Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.2

SUBSCRIPTION INSTRUCTIONS 

Please make sure that your subscription includes:

	1. 	
      one (1) signed copy of the Subscription Agreement
      with the information on pages 2 , 3 and 4 completed;

	 	 
	2. 	
      a certified cheque or bank draft in an amount equal to
      the aggregate Subscription Price, payable in Canadian funds to “Cormark
      Securities Inc.” unless other acceptable payment arrangements have been
      made;

	 	 
	3. 	
      IF THE SUBSCRIBER IS RESIDENT IN CANADA a duly
      completed and executed (i) Certificate of Subscribers in the form of
      Schedule “C”, (ii) a Canadian Accredited Investor Certificate in the form
      of Schedule “D”, and (iii) a Questionnaire in the form of Annex B to
      Schedule “H”;

	 	 
	4. 	
      IF THE SUBSCRIBER IS RESIDENT IN THE UNITED STATES,
      a duly completed and executed (i) Certificate of Subscribers in the
      form of Schedule “C”, and (ii) a Questionnaire in the form of Annex B to
      Schedule “H”;

	 	 
	5. 	
      IF THE SUBSCRIBER IS NOT RESIDENT
      IN CANADA OR THE UNITED STATES, a duly completed and executed (i)
      Certificate of Subscribers in the form of Schedule “C”, (ii) a Certificate
      of Non-Canadian Subscribers in the form of Schedule “E”, and (iii) a
      Questionnaire in the form of Annex B to Schedule “H”; and

	 	 
	6. 	
      IF APPLICABLE, a duly completed and executed Form
      4C – Corporate Placee Registration Form – in the form of Schedule
    “F”.

Please deliver your subscription to: 

Cormark Securities Inc. 
Royal Bank Plaza 
South Tower,
Suite 2800 
200 Bay Street 
Toronto, Ontario M5J 2J2 
Attention: Susan
Samila-Moroz 
Fax: 416-943-6496 

SUBSCRIPTION AGREEMENT 

The securities subscribed for herein have not been and will
not be registered under the United States Securities Act of 1933, as amended,
and, subject to certain exceptions, may not be offered or sold in the United
States or to a U.S. Person. The sale contemplated hereby is being made in
reliance on a private placement exemption to “accredited investors” that satisfy
the criteria set forth in Rule 501(a) of Regulation D under the United States
Securities Act of 1933, as amended. 

	TO: 	
      U.S. GEOTHERMAL INC. (the “Corporation”)
      

	  	
       

	AND TO: 	
      CORMARK SECURITIES INC., DUNDEE SECURITIES CORPORATION
      AND TOLL CROSS SECURITIES INC. (collectively, the
      “Underwriters”) 

	  	
       

	AND TO: 	
      CORMARK SECURITIES (U.S.A.) LIMITED, DUNDEE SECURITIES
      INC., AND TOLL CROSS SECURITIES USA INC. (the “US
      Affiliates”) 

The undersigned (hereinafter referred to as the
“Subscriber”) hereby irrevocably subscribes for and agrees to purchase
from the Corporation that number of common shares set forth below (the
“Offered Shares”) for the aggregate consideration set forth below,
representing a subscription price of $2.20 (Canadian) per Share, upon and
subject to the terms and conditions set forth in “Terms and Conditions of the
Subscription for Offered Shares” attached hereto as Schedule “A” and as set
forth in the other applicable schedules hereto (the “Offering”).

SUBSCRIPTION AND SUBSCRIBER INFORMATION 

Please print all information (other than signatures), as
applicable, in the space provided below 

	 	 	Number of Offered Shares:_________________________
    
	(Name of Subscriber – please print) 	 	 
	 	 	 
	 	 	Aggregate Consideration: 
	 	 	$_________________________ 
	By:____________________________________________ 	 	(number of Offered Shares x CDN$2.20) 
	(Authorized Signature) 	 	 
	 	 	 
	 	 	 
	(Please print name of individual whose signature appears
      above if different than the name of the subscriber printed
      above, and title if applicable.) 		If the subscriber is signing as agent for a
      principal and the subscriber is not a trust corporation or a person
      purchasing as trustee or agent for accounts fully managed by it, in each
      case satisfying the criteria set forth in National Instrument 45-106,
      complete the following: 
	 	 	 
	 	 	 
	(Subscriber’s Address) 	 	(Name of Principal) 
	 	 	 
	 	 	 
	(Telephone Number) 	 	(Principal’s Address) 
	 	 	 
	 	 	 
	(Fax
      Number)                                                      
      (E-mail address) 	 	(Telephone Number) 
	 	 	 
	 	 	 
	 	 	(Fax
      Number)                                                      
      (E-mail address) 
	 	 	 
	 	 	 
	Register the Offered Shares as set forth below:
    	 	Deliver the Offered Shares as set forth
      below: 
	 	 	 
	 	 	 
	(Name) 	 	(Name) 
	 	 	 
	 	 	 
	(Account reference, if applicable) 	 	(Account reference, if applicable) 
	 	 	 
	 	 	 
	(Address) 	 	(Contact Name) 
	 	 	 
	 	 	 
	 	 	(Address) 
	 	 	 
	 	 	 
	 	 	(Telephone Number) 

- 2 - 

Present Ownership of Securities 

The Subscriber either [check appropriate box]:

	[   ]	
      owns directly or indirectly, or exercises control or
      direction over, _______________ Common Shares and convertible securities
      entitling the holder thereof to acquire an additional _______________
      Common Shares; or 

	 	
       

	[   ]	
      does not own directly or indirectly, or exercise control
      or direction over, Common Shares of the Corporation or securities
      convertible into Common Shares. 

Insider Status 

The Subscriber either [check appropriate box]:

[   ]        is an
“Insider” of the Corporation; or

[   ]        is
not an “Insider” of the Corporation. 

“Insider” means: 

	 	(a) 	
      a director or senior officer of the
Corporation;

	 	(b) 	
      a director or senior officer of a person that is itself
      an insider or subsidiary of the Corporation;

	 	(c) 	
      a person that beneficially owns or controls, directly or
      indirectly securities of the Corporation carrying more than 10% of the
      voting rights attached to all the Corporation’s outstanding voting
      securities, or

	 	(d) 	
      the Corporation itself, if it has purchased, redeemed or
      otherwise acquired any securities of its own issue, for so long as it
      continues to hold those securities.

Member of “Pro Group” 

The Subscriber either [check appropriate box]:

[   ]        is a
member of the “Pro Group”; or 

[   ]        is
not a member of the “Pro Group”. 

“Pro Group” means: 

	 	1. 	
      Subject to subparagraphs (2), (3) and (4), “Pro Group”
      shall include, either individually or as a group:

	 	 	 
	 		(a) 	
      the member (i.e. a member of the TSX-V under the TSX-V
      requirements);

	 		(b) 	
      employees of the member;

	 		(c) 	
      partners, officers and directors of the member;

	 		(d) 	
      affiliates of the member; and

	 		(e) 	
      associates of any parties referred to in subparagraphs
      (a) through (d).

	 	 	 	 
	 	2. 	
      The TSX-V may, in its discretion, include a person or
      party in the Pro Group for the purposes of a particular calculation where
      the TSX-V determines that the person is not acting at arm’s length to the
      member;

	 	 	 
	 	3. 	
      The TSX-V may, in its discretion, exclude a person from
      the Pro Group for the purposes of a particular calculation where the TSX-V
      determines that the person is acting at arm’s length of the
  member;

	 	 	 
	 	4. 	
      The member may deem a person who would otherwise be
      included in the Pro Group pursuant to subparagraph (1) to be excluded from
      the Pro Group where the member determines that:

	 		(a) 	
      the person is an affiliate or associate of the member
      acting at arm’s length of the member;

	 		(b) 	
      the associate or affiliate has a separate corporate and
      reporting structure;

	 		(c) 	
      there are sufficient controls on information flowing
      between the member and the associate or affiliate; and

	 		(d) 	
      the member maintains a list of such excluded
    persons.

- 3 - 

Corporate Placee Form 

The Subscriber, if not an individual, either [check
appropriate box]: 

	[   ] 	
      subsequent to April 1, 2004 has filed a Corporate Placee
      Registration Form with the TSX Venture Exchange and there have been no
      changes to the information provided by the Subscriber in the form since
      such filing; or 

	 	
      

	[   ] 	
      has completed and returned with this Subscription a duly
      executed Corporate Placee Registration Form (Schedule “F” to this
      Subscription Agreement). 

* * * * * * * 

The following Schedules are attached to and incorporated by
reference in this Subscription Agreement and are deemed to be a part hereof:

	 	Schedule “A” 	-	
      Terms and Conditions of Subscriptions for Offered Shares
      

	 	Schedule “B” 	-	
      Term Sheet 

	 	Schedule “C” 	-	
      Certificate of Subscribers 

	 	Schedule “D” 	-	
      Canadian Accredited Investor Certificate 

	 	Schedule “E” 	-
    	
      Certificate of Non-Canadian Subscribers (Other than U.S.
      Subscribers) 

	 	Schedule “F” 	-	
      Form 4C – Corporate Placee Registration Form 

	 	Schedule “G” 	-	
      Appendix 6A – Acknowledgment – Personal Information
    

	 	Schedule “H” 	-	
      Terms and Conditions of Registration Rights
  

Unless otherwise specified, all dollar amounts referred to
in this Subscription Agreement are in Canadian dollars. 

ACCEPTANCE: The Corporation hereby accepts the above
subscription this ______ day of ____________ , 2007. 

U.S. GEOTHERMAL INC. 

Per:
___________________________________________
        
Name: 
         Title: 

- 4 - 

SCHEDULE “A” 

TERMS AND CONDITIONS OF SUBSCRIPTION FOR OFFERED SHARES

ARTICLE 1 - INTERPRETATION 

1.1     
Definitions 

     
      Whenever used in this Subscription
Agreement, unless there is something in the subject matter or context
inconsistent therewith, the following words and phrases shall have the
respective meanings ascribed to them as follows: 

“Accredited Investor” means those “accredited investors”
specified in Rule 501(a) of Regulation D; 

“Broker Share” means a Common Share issued pursuant to
the exercise of a Broker Warrant. 

“Broker Warrants” means the broker warrants exercisable
for a period of 18 months following the Closing to purchase Broker Shares at the
US dollar equivalent of the Offered Share Price (calculated as of the Closing
Date). 

“Business Day” means a day other than a Saturday, Sunday
or any other day on which the principal chartered banks located in Toronto are
not open for business. 

“Closing” shall have the meaning ascribed to such term
in Section 3.1. 

“Closing Date” shall have the meaning ascribed to such
term in Section 3.1. 

“Closing Time” shall have the meaning ascribed to such
term in Section 3.1. 

“Common Share” means a common share in the capital of
the Corporation as constituted as at the Closing Date. 

“Control Person” means a person, company or combination
of persons or companies described in clause (c) of the definition of
“distribution” in subsection 1(1) of the Securities Act (Ontario). 

“Corporation” means U.S. Geothermal Inc. and includes
any successor corporation to or of the Corporation. 

“Insider” means (a) a director or senior officer of the
Corporation, (b) a director or senior officer of a company that is an insider or
subsidiary of the Corporation, or (c) any person who beneficially owns, directly
or indirectly, voting securities of the Corporation or who exercises control or
direction over voting securities of the Corporation or a combination of both
carrying more than 10% of the voting rights attached to all voting securities of
the Corporation for the time being outstanding. 

“Offered Share” means a Common Share offered in the
Offering. 

“Offered Share Price” means the subscription price per
Offered Share under this Offering. 

“Offering” shall have the meaning ascribed to such term
on the face page of this Subscription Agreement. 

“person” means any individual (whether acting as an
executor, trustee administrator, legal representative or otherwise),
corporation, firm, partnership, sole proprietorship, syndicate, joint venture,
trustee, trust, unincorporated organization or association, and pronouns have a
similar extended meaning. 

“Regulation D” means Regulation D adopted by the SEC
under the U.S. Securities Act; 

“Regulation S” means Regulation S adopted by the SEC
under the U.S. Securities Act; 

“Securities” means the Offered Shares. 

“Securities Laws” means, as applicable, the securities
laws, regulations, rules, rulings and orders in each of the Selling
Jurisdictions, and the notices, policies and written interpretations issued by
the Securities Regulators in each of the Selling Jurisdictions, and the rules of
the TSX-V. 

“Securities Regulators” means the securities commissions
or other securities regulatory authorities of all of the Selling Jurisdictions
or the relevant Selling Jurisdiction as the context so requires. 

“Selling Jurisdictions” means each of the provinces of
Canada and the United States and such other jurisdictions which are agreed to by
the Corporation and the Underwriters; and “Selling Jurisdiction” means,
in the case of any Subscriber, the jurisdiction in which such Subscriber is
resident.

“Subscriber” means the subscriber for the Offered Shares
as set out on the face page of this Subscription Agreement. 

“Subscription Agreement” means this subscription
agreement (including any schedules hereto) and any instrument amending this
Subscription Agreement; “hereof”, “hereto”, “hereunder”,
“herein” and similar expressions mean and refer to this Subscription Agreement
and not to a particular Article or Section; and the expression “Article” or
“Section” followed by a number means and refers to the specified Article or
Section of this Subscription Agreement. 

“Subscription Amount” means an amount equal to the
Offered Share Price multiplied by the number of Offered Shares subscribed for
and paid for pursuant to this Subscription Agreement. 

“Term Sheet” means the term sheet delivered to potential
purchasers of the Offered Shares, a copy of which is attached hereto as Schedule
“B”. 

“TSX-V” means the TSX Venture Exchange. 

“Underwriters” shall have the meaning ascribed to such
term on the face page of this Subscription Agreement. 

“Underwriting Agreement” means the underwriting
agreement to be dated as of the Closing Date entered into between the
Underwriters and the Corporation in respect of the Offering. 

“United States” means the United States of America, its
territories and possessions, any State of the United States of America and the
District of Columbia. 

“U.S. Person” shall have the meaning ascribed to such
term in Rule 902(k) of Regulation S under the U.S. Securities Act. 

“U.S. Securities Act” means the United States Securities
Act of 1933, as amended. 

1.2      Gender
and Number 

         
  Words importing the singular number only shall include the plural
and vice versa, words importing the masculine gender shall include the feminine
gender and words importing persons shall include firms and corporations and vice
versa. 

1.3      Currency

           
Unless otherwise specified, all dollar amounts in this Subscription Agreement,
including the symbol “$”, are expressed in Canadian dollars. 

1.4      Subdivisions,
Headings and Table of Contents 

A-2 

          The
division of this Subscription Agreement into Articles, Sections, Schedules and
other subdivisions and the inclusion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Subscription Agreement. The headings in this Subscription Agreement are not
intended to be full or precise descriptions of the text to which they refer.
Unless something in the subject matter or context is inconsistent therewith,
references herein to an Article, Section, Subsection, paragraph, clause or
Schedule are to the applicable article, section, subsection, paragraph, clause
or schedule of this Subscription Agreement. 

ARTICLE 2 - SUBSCRIPTION AND DESCRIPTION OF OFFERED SHARES

2.1      Subscription
for the Offered Shares 

          
 The Subscriber hereby confirms its irrevocable subscription for and offer
to purchase Offered Shares from the Corporation, on and subject to the terms and
conditions set out in this Subscription Agreement, for the Subscription Amount
which is payable as described in Article 3 hereto. 

2.2      Acceptance
and Rejection of Subscription by the Corporation 

        
   The Subscriber acknowledges and agrees that the Corporation
and the Underwriters reserve the right, in their absolute discretion, to reject
this subscription for Offered Shares, in whole or in part, at any time prior to
the Closing Time. If this subscription is rejected in whole, any cheques or
other forms of payment delivered to the Underwriters representing the
Subscription Amount will be promptly returned to the Subscriber without interest
or deduction. If this subscription is accepted only in part, a cheque
representing any refund of the Subscription Amount for that portion of the
subscription for Offered Shares which is not accepted, will be promptly
delivered to the Subscriber without interest or deduction. 

ARTICLE 3 - CLOSING 

3.1      Closing

          
 Delivery and sale of the Offered Shares and payment of the Subscription
Amount will be completed (the “Closing”) at the offices of the
Corporation’s counsel, Goodmans LLP, 250 Yonge Street, Suite 2400, Toronto,
Ontario M5B 2M6 at 10 a.m. (Toronto time) (the “Closing Time”) on June 5,
2007 or such other date or time as the Corporation and the Underwriters may
decide (the “Closing Date”). 

           
Certificates representing the Securities will be available for delivery to the
Subscriber following Closing, provided (i) the Subscriber has satisfied the
conditions described in section 3.2 hereof and (ii) the Corporation has accepted
this Subscription Agreement. If payment has not yet been made for the Offered
Shares as described in section 3.2(a) hereof on or before Closing, Certificates
representing the Securities will be released to the Subscriber against payment
to the Corporation of the amount of the Subscription Amount for the Offered
Shares in freely transferable Canadian funds. Such payment is to be made by bank
draft, certified cheque or other form of immediately available funds payable in
favour of “Cormark Securities Inc.” or such other person as the Corporation
shall advise the Subscriber. 

3.2      Conditions
of Closing 

      
     The Subscriber acknowledges and agrees that the
obligations of the Corporation hereunder are conditional on the accuracy of the
representations and warranties of the Subscriber contained in this Subscription
Agreement as of the date of this Subscription Agreement, and as of the Closing
Time as if made at and as of the Closing Time, and the fulfillment of the
following additional conditions as soon as possible and in any event not later
than the Closing Time: 

	 	(a) 	
      unless other arrangements acceptable to the Corporation
      have been made, payment by the Subscriber of the Subscription Amount by
      certified cheque, bank draft or other acceptable means in Canadian dollars
      payable to “Cormark Securities Inc.”.

A-3 

	 	(b) 	
      the Subscriber having properly completed, signed and
      delivered this Subscription Agreement to:

	 	 	 
	 		
      Cormark Securities Inc.

