 4. Event of Default. The occurrence of any of the
following shall constitute an “Event of Default”: 
 (a) Borrower’s failure to make payment of any
principal, interest, fees, costs, charges, expenses, or other sums payable from time to time hereunder or under the Note when required hereunder or thereunder, and, in any such case, such failure shall continue for (i) in the case of a payment
of scheduled principal or interest, a period of five (5) business days following the date upon which any such payment was due, or (ii) in the case of any other amount payable, a period of five (5) business days following the date of
Borrower’s receipt from Secured Party of a written notice identifying the amount due and providing reasonable supporting details; 
 (b) Borrower shall (i) apply for, consent to or suffer to exist the appointment of or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated bankrupt or insolvent,
(v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to without challenge within ten (10) days of the filing thereof, or fail to have dismissed within forty-five
(45) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing; 

(c) Borrower shall cease operation of its present business; or 
 (d) Borrower directly or indirectly sells, assigns, transfers, conveys, or suffers or permits to occur any sale, assignment, transfer or conveyance of all or substantially all of its assets, except as
permitted herein. 

  
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 Section 5. Secured Party’s Rights and Remedies. Upon the occurrence
of any Event of Default or at any time thereafter, and subject to the provisions of the Interim Order and the Final Order as applicable: 
 (a) Secured Party may, at its option, declare all of the Indebtedness secured by this Agreement (notwithstanding any provisions of any agreement with respect to the Indebtedness to the contrary)
immediately due and payable without demand or notice of any kind, and the Indebtedness thereupon shall become due and payable immediately without demand or notice (but with such adjustments, if any, with respect to interest or other charges as may
be provided for in the promissory notes or other writings evidencing the Indebtedness secured). 
 (b) Secured Party and its
agents are authorized to enter into and enter onto any premises where the Collateral may be located for the purpose of taking possession of the Collateral and any records thereof and Secured Party may, at its option, demand Borrower at
Borrower’s expense to assemble the Collateral and make the Collateral available to Secured Party at a convenient place acceptable to Secured Party and, after notice to the Borrower as hereinafter provided, and other reasonable notice to secured
parties of record, Secured Party may sell or otherwise dispose of the Collateral at public or private sale, without further notice or advertisement, at which sale Secured Party may become the purchaser. 

(c) Secured Party may demand that Borrower shall upon receipt by Borrower of any proceeds covered hereby or of any check, draft, or other
instrument representing the proceeds, forthwith and without further notice or demand deliver the same to Secured Party in the form in which the said items are received, endorsed by Borrower for payment to Secured Party. 

(d) Secured Party may by written notice deem Borrower to have transferred the Collateral to Secured Party and to have constituted and
appointed Secured Party its true and lawful attorney-in-fact with full and irrevocable power and authority in the name, place and stead of Borrower, from time to time, in Secured Party’s discretion to demand, collect, receive and give receipts
for all monies due on the Collateral or due otherwise under or with respect to any of the Collateral and to endorse any checks or other instruments or orders and to file any claims and take any other action or proceeding deemed by Secured Party
appropriate for the purpose of collecting all such monies whenever they may become payable. Secured Party may reasonably require Borrower to assist Secured Party in all such collections. 

(e) Secured Party shall have and may exercise, from time to time, all rights and remedies of a secured party under the Uniform Commercial
Code of Florida and all rights and remedies available to a secured party under any other applicable law. 
 (f) Any notice of
sale, disposition, or other intended action by Secured Party, mailed to Borrower at its business offices in Tampa, Florida or at any other address to which Borrower has requested in writing that notices be sent, at least five (5) days prior to
such action, shall constitute reasonable notice to Borrower. 
 (g) In the event of a sale or other disposition of the Collateral
or the receipt of any proceeds of the Collateral by Secured Party, after all of the Indebtedness with appropriate interest and all costs and expenses of Secured Party with respect to the possession and sale of the Collateral have been paid in full
as appropriate, the surplus, if any, shall be paid to Borrower by Secured Party, and any Collateral remaining shall be transferred and reassigned to 

  
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Borrower by Secured Party; and in the event of a deficiency, there shall be due from Borrower and Borrower shall immediately pay to Secured Party the difference between the amounts received by
Secured Party and the remaining sum secured hereby, plus all costs and expenses of Secured Party in repossessing, transporting, repairing, storing, selling or otherwise handling the Collateral pursuant to such sale or other disposition. 

(h) All remedies hereunder shall be cumulative and not alternative. Borrower shall pay promptly the costs and expenses of Secured Party of
collection of all Indebtedness, enforcement of rights under this Agreement, including reasonable attorneys’ fees, and those costs, expenses, and attorneys’ fees incurred in appellate proceedings and expenses and attorneys’ fees on any
actions otherwise with respect to the Collateral. 
 Section 6. Rights and Remedies of Borrower.
Borrower shall have the rights and remedies provided in this Agreement and Borrower specifically waives and releases all rights provided in Article 9 of the Uniform Commercial Code in force in the State of Florida on the date of this
Agreement. 
 Section 7. Miscellaneous. 

(a) Borrower authorizes Secured Party at Borrower’s expense to file any financing statement or statements relating to the Collateral
(without Borrower’s signature thereon) which Secured Party deems appropriate, and Borrower appoints Secured Party as Borrower’s attorney-in-fact to execute any such financing statement or statements in Borrower’s name and to perform
all other acts which Secured Party deems appropriate to perfect and to continue perfection of the Security Interest. 
 (b)
Without limiting any other right of Secured Party, whenever Secured Party has the right to declare any Indebtedness to be immediately due and payable (whether or not it has so declared), Secured Party may set off against the Indebtedness all monies
then owed to the Borrower by Secured Party in any capacity whether due or not and Secured Party shall be deemed to have exercised its right to set off immediately at the time its right to such election accrues. 