	 		
      Royal Bank Plaza, South Tower 
Suite 2800, 200 Bay
      Street 
Toronto, Ontario 
M5J 2J2

	 	 	 
	 		
      Attention:         
      Susan Samila-Moroz
      
Fax:                    
      (416) 943-6493

	 	 	 
	 	(c) 	
      the Subscriber having properly completed, signed and
      delivered Schedule “C”, Schedule “D”, Schedule “E” and Annex B to Schedule
      “H”, as applicable:

	 	(i) 	
      ALL SUBSCRIBERS

	 	 	
       

			
      a duly completed and executed Certificate of Subscribers
      in the form attached to the Subscription Agreement as Schedule “C” and
      Annex B to Schedule “H”.

	 	 	
       

	 	(ii) 	
      ALL CANADIAN SUBSCRIBERS

	 	 	
       

			
      a duly completed and executed Canadian Accredited
      Investor Certificate in the form attached to this Subscription Agreement
      as Schedule “D” (in addition to Schedule “C” and Annex B to Schedule “H”);
      and

	 	 	
       

	 	(iii) 	
      ALL SUBSCRIBERS WHO ARE NOT
      RESIDENT IN CANADA OR THE UNITED STATES

	 	 	
       

	 		
      a duly completed and executed Certificate of Non-Canadian
      Subscribers in the form attached to this Subscription Agreement as
      Schedule “E” (in addition to Schedule “C” and Annex B to Schedule “H”);
      and

	 	(d) 	
      if applicable, the Subscriber having properly completed,
      signed and delivered Form 4C – Corporate Placee Registration Form, a copy
      of which is attached hereto as Schedule “F”;

          
 The Corporation acknowledges and agrees that the obligations of the
Subscriber hereunder are conditional on the accuracy of the representations and
warranties of the Corporation contained in this Subscription Agreement and in
the Underwriting Agreement as of the date of this Subscription Agreement, and as
of the Closing Time as if made at and as of the Closing Time, and the
fulfillment of the following conditions, amongst others, as soon as possible and
in any event not later than the Closing Time: 

	 	(a) 	
      all covenants, agreements and conditions contained in
      this Subscription Agreement and in the Underwriting Agreement to be
      performed by the Corporation on or prior to the Closing shall have been
      performed or complied with in all material aspects, including without
      limitation, obtaining conditional approval from the TSX-V; and

	 	 	 	 
	 	(b) 	
      the Corporation shall have delivered to the Underwriter’s
      counsel the following items:

	 	 	 	 
	 		(i) 	
      a copy of the certificates representing the Securities
      purchased by the Subscriber registered in the name of the Subscriber or
      its nominee;

	 	 	 	 
	 		(ii) 	
      a copy of this Subscription Agreement duly executed by
      the Corporation; and

A-4 

	 	(iii) 	
      such other documents relating to the transactions
      contemplated by this Subscription Agreement and the Underwriting Agreement
      as the Underwriter or its counsel may reasonably
request.

ARTICLE 4 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
CORPORATION 

4.1     
Representations, Warranties and Covenants of the Corporation 

    
       By execution of this Subscription
Agreement, the Corporation hereby agrees with the Subscriber that the Subscriber
shall be entitled to rely on the representations, warranties and covenants made
by the Corporation in this Subscription Agreement (including the schedules
hereto) and to the Underwriters as set forth in the Underwriting Agreement (to
the extent that they have not been varied, amended, altered or waived, in whole
or in part, by the Underwriters). Such representations, warranties and covenants
shall form an integral part of this Subscription Agreement and shall survive the
Closing of the purchase and sale of the Offered Shares and shall continue in
full force and effect for the benefit of the Subscriber in accordance with the
terms of this Subscription Agreement and the Underwriting Agreement.

      
     The Corporation, hereby represents and warrants
to, and covenants with, the Subscriber and Underwriters as follows and
acknowledges that the Subscriber and the Underwriters are relying on such
representations, warranties and covenants in connection with the transactions
contemplated herein: 

	 	(a) 	
      The Corporation acknowledges and agrees to the terms and
      conditions set out in Schedule “H”.

	 	 	 
	 	(b) 	
      No form of general solicitation or general advertising
      (including advertisements, articles, notices or other communications
      published in any newspaper, magazine or similar media or broadcast over
      radio, television or electronic display (including the internet) or any
      seminar or meeting whose attendees had been invited by general
      solicitation or general advertising) was used by the Corporation or, to
      the best of its knowledge, any other person acting on behalf of the
      Corporation (other than the Underwriters and persons acting on their
      behalf, as to which no representation is made), in respect of or in
      connection with the offer and sale of the Offered Shares in the United
      States or elsewhere or to citizens or residents of the United States or
      elsewhere.

	 	 	 
	 	(c) 	
      Neither the Corporation nor any person authorized to act
      on its behalf (other than the Underwriters and persons acting on their
      behalf, as to which no representation is made) has sold or offered for
      sale any Offered Shares, or solicited any offers to buy any Offered Shares
      thereby so as to cause the issuance or sale of any of the Offered Shares
      to be in violation of Section 5 of the U.S. Securities Act, Canadian or
      other securities laws.

	 	 	 
	 	(d) 	
      The Corporation is not an open-end investment company,
      closed-end investment company, unit investment or face-amount certificate
      company that is or is required to be registered under Section 8 of the
      United States Investment Company Act of 1940, as amended.

	 	 	 
	 	(e) 	
      The Corporation has not, for a period of six months prior
      to the date hereof sold, offered for sale or solicited any offer to buy
      any of its securities in a manner that would be integrated with the offer
      and sale of the Offered Shares and would cause the exemption from
      registration set forth in Rule 506 of Regulation D under the U.S.
      Securities Act to become unavailable with respect to the offer and sale of
      the Offered Shares.

	 	 	 
	 	(f) 	
      The Corporation will use commercially reasonable efforts
      to ensure that there is available “adequate current public information”
      with respect to the Corporation within the meaning of Rule 144(c) under
      the U.S. Securities Act commencing on the first anniversary of the Closing
      Date and at all times thereafter when the registration statement referred
      to in Section 4.1(a) is not effective and up to
date.

A-5 

	 	(g) 	
      At any time that the Corporation is neither subject to
      Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
      the Corporation shall at the request of the Subscriber or any prospective
      purchaser designated by the Subscriber, promptly provide to such person
      with reasonable promptness, the information specified in Rule
      144A(d)(4)(i) under the U.S. Securities Act.

ARTICLE 5 - REPRESENTATIONS, WARRANTIES, COVENANTS AND
ACKNOWLEDGMENTS OF THE SUBSCRIBER 

5.1      Representations,
Warranties and Covenants of the Subscriber 

          
 The Subscriber, on its own behalf and, if applicable, on behalf of others
for whom it is acting hereunder, hereby represents and warrants to, and
covenants with, the Corporation and Underwriters as follows and acknowledges
that the Corporation and the Underwriters are relying on such representations,
warranties and covenants in connection with the transactions contemplated
herein: 

	 	(a) 	
      The matters set forth on page 2, 3 and 4 of this
      Subscription Agreement are true and correct as of the date of execution of
      this Subscription Agreement and will be true and correct as of the Closing
      Time.

	 	 	 
	 	(b) 	
      The Subscriber and each beneficial purchaser for whom it
      is acting is a resident in the jurisdiction set out on page 2 of this
      Subscription Agreement. Such address was not created and is not used
      solely for the purpose of acquiring the Offered Shares and the Subscriber
      and any beneficial purchaser was solicited to purchase and executed this
      agreement in such jurisdiction.

	 	 	 
	 	(c) 	
      The Subscriber has properly completed, executed and
      delivered to the Underwriters within the applicable time periods the
      certificate(s) set forth in Schedule “C” and Annex B to Schedule “H” and
      Schedule “D”, Schedule “E” and Schedule “F”, as applicable, to this
      Subscription Agreement and the information contained therein is true and
      correct.

	 	 	 
	 	(d) 	
      The representations, warranties and covenants contained
      in the applicable Schedules to this Subscription Agreement are true and
      correct as of the date of execution of this Subscription Agreement and
      will be true and correct as of the Closing Time.

	 	 	 
	 	(e) 	
      If the Subscriber, or any beneficial purchaser for whom
      it is acting, is not a person resident in Canada, the subscription for the
      Offered Shares by and the issuance and delivery of the Offered Shares to
      the Subscriber, or such beneficial purchaser, does not contravene any of
      the applicable securities legislation in the jurisdiction in which the
      Subscriber or such beneficial purchaser resides and does not give rise to
      any obligation of the Corporation to prepare and file a prospectus or
      similar document or to register the Securities or to be registered with or
      to file any report or notice with any governmental or regulatory authority
      of any kind whatsoever.

	 	 	 
	 	(f) 	
      The execution and delivery of this Subscription
      Agreement, the performance and compliance with the terms hereof, the
      subscription for Offered Shares and the completion of the transactions
      described herein by the Subscriber will not result in any material breach
      of, or be in conflict with or constitute a material default under, or
      create a state of facts which, after notice or lapse of time, or both,
      would constitute a material default under any term or provision of the
      constating documents, by-laws or resolutions of the Subscriber, the
      Securities Laws or any other laws applicable to the Subscriber, any
      agreement to which the Subscriber is a party, or any judgment, decree,
      order, statute, rule or regulation applicable to the Subscriber.

	 	 	 
	 	(g) 	
      The funds representing the Subscription Amount which will
      be advanced by the Subscriber to the Corporation hereunder will not
      represent proceeds of crime for the purposes of the Proceeds of Crime
      (Money Laundering) Act (Canada) (the “PCMLA”) and the
      Subscriber acknowledges that the Corporation may in the future be required
      by law to disclose the Subscriber’s name and other

A-6 

	 		
      information relating to this Subscription Agreement and
      the Subscriber’s subscription hereunder, on a confidential basis, pursuant
      to the PCMLA. To the best of its knowledge: none of the subscription funds
      to be provided by the Subscriber (i) have been or will be derived from or
      related to any activity that is deemed criminal under the law of Canada,
      the United States of America, or any other jurisdiction, or (ii) are being
      tendered on behalf of a person or entity who has not been identified to
      the Subscriber, and it shall promptly notify the Corporation if the
      Subscriber discovers that any of such representations ceases to be true
      and provide the Corporation with appropriate information in connection
      therewith.

	 	 	 	 
	 	(h) 	
      The Subscriber is subscribing for the Offered Shares as
      principal (within the meaning of applicable Securities Laws) and not with
      a view to the resale or distribution of all or any of the Securities or if
      it is not subscribing as principal, it acknowledges that the Corporation
      may be required by law to disclose (and if required by law the Subscriber
      agrees to disclose) to certain regulatory authorities the identity of each
      beneficial purchaser of the Offered Shares for whom it is
acting.

	 	 	 	 
	 	(i) 	
      In the case of a subscription for the Offered Shares by
      the Subscriber acting as trustee or agent (including, for greater
      certainty, a portfolio manager or comparable adviser) for a principal, the
      Subscriber is duly authorized to execute and deliver this Subscription
      Agreement and all other necessary documentation in connection with such
      subscription on behalf of each such beneficial purchaser, each of whom is
      subscribing as principal for its own account, not for the benefit of any
      other person and not with a view to the resale or distribution of all or
      any of the Securities, and this Subscription Agreement has been duly
      authorized, executed and delivered by or on behalf of and constitutes a
      legal, valid and binding agreement of, such principal, and the Subscriber
      acknowledges that the Corporation may be required by law to disclose (and
      if required by law the Subscriber agrees to disclose) the identity of each
      beneficial purchaser for whom the Subscriber is acting.

	 	 	 	 
	 	(j) 	
      If the Subscriber is an “insider” or “affiliate” of the
      Corporation (as such terms are defined in applicable securities laws), the
      Subscriber shall, at the time of the sale of Offered Shares, have no
      reasonable grounds to believe that the Corporation is in default of any
      requirement of any applicable Securities Laws to which the Corporation is
      subject.

	 	 	 	 
	 	(k) 	
      In the case of a subscription for the Offered Shares by
      the Subscriber acting as principal, this Subscription Agreement has been
      duly authorized, executed and delivered by, and constitutes a legal, valid
      and binding agreement of, the Subscriber. This Subscription Agreement is
      enforceable in accordance with its terms against the Subscriber and any
      beneficial purchasers on whose behalf the Subscriber is acting.

	 	 	 	 
	 	(l) 	
      If the Subscriber is:

	 	 	 	 
	 		(i) 	
      a corporation, the Subscriber is duly incorporated and is
      validly subsisting under the laws of its jurisdiction of incorporation and
      has all requisite legal and corporate power and authority to execute and
      deliver this Subscription Agreement, to subscribe for the Offered Shares
      as contemplated herein and to carry out and perform its obligations under
      the terms of this Subscription Agreement;

	 	 	 	 
	 		(ii) 	
      a partnership, syndicate or other form of unincorporated
      organization, the Subscriber has the necessary legal capacity and
      authority to execute and deliver this Subscription Agreement and to
      observe and perform its covenants and obligations hereunder and has
      obtained all necessary approvals in respect thereof; or

	 	 	 	 
	 		(iii) 	
      an individual, the Subscriber is of the full age of
      majority and is legally competent to execute this Subscription Agreement
      and to observe and perform his or her covenants and obligations
      hereunder.

A-7 

	 	(m) 	
      Other than the Underwriters and the US Affiliates, to the
      best of the Subscriber’s knowledge, there is no person acting or
      purporting to act in connection with the transactions contemplated herein
      who is entitled to any brokerage or finder’s fee. If any person
      establishes a claim that any fee or other compensation is payable in
      connection with this subscription for the Offered Shares, the Subscriber
      covenants to indemnify and hold harmless the Corporation and the
      Underwriters with respect thereto and with respect to all costs reasonably
      incurred in the defence thereof.

	 	 	 
	 	(n) 	
      The Subscriber is not, with respect to the Corporation or
      any of its affiliates, a Control Person and the Subscriber will not become
      a Control Person by purchasing the number of Offered Shares subscribed for
      under this Subscription Agreement and does not intend to act jointly or in
      concert with any other person to form a control group in respect of the
      Corporation.

	 	 	 
	 	(o) 	
      If required by applicable Securities Laws or the
      Corporation, the Subscriber will execute, deliver and file or assist the
      Corporation in filing such reports, undertakings and other documents with
      respect to the issue of the Offered Shares as may be required by any
      securities commission, stock exchange or other regulatory
  authority.

	 	 	 
	 	(p) 	
      The Subscriber, and each beneficial purchaser for whom it
      is acting hereunder, have been advised to consult their own legal advisors
      with respect to trading in the Securities with respect to the resale
      restrictions imposed by the Securities Laws of the jurisdiction in which
      the Subscriber resides, other applicable securities laws, and the policies
      of the TSX-V, and subject to the registration rights described in Schedule
      “H” acknowledges that no representation has been made respecting the
      applicable hold periods imposed by the Securities Laws or other resale
      restrictions applicable to such securities which restrict the ability of
      the Subscriber (or others for whom it is contracting hereunder) to resell
      such securities, that the Subscriber (or others for whom it is contracting
      hereunder) is solely responsible to find out what these restrictions are
      and the Subscriber is solely responsible (and the Corporation and the
      Underwriters are not in any way responsible) for compliance with
      applicable resale restrictions and the Subscriber is aware that it (or
      beneficial purchasers for whom it is contracting hereunder) may not be
      able to resell such securities except in accordance with limited
      exemptions under the Securities Laws and other applicable securities
      laws.

	 	 	 
	 	(q) 	
      The Subscriber has not received nor been provided with,
      has not requested and does not have any need to receive a prospectus or
      offering memorandum, within the meaning of the Securities Laws, or any
      sales or advertising literature in connection with the Offering and the
      Subscriber’s decision to subscribe for the Offered Shares was based upon
      the Corporation’s publicly available documents included in the Edgar
      database administered by the SEC and the SEDAR database administered under
      the direction of the Canadian Securities Administrators. The Subscriber’s
      investment decision was not otherwise based upon, and the Subscriber has
      not relied upon, any verbal or written representations as to facts made by
      or on behalf of the Corporation.

	 	 	 
	 	(r) 	
      The Subscriber (and, if applicable, others for whom it is
      contracting hereunder) has relied solely upon publicly available
      information relating to the Corporation, this Subscription Agreement and
      the Underwriting Agreement and not upon any verbal or written
      representation as to any fact or otherwise made by or on behalf of the
      Corporation, the Underwriters or any employee, agent or affiliate thereof
      or any other person associated therewith. The Underwriter assumes no
      responsibility or liability of any nature whatsoever for the accuracy or
      adequacy of the publicly available information upon which the Subscriber’s
      investment decision has been made or as to whether all information
      concerning the Corporation required to be disclosed by the Corporation has
      been disclosed. The Subscriber, on its own behalf and on behalf of others
      for whom the Subscriber is contracting hereunder, acknowledges that the
      decision to purchase the Offered Shares was made on the basis of currently
      available public information, this Subscription Agreement and the
      Underwriting Agreement.

	 	 	 
	 	(s) 	
      The Subscriber is not purchasing the Offered Shares with
      knowledge of material information concerning the Corporation which has not
      been generally or publicly disclosed.

A-8 

	 	(t) 	
      No person has made any written or oral
      representations:

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase the Offered
      Shares;

	 	 	 	 
	 		(ii) 	
      that any person will refund the Subscription Amount;
      or

	 	 	 	 
	 		(iii) 	
      as to the future price or value of the Offered
    Shares.

	 	 	 	 
	 	(u) 	
      The subscription for the Offered Shares has not been made
      through or as a result of, and the offer and sale of the Offered Shares is
      not being accompanied by any advertisement, including without limitation
      in printed public media, radio, television or telecommunications,
      including electronic display, or as part of a general
  solicitation.

5.2     
Acknowledgments of the Subscriber 

        
   The Subscriber, on its own behalf and, if applicable, on
behalf of others for whom it is acting hereunder, acknowledges and agrees as
follows: 

	 	(a) 	
      The Subscriber has received and reviewed a copy of the
      Term Sheet setting out the principal terms of the Offering.

	 	 	 
	 	(b) 	
      The Subscriber acknowledges that the aggregate gross
      proceeds of the Offering will be up to approximately $15,000,000 (subject
      to the option to increase the number of Offered Shares by 2,272,718
      Offered Shares).

	 	 	 
	 	(c) 	
      No securities commission, agency, governmental authority,
      regulatory body, stock exchange or similar regulatory authority has
      reviewed, passed, made any finding or determination, or recommended or
      endorsed on the merits of the Offered Shares.

	 	 	 
	 	(d) 	
      Subject to the registration rights described in Schedule
      “H”, the Securities shall be subject to statutory resale restrictions
      under the Securities Laws of the province, territory or jurisdiction in
      which the Subscriber resides and the U.S. Securities Act and under other
      applicable securities laws, and the Subscriber covenants that it will not
      resell the Securities except in compliance with such laws and the
      Subscriber acknowledges that it is solely responsible (and the Corporation
      and the Underwriters are not in any way responsible) to find out what
      those restrictions are and to comply with them before selling the
      Securities.

	 	 	 
	 	(e) 	
      The Subscriber’s ability to transfer the Offered Shares
      is limited by, among other things, applicable Securities Laws.

	 	 	 
	 	(f) 	
      The certificates representing the Offered Shares (and, if
      issued within four months after the Closing Date, any certificates
      representing the Broker Shares) will bear, as of the Closing Date, a
      legend substantially in the following form and with the necessary
      information inserted:

	 	 	 
	 		
      UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE
      HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE. <INSERT
      DATE THAT IS FOUR (4) MONTHS AND ONE (1) DAY AFTER THE CLOSING
      DATE>.

	 	 	 
	 	(g) 	
      In addition, the certificates representing the Securities
      (and, if issued within four months after the Closing Date, any
      certificates representing the Broker Shares) will also bear a legend
      substantially in the following form:

	 	 	 
	 		
      WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE
      EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
  SOLD,

A-9 

	 		
      TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR
      THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA
      OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL <INSERT DATE THAT
      IS FOUR (4) MONTHS AND ONE (1) DAY AFTER THE CLOSING
  DATE>.

	 	 	 	 
	 	(h) 	
      The Subscriber, and each beneficial purchaser for whom it
      is acting hereunder, shall execute, deliver, file and otherwise assist the
      Corporation and Underwriters with filing all documentation required by the
      applicable Securities Laws to permit the subscription for the Offered
      Shares and the issuance of the Securities.

	 	 	 	 
	 	(i) 	
      No prospectus or offering memorandum, within the meaning
      of the Securities Laws, or other similar disclosure document has been
      filed by the Corporation with a securities commission, securities
      regulatory authority or other governmental or regulatory authority in the
      United States, in any province in Canada or any other jurisdiction in
      connection with the issuance of the Offered Shares.

	 	 	 	 
	 	(j) 	
      The Underwriters and/or their directors, officers,
      employees, agents and representatives assume no responsibility or
      liability of any nature whatsoever for the accuracy or adequacy of any
      such publicly available information concerning the Corporation or as to
      whether all information concerning the Corporation that is required to be
      disclosed or filed by the Corporation under the Securities Laws has been
      so disclosed or filed.

	 	 	 	 
	 	(k) 	
      The Corporation and Underwriters are relying on the
      representations, warranties and covenants contained herein and in the
      applicable Schedules attached hereto to determine the Subscriber’s
      eligibility to subscribe for the Offered Shares under applicable
      Securities Laws and the Subscriber agrees to indemnify each of the
      Corporation and the Underwriters, and each of its directors and officers
      against all losses, claims, costs, expenses, damages or liabilities which
      any of them may suffer or incur as a result of or arising from reliance
      thereon. The Subscriber undertakes to immediately notify the Corporation
      of any change in any statement or other information relating to the
      Subscriber set forth in such applicable Schedules which takes place prior
      to the Closing Time.

	 	 	 	 
	 	(l) 	
      The Corporation is relying on an exemption from the
      requirement to provide the Subscriber with a prospectus under the
      Securities Laws of Canada and as a consequence of acquiring the Offered
      Shares pursuant to such exemption:

	 	 	 	 
	 		(i) 	
      certain protections, rights and remedies provided by
      applicable Securities Laws, including statutory rights of rescission and
      certain statutory remedies against an issuer, underwriters, auditors,
      directors and officers that are available to investors who acquire
      securities offered by a prospectus, will not be available to the
      Subscriber and each beneficial person for whom it is contracting
      hereunder, or, if applicable, others for whom you are contracting
      hereunder;

	 	 	 	 
	 		(ii) 	
      the common law may not provide investors with an adequate
      remedy in the event that they suffer investment losses in connection with
      securities acquired in a private placement;

	 	 	 	 
	 		(iii) 	
      the Subscriber and each beneficial person for whom it is
      contracting hereunder, may not receive information that would otherwise be
      required to be given under applicable Securities Laws; and

	 	 	 	 
	 		(iv) 	
      the Corporation is relieved from certain obligations that
      would otherwise apply under applicable Securities
Laws.

A-10 

	 	(m) 	
      The Securities are “restricted securities” as defined in
      Rule 144(a)(3) under the U.S. Securities Act and have not been registered
      under the U.S. Securities Act or any state securities laws and may not be
      reoffered or resold in the United States or to U.S. Persons unless
      registered under the U.S. Securities Act and applicable state securities
      laws, as contemplated in Schedule “H”, or an exemption from such
      registration requirements is available. Until resales of the Securities
      are registered under the U.S. Securities Act, the Securities may not
      practically be able to be offered and sold on the TSX-V pursuant to Rule
      904 under the U.S. Securities Act since the securities will remain
      “restricted securities” pursuant to Rule 905 of Regulation S under the
      U.S. Securities Act. Notwithstanding the registration of the resale of the
      Securities, the Corporation does not intend to register or qualify such
      resales under state securities or Blue Sky laws, and the subscriber
      acknowledges that the initial sale of the securities on the TSX V, or any
      other trading market, may not be made to the U.S. Person unless an
      exemption from such registration or qualification is then
  available.

	 	 	 	 
	 	(n) 	
      The Subscriber agrees that if the Subscriber decides to
      offer, sell, pledge or otherwise transfer any of the Offered Shares, the
      Subscriber will not offer, sell, pledge or otherwise transfer any of the
      Offered Shares, directly or indirectly, unless;

	 	 	 	 
	 		(i) 	
      the sale is to the Corporation; or

	 	 	 	 
	 		(ii) 	
      made pursuant to an effective registration statement
      under the U.S. Securities Act; or

	 	 	 	 
	 		(iii) 	
      the sale is made outside the United States in compliance
      with the requirements of Rule 904 of Regulation S under the U.S.
      Securities Act and in compliance with applicable local laws and
      regulations; or

	 	 	 	 
	 		(iv) 	
      the sale is made in compliance with an exemption from
      registration under the U.S. Securities Act provided by (A) Rule 144
      thereunder or (B) Rule 144A thereunder, if available, and in accordance
      with any applicable state securities law; or

	 	 	 	 
	 		(v) 	
      the Offered Shares are sold in a transaction that does
      not require registration under the U.S. Securities Act or any applicable
      state securities laws.

	 	 	 	 
	 	(o) 	
      There is no government insurance or other insurance
      covering the Securities.

	 	 	 	 
	 	(p) 	
      AN INVESTMENT IN THE OFFERED SHARES IS NOT WITHOUT
      RISK AND THE SUBSCRIBER (AND ANY BENEFICIAL PURCHASER) MAY LOSE HIS, HER
      OR ITS ENTIRE INVESTMENT.

	 	 	 	 
	 	(q) 	
      The Corporation may complete additional financings in the
      future in order to develop the business of the Corporation and fund its
      ongoing development, and such future financings may have a dilutive effect
      on current securityholders of the Corporation, including the Subscriber,
      but there is no assurance that such financing will be available, on
      reasonable terms or at all, and if not available, the Corporation may be
      unable to fund its ongoing development.

	 	 	 	 
	 	(r) 	
      The Subscriber has such knowledge, or has received
      advice, in financial and business affairs as to be capable of evaluating
      the merits and risks of the Subscriber’s investment, and the Subscriber,
      or where the Subscriber is not purchasing as principal, each beneficial
      purchaser, is able to bear the economic risk of loss of its
    investment.

	 	 	 	 
	 	(s) 	
      The Subscriber, and each beneficial person for whom it is
      contracting hereunder, is responsible for obtaining such legal,
      investment, tax and other professional advice as it considers appropriate
      in connection with the execution, delivery and performance of this
      Subscription Agreement and the transactions contemplated under this
      Subscription Agreement (including the resale and transfer restrictions
      referred to herein), and, without limiting the generality of the
      foregoing:

A-11 

	 	(i) 	
      the Corporation’s counsel are acting solely as counsel to
      the Corporation and not as counsel to the Subscriber;

	 	 	 
	 	(ii) 	
      the Underwriters’ counsel are acting solely as counsel to
      the Underwriters and not as counsel to the Subscriber; and

	 	 	 
	 	(iii) 	
      the Underwriters are acting solely as financial advisors
      to, and underwriters of, the Corporation and not as financial advisors to
      the Subscriber, or as underwriters of, the Subscriber, except insofar as
      is necessary at the Closing to deliver payment for the Offered Shares to
      the Corporation on behalf of the Subscriber and to accept and deliver the
      Offered Shares to the Subscriber after the
Closing.

	 	(t) 	
      The Offered Shares have not been registered under the
      U.S. Securities Act or any state securities laws, and the sale
      contemplated hereby is being made in reliance on the a private placement
      exemption to Accredited Investors (as defined in Rule 506 under the U.S.
      Securities Act).

	 	 	 
	 	(u) 	
      The Subscriber understands that, until such time as is no
      longer required under applicable requirements of the U.S. Securities Act
      or applicable state securities laws, all certificates representing the
      Offered Shares, as well as all certificates issued in exchange for or in
      substitution of the foregoing securities, will bear a legend to the
      following effect:

	 	 	 
	 		
      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
      REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
      “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
      PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT
      SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
      ONLY: (A) TO THE CORPORATION, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
      ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT IF
      AVAILABLE, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S.
      SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE,
      AND IN COMPLIANCE WITH ANY STATE SECURITIES LAWS, OR (E) WITH THE PRIOR
      WRITTEN CONSENT OF THE CORPORATION, PURSUANT TO ANOTHER EXEMPTION FROM
      REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS; PROVIDED THAT, IN CONNECTION WITH A TRANSFER PURSUANT TO
      (C), (D) OR (E) ABOVE, AN OPINION OF COUNSEL, OF RECOGNIZED STANDING
      REASONABLY SATISFACTORY TO THE COMPANY HAS BEEN PROVIDED TO THE COMPANY TO
      SUCH EFFECT.

	 	 	 
	 		
      if the Offered Shares are being sold pursuant sections
      (C) through (E) of the foregoing legend, the legend may be removed by
      delivery to the Corporation’s registrar and transfer agent and the
      Corporation of an opinion of counsel, of recognized standing in form and
      substance satisfactory to the Corporation, that such legend is no longer
      required under applicable requirements of the U.S. Securities Act or state
      securities laws.

	 	 	 
	 	(v) 	
      The Subscriber understands and agrees that there may be
      material tax consequences to the Subscriber of an acquisition or
      disposition of the Offered Shares, and the Subscriber acknowledges that it
      is responsible for determining the tax consequences of its investments.
      The Corporation gives no opinion and makes no representation with respect
      to the tax consequences to the Subscriber under United States, state,
      local or Canadian or other foreign tax law of the Subscriber's acquisition
      or disposition of such securities.

	 	 	 
	 	(w) 	
      subject to the terms and conditions of the registration
      rights set forth in Schedule “H”, it acknowledges that such registration
      rights may be amended or waived by holders holding a majority of the
      Offered Shares, and that the Corporation’s obligations under Schedule “H”
      are

A-12 

conditioned upon the Subscriber cooperating
  with the Corporation as reasonably requested by the Corporation in connection
  with the preparation and filing of any Registration Statement hereunder, including
  but not limited to providing such information in a timely manner regarding itself,
  the Offered Shares and other securities of the Corporation held by it and the
  intended method of disposition of the Offered Shares as shall be reasonably
  required to effect and maintain the effectiveness of the registration of such
  Offered Shares. 

5.3      Reliance
on Representations, Warranties, Covenants and Acknowledgements 

            The
Subscriber acknowledges and agrees that the representations, warranties,
covenants and acknowledgements made by the Subscriber in this Subscription
Agreement are made with the intention that they may be relied upon by the
Corporation and the Underwriters in determining the Subscriber’s eligibility
(and, if applicable, the eligibility of others for whom the Subscriber is
contracting hereunder) to purchase the Offered Shares under Securities Laws. The
Subscriber undertakes to immediately notify the Corporation of any change in any
statement or other information relating to the Subscriber set forth in this
Subscription Agreement, or in any document furnished by the Subscriber to the
Corporation or the Underwriters in connection with this Subscription Agreement,
which takes place at or prior to the Closing Time. 

            The
Subscriber further agrees that by accepting the Offered Shares, the Subscriber
shall be representing and warranting that such representations, warranties,
acknowledgements and covenants are true as at the Closing Time with the same
force and effect as if they had been made by the Subscriber at the Closing Time
and that they shall survive the purchase by the Subscriber of the Offered Shares
and shall continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of any of Offered Shares. 

ARTICLE 6 - SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS 

6.1     
Survival of Representations, Warranties and Covenants of the Corporation

           
The representations, warranties and covenants of the Corporation contained in
this Subscription Agreement shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Subscriber with respect
thereto, shall continue in full force and effect for the benefit of the
Subscriber and the Underwriters (as provided herein). 

6.2      Survival
of Representations, Warranties and Covenants of the Subscriber 

            The
representations, warranties and covenants of the Subscriber contained in this
Subscription Agreement shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Corporation or the
Underwriters with respect thereto, shall continue in full force and effect for
the benefit of the Corporation and the Underwriters. 

ARTICLE 7 - INDEMNITY 

7.1      Indemnity

            The
Subscriber shall indemnify and hold harmless each of the Corporation and the
Underwriters and each of their respective directors, officers, employees,
underwriters, advisers and shareholders (collectively, the “Indemnified
Parties” and each an “Indemnified Party”) from and against any and
all actual or threatened claims, actions, suits, investigations and proceedings
(collectively, the “Proceedings”) and any and all losses, liabilities,
claims, damages, fees, costs and expenses, all amounts paid to settle any
Proceeding or to satisfy any judgment or award, and all legal fees and
disbursements incurred by an Indemnified Party (including legal fees and
disbursements incurred in enforcing this indemnity), caused or arising, directly
or indirectly, by reason of or in consequence of, any representation or warranty
of the Subscriber contained in this Subscription Agreement or in any document
furnished by the Subscriber to the Corporation or the Underwriters in connection
with this Subscription Agreement being untrue in any material respect or any
breach or failure by the Subscriber to comply with any 

A-13 

covenant or agreement made by the Subscriber in this
Subscription Agreement or in any document furnished by the Subscriber to the
Corporation or the Underwriters in connection with this Subscription Agreement.

ARTICLE 8 - AUTHORIZATION OF THE UNDERWRITERS 

8.1      Authorization
of the Underwriters 

            The
Subscriber irrevocably authorizes the Underwriters in their sole and absolute
discretion, to act as the Subscriber’s representative at the Closing, and hereby
appoints the Underwriters and the US Affiliates, with full power of
substitution, as its true and lawful attorney with full power and authority in
the Subscriber’s place and stead: 

	 	(a) 	
      to receive certificates representing the Securities, to
      execute in the Subscriber’s name and on its behalf all closing receipts
      and required documents, to complete and correct any errors or omissions in
      any form or document provided by the Subscriber in connection with the
      subscription for the Offered Shares and to exercise any rights of
      termination contained in the Underwriting Agreement;

	 	 	 
	 	(b) 	
      to extend such time periods and to waive, in whole or in
      part, any representations, warranties, covenants or conditions for the
      Subscriber’s benefit contained in this Subscription Agreement and the
      Underwriting Agreement or any ancillary or related documents;

	 	 	 
	 	(c) 	
      to terminate this Subscription Agreement if any condition
      precedent is not satisfied, in such manger and on such terms and
      conditions as the Underwriters in their sole discretion may determine;
      and

	 	 	 
	 	(d) 	
      without limiting the generality of the foregoing, to
      negotiate, settle, execute, deliver and amend the Underwriting
      Agreement.

ARTICLE 9 - COMMISSION 

9.1      Fee
to the Underwriters 

            The
Subscriber understands that in connection with the issue and sale of the Offered
Shares pursuant to the Offering, the Underwriters will receive from the
Corporation on Closing, a cash fee equal to 5.0% of the gross proceeds of the
offering of Offered Shares, and Broker Warrants entitling the Underwriters to
acquire that number of Offered Shares as is equal to 5.0% of the number of
Offered Shares sold pursuant to the Offering at the U.S. dollar equivalent of
the Offered Share Price (calculated at the Closing Date) during the period
ending 18 months from the closing of the Offering. No other fee or commission is
payable by the Corporation in connection with the completion of the Offering.
However, the Corporation will pay certain fees and expenses of the Underwriters
in connection with the Offering as set out in the Underwriting Agreement. 

ARTICLE 10 - COLLECTION OF PERSONAL INFORMATION 

10.1     Collection
of Personal Information 

            The
Subscriber acknowledges and consents to the fact that the Corporation and the
Underwriters are collecting the Subscriber’s (and any beneficial purchaser for
which the Subscriber is contracting hereunder) personal information for the
purpose of completing the Subscriber’s subscription. The Subscriber acknowledges
and consents to the Corporation and Underwriters retaining the personal
information for so long as permitted or required by applicable law or business
practices. The Subscriber further acknowledges and consents to the fact that the
Corporation or the Underwriters may be required by Securities Laws, stock
exchange rules and/or Investment Dealers Association of Canada rules to provide
regulatory authorities any personal information provided by the Subscriber
respecting itself (and any beneficial purchaser for which the Subscriber is
contracting hereunder). The Subscriber represents and warrants that it has the
authority to provide the consents and acknowledgements set out in 

A-14 

this paragraph on behalf of all beneficial purchasers for which
the Subscriber is contracting. In addition to the foregoing, the Subscriber
agrees and acknowledges that the Corporation or the Underwriters, as the case
may be, may use and disclose its personal information, or that of each
beneficial purchaser for whom it is contracting hereunder, as follows: 

	 	(a) 	
      for internal use with respect to managing the
      relationships between and contractual obligations of the Corporation, the
      Underwriters and the Subscriber or any beneficial purchaser for whom the
      Subscriber is contracting hereunder;

	 	 	 
	 	(b) 	
      for use and disclosure for income tax related purposes,
      including without limitation, where required by law, disclosure to Canada
      Revenue Agency;

	 	 	 
	 	(c) 	
      for disclosure to securities regulatory authorities and
      other regulatory bodies with jurisdiction with respect to reports of
      trades and similar regulatory filings;

	 	 	 
	 	(d) 	
      for disclosure to a governmental or other authority to
      which the disclosure is required by court order or subpoena compelling
      such disclosure and where there is no reasonable alternative to such
      disclosure;

	 	 	 
	 	(e) 	
      for disclosure to professional advisers of the
      Corporation or the Underwriters in connection with the performance of
      their professional services;

	 	 	 
	 	(f) 	
      for disclosure to any person where such disclosure is
      necessary for legitimate business reasons and is made with the
      Subscriber’s prior written consent;

	 	 	 
	 	(g) 	
      for disclosure to a court determining the rights of the
      parties under this Subscription Agreement; or

	 	 	 
	 	(h) 	
      for use and disclosure as otherwise required or permitted
      by law.