(c) Upon Borrower’s failure to perform any of its duties hereunder, Secured Party may but it shall not be obligated to perform any of
such duties and Borrower shall forthwith upon demand reimburse Secured Party for any expense incurred by Secured Party in so doing. 
 (d) No delay or omission by Secured Party in exercising any right hereunder or with respect to any Indebtedness shall operate as a waiver of that or any other right, and no single or partial exercise of
any right shall preclude Secured Party from any other or further exercise of any other right or remedy. Secured Party may cure any default by Borrower in any reasonable manner without waiving the default so cured and without waiving any other prior
or subsequent default by Borrower. 
 (e) Secured Party shall have no obligation to take and Borrower shall have the sole
responsibility for taking any steps to preserve rights against all prior parties. Borrower waives presentment for payment, notice of protest, notice of nonpayment, notice of dishonor and protest of any instrument at any time held by Secured Party on
which Borrower is in any way liable and, if waivable, waives notice of any other action taken by Secured Party. 
 (f) The
singular pronoun shall include the plural, and the neuter shall include the masculine and feminine. 

  
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 (g) This Agreement may not be modified or amended nor shall any provision of it be waived
except by a written instrument signed by Borrower and Secured Party. 
 (h) This Agreement is a continuing agreement and shall
survive any closing and shall remain in force until Secured Party shall provide written notice of its termination and thereafter until all of the Indebtedness contracted for or created before receipt of the notice and any extension or renewals of
that Indebtedness (whether made before or after receipt of the notice) together with all interest thereon both before and after the notice, shall be paid in full. 
 Section 8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Illinois, without reference to principles of choice or conflict of law
thereunder. Whenever possible, each provision of this Agreement shall be interpreted to be effective and valid under applicable law. If any provision of this Agreement is prohibited by or invalid under applicable law, the provision shall be
ineffective only to the extent of the prohibition or invalidity, without invalidating the remainder of the provision or the other remaining provisions of this Agreement. 
 Section 9. Notice. All notices, requests, demands, claims, and other communications hereunder shall be in writing and given in accordance with the notice provisions of the Note.

 Section 10. Jurisdiction. THE BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE AND/OR FEDERAL COURTS
LOCATED IN THE STATE OF ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE BORROWER, ON THE ONE HAND, AND THE SECURED PARTY, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT; PROVIDED, THAT THE BORROWER ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE STATE OF ILLINOIS; AND FURTHER PROVIDED, THAT NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE SECURED PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE INDEBTEDNESS,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE SECURED PARTY. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE BORROWER HEREBY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE BORROWER AND THE SECURED PARTY HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND AGREE THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWER OR THE SECURED PARTY, AS APPLICABLE, AT THE ADDRESS SET FORTH IN THE FIRST PARAGRAPH OF THE NOTE AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE BORROWER’S OR THE SECURED PARTY’S, AS APPLICABLE, ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAIL, PROPER POSTAGE PREPAID. 

[Signature Page to Follow] 

  
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 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first
above-written. 
  

			
	BORROWER:
	
	 ACCENTIA BIOPHARMACEUTICALS, INC.,
 a Florida corporation

		
	By:	 	 /s/ Samuel S. Duffey

	Name:	 	Samuel S. Duffey, Esq.
	Title:	 	President and CEO
	
	SECURED PARTY:
	
	PABETI, INC., an Illinois corporation
		
	By:	 	 /s/ Ronald E. Osman

	By:	 	Ronald E. Osman, Esq.
	Title:	 	President

  
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 Exhibit A 

Description of the Collateral 
 The term “Collateral” shall include the following specific property and assets of ACCENTIA BIOPHARMACEUTICALS, INC. regardless of where located, and all proceeds, rents and products of
all of the foregoing and all distributions thereon. 
  

	 	1.	Six Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six (6,666,666) shares of Biovest International, Inc. common stock owned by Accentia, to be held in an
escrow account as “pledged Collateral” by Bob Rocke, Esq. the escrow agent selected by mutual agreement of Secured Party and Borrower. 

  

	 	2.	All assets of Borrower, with the specific exception of approximately 23.5 million shares of the common stock of Biovest International, Inc. owned by Accentia and
not specifically pledged to one or more creditors of Accentia in security for this and/or other debt obligations of Accentia. NOTE: It is acknowledged and understood by the Secured Party that Secured Party’s lien in this collateral described in
this subsection 2 may be subordinate to that of other creditors, including without limitation to the lien of Laurus Master Fund and/or its affiliates.U.S. Geothermal Inc.: Exhibit 4.1  - Filed by newsfilecorp.com

U.S. GEOTHERMAL INC.

	NO. • 	• WARRANTS 

Date of Issuance: December [•], 2012 (the “Issuance
Date”)

COMMON SHARE PURCHASE WARRANTS

THIS IS TO CERTIFY THAT for value received [•], the
registered holder hereof or its permitted assigns (the “Holder”), is
entitled, subject to the terms set forth below, for each whole warrant
represented by this certificate (this “Warrant Certificate”) to purchase,
at any time or times on or after the Issuance Date up to and including 5:00 p.m.
(New York time) on December [•], 2017 (the “Time of Expiry”), one fully
paid and non-assessable common share (“Common Share”) in the capital of
U.S. Geothermal Inc. (the “Company”) (such common share, a “Warrant
Share” and collectively, the “Warrant Shares”) at a price per share
of US$0.50 (the “Exercise Price”), subject to adjustment as hereinafter
referred to. The warrants represented by this Warrant Certificate are the
warrants to purchase Common Shares (the “Warrants”) issued pursuant to
(i) that certain Subscription Agreement, dated as of December [•], 2012, by
and between the Company and the Holder (the “Subscription Agreement”) and
(ii) the Company’s Registration Statement on Form S-3 (File number 333-170202)
including the exhibits thereto, as amended at the date of this Warrant
Certificate, the Prospectus contained therein filed with the Securities and
Exchange Commission (the “Commission”), effective December 1, 2010, and a
Prospectus Supplement containing certain supplemental information regarding the
securities sold pursuant to the Subscription Agreement that has been or will be
filed with the Commission.

1.   Exercise of Warrants.

1.1 Election to Purchase.

     The rights evidenced by this
Warrant Certificate may be exercised by the Holder on any day on or after the
Issuance Date, in whole or in part, up to and including the Time of Expiry in
accordance with the provisions hereof. The exercise may be effected by providing
to the Company at 1505 Tyrell Lane, Boise, Idaho 83706 (or such other address as
may be notified in writing by the Company) (i) this Warrant Certificate and a
duly completed and executed Subscription Form in substantially the form attached
as Exhibit “1” hereto (“Subscription Form”) and (ii) (A) payment of the
Exercise Price by a certified cheque, bank draft or money order payable at par
to the order of the Company, or by wire or electronic funds transfer to an
account designated by the Company, in each case in the amount of the aggregate
Exercise Price for the number of Warrant Shares specified in the Subscription
Form (the “Aggregate Exercise Price”) or (B) provided the conditions for
cashless exercise set forth in Section 1.5 are satisfied, by notifying the
Company that the Warrants are being exercised pursuant to a Cashless Exercise
(as defined in Section 1.5) . A duly completed and executed Subscription Form
shall be deemed to be delivered only upon personal delivery thereof to, or if
sent by mail or other means of transmission upon actual receipt thereof by, the
Company. If the Holder subscribes for a lesser number of Common Shares than may
be subscribed for pursuant to this Warrant Certificate, the Holder shall be
entitled to receive, without charge to the Holder, a new warrant certificate in
respect of the balance of the Warrants referred to in any
surrendered warrant certificate but not exercised pursuant to the Subscription
Form. On or before the first (1st) business day following the date on
which the Company has received each of this Warrant Certificate, the duly
completed and executed Subscription Form and the Aggregate Exercise Price (or
notice of a Cashless Exercise) (collectively, the “Exercise Delivery
Documents”), the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and to the Company’s transfer agent (the “Transfer Agent”).
For purposes of this Warrant Certificate, “business day” means any day
which is not Saturday or Sunday or a legal holiday in the City of New York, New
York.

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1.2 Exercise.

      The Company shall, as soon as
possible following the date of receipt of the Exercise Delivery Documents (the
“Exercise Date”) and in accordance with Section 1.3, issue as of the
Exercise Date that number of Warrant Shares specified in the Subscription Form
as fully paid and non-assessable Common Shares in the capital of the Company.
The Company shall pay any and all transfer taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of the
Warrants.

1.3 Share Delivery.

      As promptly as practicable after
the Exercise Date and, in any event, within three (3) business days of the
Exercise Date (the “Share Delivery Date”), the Company shall, (i) credit
such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with The
Depository Trust Company (“DTC”) through its Deposit/Withdrawal At
Custodian system, or (ii) issue and dispatch by overnight courier to the address
as specified in the Subscription Form, or, if not so specified in the
Subscription Form, cause to be held for collection by the Holder at the address
of the Company as set out in subsection 1.1 (or at such additional place as may
be decided by the Company from time to time and notified to the Holder),
certificates, registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise. Subject to applicable laws, upon delivery of
the Exercise Delivery Documents, the Holder or its designee, as applicable,
shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which the Warrants have been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s or its
designee’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be.

1.4 Company’s Failure to Timely Deliver Securities.

       If, upon the Holder’s
exercise of the Warrants, the Company shall fail for any reason or for no
reason, within three (3) trading days of receipt of the Exercise Delivery
Documents in compliance with the terms of this Section 1, to issue to the
Holder a certificate for the number of Warrant Shares to which the Holder is
entitled and register such Warrant Shares on the Company’s share register, or to
credit the Holder’s balance account with DTC for such number of Warrant Shares
to which the Holder is entitled, and if on or after such third (3rd)
business day the Holder purchases (in an open market transaction or otherwise)
Common Shares to deliver in satisfaction of a sale by the Holder of Warrant Shares issuable
upon such exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three (3) business days after
the Holder’s written request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the Common Shares so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such
certificate or to credit such balance account (and to issue such Warrant Shares)
shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Warrant Shares, or to credit the
Holder’s balance account with DTC for such Warrant Shares, and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of Common Shares, times (B) the Closing Bid Price (as
defined below) on the date of exercise.

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     As used in this Warrant
Certificate, “Closing Bid Price” means, for any security as of any date,
the last closing bid price for such security on the Principal Market (as defined
in Section 2.1), as reported by Bloomberg, or, if the Principal Market begins to
operate on an extended hours basis and does not designate the closing bid price,
then the last bid price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid
price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” by OTC Pink (formerly the National Quotation
Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder. All such determinations to be appropriately adjusted
for any share dividend, share split, share combination or other similar
transaction during the applicable calculation period. 

1.5 Cashless Exercise Under Certain Circumstances. 

      Notwithstanding anything
contained herein to the contrary, if, at any time following the Issuance Date, a
registration statement under the United States Securities Act of 1933, as
amended, including any amendments or supplements thereto, registering the
Warrant Shares (a “Registration Statement”) is not effective thereunder,
prior to the Time of Expiry, and for so long as a Registration Statement is not
effective, any holder of any Warrant must exercise the Warrants in whole or in
part on a “cashless basis” and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, receive upon such exercise the “Net Number” of Warrant
Shares determined according to the following formula (a “Cashless
Exercise”):

Net Number = (A x B) - (A x
C) 
                                     
B

For purposes of the foregoing
formula:

A = the total number of Warrant Shares
with respect to which the Warrants are then being exercised.