         
  The contact information for the officer of the Corporation who can
answer questions about this collection of information is as follows: 

Daniel Kunz, President 
U.S.
Geothermal Inc. 
1509 Tyrell Lane, Suite 13 
Boise, Idaho 83706 

Telephone:      (208) 424-1027

Facsimile:         (208) 424-1030

            By
executing this Subscription Agreement, the Subscriber (on its own behalf and, if
applicable, on behalf of each beneficial purchaser on whose behalf the
Subscriber is acting) acknowledges and expressly consents to: 

	 	(a) 	
      the disclosure of Personal Information by the Corporation
      to the TSX-V (as described in TSX-V Appendix 6A, a copy of which is
      attached as Schedule “G”) pursuant to Form 4B of the TSX-V;
    and

	 	 	 
	 	(b) 	
      the collection, use and disclosure of Personal
      Information by the TSX-V for the purposes described in Appendix 6A or as
      otherwise identified by the TSX-V, from time to
time.

            
   For the purposes of this Section 10.1, Personal Information
means any information about the Subscriber, and includes information contained
in Part II Items 8, 9, 10 and Part IV Item 3(a), as applicable, of the TSX-V
Form 4B - Private Placement Notice Form. 

A-15 

            The
Subscriber acknowledges that the Corporation is required to file with the
Ontario Securities Commission (“OSC”) a report setting out the
Subscriber’s name, address and telephone number, the number and type of
securities issued, the date of issuance and the purchase price of the securities
issued to the Subscriber. Such information is collected indirectly by the OSC
under the authority granted to it in securities legislation, for the purposes of
the administration and enforcement of the securities legislation of Ontario. By
submitting this Subscription Agreement, the Subscriber authorizes such indirect
collection of the information by the OSC. The following official can answer
questions about the OSC’s indirect collection of the information: 

Administrative Assistant to the
Director of Corporate Finance 
Suite 903, Box 5520 Queen Street West

Toronto, Ontario M5H 3S8 

Telephone:           (416)
593-8086

Facsimile:              (416)
593-8252 

ARTICLE 11 - MISCELLANEOUS 

11.1     Further
Assurances 

            Each
of the parties hereto upon the request of each of the other parties hereto,
whether before or after the Closing Time, shall do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further acts, deeds, documents, assignments, transfers, conveyances, powers of
attorney and assurances as may reasonably be necessary or desirable to complete
the transactions contemplated herein. 

11.2     Notices

	 	(a) 	
      Any notice, direction or other instrument required or
      permitted to be given to any party hereto shall be in writing and shall be
      sufficiently given if delivered personally, or transmitted by facsimile
      tested prior to transmission to such party, as follows:

	 	 	 	 
	 		(i) 	
      in the case of the Corporation, to:

	 	 	 	 
	 			
      U.S. Geothermal Inc. 
1509 Tyrell Lane, Suite 13
      
Boise, Idaho 
83706

	 	 	 	 
	 			
      Attention:           Daniel
      Kunz, President
      
Fax:                      (208)
      424-1030

	 	 	 	 
	 			
      with a copy to:

	 	 	 	 
	 			
      Goodmans LLP

	 			
      355 Burrard Street, Suite 1900 
Vancouver, British
      Columbia 
V6C 2G8

	 	 	 	 
	 			
      Attention:           Bruce
      Wright
      
Fax:                      
      (604) 682-7131

	 	 	 	 
	 		(ii) 	
      in the case of the Subscriber, at the address specified
      on the face page hereof, with a copy to the Underwriters at:

	 	 	 	 
	 			
      Cormark Securities Inc. 
Royal Bank
  Plaza

A-16 

South Tower, Suite 2800 
200 Bay
Street 
Toronto, Ontario 
M5J 2J2 

Attention:           Susan
Samila-Moroz

Fax:                      
(416) 943-6496 

	 	(b) 	
      Any such notice, direction or other instrument, if
      delivered personally, shall be deemed to have been given and received on
      the day on which it was delivered, provided that if such day is not a
      Business Day then the notice, direction or other instrument shall be
      deemed to have been given and received on the first Business Day next
      following such day and if transmitted by fax or electronic transmission,
      shall be deemed to have been given and received on the day of its
      transmission, provided that if such day is not a Business Day or if it is
      transmitted or received after the end of normal business hours then the
      notice, direction or other instrument shall be deemed to have been given
      and received on the first Business Day next following the day of such
      transmission.

	 	 	 
	 	(c) 	
      Any party hereto may change its address for service from
      time to time by notice given to each of the other parties hereto in
      accordance with the foregoing provisions.

11.3     Time of
the Essence 

            Time
shall be of the essence of this Subscription Agreement and every part hereof.

11.4     Costs
and Expenses 

            All
costs and expenses (including, without limitation, the fees and disbursements of
legal counsel) incurred in connection with this Subscription Agreement and the
transactions herein contemplated shall be paid and borne by the party incurring
such costs and expenses. 

11.5     Applicable
Law 

            This
Subscription Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the province of
Ontario and the laws of Canada applicable therein. Any and all disputes arising
under this Subscription Agreement, whether as to interpretation, performance or
otherwise, shall be subject to the non-exclusive jurisdiction of the courts of
the province of Ontario and each of the parties hereto hereby irrevocably
attorns to the jurisdiction of the courts of such province. 

11.6     Entire
Agreement 

            This
Subscription Agreement, including the Schedules hereto, constitutes the entire
agreement between the parties with respect to the transactions contemplated
herein and cancels and supersedes any prior understandings, agreements,
negotiations and discussions between the parties. There are no representations,
warranties, terms, conditions, undertakings or collateral agreements or
understandings, express or implied, between the parties hereto other than those
expressly set forth in this Subscription Agreement or in any such agreement,
certificate, affidavit, statutory declaration or other document as aforesaid.
This Subscription Agreement may not be amended or modified in any respect except
by written instrument executed by each of the parties hereto. 

11.7     Counterparts

            This
Subscription Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same Subscription Agreement. Counterparts may be
delivered either in original or faxed form and the parties adopt any signature
received by a receiving fax machine as original signatures of the parties. 

A-17 

11.8     Electronic
Delivery of Subscription 

            The
Corporation shall be entitled to rely on delivery by fax or e-mail of an
executed copy of this Subscription Agreement, including the completed Schedules
to this Subscription Agreement, and acceptance by the Corporation of the fax or
e-mail copy shall be legally effective to create a valid and binding agreement
between the Subscriber and the Corporation in accordance with the terms of this
Subscription Agreement. 

11.9     Amendments

            The
provisions of this Subscription Agreement may only be amended with the written
consent of the other parties hereto. 

11.10   Assignment 

            This
Subscription Agreement may not be assigned by either party except with the prior
written consent of the other parties hereto. 

11.11   Enurement 

            This
Subscription Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, successors (including any
successor by reason of the amalgamation or merger of any party), administrators
and permitted assigns. 

11.12   Language 

            Each
of the Corporation and the Subscriber hereby acknowledges that it has consented
and requested that all documents evidencing or relating in any way to the
Offered Shares and this Subscription Agreement be drawn up in the English
language only. La Société et le souscripteur reconnaissent par les présentes
avoir consenti et demandé que tous les documents faisant foi ou se rapportant de
quelque manière a la vente d’actions ordinaires de la société et à la présente
convention de souscription soient rédigés en anglais seulement. 

A-18 

	SCHEDULE “B” 
	 
	Term Sheet 
	 
	U.S. GEOTHERMAL INC. 
	 
	Terms And Conditions 
	 
	Private Placement of Offered Shares 
	 

	Issuer: 	
      U.S. Geothermal Inc. (the “Company”). 

	  	
       

	Offer: 	
      Underwritten private placement (the “Offering”) of
      6,818,182 common shares (“Offered Shares”) of the Company. 

	  	
       

	Option: 	
      The Underwriters shall have the option, exercisable at
      any time until 48 hours prior to Closing, to increase the size of the
      Offering by up to 2,272,718 Offered Shares. 

	  	
       

	Offering Price: 	
      CDN$2.20 per Offered Share (the “Offering Price”).
  

	  	
       

	Size of Offering: 	
      CDN$15,000,000 (subject to the option to increase the
      number of Offered Shares by 2,272,718 Offered Shares). 

	  	
       

	Use of Proceeds: 	
      The net proceeds of the offering will be used for general
      working capital purposes. 

	  	
       

	Offering 
Jurisdictions: 	
      Each of the provinces of Canada, the United States
      (pursuant to Regulation D or rule 144A under the United States
      Securities Act of 1933, as amended (the “U.S. Securities Act)) or in
      such other manner as to not require registration under the U.S. Securities
      Act, and jurisdictions other than Canada and the United States, provided
      that the Company is not required to file a prospectus or other disclosure
      document or become subject to continuing reporting obligations in such
      other jurisdictions. 

	  	
       

	Liquidity Provision: 	
      In the event that a Registration Statement registering
      the Offered Shares under the U.S. Securities Act has not become effective
      on or before the date that is 5 months following the Closing Date,
      purchasers of the Offered Shares will be entitled to receive an additional
      0.1 Offered Shares for every Offered Share purchased in the Offering in
      accordance with the terms and conditions set out in Schedule “H”.
  

	  	
       

	Listing: 	
      The Company will make application to list the Offered
      Shares on the TSX Venture Exchange for trading on Closing. 

	  	
       

	Closing Date: 	
      On or about June 5, 2007 or such other date as the
      parties may agree (the “Closing Date”). 

	  	
       

	Cash Commission: 	
      5% of the gross proceeds of the Offering. 

	  	
       

	Broker Warrants: 	
      In addition to the cash commission, the Company will
      issue to the Underwriters broker’s warrants exercisable for a period of 18
      months following the Closing to purchase at the U.S. dollar equivalent of
      the Offering Price (calculated as of the Closing Date) that number of
      shares as is equal to 5% of the aggregate number of Offered Shares
      purchased by purchasers other than certain exempt purchasers agreed upon
      by the Company and the Underwriters. 

	  	
       

	Standstill: 	
      The Company agrees not to issue nor announce the issuance
      of any Offered Shares or financial instruments convertible or exercisable
      into Offered Shares for a period 

		
      commencing on the date hereof and expiring 120 days
      following Closing without the prior written consent of the Underwriters,
      which consent will not be unreasonably withheld or delayed. This condition
      shall not apply to the issuance of securities pursuant to: (i) securities
      issued in connection with private placements to existing shareholders or
      in nonbrokered private placements arranged by the Company with any
      existing or potential strategic partners; (ii) any bonafide
      acquisition by the Company or one of its affiliates; (iii) the
      issuance of securities to directors, officers, employees and consultants
      under existing compensation arrangements, including applicable stock
      option agreements or plans; (iv) securities issued to holders of rights to
      acquire any securities of the Company, including any existing convertible
      or exchangeable securities of the Company, that are outstanding on the
      date hereof; and (v) any securities issued in relation to any project
      finance. 

	  	  
	Syndicate: 	Cormark Securities Inc., Dundee
      Securities Corporation and Toll Cross Securities Inc. 

B-2 

SCHEDULE “C” 

CERTIFICATE OF SUBSCRIBERS 

UNITED STATES ACCREDITED INVESTOR CERTIFICATE 

	TO: 	
      U.S. GEOTHERMAL INC. (THE “CORPORATION”)

	 	
       

	AND TO: 	
      CORMARK SECURITIES INC., DUNDEE SECURITIES CORPORATION
      AND TOLL CROSS SECURITIES INC. 

	 	
       

	AND TO: 	
      CORMARK SECURITIES (U.S.A.) LIMITED, DUNDEE SECURITIES
      INC., AND TOLL CROSS SECURITIES USA INC. 

	 	
       

	RE: 	
      SUBSCRIPTION FOR OFFERED SHARES OF THE CORPORATION
      

	 	 

Capitalized terms not otherwise defined herein shall have the
meanings attributed thereto in the subscription agreement to which this
certificate was attached. 

The undersigned (the “Subscriber”) represents, warrants
and covenants to the Corporation that: 

1.     the Subscriber (and if the
Subscriber is acting on behalf of a principal, then also for the principal for
whom the Subscriber is acting) satisfies one or more of the categories of
“accredited investor” as that term is defined in Rule 501 of the Securities
Act of 1933, as amended (the “U.S. Securities Act”), by virtue of the
Subscriber being: 

[please indicate “Sub” for Subscriber, and if acting on
behalf of one or more beneficial purchaser, “BP” for each beneficial purchaser]

	___	Category 1. 	
      An organization described in Section 501(c)(3) of the
      United States Internal Revenue Code, a corporation, a Massachusetts or
      similar business trust or partnership, not formed for the specific purpose
      of acquiring the Offered Shares, with total assets in excess of
      US$5,000,000 

	 	  	
       

	___	Category 2. 	
      A natural person whose individual net worth or joint net
      worth with that person’s spouse, at the date hereof, exceeds US$1,000,000
      

	 	  	
       

	___	Category 3. 	
      A natural person who had an individual income in excess
      of US$200,000 in each of the two most recent years or joint income with
      that person’s spouse in excess of US$300,000 in each of those years and
      has a reasonable expectation of reaching the same income level in the
      current year 

	 	  	
       

	___	Category 4. 	
      A trust that: (a) has total assets in excess of
      US$5,000,000, (b) was not formed for the specific purpose of acquiring the
      Offered Shares, and (c) is directed in its purchases of securities by a
      person who has such knowledge and experience in financial and business
      matters that he/she is capable of evaluating the merits and risks of an
      investment in the Offered Shares 

	 	  	
       

	___	Category 5. 	
      Any bank as defined in Section 3(a)(2) of the U.S.
      Securities Act or any savings and loan association or other institution as
      defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in
      its individual or fiduciary capacity; any broker dealer registered
      pursuant to Section 15 of the United States Securities Exchange Act of
      1934; any insurance company as defined in Section 2(13) of the U.S.
      Securities Act; any investment company registered under the Investment
      Company Act of 1940 or a business development company as defined in
      Section 2(a)(48) of that Act; any Small Business Investment Company
      licensed by the U.S. Small Business Administration

			
      under Section 301(c) or (d) of the Small Business
      Investment Act of 1958; any plan established and maintained by a state,
      its political subdivisions, or any agency or instrumentality of a state or
      its political subdivisions, for the benefit of its employees, if such plan
      has total assets in excess of US$5,000,000; or any employee benefit plan
      within the meaning of the Employee Retirement Income Security Act of 1974
      (“ERISA”), if the investment decision is made by a plan fiduciary,
      as defined in Section 3(21) of ERISA, which is either a bank, savings and
      loan association, insurance company, or registered investment adviser, or
      if the employee benefit plan has total assets in excess of US$5,000,000,
      or, if a self-directed plan, with investment decisions made solely by
      persons that are Accredited Investors 

	 	  	
       

	___	Category 6. 	
      Any director or executive officer of the issuer of the
      securities being offered or sold. 

	 	  	
       

	___	Category 7. 	
      A private business development as defined in Section
      202(a)(22) of the Investment Advisors Acts of 1940 

	 	  	
       

	___	Category 8. 	
      An entity, other than a trust, in which all of the equity
      owners satisfy the requirements of one or more of the foregoing categories
      

2.     (a) if the undersigned is the
Subscriber, he or she is making the above statement based on personal knowledge
of his or her financial situation and has reviewed personal financial
documentation with an accountant, financial advisor or other financial
professional, if necessary, to determine that the above statement is true; or
(b) if the undersigned is other than the Subscriber, he or she is making the
above statement based on a review, if necessary, of the financial statements of
the Subscriber for the most recently completed financial year and any interim
financial statements prepared since the end of such financial year and has
undertaken such other review and due diligence necessary to determine and
certify that the Subscriber is an “accredited investor” as that term is defined
in Rule 501(a) or any entity in which all of the equity owners are “accredited
investors” under the U.S. Securities Act; and 

3.     the Subscriber understands that the
Corporation is relying on this certificate as evidence of the Subscriber’s
status as an institutional “accredited investor” in accordance with Rule 501(a)
of the U.S. Securities Act and further understands that the Corporation may, in
its sole discretion, require the Subscriber to execute a new and separate
certificate each time the Subscriber subscribes for additional Offered Shares.

DATED at _____________ this ______ day of
____________________________, 200__. 