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B = the Weighted Average Price (as
defined below) of the Common Shares (as reported by Bloomberg) for the five
consecutive trading days ending on the date immediately preceding the Exercise
Date.

C = the Exercise Price then in effect
for the applicable Warrant Shares at the time of such exercise.

     As used in this Warrant
Certificate, “Weighted Average Price” means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York City
time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg
through its “Volume at Price” function or, if the foregoing does not apply, the
dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period
beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New
York City time, as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any
of the market makers for such security as reported in the “pink sheets” by OTC
Pink. If the Weighted Average Price cannot be calculated for such security on
such date on any of the foregoing bases, the Weighted Average Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder. All such determinations shall be appropriately
adjusted for any share dividend, share split or other similar transaction during
such period.

     For the avoidance of doubt, in
the event that these Warrants may not be exercised for cash pursuant to Section
1.1 hereof due to the lack of a then effective and current Registration
Statement registering the Warrant Shares with the Commission and an exemption
from registration or qualification under applicable federal and state securities
laws is not otherwise available for such exercise, the sole method of exercise
available to a Holder shall be a “cashless exercise” pursuant to Section 1.5
hereof. Notwithstanding anything contained herein to the contrary, in no event
shall the Holder be entitled to demand a “net cash settlement” of these
Warrants. 

1.6 Beneficial Ownership.

      The Company shall not effect the
exercise of the Warrants, and the Holder shall not have the right to exercise
the Warrants, to the extent that after giving effect to such exercise, such
person (together with such person’s affiliates (as such term is defined in the
Securities Exchange Act of 1934, as amended (the “Exchange Act”))) would
beneficially own in excess of 9.99% of the Common Shares outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence,
the aggregate number of Common Shares beneficially owned by such person and its
affiliates shall include the number of Warrant Shares issuable upon exercise of
the Warrants with respect to which the determination of such sentence is being
made, but shall exclude Warrant Shares which would be issuable upon (i) exercise
of the remaining, unexercised portion of the Warrants beneficially owned by such
person and its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company beneficially owned by
such person and its affiliates (including, without limitation, any convertible
notes or convertible preferred shares or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. For purposes of this Warrant Certificate, in
determining the number of outstanding Common Shares, the Holder may rely on the
number of outstanding Common Shares as reflected in the most recent of (1) the
Company’s most recent Annual Report on Form 10-K, the Company’s most recent
Quarterly Report on Form 10-Q, or other public filing by the Company with the
Commission, as the case may be, (2) a more recent public announcement by the
Company, or (3) any other notice by the Company or the Transfer Agent setting
forth the number of Common Shares outstanding. In any case, the number of
outstanding Common Shares shall be determined after giving effect to the
conversion or exercise of securities of the Company, including the Warrants, by
the Holder and its affiliates since the date as of which such number of
outstanding Common Shares was reported. The provisions of this paragraph shall
be construed, corrected and implemented in a manner so as to effectuate the
intended beneficial ownership limitation herein contained.

- 5 -

1.7 Fractional Warrant Share.

      Fractional Warrant Shares shall
not be issued upon the exercise of any Warrants. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Exercise
Price or round up to the next whole Warrant Share.

2.   Anti-Dilution Protection.

2.1 Definitions.

      For the purposes of Section 2
the words and terms defined below shall have the respective meanings specified
therefor in this subsection 2.1:

	 	(i) 	
      “Adjustment Period” means the period commencing on
      the Issuance Date and ending at the Time of Expiry;

	 	 	 
	 	(ii) 	
      “Current Market Price per Common Share”, at any
      date, means the volume weighted average price per Common Share at which
      the Common Shares have traded (each, a “Trading Day”) on the NYSE
      MKT LLC (or if the Common Shares are not then listed on the NYSE MKT LLC,
      the recognized stock exchange on which the Common Shares are listed on
      which the greatest volume of Common Shares were traded during the period
      referenced below or, if the Common Shares are not so listed on any
      recognized stock exchange, then on the over-the-counter market on which
      the Common Shares are traded as selected by action of the directors acting
      reasonably for such purpose) (the “Principal Market”), during the
      five (5) most recent Trading Days ending on the third Trading Day before
      such date on which there has occurred at least one trade of at least one
      board lot of Common Shares prior to such date, such weighted average price
      to be determined by dividing the aggregate sale price of all Common
      Shares sold in board lots on such exchange or market, as the
      case may be, during the said five (5) Trading Days, by the number of
  Common Shares so sold;

- 6 -

	 	(iii) 	
      “Dividends Paid in the Ordinary Course” means any
      dividend declared payable on the Common Shares (whether in cash,
      securities, property or assets) in any fiscal year of the Company to the
      extent that such dividends do not exceed, in the aggregate, the greater
      of: (i) the aggregate value of dividends declared payable by the Company
      on the Common Shares in its immediately preceding fiscal year; (ii) the
      arithmetic mean of the aggregate value of dividends declared payable by
      the Company on the Common Shares in its three immediately preceding fiscal
      years; and (iii) 100% of the aggregate consolidated net income of the
      Company, before extraordinary items, for its immediately preceding fiscal
      year (such consolidated net income to be computed in accordance with
      United States generally accepted accounting principles);

	 	 	 
	 	(iv) 	
      “director” means a director of the Company for the
      time being and reference herein to an “action by the directors”
      means an action by the directors of the Company as a board or, whenever
      duly empowered, an action by a committee of directors;

	 	 	 
	 	(v) 	
      “recognized stock exchange” means a stock exchange
      or quotation system recognized by the Commission; and

	 	 	 
	 	(vi) 	
      “TSX” means the Toronto Stock
  Exchange.

2.2 Adjustments.

      The Exercise Price and the
number of Warrant Shares shall, while any Warrants are still outstanding and
unexercised, be subject to adjustment from time to time upon the occurrence of
any of the events and in the manner provided as follows:

	 	(a) 	
      If and whenever during the Adjustment Period, the Company
      shall:

	 	 	 	 
	 		(i) 	
      declare a dividend or make a distribution on its Common
      Shares payable in Common Shares (or securities exchangeable for or
      convertible into Common Shares), other than Dividends Paid in the Ordinary
      Course; or

	 	 	 	 
	 		(ii) 	
      subdivide or change its outstanding Common Shares into a
      greater number of Common Shares; or

	 	 	 	 
	 		(iii) 	
      reduce, combine or consolidate its outstanding Common
      Shares into a lesser number or Common Shares,

(any of such events in paragraphs (i),
(ii) or (iii) above being called a “Share Reorganization”), then
effective immediately after the record date or effective date, as the case may
be, at which the holders of Common Shares are determined for the purposes of the
Share Reorganization, the Exercise Price shall be adjusted to a price determined by multiplying the applicable
      Exercise Price in effect on such effective date or record date by a
      fraction, the numerator of which shall be the number of Common Shares
      outstanding on such effective date or record date before giving effect to
      such Share Reorganization and the denominator of which shall be the number
      of Common Shares outstanding immediately after giving effect to such Share
      Reorganization (including, in the case where securities exchangeable for
      or convertible into Common Shares are distributed, the number of
      additional Common Shares that would have been outstanding had such
      securities been exchanged for or converted into Common Shares immediately
after giving effect to such Share Reorganization).

- 7 -

	 	(b) 	
      If and whenever during the Adjustment Period the Company
      shall fix a record date for the payment, issue or distribution to all or
      substantially all of the holders of the Common Shares of (i) a dividend,
      (ii) cash or assets (including evidences of the Company’s indebtedness),
      or (iii) rights or other securities (including without limitation,
      securities convertible into or exchangeable for Common Shares), and such
      payment, issue or distribution does not constitute a Dividend Paid in the
      Ordinary Course or a Share Reorganization (any of such non-excluded events
      being herein called a “Special Distribution”), the Exercise Price
      shall be adjusted as determined by action of the directors (whose
      determination shall be conclusive) effective immediately after such record
      date by an amount that is no greater than the difference between (x) the
      volume weighted average trading price of the Common Shares on the
      Principal Market for the five (5) most recent Trading Days ending
      immediately prior to the Trading Day the Common Shares begin trading on an
      “ex-distribution” basis, and (y) the volume weighted average trading price
      of the Common Shares on the Principal Market for the five (5) most recent
      Trading Days beginning immediately after the Trading Day the Common Shares
      commence trading on an “ex-distribution” basis.

	 	 	 
	 		
      Such adjustment shall be made successively whenever such
      a record date is fixed. To the extent that such payment, issuance or
      distribution is not so made or any rights, options or warrants so
      distributed are not exercised, the Exercise Price shall be readjusted
      effective immediately to the Exercise Price which would then be in effect
      based upon such payment, issuance or distribution actually made, or based
      on the Common Shares or securities exchangeable or convertible for Common
      Shares actually delivered upon the exercise of any rights, options or
      warrants as the case may be but subject to any other adjustment required
  hereunder by reason of any event arising after the record date.

- 8 -

	 	(c) 	If and whenever at any time during the Adjustment Period
      there shall be a reorganization, reclassification or other change of
      Common Shares at any time outstanding or change of the Common Shares into
      other shares or into other securities (other than a Share Reorganization),
      or a consolidation, amalgamation, arrangement or merger of the Company
      with or into any other company or other entity, or a transfer of all or
      substantially all of the undertaking or assets of the Company to another
      company or entity, in each case in which the holders
      of Common Shares are entitled to receive shares, other
      securities or property, including cash, (any of such events being herein
      called a “Capital Reorganization”), any Holder who exercises his
      right to subscribe for and purchase Warrant Shares pursuant to the
      exercise of the Warrants after the effective date of such Capital
      Reorganization shall be entitled to receive, and shall accept for the same
      aggregate consideration in lieu of the number of Warrant Shares to which
      such Holder was theretofore entitled upon such exercise, the aggregate
      number of shares, other securities or other property, including cash,
      which such Holder would have received as a result of such Capital
      Reorganization had he exercised his right to acquire Warrant Shares
      immediately prior to the effective date or record date, as the case may
      be, of the Capital Reorganization and had he been the holder of such
      Warrant Shares on such effective date or record date, as the case may be,
      subject to adjustment thereafter in accordance with provisions the same,
      as nearly as may be possible, as those contained in subsection 2.2(b). If
      determined appropriate by the directors, acting reasonably, and subject to
      any required prior approval of the NYSE MKT LLC, TSX and any other stock
      exchange or market on which the Common Shares may be listed or traded,
      appropriate adjustments shall be made as a result of any such Capital
      Reorganization in the application of the provisions set forth in this
      subsection 2.2, with respect to the rights and interests thereafter of a
      Holder to the end that the provisions set forth in this subsection 2.2
      shall thereafter correspondingly be made applicable as nearly as may
      reasonably be in relation to any shares, other securities or other
      property, including cash, thereafter deliverable upon the exercise of any
      Warrant. Any such adjustments shall be made by and set forth in an
      agreement supplemental hereto approved by action by the directors, acting
      reasonably, and shall for all purposes be conclusively deemed to be
      appropriate adjustments.

	 	(d) 	
      If and whenever at any time during the Adjustment Period
      there shall occur a Share Reorganization which results in an adjustment to
      the Exercise Price pursuant to subsection 2.2(a), the number of Warrants
      Shares purchaseable (at the adjusted Exercise Price) shall be adjusted
      contemporaneously with the adjustment of the Exercise Price by multiplying
      the number of Warrant Shares theretofore purchaseable on the exercise
      thereof by a fraction, the numerator of which shall be the applicable
      Exercise Price in effect immediately prior to such adjustment and the
      denominator of which shall be the applicable Exercise Price resulting from
      such adjustment.