	 	 	 	 
	Signature of Subscriber (if an individual) 	 	 	Name of Subscriber (if not an
      individual) 
	 	 	 	 
	  	 	Per: 	
	Name of Subscriber (if an individual) 	 	 	(Signature of Authorized
      Representative) 
	 	 	 	 
	 	 	 	 
	  	 	 	Name and Title of Authorized
      Representative 

B-2 

SCHEDULE “D” 

CANADIAN ACCREDITED INVESTOR CERTIFICATE 

The Subscriber or the disclosed principal, as the case may be,
hereby represents, warrants and certifies (by completing and signing this
certificate below) on its own behalf or, if applicable on behalf of those for
whom the Subscriber is contracting hereunder, to the Corporation and its counsel
(which representations, warranties and certifications shall survive Closing) and
acknowledges that the Corporation and its counsel are relying thereon that the
Subscriber, or, if applicable, its disclosed principal, is a resident of or
otherwise subject to the securities legislation of a province or territory of
Canada, the Subscriber or such disclosed principal is an “accredited investor”,
as such term is defined in National Instrument 45-106 – Prospectus and
Registration Exemptions (“NI 45-106”) and, as at the time the
subscription is accepted by the Corporation, the Subscriber or the disclosed
principal, as the case may be, will fall within one or more of the following
categories (Please initial one or more, as applicable): 

	___	(a) 	
      a Canadian financial institution, or an authorized
      foreign bank listed in Schedule III of the Bank Act
  (Canada);

	 	 	 
	___	(b) 	
      the Business Development Bank of Canada incorporated
      under the Business Development Bank of Canada Act
  (Canada);

	 	 	 
	___	(c) 	
      a subsidiary of any person referred to in paragraphs (a)
      or (b), if the person owns all of the voting securities of the subsidiary,
      except the voting securities required by law to be owned by directors of
      that subsidiary;

	 	 	 
	___ 	(d) 	
      a person registered under the securities legislation of a
      jurisdiction of Canada as an adviser or dealer, other than a person
      registered solely as a limited market dealer registered under one or both
      of the Securities Act (Ontario) or the Securities Act
      (Newfoundland and Labrador);

	 	 	 
	___	(e) 	
      an individual registered or formerly registered under the
      securities legislation of a jurisdiction of Canada as a representative of
      a person referred to in paragraph (d);

	 	 	 
	___	(f) 	
      the Government of Canada or a jurisdiction of Canada, or
      any crown corporation, agency or wholly owned entity of the Government of
      Canada or a jurisdiction of Canada;

	 	 	 
	___	(g) 	
      a municipality, public board or commission in Canada and
      a metropolitan community, school board, the Comité de gestion de la taxe
      scolaire de l’île de Montréal or an intermunicipal management board in
      Québec;

	 	 	 
	___	(h) 	
      any national, federal, state, provincial, territorial or
      municipal government of or in any foreign jurisdiction, or any agency of
      that government;

	 	 	 
	___	(i) 	
      a pension fund that is regulated by either the Office of
      the Superintendent of Financial Institutions (Canada) or a pension
      commission or similar regulatory authority of a jurisdiction of
    Canada;

	 	 	 
	___	(j) 	
      an individual who, either alone or with a spouse,
      beneficially owns, directly or indirectly, financial assets having an
      aggregate realizable value that before taxes, but net of any related
      liabilities, exceeds $1,000,000;

	 	 	 
	___	(k) 	
      an individual whose net income before taxes exceeded
      $200,000 in each of the two most recent calendar years or whose net income
      before taxes combined with that of a spouse exceeded $300,000 in each of
      the two most recent calendar years and who, in either case, reasonably
      expects to exceed that net income level in the current
  year;

	___	(l) 	
      an individual who, either alone or with a spouse, has net
      assets of at least $5,000,000;

		 	 
	___	(m) 	
      a person, other than an individual or investment fund,
      that has net assets of at least $5,000,000 as shown on its most recently
      prepared financial statements;

	 	 	 
	___	(n) 	
      an investment fund that distributes or has distributed
      its securities only to (i) a person that is or was an accredited investor
      at the time of the distribution, (ii) a person that acquires or acquired
      securities in the circumstances referred to in section 2.10 of NI 45-106
      and section 2.19 of NI 45-106, or (iii) a person described in paragraph
      (i) or (ii) that acquires or acquired securities under section 2.18 of NI
      45-106;

	 	 	 
	___	(o) 	
      an investment fund that distributes or has distributed
      securities under a prospectus in a jurisdiction of Canada for which the
      regulator or, in Québec, the securities regulatory authority, has issued a
      receipt;

	 	 	 
	___	(p) 	
      a trust company or trust corporation registered or
      authorized to carry on business under the Trust and Loan Companies Act
      (Canada) or under comparable legislation in a jurisdiction of Canada
      or a foreign jurisdiction, acting on behalf of a fully managed account
      managed by the trust company or trust corporation, as the case may
    be;

	 	 	 
	___	(q) 	
      a person acting on behalf of a fully managed account
      managed by that person, if that person(i) is registered or authorized to
      carry on business as an adviser or the equivalent under the securities
      legislation of a jurisdiction of Canada or a foreign jurisdiction. And
      (ii) in Ontario, is purchasing a security that is not a security of an
      investment fund;

	 	 	 
	___	(r) 	
      a registered charity under the Income Tax Act
      (Canada) that, in regard to the trade, has obtained advice from an
      eligibility adviser or other adviser registered under the securities
      legislation of the jurisdiction of the registered charity to give advice
      on the securities being traded;

	 	 	 
	___	(s) 	
      an entity organized in a foreign jurisdiction that is
      analogous to any of the entities referred to in paragraphs (a) to (d) or
      paragraph (i) in form and function;

	 	 	 
	___	(t) 	
      a person in respect of which all of the owners of
      interests, direct, indirect or beneficial, except the voting securities
      required by law to be owned by directors, are persons that are accredited
      investors;

	 	 	 
	___	(u) 	
      an investment fund that is advised by a person registered
      as an advisor or a person that is exempt from registration as an advisor;
      or

	 	 	 
	___	(v) 	
      a person that is recognized or designated by the
      securities regulatory authority or, except in Ontario and Québec, the
      regulator as (i) an accredited investor, or (ii) an exempt purchaser in
      Alberta or British Columbia after September 14,
2005.

For the purposes of the representation and warranties set out
above, the terms set out below shall have the following meanings: 

“bank” means a bank named in Schedule I or II of the
Bank Act (Canada); 

“Canadian financial institution” means 

	 	(a) 	
      an association governed by the Cooperative Credit
      Associations Act (Canada) or a central cooperative credit society for
      which an order has been made under section 473(1) of that Act,
or

	 	 	 
	 	(b) 	
      a bank, loan corporation, trust company, trust
      corporation, insurance company, treasury branch, credit union, caisse
      populaire, financial services cooperative, or league that, in each case,
      is authorized by an enactment of Canada or a jurisdiction of Canada to
      carry on business in Canada or a jurisdiction of
Canada;

D-2 

“director” means 

	 	(a) 	
      a member of the board of directors of a company or an
      individual who performs similar functions for a company, and

	 	 	 
	 	(b) 	
      with respect to a person that is not a company, an
      individual who performs functions similar to those of a director of a
      company;

“EVCC” means an employee venture capital corporation
that does not have a restricted constitution, and is registered under Part 2 of
the Employee Investment Act (British Columbia), and whose business
objective is making multiple investments; 

“eligibility adviser” means 

	 	(a) 	
      a person that is registered as an investment dealer or in
      an equivalent category of registration under the securities legislation of
      the jurisdiction of a purchaser and authorized to give advice with respect
      to the type of security being distributed, and

	 	 	 
	 	(b) 	
      in Saskatchewan or Manitoba, also means a lawyer who is a
      practicing member in good standing with a law society of a jurisdiction of
      Canada or a public accountant who is a member in good standing of an
      institute or association of chartered accountants, certified general
      accountants or certified management accountants in a jurisdiction of
      Canada provided that the lawyer or public accountant must not (i) have a
      professional, business or personal relationship with the issuer, or any of
      its directors, executive officers, founders, or control persons, and (ii)
      have acted for or been retained personally or otherwise as an employee,
      executive officer, director, associate or partner of a person that has
      acted for or been retained by the issuer or any of its directors,
      executive officers, founders or control persons within the previous 12
      months;

“financial assets” means 

	 	(a) 	
      cash,

	 	 	 
	 	(b) 	
      securities, or

	 	 	 
	 	(c) 	
      a contract of insurance, a deposit or an evidence of a
      deposit that is not a security for the purposes of securities
      legislation;

“fully managed account” means an account of a client for
which a person makes the investment decisions if that person has full discretion
to trade in securities for the account without requiring the client’s express
consent to a transaction; 

“individual” means a natural person, but does not
include a partnership, unincorporated association, unincorporated organization,
trust or a natural person in his or her capacity as trustee, executor,
administrator or other legal personal representative; 

“instrument” means National Instrument 45-106 Prospectus
and Registration Exemptions of the Canadian Securities Administrators; 

“investment fund” means a mutual fund or a
non-redeemable investment fund, and, for greater certainty in British Columbia,
includes an EVCC and a VCC; 

“jurisdiction” means a province or territory of Canada
except when used in the term foreign jurisdiction; 

“mutual fund” has the meaning ascribed to such term
under the securities legislation of the applicable jurisdiction; 

D-3 

“non-redeemable investment fund” means an issuer: 

	 	(a) 	
      whose primary purpose is to invest money provided by its
      securityholders,

	 	 	 	 
	 	(b) 	
      that does not invest,

	 	 	 	 
	 		(i) 	
      for the purpose of exercising or seeking to exercise
      control of an issuer, other than an issuer that is a mutual fund or a
      non-redeemable investment fund, or

	 	 	 	 
	 		(ii) 	
      for the purpose of being actively involved in the
      management of any issuer in which it invests, other than an issuer that is
      a mutual fund or a non-redeemable investment fund, and

	 	 	 	 
	 	(c) 	
      that is not a mutual fund;

“officer” means the chair, any vice chair of the board
of directors, the president, any vice president, the secretary, the assistant
secretary, the treasurer, the assistant treasurer, and the general manager of a
company, and any other person designated an officer or a company by law or
similar authority, or any individual acting in a similar capacity on behalf of
the issuer; 

“person” includes 

	 	(a) 	
      an individual,

	 	 	 
	 	(b) 	
      a corporation,

	 	 	 
	 	(c) 	
      a partnership, trust, fund and an association, syndicate,
      organization or other organized group of persons, whether incorporated or
      not, and

	 	 	 
	 	(d) 	
      an individual or other person in that person’s capacity
      as a trustee, executor, administrator or personal or other legal
      representative;

“related liabilities” means 

	 	(a) 	
      liabilities incurred or assumed for the purpose of
      financing the acquisition or ownership of financial assets, or

	 	 	 
	 	(b) 	
      liabilities that are secured by financial
  assets;

“Schedule III bank” means an authorized foreign bank
named in Schedule III of the Bank Act (Canada); 

“spouse” means, an individual who, 

	 	(a) 	
      is married to another individual and is not living
      separate and apart within the meaning of the Divorce Act (Canada), from
      the other individual,

	 	 	 
	 	(b) 	
      is living with another individual in a marriage-like
      relationship, including a marriage-like relationship between individuals
      of the same gender, or

	 	 	 
	 	(c) 	
      in Alberta, is an individual referred to in paragraph (a)
      or (b), or is an adult interdependent partner within the meaning of the
      Adult Interdependent Relationships Act
(Alberta);

“subsidiary” means an issuer that is controlled directly
or indirectly by another issuer and includes a subsidiary of that subsidiary.

D-4 

“VCC” means a venture capital corporation registered
under Part 1 of the Small Business Venture Capital Act (British
Columbia), whose business objective is making multiple investments. 

Control 

A person (first person) is considered to control another person
(second person) if 

	 	(a) 	
      the first person, directly or indirectly, beneficially
      owns or exercises control or direction over securities of the second
      person carrying votes which, if exercised, would entitle the first person
      to elect a majority of the directors of the second person, unless that
      first person holds the voting securities only to secure an
    obligation,

	 	 	 
	 	(b) 	
      the second person is a partnership, other than a limited
      partnership, and the first person holds more than 50% of the interests of
      the partnership, or

	 	 	 
	 	(c) 	
      the second person is a limited partnership and the
      general partner of the limited partnership is the first
  person.

* * * * * * * * * 

The foregoing representations contained in this certificate are
true and accurate as of the date hereof and will be true and accurate as of the
Closing Date. If any such representations shall not be true and accurate
prior to the Closing Date, the Subscriber shall give immediate notice to the
Corporation. 

EXECUTED by the Subscriber at _______________ this ______ day
of ________________, 200__. 

	If a corporation, partnership or other entity: 	 	If an individual: 
	 	 	 
	 	 	 
	Print Name of Subscriber 	 	Print Name 
	 	 	 
	 	 	 
	Signature of Authorized Signatory 	 	Signature 
	 	 	 
	 	 	 
	Name and Position of Authorized Signatory 	 	Jurisdiction of Residence 
	 	 	 
	 	 	 
	Jurisdiction of Residence 	 	Print Name of Witness 
	 	 	 
	 	 	 
	  	 	Signature of Witness

D-5 

SCHEDULE “E” 

CERTIFICATE OF NON-CANADIAN SUBSCRIBERS 
(OTHER THAN U.S.
SUBSCRIBERS) 

The Subscriber, on its own behalf and (if applicable) on behalf
of others for whom it is contracting hereunder, further represents, warrants and
covenants to and with the Corporation (and acknowledges that the Corporation is
relying thereon) that it is, and (if applicable) any beneficial purchaser for
whom it is contracting hereunder is, a resident of, or otherwise subject to, the
securities legislation of a jurisdiction other than Canada or the United States,
and: 

	 	(a) 	 the Subscriber is, and (if applicable) any
        other purchaser for whom it is contracting hereunder, is:

	 	 	 	 
	 		(i) 	 a purchaser that is recognized by the securities regulatory
        authority in the jurisdiction in which it is, and (if applicable) any
        other purchaser for whom it is contracting hereunder is resident or otherwise
        subject to the securities laws of such jurisdiction, as an exempt purchaser
        and is purchasing the Offered Shares as principal for its, or (if applicable)
        each such other purchaser’s, own account, and not for the benefit
        of any other person; or

	 	 	 	 
	 		(ii) 	 a purchaser which is purchasing Offered Shares pursuant
        to an exemption from any prospectus or securities registration requirements
        (particulars of which are enclosed herewith) available to the Corporation,
        the Subscriber and any such other purchaser under applicable securities
        laws of their jurisdiction of residence or to which the Subscriber and
        any such other purchaser are otherwise subject to, and the Subscriber
        and any such other purchaser shall deliver to the Corporation such further
        particulars of the exemption and their qualification thereunder as the
        Corporation may reasonably request;

	 	 	 	 
	 	(b) 	 the purchase of Offered Shares by the Subscriber,
        and (if applicable) each such other purchaser, does not contravene any
        of the applicable securities laws in such jurisdiction and does not trigger:
        (i) any obligation to prepare and file a prospectus, an offering memorandum
        or similar document, or any other ongoing reporting requirements with
        respect to such purchase or otherwise; or (ii) any registration or other
        obligation on the part of the Corporation;

	 	 	 	 
	 	(c) 	 the Subscriber, and (if applicable) any other
        purchaser for whom we are contracting hereunder will not sell or otherwise
        dispose of any Offered Shares, except in accordance with applicable securities
        laws in Canada and the United States, and if the Subscriber, or (if applicable)
        such beneficial purchaser sells or otherwise disposes of any Offered Shares
        to a person other than a resident of Canada or the United States, as the
        case may be, the Subscriber, and (if applicable) such beneficial purchaser,
        will obtain from such purchaser representations, warranties and covenants
        in the same form as provided in this Schedule D and shall comply with
        such other requirements as the Corporation may reasonably require.

Dated at _____________ this ________ day of _______________,
200____. 

	 	 	 
	 	Name of Subscriber 
	 	 	 
	 	By: 	
	 	 	Signature 
	 	 	 
	 	 	  
	 	 	Title 

SCHEDULE “F” 

TSX VENTURE EXCHANGE 

FORM 4C

CORPORATE PLACEE REGISTRATION FORM

 

	 	FORM 4C
      	 

CORPORATE PLACEE REGISTRATION FORM

Where subscribers to a Private Placement are not individuals,
the following information about the placee must be provided. This Form will
remain on file with the Exchange. The corporation, trust, portfolio manager or
other entity (the “Placee”) need only file it on one time basis, and it will be
referenced for all subsequent Private Placements in which it participates. If
any of the information provided in this Form changes, the Placee must notify the
Exchange prior to participating in further placements with Exchange listed
companies. If as a result of the Private Placement, the Placee becomes an
Insider of the Issuer, Insiders of the Placee are reminded that they must file a
Personal Information Form (2A) or, if applicable, Declarations, with the
Exchange.

Placee Information: 

	 	(d) 	
      Name: _________________________________________________________________________________________________

	 	 	 
	 	(e) 	
      Complete Address: _______________________________________________________________________________________

	 	 	______________________________________________________________________________________________________
	 	 	 
	 	(f) 	
      Jurisdiction of Incorporation or Creation: ______________________________________________________________________

	 	(a) 	
      Is the Placee purchasing securities as a portfolio
      manager (Yes/No)?

	 	(b) 	
      Is the Placee carrying on business as a portfolio manager
      outside of Canada (Yes/No)? __________

If the answer to 2(b) above was “Yes”, the undersigned
certifies that: 

	 	(g) 	
      It is purchasing securities of an Issuer on behalf of
      managed accounts for which it is making the investment decision to
      purchase the securities and has full discretion to purchase or sell
      securities for such accounts without requiring the client’s express
      consent to a transaction;

	 	 	 
	 	(h) 	
      it carries on the business of managing the investment
      portfolios of clients through discretionary authority granted by those
      clients (a “portfolio manager” business) in ____________________
      [jurisdiction], and it is permitted by law to carry on a portfolio manager
      business in that jurisdiction;

	 	 	 
	 	(i) 	
      it was not created solely or primarily for the purpose of
      purchasing securities of the Issuer;

	 	 	 
	 	(j) 	
      the total asset value of the investment portfolios it
      manages on behalf of clients is not less than $20,000,000; and

	 	 	 
	 	(k) 	
      it has no reasonable grounds to believe, that any of the
      directors, senior officers and other insiders of the Issuer, and the
      persons that carry on investor relations activities for the Issuer has a
      beneficial interest in any of the managed accounts for which it is
      purchasing

If the answer to 2(a). above was “No”, please provide the names
and addresses of control persons of the Placee: 

	FORM 4C 	CORPORATE PLACEE REGISTRATION FORM 	Page
      1 
	(as at March 11, 2004) 	 	  

	Name 	City 	Province or State 	Country 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

The undersigned acknowledges that it is bound by the provisions
  of applicable Securities Law, including provisions concerning the filing of
  insider reports and reports of acquisitions (See for example, sections 87 and
  111 of the Securities Act (British Columbia) and sections 176 and 182
  of the Securities Act (Alberta). 