	 	 	 
	 	(e) 	
      In case the Company during the Adjustment Period shall
      take any action affecting the Common Shares, other than action described
      above in this subsection 2.2 which in the opinion of the directors, acting
      reasonably, would materially adversely affect the rights of the Holder,
      the Exercise Price or the number of Warrant Shares shall be adjusted in
      such manner, if any, and at such time, by action by the directors, acting
      reasonably, as they may determine to be equitable in the circumstances,
      but subject in all cases to any necessary regulatory
  approval.

- 9 -

2.3 Rules.

      For the purposes of subsection
2.2 hereof, any adjustment shall be made successively whenever an event referred
to therein shall occur, subject to the following provisions:

	 	(a) 	
      subject to subsection 2.3(b), as to any fraction of a
      Common Share which the Holder would otherwise be entitled upon the
      occurrence of the adjustment(s) described above, the Company shall, at its
      election, either pay a cash adjustment in respect of such final fraction
      in an amount equal to such fraction multiplied by the then applicable
      Exercise Price or round up to the next whole share;

	 	 	 	 
	 	(b) 	
      no adjustment to an Exercise Price shall be required
      unless such adjustment would result in a change of at least 1% in the
      prevailing Exercise Price and no adjustment in the number of Warrant
      Shares will be required to be made unless the cumulative effect of such
      adjustment or adjustments would change the number of Warrant Shares by at
      least one Warrant Share and, for greater clarity, any adjustment which,
      except for the qualification of this section, would otherwise have been
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment; provided, however, that in no event shall the
      Company be obligated to issue fractional Warrant Shares or fractional
      interests in Warrant Shares upon exercise of a Warrant;

	 	 	 	 
	 	(c) 	
      if a dispute shall at any time arise with respect to
      adjustments to the Exercise Price or the number of Warrant Shares
      purchasable pursuant to the exercise rights represented by a Warrant, such
      disputes shall be conclusively determined by the Company’s auditors or, if
      they are unable or unwilling to act, by such other firm of independent
      chartered accountants as may be selected by action by the directors and
      any such determination, shall be conclusive evidence of the correctness of
      any adjustments made;

	 	 	 	 
	 	(d) 	
      if the Company shall set a record date to determine the
      holders of its Common Shares for the purpose of entitling them to receive
      any dividend or distribution or any subscription or purchase rights,
      options or warrants and shall thereafter and before the distribution to
      such shareholders of any such dividend, distribution or subscription or
      purchase rights legally abandon its plan to pay or deliver such dividend,
      distribution or subscription or purchase rights, then no adjustment in the
      Exercise Price or the number of Warrant Shares shall be required by reason
      of the setting of such record date; and

	 	 	 	 
	 	(e) 	
      in any case in which this Warrant Certificate requires
      that an adjustment become effective immediately after a record date for an
      event referred to in subsection 2.2 hereof, the Company may defer, until
      the occurrence of such event:

	 	 	 	 
	 		(i) 	
      issuing to the Holder, to the extent that the Warrants
      are exercised after such record date and before the occurrence of such
      event, the additional Warrant Shares issuable upon such exercise by reason
      of the adjustment required by such event; and

- 10 -

	 	 	(ii) 	
      delivering to the Holder any distribution declared with
      respect to such additional Warrant Shares after such record date and
      before such event;

provided, however, that the Company
delivers to the Holder an appropriate instrument evidencing the right of the
Holder, upon the occurrence of the event requiring the adjustment, to an
adjustment in the Exercise Price and/or the number of Warrant Shares.

2.4 Taking of Actions.

      As a condition precedent to the
taking of any action which would require an adjustment pursuant to Section 2.2
hereof, the Company shall take any action that may, in the opinion of counsel,
be necessary in order that the Company may validly and legally issue as fully
paid and non-assessable all of the Common Shares which the Holder is entitled to
receive in accordance with the provisions of this Warrant Certificate.

2.5 Notice.

      At least seven days prior to the
effective date or record date, as the case may be, of any event that requires or
that may require an adjustment in any of the exercise rights of the Holder under
this Warrant Certificate, including the number of Warrant Shares, the Company
shall deliver to the Holder a certificate of the Company specifying the
particulars of such event and, if determinable, the required adjustment and the
computation of such adjustment. In case any adjustment for which a certificate
has been given is not then determinable, the Company shall promptly after such
adjustment is determinable deliver to the Holder hereof a certificate of the
Company showing how such adjustment was computed. The Company hereby covenants
and agrees that the register of transfers and share transfer books for the
Common Shares shall be open during normal business hours for inspection by the
Holder, and that the Company will not take any action which might deprive the
Holder of the opportunity of exercising the rights of subscription contained in
this Warrant Certificate, during such seven day period.

3.  Shares to be Reserved.

     The Company will at all times
take all action necessary to reserve and keep available out of its authorized
Common Shares, solely for the purpose of issue upon the exercise of the
Warrants, 100% of the number of Warrant Shares as are then issuable upon the
exercise of the Warrants (without regard to any limitations on exercise). The
Company covenants and agrees that all Warrant Shares that are so issuable will,
upon issuance in accordance with the terms of this Warrant Certificate and
applicable laws, be duly authorized, fully paid and non-assessable. The Company
will take such actions as may be reasonably necessary and as are within its
power to ensure that all such Warrant Shares may be so issued without violation
of any applicable laws or the applicable requirements of any stock exchange upon
which the Common Shares of the Company may be listed.

- 11 -

4.  Noncircumvention. 

     The Company hereby covenants and
agrees that the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant Certificate, and will at all times in good
faith comply with all the provisions of this Warrant Certificate and take all
actions consistent with effectuating the purposes of this Warrant Certificate.
Without limiting the generality of the foregoing, the Company shall take all
such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Common Shares upon the
exercise of the Warrants.

5.  Warrant Holder Not Deemed a
Shareholder. 

     Except as otherwise specifically
provided herein, the Holder, solely in such person’s capacity as a holder of the
Warrants, shall not be entitled to vote or receive dividends or be deemed the
holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant Certificate be construed to confer upon the Holder,
solely in such person’s capacity as the Holder of the Warrants, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of shares,
reclassification of share capital, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such person is then entitled to receive upon the due exercise of a
Warrant. In addition, nothing contained in this Warrant Certificate shall be
construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of a Warrant or otherwise) or as a shareholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.

6.  The Register. 

     The Company shall keep: 

	 	(a) 	
      at the principal office of the Company, a register of
      holders of the Warrants represented by this Warrant Certificate or any
      portion thereof in which shall be entered in alphabetical order the names
      and addresses of the holders and particulars of the Warrants held by them;
      and

	 	 	 
	 	(b) 	
      at the principal office of the Company, a register of
      transfers in which all transfers of the Warrants represented by this
      Warrant Certificate or any portion thereof and the date and other
      particulars of each transfer shall be entered.

7.  Transfer of Warrants. 

     Subject to the following
provisions of this Section 7 and applicable laws, the Warrants evidenced hereby
and/or any portion of the rights to subscribe for and purchase Warrant Shares
hereunder may be transferred by the Holder. No transfer of the Warrants
evidenced hereby or any portion of the rights hereunder will be valid unless
duly entered on the appropriate register of transfers, upon the surrender to the Company of this Warrant
Certificate accompanied by a duly completed Transfer Form in substantially the
form attached as Exhibit “2” hereto executed by the registered Holder or its
executors, administrators or other legal representatives or its attorney duly
appointed by an instrument in writing in form and execution satisfactory to the
Company, and, upon compliance with all applicable securities laws and such other
reasonable requirements as the Company may prescribe, such transfer will be duly
recorded by the Company on the applicable registers. If less than all of the
Warrants represented by this Warrant Certificate are transferred, the Holder
shall receive a new Warrant Certificate representing the portion of such
Warrants that were not transferred, registered in the name of the Holder.

- 12 -

     The Warrants may not be sold,
transferred or otherwise disposed of to a Canadian resident for a period of four
(4) months and one (1) day from the Issuance Date, nor may the Holder enter into
any discussions, negotiations or agreements within Canada with respect to the
sale, transfer or disposition of any of the Warrants for a period of four (4)
months and one (1) day from the Issuance Date.

8.  Replacement.

     Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, if requested by the Company, upon delivery of an
indemnity and/or surety bond in amount and form satisfactory to the Company (or,
in the case of mutilation, upon surrender of this Warrant Certificate), the
Company shall issue and deliver to the Holder a replacement certificate
containing the same legends, terms and conditions as this Warrant
Certificate.

9.  Expiry Date.

     The Warrants shall expire and all
rights to purchase Warrant Shares hereunder shall cease and become null and void
at 5:00 p.m. (New York time) on December [•], 2017.

10. Time.

      Time shall be of the essence of
this Warrant Certificate.

11. Business Day.

      In the event that any day on or
before which any action is required or permitted to be taken hereunder is not a
business day, such action shall be required or permitted to be taken on or
before the requisite time on the next succeeding day that is a business day.

12. Notices.

      Whenever notice is required or
permitted to be given under this Warrant Certificate, unless otherwise provided
herein, such notice will be in writing, will be mailed (a) if within the
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International
Federal Express or facsimile, and will be deemed given (i) if delivered by
first-class registered or certified mail domestic, three business days after so
mailed, (ii) if delivered by nationally recognized overnight carrier,
one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile,
upon electronic confirmation of receipt and will be delivered and addressed as
follows:

- 13 -

if to the Company, to:

	 	U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Attention: Daniel J. Kunz, Chief Executive
      Officer 
	 	Facsimile: (208) 424-1030 

with copies to:

	 	Dorsey & Whitney LLP 
	 	Columbia Center 
	 	701 Fifth Avenue, Suite 6100 
	 	Seattle, Washington 98104 
	 	Attention: Christopher J. Barry 
	 	           
                     Kimberley R.
      Anderson 
	 	Facsimile: (206) 903-8820 

if to the Holder, at its address
appearing on the register hereinbefore mentioned, or at such other address or
addresses as may have been furnished to the Company in writing.

13. Amendment and Waiver. 

      These Warrants are part of a
series of warrants to purchase Common Shares of the Company issued on the
Issuance Date (collectively, the “2012 Warrants”). Except as otherwise
provided herein, the provisions of these Warrants may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of a majority of the 2012 Warrants then outstanding.

14. Governing Law.

      This Warrant Certificate shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without giving effect to the principles of conflicts
of law that would require the application of the laws of any other
jurisdiction.

15. Successor.

      The Company shall not enter into
any transaction whereby all or substantially all of its undertaking, property
and assets would become the property of any other company (herein called a
“Successor Company”) whether by way of reorganization, reconstruction,
consolidation, amalgamation, merger, transfer, sale, disposition or otherwise,
unless prior to or contemporaneously with the consummation of such transaction the
Company and the Successor Company shall have executed such instruments and done
such things as the Company, acting reasonably, considers to be necessary or
advisable to establish that upon the consummation of such transaction:

- 14 -

	 	(a) 	
      the Successor Company will have assumed all the covenants
      and obligations of the Company under this Warrant Certificate,
  and

	 	 	 
	 	(b) 	
      this Warrant Certificate will be a valid and binding
      obligation of the Successor Company entitling the Holder, as against the
      Successor Company, to all the rights of the Holder under this Warrant
      Certificate (without limitation reflecting any adjustments to which the
      Holder may be entitled as a result of such transaction pursuant to
      Sections 2.2 and 2.3).