	FORM 4C 	CORPORATE PLACEE REGISTRATION FORM 	Page
      2
	(as at March 11, 2004) 	 	  

Acknowledgement - Personal Information 

“Personal Information” means any information about an
identifiable individual, and includes information contained in sections 1, 2 and
4, as applicable, of this Form. 

The undersigned hereby acknowledges and agrees that it has
obtained the express written consent of each individual to: 

	(a) 	
      the disclosure of Personal Information by the undersigned
      to the Exchange (as defined in Appendix 6B) pursuant to this Form;
    and

	 	 
	(b) 	
      the collection, use and disclosure of Personal
      Information by the Exchange for the purposes described in Appendix 6B or
      as otherwise identified by the Exchange, from time to
  time.

Dated at ________________________________________ on ____________________________________

 

	 	 
	 	(Name of Purchaser - please print) 
	 	 
	 	 
	 	(Authorized Signature) 
	 	 
	 	 
	 	(Official Capacity - please print) 
	 	 
	 	 
	 	(please print name of individual whose
      signature appears above) 

THIS IS NOT A PUBLIC DOCUMENT 

	FORM 4C 	CORPORATE PLACEE REGISTRATION FORM 	Page
      3
	(as at March 11, 2004) 	 	  

SCHEDULE “G” 

 

TSX VENTURE EXCHANGE 

 

APPENDIX 6A 

ACKNOWLEDGMENT – PERSONAL INFORMATION

 

APPENDIX 6A 
ACKNOWLEDGEMENT – PERSONAL INFORMATION 

TSX Venture Exchange Inc. and its affiliates, authorized
agents, subsidiaries and divisions, including the TSX Venture Exchange
(collectively referred to as “the Exchange”) collect Personal Information in
certain Forms that are submitted by the individual and/or by an Issuer or
Applicant and use it for the following purposes: 

	to conduct background checks,
  
	to verify the Personal Information that has been provided about each
  individual,
  
	to consider the suitability of the individual to act as an officer,
  director, insider, promoter, investor relations provider or, as applicable, an
  employee or consultant, of the Issuer or Applicant,
  
	to consider the eligibility of the Issuer or Applicant to list on the
  Exchange,
  
	to provide disclosure to market participants as to the security holdings
  of directors, officers, other insiders and promoters of the Issuer, or its
  associates or affiliates,
  
	to conduct enforcement proceedings, and
  
	to perform other investigations as required by and to ensure compliance
  with all applicable rules, policies, rulings and regulations of the Exchange,
  securities legislation and other legal and regulatory requirements governing
  the conduct and protection of the public markets in Canada. 

As part of this process, the Exchange also collects additional
Personal Information from other sources, including but not limited to,
securities regulatory authorities in Canada or elsewhere, investigative, law
enforcement or self-regulatory organizations, regulations services providers and
each of their subsidiaries, affiliates, regulators and authorized agents, to
ensure that the purposes set out above can be accomplished.

The Personal Information the Exchange collects may also be
disclosed: 

	(a) 	
      to the agencies and organizations in the preceding
      paragraph, or as otherwise permitted or required by law, and they may use
      it in their own investigations for the purposes described above;
  and

	 	 
	(b) 	
      on the Exchange’s website or through printed materials
      published by or pursuant to the directions of the
  Exchange.

The Exchange may from time to time use third parties to process
  information and/or provide other administrative services. In this regard, the
  Exchange may share the information with such third party service providers.

	APPENDIX 6A
      ACKNOWLEDGEMENT – PERSONAL INFORMATION 	Page
      1 
	(as at March 11, 2004) 	  

SCHEDULE “H” 

REGISTRATION RIGHTS 

Capitalized terms not otherwise defined herein shall have
the meanings attributed thereto in the subscription agreement to which this
schedule is attached. The terms of this Schedule “H” are incorporated by
reference into the subscription agreement to which it is attached. 

                    Section
1.          
Definitions. Capitalized terms used and not otherwise defined herein that
are defined in the Purchase Agreement will have the meanings given such terms in
the Purchase Agreement. As used in this Schedule, the following terms have the
respective meanings set forth in this Section 1: 

                    “Advice”
has the meaning set forth in Section 7(c). 

                    “Effective
Date” means the date on which the Registration Statement is first declared
effective by the Commission. 

                    “Effectiveness
Date” means with respect to the Registration Statement required to be filed
hereunder, the day that is the five months following the Closing Date. For
purposes of clarification, the declaration of a Suspension Period prior to the
effectiveness of the Registration Statement does not modify the Effectiveness
Date.

                    “Effectiveness
Period” has the meaning set forth in Section 2(a). 

                    “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 

                    “Filing
Date” means with respect to the Registration Statement required to be filed
hereunder, July 30, 2007.

                    “Holder”
or “Holders” means the Investors and other holder or holders, as the
case may be, from time to time of Registerable Securities. 

                    “Indemnified
Party” has the meaning set forth in Section 6(c). 

                    “Indemnifying
Party” has the meaning set forth in Section 6(c). 

                    “Investor”
means the Subscriber pursuant to the Subscription Agreement to which this
Schedule is attached; 

                    “Losses”
has the meaning set forth in Section 6(a). 

                    “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened. 

                    “Prospectus”
means the final prospectus included in the Registration Statement (including,
without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus. 

                    “Registrable
Securities” means: (i) the Shares, (ii) the Additional Shares (as defined in
Section 2(b)), and (iii) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event. Such
securities will cease to be Registrable Securities upon transfer pursuant to the
Registration Statement or Rule 144 under the Securities Act. 

                    “Registration
Statement” means the registration statement required to be filed hereunder,
including the Prospectus, amendments and supplements to such registration
statements or Prospectus, including pre and post effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference therein. 

                    “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “Securities
Act” means the Securities Act of 1933, as amended. 

                    “Shares”
means the shares of Common Stock issued or issuable to the Investors pursuant to
the Purchase Agreement. 

                    “Trading
Day” means any day on which the TSX Venture Exchange (the “TSX-V”) is open
for trading. 

  Section 2.           Registration.
  

	 	(a) 	
      On or prior to the Filing Date, the Company shall prepare
      and file with the Securities and Exchange Commission (the “Commission”)
      the Registration Statement covering the resale of all Registrable
      Securities for an offering to be made on a continuous basis pursuant to
      Rule 415, on Form S-1 (or on such other form appropriate for such
      purpose). Such Registration Statement shall contain (except if otherwise
      required pursuant to written comments received from the Commission upon a
      review of the Registration Statement) the “Plan of Distribution” attached
      hereto as Annex A. The Company shall use commercially reasonable efforts
      to cause the Registration Statement to be declared effective under the
      Securities Act as soon as possible but, in any event, no later than its
      Effectiveness Date, and shall use its commercially reasonable efforts to
      keep the Registration Statement continuously effective and available for
      use by Holders under the Securities Act until the date which is the
      earlier of (i) two years after the Closing Date or (ii) such time as all
      of the Registrable Securities covered by the Registration Statement have
      been publicly sold by the Holders (the “Effectiveness Period”).

	 	 	 
	 	(b) 	
      If the Registration Statement is not declared effective
      by the Commission on or prior to its required Effectiveness Date, then the
      Company shall issue to each Holder, as its sole and exclusive remedy for
      the failure of the Registration Statement to become effective and as
      liquidated damages and not as a penalty, an additional 0.1 Common Shares
      for every Common Share purchased pursuant to the Subscription Agreement to
      which this Schedule is attached (the “Additional Shares”). No fractions of
      a share of Additional Shares shall be issued, but in lieu thereof each
      Holder otherwise entitled to a fraction of an Additional Share shall be
      entitled to receive an amount of cash (without interest) determined by
      multiplying the average closing price for Common Shares as reported on the
      TSX-V on the required Effectiveness Date by the fractional share interest
      to which such holder would otherwise be entitled. The parties acknowledge
      that payment of the cash consideration in lieu of issuing fractional
      shares was not separately bargained for consideration, but merely
      represents a mechanical rounding off for purposes of simplifying the
      corporate and accounting complexities that would otherwise be caused by
      the issuance of fractional shares.

	 	(c) 	
      Within three business days following the date on which
      the Registration Statement is declared effective by the Commission, and
      assuming no stop-order has been issued with respect to the Registration
      Statement, the Company shall furnish to each Holder a letter, dated such
      date, of outside counsel representing the Company addressed to such
      Holder, confirming such effectiveness and, to the knowledge of such
      counsel, the absence of any stop order.

	 	 	 
	 	(d) 	
      Each Holder agrees to furnish to the Company a completed
      Questionnaire in the form attached to this Schedule as Annex B (a “Selling
      Holder Questionnaire”) no later than July 2, 2007. The Company shall not
      be required to include the Registrable Securities of a Holder in the
      Registration Statement and shall not be required to pay any liquidated or
      other damages under Section 2(b) to any Holder who fails to furnish to the
      Company a fully completed Selling Holder Questionnaire by the later of (i)
      July 2, 2007 or (ii) at least five Trading Days prior to the date of
      filing of the Registration Statement or pre-effective amendment to the
      Registration Statement (in no event is the Company required to delay
      filing the Registration Statement or any pre-effective amendment thereto).
      Each Holder also agrees to provide the Company with such other information
      as may be reasonably requested by the Company in connection with the
      preparation and filing of any Registration Statement hereunder, including
      but not limited to providing such information in a timely manner regarding
      itself, the Registrable Securities and other securities of the Company
      held by it and the intended method of disposition of the Registrable
      Securities as shall be reasonably required to effect and maintain the
      effectiveness of the registration of such Registrable Securities. The
      Company shall not be required to include the Registrable Securities of a
      Holder or pay any liquidated or other damages under Section 2(b) to any
      Holder who fails to provide such reasonably requested information or who
      objects to the inclusion of required disclosure in the Registration
      Statement regarding such Holder, the Registrable Securities and other
      securities of the Company held by it and the intended method of
      disposition of the Registrable Securities.

	 	 	 
	 	(e) 	
      Notwithstanding Section 2(a) hereof, the Company may
      delay or suspend the effectiveness of the Registration Statement (each
      such period, a “Suspension Period”) if the board of directors of the
      Company determines in good faith that the disclosure of material
      non-public information (“Pending Developments”) at such time would be
      detrimental to the Company and its subsidiaries, taken as a
  whole.

	 	 	 
	 		
      The aggregate Suspension Period for all Pending
      Developments shall not exceed 90 calendar days in any 360-day period.
      Notwithstanding the foregoing , the Company shall use its commercially
      reasonable efforts to ensure that the Registration Statement is declared
      effective and its permitted use is resumed following a suspension as
      promptly as practicable. The Company shall not be required to specify in
      the written notice to the Holders the nature of the event giving rise to
      the Suspension Period. The notice of the existence of a Pending
      Development shall remain confidential to such Holder until such
      information otherwise becomes public, unless disclosure by the Holder is
      required by law and provided that notwithstanding such Holder’s agreement
      to keep such information confidential, each such Holder makes no
      acknowledgment that any such information is material, non-public
      information.

Section
3.           Registration
Procedures. 

	 		
      In connection with the Company's registration obligations
      hereunder, the Company shall:

	 	 	 
	 	(a) 	
      Not less than five Trading Days prior to the filing of
      the Registration Statement or any related Prospectus or any amendment or
      supplement thereto, the Company shall (i) furnish to each Holder copies of
      all such documents proposed to be filed, which documents (other than those
      incorporated or deemed to be incorporated by reference) will be subject to
      the review of such Holders, and (ii) cause its officers and directors,
      counsel and independent certified public accountants to respond to such
      inquiries as shall be necessary, in the reasonable opinion of respective
      counsel to each Holder, to conduct a reasonable investigation within the
      meaning of the Securities Act. The Company shall not file a Registration
      Statement or any Prospectus or any amendments or supplements thereto to
      which a majority of the Holders of Registrable Securities object in good
      faith, provided that the Company is notified of such objection in writing
      no later than five Trading

	 		
      Days after the Holders have been so furnished copies of a
      Registration Statement or any Prospectus or amendments or supplements
      thereto. The Company and the Holders agree to act in good faith to resolve
      such objections of the Holders. The Effectiveness Date shall be extended
      by the number of days such objection remains unresolved (calculated
      commencing on the sixth Trading Day after the Holders were furnished
      copies of the applicable filing and ending on the date the Company is
      notified of the lifting of such objection in writing).

	 	 	 
	 	(b) 	
      (i) prepare and file with reasonable promptness with the
      Commission such amendments, including post effective amendments, to the
      Registration Statement and the Prospectus used in connection therewith as
      may be necessary to keep the Registration Statement continuously effective
      as to the Registrable Securities for the Effectiveness Period; (ii) cause
      the Prospectus to be amended or supplemented by any required Prospectus
      supplement, and as so supplemented or amended to be filed pursuant to Rule
      424; (iii) respond as promptly as reasonably possible to any comments
      received from the Commission with respect to the Registration Statement or
      any amendment thereto; and (iv) comply in all material respects with the
      provisions of the Securities Act and the Exchange Act with respect to the
      Registration Statement and the disposition of all Registrable Securities
      covered by the Registration Statement.

	 	 	 
	 	(c) 	
      Notify the Holders as promptly as reasonably possible
      (and, in the case of (i)(A) and (iv) below, not less than three Trading
      Days prior to such filing and, in the case of (v) below, not less than
      three Trading Days prior to the financial statements in any Registration
      Statement becoming ineligible for inclusion therein) and (if requested by
      any such Person) confirm such notice in writing no later than one Trading
      Day following the day (i)(A) when a Prospectus or any Prospectus
      supplement or post effective amendment to the Registration Statement is
      proposed to be filed; (B) when the Commission notifies the Company whether
      there will be a “review” of the Registration Statement and whenever the
      Commission comments in writing on the Registration Statement (the Company
      shall provide true and complete copies thereof and all written responses
      thereto to each of the Holders that pertain to the Holders as a Selling
      Stockholder or to the Plan of Distribution, but not information which the
      Company believes would constitute material and non- public information);
      and (C) with respect to the Registration Statement or any post effective
      amendment, when the same has become effective; (ii) of any request by the
      Commission or any other Federal or state governmental authority for
      amendments or supplements to the Registration Statement or Prospectus or
      for additional information; (iii) of the issuance by the Commission or any
      other Federal or state governmental authority of any stop order suspending
      the effectiveness of the Registration Statement covering any or all of the
      Registrable Securities or the initiation of any Proceedings for that
      purpose; (iv) of the receipt by the Company of any notification with
      respect to the suspension of the qualification or exemption from
      qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and (v) of the occurrence of any event or passage of time that
      makes the financial statements included in the Registration Statement
      ineligible for inclusion therein or any statement made in the Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires any revisions to the Registration Statement, Prospectus or other
      documents so that, in the case of the Registration Statement or the
      Prospectus, as the case may be, it will not contain any untrue statement
      of a material fact or omit to state any material fact required to be
      stated therein or necessary to make the statements therein, in light of
      the circumstances under which they were made, not misleading; and (vi) the
      occurrence of a Suspension Period.

	 	 	 
	 	(d) 	
      Use its commercially reasonable efforts to avoid the
      issuance of, or, if issued, obtain the withdrawal of (i) any order
      suspending the effectiveness of the Registration Statement, or (ii) any
      suspension of the qualification (or exemption from qualification) of any
      of the Registrable Securities for sale in any jurisdiction, at the
      earliest practicable moment.

	 	 	 
	 	(e) 	
      Furnish to each Holder, without charge, at least one
      conformed copy of the Registration Statement and each amendment thereto
      and all exhibits to the extent requested by such Person (including those
      previously furnished) promptly after the filing of such documents with the
      Commission.

	 	(f) 	
      Promptly deliver to each Holder, without charge, copies
      of each Prospectus or Prospectuses and each amendment or supplement
      thereto as such Persons may reasonably request. The Company hereby
      consents to the use of such Prospectus and each amendment or supplement
      thereto by each of the selling Holders in connection with the offering and
      sale of the Registrable Securities covered by such Prospectus and any
      amendment or supplement thereto.

	 	 	 
	 	(g) 	
      The Company shall, at its own expense, cooperate with the
      Underwriters and the U.S. Affiliates with respect to any filing made by
      any of them with the National Association of Securities Dealers Inc. (the
      “NASD”) Corporate Financing Department pursuant to NASD Rule
      2710(b)(4)(a)(i) so as to permit such filing and any amendments thereto to
      be made on a timely basis.

	 	 	 
	 	(h) 	
      Cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable
      Securities to be delivered to a transferee pursuant to the Registration
      Statement, which certificates shall be free, to the extent permitted by
      the Purchase Agreement, of all restrictive legends, and to enable such
      Registrable Securities to be in such denominations and registered in such
      names as any such Holders may request.

	 	 	 
	 	(i) 	
      Upon the occurrence of any event contemplated by Section
      3(c)(v), use its commercially reasonable efforts to ensure that the use of
      the Registration Statement or Prospectus may be resumed as promptly as
      practicable and shall promptly prepare a supplement or amendment,
      including a post effective amendment, to the Registration Statement or a
      supplement to the related Prospectus or any document incorporated or
      deemed to be incorporated therein by reference, and file any other
      required document so that, as thereafter delivered, no Registration
      Statement nor any Prospectus will contain an untrue statement of a
      material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading. The Company
      shall be entitled to exercise its right under this section 3(h) to suspend
      the availability of a Registration Statement or Prospectus for an
      aggregate period, including any Suspension Period, not to exceed 90
      calendar days in any 360-day period.

	 	 	 
	 	(j) 	
      Comply with all applicable rules and regulations of the
      Commission.

Section
4.           Obligations of
Each Holder. In connection with the registration of Registrable Securities
pursuant to the Registration Statement, each Holder shall: 

	 	(a) 	
      in the event of an underwritten offering of such
      Registrable Securities in which such Holder participates, enter into a
      customary and reasonable underwriting agreement and execute such other
      documents as the Company and the managing underwriter for such offering
      may reasonably request; and

	 	 	 
	 	(b) 	
      notify the Company when it has sold all of the
      Registrable Securities held by it.

Section
5.           Registration
Expenses. All fees and expenses incident to the performance of or compliance
with this Schedule by the Company shall be borne by the Company whether or not
any Registrable Securities are sold pursuant to the Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and auditors, and other reasonable
counsel fees and expenses, and including, without limitation, fees and expenses
(A) with respect to filings made with the Commission, (B) with respect to
filings required to be made with any trading market or exchange on which the
Common Stock is then listed for trading, (C) with respect to filing fees of the
NASD pursuant to NASD Rule 2710, and (D) with respect to fees relating to
compliance with applicable state securities or Blue Sky laws in connection with
Blue Sky qualifications or exemptions of the Registerable Securities, (ii)
messenger, telephone and delivery expenses, (iii) fees and disbursements of
counsel for the Company, (iv) Securities Act liability insurance, if the Company
so desires such insurance, and (v) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Schedule. In addition, the Company shall be responsible for
all of its 

internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Schedule (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. 

Section
6.          
Indemnification. 

	 	(a) 	
      Indemnification by the Company. The Company shall,
      notwithstanding any termination of this Agreement or Schedule, indemnify
      and hold harmless each Holder, the officers, directors, agents, investment
      advisors, brokers (including brokers who offer to sell Registrable
      Securities as principal as a result of a pledge or any failure to perform
      under a margin call effected on a Holder), partners, members and employees
      of each of them (and any other persons with a functionally equivalent role
      of a person holding such titles or performing such functions,
      notwithstanding a lack of such title or any other title), each Person who
      controls any such Holder (within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act) and the officers,
      directors, agents and employees of each such controlling Person, to the
      fullest extent permitted by applicable law, from and against any and all
      losses, claims, damages, liabilities, costs (including, without
      limitation, reasonable costs of preparation and reasonable attorneys'
      fees) and expenses (collectively, “Losses”), as incurred, arising out of
      or relating (1) to any untrue or alleged untrue statement of a material
      fact contained in any Registration Statement, any Prospectus or any form
      of prospectus or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or
      alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form of prospectus or supplement thereto, in light of the circumstances
      under which they were made) not misleading, and (2) any violation or
      alleged violation by the Company of the Securities Act, the Exchange Act
      or any state securities law, or any rule or regulation thereunder, in
      connection with the performance of its obligations under this Agreement
      and Schedule, except to the extent, but only to the extent, that (1) such
      untrue statements or omissions are based solely upon information regarding
      such Holder furnished in writing to the Company by such Holder expressly
      for use therein, or to the extent that such information relates to such
      Holder or such Holder's proposed method of distribution of Registrable
      Securities and was reviewed and expressly approved in writing by such
      Holder expressly for use in the Registration Statement, such Prospectus or
      such form of Prospectus or in any amendment or supplement thereto (it
      being understood that the Holder has approved Annex A hereto for this
      purpose) or (2) in the case of an occurrence of an event of the type
      specified in Section 3(c)(ii)-(vi), the use by such Holder of an outdated
      or defective Prospectus after the Company has notified such Holder in
      writing that the Prospectus is outdated or defective and prior to the
      receipt by such Holder of an Advice or an amended or supplemented
      Prospectus, but only if and to the extent that following the receipt of
      the Advice or the amended or supplemented Prospectus the misstatement or
      omission giving rise to such Loss would have been corrected. The Company
      shall notify the Holders promptly in writing of the institution, threat or
      assertion of any Proceeding of which the Company is aware in connection
      with the transactions contemplated by this Schedule.

	 	 	 
	 	(b) 	
      Indemnification by Holders. Each Holder shall,
      severally and not jointly, indemnify and hold harmless the Company, its
      directors, officers, agents and employees, each Person who controls the
      Company (within the meaning of Section 15 of the Securities Act and
      Section 20 of the Exchange Act), and the directors, officers, agents or
      employees of such controlling Persons, to the fullest extent permitted by
      applicable law, from and against all Losses, as incurred, arising solely
      out of or based solely upon: (x) such Holder's failure to comply with the
      prospectus delivery requirements of the Securities Act or (y) any untrue
      statement of a material fact contained in the Registration Statement, the
      Prospectus, or any form of prospectus, or in any amendment or supplement
      thereto, or arising solely out of or based solely upon any omission of a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading to the extent, but only to the extent
      that, (1) such untrue statements or omissions are based solely upon
      information regarding such Holder furnished in writing to the Company by
      such Holder expressly for use therein, or to the extent that such
      information relates to such Holder or such
Holder's

	 		
      proposed method of distribution of Registrable Securities
      and was reviewed and expressly approved in writing by such Holder
      expressly for use in the Registration Statement (it being understood that
      the Holder has approved Annex A hereto for this purpose), such Prospectus
      or such form of Prospectus or in any amendment or supplement thereto or
      (2) in the case of an occurrence of an event of the type specified in
      Section 3(c)(ii)-(vi), the use by such Holder of an outdated or defective
      Prospectus after the Company has notified such Holder in writing that the
      Prospectus is outdated or defective and prior to the receipt by such
      Holder of an Advice or an amended or supplemented Prospectus, but only if
      and to the extent that following the receipt of the Advice or the amended
      or supplemented Prospectus the misstatement or omission giving rise to
      such Loss would have been corrected. In no event shall the liability of
      any selling Holder hereunder be greater in amount than the dollar amount
      of the net proceeds received by such Holder upon the sale of the
      Registrable Securities giving rise to such indemnification
    obligation.

	 	 	 
	 	(c) 	
      Conduct of Indemnification Proceedings. If any
      Proceeding shall be brought or asserted against any Person entitled to
      indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
      promptly notify the Person from whom indemnity is sought (the
      “Indemnifying Party”) in writing, and the Indemnifying Party shall assume
      the defense thereof, including the employment of counsel reasonably
      satisfactory to the Indemnified Party and the payment of all fees and
      expenses incurred in connection with defense thereof; provided, that the
      failure of any Indemnified Party to give such notice shall not relieve the
      Indemnifying Party of its obligations or liabilities pursuant to this
      Agreement and Schedule, except (and only) to the extent that it shall be
      finally determined by a court of competent jurisdiction (which
      determination is not subject to appeal or further review) that such
      failure shall have proximately and materially adversely prejudiced the
      Indemnifying Party.

	 	 	 
	 		
      An Indemnified Party shall have the right to employ
      separate counsel in any such Proceeding and to participate in the defense
      thereof, but the fees and expenses of such counsel shall be at the expense
      of such Indemnified Party or Parties unless: (1) the Indemnifying Party
      has agreed in writing to pay such fees and expenses; (2) the Indemnifying
      Party shall have failed promptly to assume the defense of such Proceeding
      and to employ counsel reasonably satisfactory to such Indemnified Party in
      any such Proceeding; or (3) the named parties to any such Proceeding
      (including any impleaded parties) include both such Indemnified Party and
      the Indemnifying Party, and such Indemnified Party shall have been advised
      by counsel to the Indemnified Party that a conflict of interest is likely
      to exist if the same counsel were to represent such Indemnified Party and
      the Indemnifying Party (in which case, if such Indemnified Party notifies
      the Indemnifying Party in writing that it elects to employ separate
      counsel at the expense of the Indemnifying Party, the Indemnifying Party
      shall not have the right to assume the defense thereof and such counsel
      shall be at the expense of the Indemnifying Party). The Indemnifying Party
      shall not be liable for any settlement of any such Proceeding effected
      without its written consent, which consent shall not be unreasonably
      withheld or delayed. No Indemnifying Party shall, without the prior
      written consent of the Indemnified Party, effect any settlement of any
      pending Proceeding in respect of which any Indemnified Party is a party,
      unless such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of such Proceeding.

	 	 	 
	 		
      All fees and expenses of the Indemnified Party (including
      reasonable fees and expenses to the extent incurred in connection with
      investigating or preparing to defend such Proceeding in a manner not
      inconsistent with this Section) shall be paid to the Indemnified Party, as
      incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party (regardless of whether it is ultimately determined that
      an Indemnified Party is not entitled to indemnification hereunder;
      provided, that the Indemnifying Party may require such Indemnified Party
      to undertake to reimburse all such fees and expenses to the extent it is
      finally judicially determined that such Indemnified Party is not entitled
      to indemnification hereunder).

	 	 	 
	 	(d) 	
      Contribution. If a claim for indemnification under
      Section 6(a) or 6(b) is unavailable to an Indemnified Party or
      insufficient to hold an Indemnified Party harmless for any Losses (by
      reason of public policy or otherwise), then each Indemnifying Party shall
      contribute to the amount paid or

payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 6(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. 

The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
6(d), no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 

The indemnity and contribution
agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties. 

Section
7.           Miscellaneous.

	 	(a) 	
      Compliance. Each Holder covenants and agrees that
      it will comply with the prospectus delivery requirements of the Securities
      Act as applicable to it in connection with sales of Registrable Securities
      pursuant to the Registration Statement.

	 	 	 
	 	(b) 	
      Discontinued Disposition. Each Holder agrees by
      its acquisition of such Registrable Securities that, upon receipt of a
      notice from the Company of the occurrence of any event of the kind
      described in Section 3(c)(iii) through (vi), such Holder will forthwith
      discontinue disposition of such Registrable Securities under the
      Registration Statement until such Holder's receipt of the copies of the
      supplemented Prospectus and/or amended Registration Statement or until it
      is advised in writing (the “Advice”) by the Company that the use of the
      applicable Prospectus may be resumed, and, in either case, has received
      copies of any additional or supplemental filings that are incorporated or
      deemed to be incorporated by reference in such Prospectus or Registration
      Statement. The Company may provide appropriate stop transfer orders to
      enforce the provisions of this paragraph. The Company will use its
      commercially reasonable efforts to ensure that the use of the prospectus
      may be resumed as promptly as is practicable. The Company agrees and
      acknowledges that any periods during which the Holder is required to
      discontinue the disposition of Registrable Securities pursuant to Section
      3(c)(v) and (vi) hereunder shall be subject to the limitations set forth
      in the last sentence of Section 3(h).

	 	 	 
	 	(c) 	
      Delay of Registration. No Holder shall have any
      right to obtain or seek an injunction restraining or otherwise delaying
      any such registration as the result of any controversy that might arise
      with respect to the interpretation or implementation of this
    Schedule.

	 	 	 
	 	(d) 	
      Amendments and Waivers. The provisions of this
      Schedule, including the provisions of this Section 7(d), may not be
      amended, modified or supplemented, and waivers or consents to departures
      from the provisions hereof may not be given, unless the same shall be in
      writing and signed by the Company and the Holders of no less than a
      majority interest of the then outstanding Registrable Securities.
      Notwithstanding the foregoing, a waiver or consent to depart from
    the

	 		
      provisions hereof with respect to a matter that relates
      exclusively to the rights of certain Holders and that does not directly or
      indirectly affect the rights of other Holders may be given by Holders of
      at least a majority of the Registrable Securities to which such waiver or
      consent relates.

	 	 	 
	 	(e) 	
      Notices. Any and all notices or other
      communications or deliveries required or permitted to be provided
      hereunder shall be provided in accordance with the terms of the
      Subscription Agreement to which this Schedule is attached; provided
      however, that all written notices or copies of documents required to be
      provided pursuant to this Schedule may be electronic copies transmitted
      electronically to the Holder’s email address as set forth on the Selling
      Shareholder Questionnaire, or at set other email address as provided to
      the Company by the Holder.

	 	 	 
	 	(f) 	
      Successors and Assigns. The Company may not assign
      its rights or obligations hereunder without the prior written consent of
      each Holder. The rights under this Schedule shall be automatically
      assignable by the Investors to any transferee of 1,000 (one thousand)
      Registerable Securities if: (i) the Investor agrees in writing with the
      transferee or assignee to assign such rights, and a copy of such agreement
      is furnished to the Company within a reasonable time after such
      assignment; (ii) the Company is, within a reasonable time after such
      transfer or assignment, furnished with written notice of (a) the name and
      address of such transferee or assignee, and (b) the securities with
      respect to which such registration rights are being transferred or
      assigned; (iii) the transfer of assignment is completed prior to the
      effectiveness of the Registration Statement or immediately following such
      transfer or assignment if the further disposition of the securities is
      restricted under the Securities Act and applicable state securities laws;
      (iv) at or before the time the Company receives the written notice
      contemplated by clause (ii) of this sentence the transferee or assignee
      agrees in writing with the Company to be bound by all of the provisions
      contained herein; and (v) such transfer shall have been made in accordance
      with the applicable requirements of the Subscription Agreement.

	 	 	 
	 	(g) 	
      Severability. If any term, provision, covenant or
      restriction of this Schedule is held by a court of competent jurisdiction
      to be invalid, illegal, void or unenforceable, the remainder of the terms,
      provisions, covenants and restrictions set forth herein shall remain in
      full force and effect and shall in no way be affected, impaired or
      invalidated, and the parties hereto shall use their commercially
      reasonable efforts to find and employ an alternative means to achieve the
      same or substantially the same result as that contemplated by such term,
      provision, covenant or restriction. It is hereby stipulated and declared
      to be the intention of the parties that they would have executed the
      remaining terms, provisions, covenants and restrictions without including
      any of such that may be hereafter declared invalid, illegal, void or
      unenforceable.

	 	 	 
	 	(h) 	
      Headings. The headings in this Schedule are for
      convenience of reference only and shall not limit or otherwise affect the
      meaning hereof.

	 	 	 
	 	(i) 	
      Independent Nature of Holders' Obligations and Rights.
      The obligations of each Holder under this Schedule are several and not
      joint with the obligations of each other Holder, and no Holder shall be
      responsible in any way for the performance of the obligations of any other
      Holder under this Schedule. Nothing contained herein or in any other
      agreement or document delivered at any closing, and no action taken by any
      Holder pursuant thereto, shall be deemed to constitute the Holders as a
      partnership, an association, a joint venture or any other kind of entity,
      or create a presumption that the Holders are in any way acting in concert
      or as a group with respect to such obligations or the transactions
      contemplated by this Schedule. Each Holder acknowledges that no other
      Holder will be acting as agent of such Holder in enforcing its rights
      under this Schedule. Each Holder shall be entitled to independently
      protect and enforce its rights, including without limitation the rights
      arising out of this Schedule, and it shall not be necessary for any other
      Holder to be joined as an additional party in any Proceeding for such
      purpose. The Company acknowledges that each of the Holders has been
      provided with the same Schedule for the purpose of closing a transaction
      with multiple Holders and not because it was required or requested to do
      so by any Holder.

ANNEX A 

Plan of Distribution 

          Each
Selling Stockholder (the “Selling Stockholders”) of the common stock (“Common
Stock”) of U.S. Geothermal Inc., a corporation incorporated pursuant to the laws
of the State of Delaware (the “Company”) and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on the Trading Market or any other
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
Selling Stockholder may use any one or more of the following methods when
selling shares: 

	
  ordinary brokerage transactions and transactions in which the broker dealer
  solicits purchasers; 

  
	
  block trades in which the broker dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction; 

  
	
  purchases by a broker dealer as principal and resale by the broker dealer
  for its account; 

  
	
  an exchange distribution in accordance with the rules of the applicable
  exchange; 

  
	
  privately negotiated transactions; 

  
	
  settlement of short sales entered into after the effective date of the
  registration statement of which this prospectus is a part; 

  
	
  broker dealers may agree with the Selling Stockholders to sell a specified
  number of such shares at a stipulated price per share; 

  
	
  a combination of any such methods of sale; 

  
	
  through the writing or settlement of options or other hedging transactions,
  whether through an options exchange or otherwise; or 

  
	
  any other method permitted pursuant to applicable law. 

          The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities Act”), if available, rather than under
this prospectus. 

          Broker
dealers engaged by the Selling Stockholders may arrange for other brokers
dealers to participate in sales. Broker dealers may receive commissions or
discounts from the Selling Stockholders (or, if any broker dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this Prospectus, in the case of an
agency transaction not in excess of a customary brokerage commission in
compliance with NASD Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASD IM-2440.

          In
connection with the sale of the Common Stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the Common
Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the Common Stock short and deliver these
securities to close out their short positions, or loan or pledge the Common
Stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). 

          The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any underwriter or other person to distribute the
Common Stock. In no event shall any broker-dealer receive fees, commissions and
markups which, in the aggregate, would not exceed customary fees and
commissions. 

          The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of Selling Stockholders to include the pledgee, transferee or other
successors in interest as Selling Stockholders under this prospectus.

          The
Selling Stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus
and may sell the shares of common stock from time to time under this prospectus
after we have filed an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other successors in
interest as Selling Stockholders under this prospectus. 

          The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares, but the Company will not receive any
proceeds from the sale of the common stock by the Selling Stockholders. The
Company has agreed to indemnify the Selling Stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities Act.

          Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than under this prospectus. Each Selling Stockholder has
advised us that they have not entered into any written or oral agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders. 

          We
agreed to keep this prospectus effective until the earlier of (i) June 5, 2009,
or (ii) such time as all shares covered by the registration statement have been
sold publicly. The resale shares will be sold only through registered or
licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the resale shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with. 

          Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the Common Stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. We have advised each Selling Stockholder that it may not use
shares registered under this Registration Statement to cover short sales of
common stock made prior to the date on which this Registration Statement shall
have been declared effective by the Securities and Exchange Commission. In
addition, the Selling Stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including Regulation
M, which may limit the timing of purchases and sales of shares of the Common
Stock by the Selling Stockholders or any other person. We will make copies of
this prospectus available to the Selling Stockholders and have informed them of
the need to deliver a copy of this prospectus to each purchaser at or prior to
the time of the sale. 

ANNEX B 

SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE 

          The
undersigned beneficial owner of common stock (the “Registrable Securities”) of
U.S. Geothermal Inc., a Delaware corporation (the “Company”), understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the “Securities Act”), of the Registrable Securities, in
accordance with the terms of the Registration Rights (the “Registration Rights
Agreement”) to which this document is annexed. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Registration Rights Agreement.

          Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.

NOTICE 

          The
undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it in
the Registration Statement.

          The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate: 

QUESTIONNAIRE 

	1. 	
      NAME.

	 	 	 
		(a) 	
      _________________________________________________________________
Full
      Legal Name of Selling Securityholder

	 	 	 
		(b) 	
      Full Legal Name of Registered Holder (if not the same as
      (a) above) through which Registrable

	 	 	 
			
      _________________________________________________________________
Securities
      are held:

	 	 	 
		(c) 	
      Full Legal Name of Natural Control Person (which means a
      natural person who directly or indirectly alone or with others has power
      to vote or dispose of the securities covered by the

	 	 	 
			
      _________________________________________________________________
questionnaire):

	 	 	 
	2. 	
      ADDRESS FOR NOTICES TO SELLING
  SECURITYHOLDER:

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Telephone:  
___________________________________________________________________

Fax :   
________________________________________________________________________

Email:   
_______________________________________________________________________

Contact Person:   
_______________________________________________________________

	3. 	
      BROKER-DEALER STATUS:

	 	 	 
		(a) 	
      Are you a broker-dealer?