     Whenever the conditions of this
Section 15 shall have been duly observed and performed, the Successor Company
shall possess, and from time to time may exercise, each and every right and
power of the Company under this Warrant Certificate in the name of the Company
or otherwise and any act or proceeding by any provision hereof required to be
done or performed by any director or officer of the Company may be done and
performed with like force and effect by the like directors or officers of the
Successor Company.

16. General.

      This Warrant Certificate is not
valid for any purpose whatsoever unless and until it has been signed by or on
behalf of the Company. The holding of the Warrants evidenced by this Warrant
Certificate shall not be construed as conferring upon the Holder any right or
interest whatsoever as a shareholder of the Company nor entitle the holder
hereof to any right or interest in respect thereof except as expressly provided
in this Warrant Certificate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

- 15 -

     IN WITNESS WHEREOF the
Company has caused this Warrant Certificate to be executed by its duly
authorized officer.

     DATED as of the ___ day of
________________, 2012.

	 	U.S. GEOTHERMAL INC. 
	 	  
	 	  
	 	Name: 
	 	Title: 

EXHIBIT 1

Subscription Form

     The undersigned Holder hereby
irrevocably elects to exercise the number of Warrants of U.S. Geothermal Inc.
(the “Company”) set out below for the number of Warrant Shares as set
forth below, evidenced by the attached certificate representing Warrants issued
by the Company (the “Warrant Certificate”). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Warrant Certificate:

     1. Form of Exercise Price. The
Holder intends that payment of the Exercise Price shall be made as:

	(A) 	
      ________     a “Cash
      Exercise” with respect to:

	 	 	 
		(i) 	
      Number of Warrants to be exercised:
      ______________________________

	 	 	 
		(ii) 	
      Number of Warrant Shares to be
      acquired:______________________________

	 	 	 
		(iii) 	
      Exercise Price per
      Warrant:______________________________

	 	 	 
		
      ; and/or

	 	 	 
	(B) 	
      ________     a “Cashless
      Exercise” with respect to:

	 	 	 
		(i) 	
      Number of Warrants to be
      exercised:______________________________

	 	 	 
		(ii) 	
      Number of Warrant Shares to be
      acquired:______________________________

     2. Payment of Exercise Price. In
the event that the Holder has elected a Cash Exercise with respect to some or
all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the
Aggregate Exercise Price in the sum of US$ ___________________[1(A)(ii)
multiplied by 1(A)(iii) above)] to the Company in accordance with the terms of
the Warrant Certificate.

     3. Delivery of Warrant Shares.
The Holder directs Warrant Shares to be registered and issued as directed below
and the Company shall deliver to the Holder such Warrant Shares in accordance
with the terms of the Warrant Certificate.

     4. The Holder acknowledges that
the Warrants are exercisable only in accordance with applicable laws.

Please check one of the following options and complete
the Required Information below:

Option 1 

	[ ] 	
      Please deliver the Warrant Shares by crediting the
      account of the Holder’s broker (as specified by such Holder below) with
      The Depository Trust Company (“DTC”) through its Deposit/Withdrawal
      At Custodian (“DWAC”) system, whereby the Holder’s broker will
      initiate a DWAC transaction using its DTC participant identification
      number.

OR

Option 2

	[ ] 	
      Please deliver a stock certificate evidencing the Warrant
      Shares registered in the name of the registered holder specified by the
      Holder below to the address specified by the Holder
  below.

Required Information:

	1. 	The exact name that your Warrant Shares are to    	 
	  	be registered in. You may use a nominee name if    	 
	  	appropriate: 	 
	  	  	 
	2. 	The relationship between the Holder and the 	 
	 	registered holder listed in response to item
      1  	 
	  	above: 	 
	  	  	 
	3. 	The mailing address of the registered holder
      listed 	 
	  	in response to item 1 above: 	 
	  	  	 
	4. 	The Social Security Number or Tax
      Identification 	 
	  	Number of the registered holder listed in
      response 	 
	  	to item 1 above: 	 
	  	
    
	 
	5. 	
    Name of DTC Participant (broker-dealer at which 
	 
		
       the account or accounts to be credited with
      the  
	 
	  	
      Warrant Shares are maintained) (Option 1 only):
      
	 
	  	
    
	 
	6. 	
    DTC Participant Number (Option 1 only): 
	 
	  	
    
	 
	7. 	
    Name of Account(s) at DTC Participant being 
	 
	  	
      credited with the Warrant Shares (Option 1 only):
      
	 
	  	
    
	 
	8. 	
    Account Number(s) at DTC Participant being 
	 
	  	credited with the Warrant Shares (Option 1
      only): 	 

DATED this_______ day of____________ , 20_____.

	 	 
	 	(Signature of registered Holder) 
	 	 
	 	 
	 	(Name of registered Holder)

EXHIBIT 2

Transfer Form

FOR VALUE RECEIVED, the undersigned hereby sells, transfers and
assigns to___________________ , whose address is ________________________________________Warrants
represented by the within Warrant Certificate and appoints U.S. Geothermal Inc.
attorney to transfer the said Warrants on its books with full power of
substitution in the premises.

DATED this______ day of___________ , 20_____.

 In the presence of: Signature of Holder guaranteed
by:

	 	 	 
	 	 	(Signature of registered Holder hereof) 
	 	 	 
	 	 	 
	 	 	(Name of registered Holder hereof)
  

		NOTICE: 	
      The signature to this Transfer Form must correspond
      with the name as it appears on the face of the Warrant
      Certificate, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company.
      Officers of corporations and those acting in a fiduciary or
      other representative capacity should file proper evidence of
      authority to assign the foregoing Warrants.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}]]