	 	 	 
			
                Yes
      ___ No ___

	 	 	 
		(b) 	
      If “yes” to Section 3(a), did you receive your
      Registrable Securities as compensation for investment banking services to
      the Company.

	 	 	 
			
                Yes
      ___ No ___

Note: If no, the Commission’s staff has
indicated that you should be identified as an underwriter in the Registration
Statement. 

	 	(c) 	
      Are you an affiliate of a broker-dealer?

	 	 	 
	 		
                Yes
      ___ No ___

	 	 	 
	 	(d) 	
      If you are an affiliate of a broker-dealer. do you
      certify that you bought the Registrable Securities in the ordinary course
      of business, and at the time of the purchase of the Registrable Securities
      to

be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities? 

          Yes
___ No ___

Note: If no, the Commission’s staff has
indicated that you should be identified as an underwriter in the Registration
Statement. 

	4. 	
      BENEFICIAL OWNERSHIP OF SECURITIES OF THE COMPANY OWNED
      BY THE SELLING SECURITYHOLDER.

	 	 
		
      Except as set forth below in this Item 4, the undersigned
      is not the beneficial or registered owner of any securities of the Company
      other than the securities issuable pursuant to the Purchase
    Agreement.

	 	 
		
      (a) Type and Amount of other securities beneficially
      owned by the Selling
      Securityholder:
__________________________________________________________________

__________________________________________________________________

	 	 
	5. 	
      RELATIONSHIPS WITH THE COMPANY:

	 	 
		
      Except as set forth below, neither the undersigned nor
      any of its affiliates, officers, directors or principal equity holders
      (owners of 5% of more of the equity securities of the undersigned) has
      held any position or office or has had any other material relationship
      with the Company (or its predecessors or affiliates) during the past three
      years.

	 	 
		
      State any exceptions
      here:
__________________________________________________________________

__________________________________________________________________

          The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

          By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

          IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

	Dated: _________________________________	Beneficial Owner:
________________________
	 	 
	  	By:     
      _________________________________
	 	 
	  	Name: _________________________________
	 	 
	  	Title: 
       _________________________________

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 

- 2 -EXHIBIT 10.1
    Resolution and Share Purchase Agreement between Marine Exploration, Inc.
                   and Marine Exploration International, Inc

                            Marine Exploration, Inc.
                            535 16th Street Suite 820
                                Denver, CO 80202

--------------------------------------------------------------------------------

                             MINUTES AND RESOLUTION

     In a meeting called this 11th day of May 2007 by the sole officer and
director of the company, it is RESOLVED THAT:

     Pursuant to the SHARE PURCHASE AGREEMENT BETWEEN MARINE EXPLORATION, INC
and MARINE EXPLORATION INTERNATIONAL, INC, it is hereby RESOLVED that the
company will order X-Clearing Corporation, its transfer agent, to issue
100,100,000 restricted, Rule 144 shares as follows, and hold for pickup:

                               100,000 shares to:
                           MTG Financial Services LLC
                              1311 Cook Street #406
                              Denver CO 80206-2624
                                 EIN 86-1170805

                              25,000,000 shares to:
                            Technology Partners, LLC
                            535 16th Street Suite 820
                                Denver, CO 80202

                              25,000,000 shares to:
                                Hoss Capital LLC
                         7701 N. France Avenue Suite 200
                                 Edina, MN 55345

                              25,000,000 shares to:
                              Stevens Family Trust
                                1405 Adams Street
                                Denver, CO 80206

                              25,000,000 shares to:
                              Enright Family Trust
                                   PO Box 553
                               Morrison, CO 80465

                                  Respectfully,

                             Miguel Thomas Gonzalez
                             President and Secretary

<PAGE>

THESE SHARES ARE OFFERED PURSUANT TO AN EXEMPTION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION. THE COMMISSION DOES NOT PASS UPON THE MERITS
OF ANY SECURITIES NOR DOES IT PASS ON THE ACCURACY OR COMPLETENESS OF ANY
PRIVATE PLACEMENT MEMORANDUM OR OTHER SELLING LITERATURE.

SHARE PURCHASE AGREEMENT BETWEEN MARINE EXPLORATION, INC. AND THE MARINE
EXPLORATION INTERNATIONAL, INC.

         THIS AGREEMENT made this 11th day of May, 2007, by and among MARINE
EXPLORATION INC, a Publicly Traded Colorado corporation, ("Public Company"), and
Marine Exploration International, Inc., a Nevada Corporation ("Private
Company"), whose name appears on Schedule A to this Agreement and who own 100%
of the outstanding shares of the Private Company.

RECITALS

         WHEREAS, PUBLIC COMPANY a public, non-reporting company whose purpose
is to seek a business to merge with or acquire an operating business has
identified and desires to acquire 100% of the total outstanding capital stock of
PRIVATE COMPANY from Private Company; and

         WHEREAS, PUBLIC COMPANY desires to acquire shares of common stock of
PRIVATE COMPANY in exchange for 100,000,000 unissued shares of the common stock
of PUBLIC COMPANY (the "PUBLIC COMPANY Common Stock" or "PUBLIC COMPANY
Shares"); and

         WHEREAS, Private Company desires to exchange the Private Common Stock
for the PUBLIC COMPANY Shares in the amounts shown on Schedule A of this
Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, the parties hereto intending to be legally
bound hereby, agree as follows:

ARTICLE 1
---------

EXCHANGE OF SECURITIES
----------------------

         1.1 Issuance of Shares. Subject to all of the terms and conditions of
this Agreement, PUBLIC COMPANY agrees to exchange the PUBLIC COMPANY Common
Stock in exchange for the outstanding common shares of PRIVATE COMPANY (the
"PRIVATE COMPANY Common Stock") in the amounts shown on Schedule A to this
Agreement.

<PAGE>
         1.2 Transfer of Shares. Subject to all of the terms and conditions of
this Agreement, Private Company agrees to transfer to PUBLIC COMPANY all of its
ownership in the PRIVATE COMPANY Common Stock.

         1.3 Exemption from Registration; Reorganization. The parties hereto
intend that the PUBLIC COMPANY Common Stock to be issued to Private Company
shall be exempt from the registration requirements of the Securities Act of
1933, as amended (the "Act"), and pursuant to applicable state statutes. The
parties hereto expect this transaction to qualify as a tax-free reorganization
under Sections 368 (a)(1)(A) and 368 (a)(2)(E) of the Internal Revenue Code of
1986, as amended (the "Code") but no IRS ruling or opinion of counsel is being
sought in connection therewith and such ruling or opinion is not a condition to
closing the transactions herein contemplated.

ARTICLE 2
---------

REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY, INC.
------------------------------------------------------

         PRIVATE COMPANY represents and warrants to PUBLIC COMPANY that:

         2.1 Organization. PRIVATE COMPANY is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do business and is in
good standing in each of the states and other jurisdictions where its business
requires qualification.

         2.2 Compliance with Laws. PRIVATE COMPANY has substantially complied
with, and is not in violation of, all applicable federal, state or local
statutes, laws and regulations, including, without limitation, any applicable
building, zoning, environmental, employment or other law, ordinance or
regulation affecting its properties, products or the operation of its business
except where such non-compliance would not have a materially adverse effect on
the business or financial condition of PUBLIC COMPANY. PRIVATE COMPANY has all
licenses and permits required to conduct its business as now being conducted.

         2.3 Litigation. PRIVATE COMPANY is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of PRIVATE COMPANY, threatened
against or affecting PRIVATE COMPANY or its business, assets or financial
condition, except for matters which would not have a material affect on PRIVATE
COMPANY or its properties. PRIVATE COMPANY is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it. PRIVATE COMPANY is not
engaged in any lawsuits to recover any material amount of monies due to it.

<PAGE>
ARTICLE 3
---------

REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY
------------------------------------------------

         PUBLIC COMPANY represents and warrants to PRIVATE COMPANY and Private
Company that:

         3.1 Organization. PUBLIC COMPANY is a corporation duly organized,
validly existing, and in good standing under the laws of Colorado, has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated, and duly qualified to do business in each of such states
and other jurisdictions where its business requires such qualification.

         3.2 Capital. Following the Closing the authorized capital stock of
PUBLIC COMPANY will consist of 500,000,000 shares of $.001 par value Common
Stock of which approximately 100,065,000 shares of PUBLIC COMPANY Common Stock
will be issued and outstanding. All of the issued and outstanding shares will be
duly and validly issued, fully paid and nonassessable. There are no outstanding
subscriptions, options, rights, warrants, convertible securities, or other
agreements or commitments obligating PUBLIC COMPANY to issue or to transfer from
its treasury any additional shares of its capital stock of any class or to
repurchase any such shares.

         3.3 Business. Following the closing, the only business and operations
of PUBLIC COMPANY shall be that conducted by PRIVATE COMPANY, which shall merge
with PUBLIC COMPANY, which will be the surviving entity.

         3.4 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein,
Shareholder shall have the opportunity to meet with PUBLIC COMPANY'S accountants
to discuss the financial condition of PUBLIC COMPANY. PUBLIC COMPANY shall make
available to Private Company all books and records of PUBLIC COMPANY.

         3.5 Compliance with Laws. PUBLIC COMPANY has complied with, and is not
in violation of, all applicable federal, state or local statutes, laws and
regulations (including, without limitation, any applicable building, zoning,
environmental or other law, ordinance, or regulation) affecting its properties
or the operation of its business, except where non-compliance would not have a
materially adverse effect on the business or operations of PUBLIC COMPANY.

         3.6 Litigation. PUBLIC COMPANY is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge and belief of PUBLIC COMPANY,
threatened against or affecting PUBLIC COMPANY or its business, assets, or
financial condition.

<PAGE>
         3.7 Authority. The Board of Directors of PUBLIC COMPANY has authorized
the execution of this Agreement and the transactions contemplated herein, is
enforceable in accordance with its terms and conditions, except as may be
limited by bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally.

         3.8 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by PUBLIC COMPANY and the performance by PUBLIC COMPANY will not
conflict with or result in (a) any material breach or violation of any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, certificate of incorporation, bylaw, or other agreement or
instrument to which PUBLIC COMPANY is a party, or by which it may be bound, nor
will any consents or authorizations of any party other than those hereto be
required, (b) an event that would permit any party to any material agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of PUBLIC COMPANY, or (c) an event that would result in the
creation or imposition of any material lien, charge, or encumbrance on any asset
of PUBLIC COMPANY.

         3.9 National Quotation Bureau Pink Sheet Listing. PUBLIC COMPANY is
currently listed on the National Quotation Bureau Pink Sheets Board (although
such symbol will soon be amended pursuant to PUBLIC COMPANY' recent name change)
with the following symbol:
MEXP

ARTICLE 4
---------

ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS OF PRIVATE COMPANY
----------------------------------------------------------------------------

         4.1 Share Ownership. Shareholder holds the PRIVATE COMPANY Common Stock
in the amounts shown on Schedule A to this Agreement. Such shares are owned of
record, and such shares are not subject to any lien, encumbrance or pledge. Each
shareholder has the authority to exchange such shares pursuant to this
Agreement.

         4.2 Investment Intent. Shareholder understand and acknowledge that the
PUBLIC COMPANY Common Stock is being offered for exchange in reliance upon the
exemption provided in Section 4(2) of the Securities Act of 1933 (the
"Securities Act") for non-public offerings; and each Shareholder makes the
following representations and warranties with the intent that the same may be
relied upon in determining the suitability of each Shareholder as a purchaser of
securities.

                  (a) The PUBLIC COMPANY Shares are being acquired solely for
the account of each Shareholder, for investment purposes only, and not with a
view to, or for sale in connection with, any distribution thereof and with no
present intention of distributing or reselling any part of the PUBLIC COMPANY
Shares.

<PAGE>
                  (b) Each Shareholder agrees not to dispose of his PUBLIC
COMPANY Shares or any portion thereof unless and until counsel for PUBLIC
COMPANY shall have determined that the intended disposition is permissible and
does not violate the Securities Act of 1933 (the "1933 Act") or any applicable
state securities laws, or the rules and regulations thereunder.

                  (c) Shareholder acknowledges that PUBLIC COMPANY has made all
documentation pertaining to all aspects of PUBLIC COMPANY and the transaction
herein available to him/her and to his/her qualified representative(s), if any,
and has offered such person or persons an opportunity to discuss PUBLIC COMPANY
and the transaction herein with the officers of PUBLIC COMPANY.

         4.3 Indemnification. Shareholder recognizes that the offer of PUBLIC
COMPANY Shares to him/her is based upon his/her representations and warranties
set forth and contained herein and hereby agrees to indemnify and hold harmless
PUBLIC COMPANY against all liability, costs or expenses (including reasonable
attorney's fees) arising as a result of any misrepresentations made herein by
such Shareholder.

         4.5 Restrictive Legend. Shareholder agrees that the certificates
evidencing the PUBLIC COMPANY Shares acquired pursuant to this Agreement will
have a legend placed thereon which will restrict the sale of said shares for
times and upon conditions that are subject to federal and state securities laws.

ARTICLE 5
---------

PRE-CLOSING COVENANTS
---------------------

         5.1 Investigative Rights. From the date of this Agreement each party
shall provide to the other party, and such other party's counsels, accountants,
auditors, and other authorized representatives, full access during normal
business hours to all of PRIVATE COMPANY's and PUBLIC COMPANY's properties,
books, contracts, commitments, and records for the purpose of examining the
same. Each party shall furnish the other party with all information concerning
PRIVATE COMPANY's and PUBLIC COMPANY's affairs as the other party may reasonably
request.

         5.2 Conduct of Business. Prior to the Closing, PRIVATE COMPANY and
PUBLIC COMPANY shall each conduct its business in the normal course, and shall
not sell, pledge, or assign any assets, without the prior written approval of
the other party, except in the regular course of business. Neither PRIVATE
COMPANY or PUBLIC COMPANY shall amend its Articles of Incorporation or Bylaws,
declare dividends, redeem or sell stock or other securities, incur additional or
newly-funded liabilities, acquire or dispose of fixed assets, change employment
terms, enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for less than
its stated amount, pay more on any liability than its stated amount, or enter
into any other transaction other than in the regular course of business.

<PAGE>
ARTICLE 6
---------

POST-CLOSING COVENANTS
----------------------

         6.1 Following the Closing herein:

                   (a) Prompt registration of Transfer. PUBLIC COMPANY shall
register transfer of the common stock of PUBLIC COMPANY within three (3)
business days after receipt of proper documentation for such transfer request.
Restricted securities shall be transferred without restrictive legend if
supported by an opinion of counsel to Private Company to which PUBLIC COMPANY's
counsel has no reasonable objection.

                   (b) Additional Financing. PUBLIC COMPANY will use its best
efforts to acquire additional funding in order to proceed with its business
plan. PUBLIC COMPANY will be solely responsible for such funding.

                   (c) Delivery of Shares. Shareholder will deliver to PUBLIC
COMPANY' management within 10 days of execution of this Agreement any share
certificates representing the PRIVATE COMPANY Common Stock.

                   (d) Registration of Shares. Public Company will endeavor to
register the resultant shares involved in this transaction under the Securities
Act of 1933.

ARTICLE 7
---------

CLOSING
-------

         7.1 Closing. The Closing of this transaction shall occur upon the
execution of this Agreement by both parties.

ARTICLE 8
---------

MISCELLANEOUS
-------------

         8.1 Captions. The Article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this Agreement.

         8.2 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.

<PAGE>
         8.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.

         8.4 Time of Essence.  Time is of the essence of this Agreement and of
each and every provision hereof.

         8.5 Entire Agreement. This Agreement contains the entire Agreement and
understanding among the parties hereto, supersedes all prior agreements and
understandings, and constitutes a complete and exclusive statement of the
agreements, responsibilities, representations and warranties of the parties.

         8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         8.7 Binding Effect. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.

         8.8 Announcements. PUBLIC COMPANY and PRIVATE COMPANY will consult and
cooperate with each other as to the timing and content of any announcements of
the transactions contemplated hereby to the general public or to employees,
customers or suppliers.

         8.9 Expenses. Each party will pay its own legal, accounting and any
other out-of-pocket expenses reasonably incurred in connection with this
transaction, whether or not the transaction contemplated hereby is consummated.

         8.10 Brokerage. PRIVATE COMPANY and PUBLIC COMPANY each represent that
no finder, broker, investment banker or other similar person has been involved
in this transaction. Each party agrees to indemnify and hold the others harmless
from payment of any brokerage fee, finder's fee or commission claimed by any
other person or entity who claims to have been involved in the transaction
herein because of an association with such party.

         8.11 Survival of Representations and Warranties. The representations
and warranties of the parties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for it, shall survive the
Closing irrespective of any investigation made by or on behalf of any party for
a period of one year.

<PAGE>
         8.12 Choice of Law.  This Agreement and its application shall be
governed by the laws of the State of Colorado.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized representatives, all as of the date first written
above.

Marine Exploration, Inc (PUBLIC COMPANY).:

By:
    --------------------------------

       Director

Marine Exploration International, Inc (PRIVATE COMPANY):

By:
    --------------------------------
     Director

SHAREHOLDERS of PRIVATE COMPANY:

By:  ___________________________    By:     ___________________________
     Hoss Capital LLC                       Technology Partners LLC

By:  ___________________________    By:     ___________________________
     Stevens Family Trust                   Enright Family Trust

SCHEDULE A

                            Shares owned of             Shares owned of
                            PRIVATE. prior to           PUBLIC COMPANY
                            execution of this           following execution
                            Agreement                   of this Agreement
Shareholder Name
Hoss Capital LLC            25,000,000                  25,000,000
Technology Partners LLC     25,000,000                  25,000,000
Stevens Family Trust        25,000,000                  25,000,000
Enright Family Trust        25,000,000                  25,000,000
Miguel Thomas Gonzalez      100,000                     100,000

<PAGE>

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