Form of Subscription Agreement

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

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;

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”;

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”;

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

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

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

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

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

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.

a director or senior officer of the Corporation;

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

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

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.

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

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

employees of the member;

partners, officers and directors of the member;

affiliates of the member; and

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

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;

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;

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:

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

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

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

the member maintains a list of such excluded persons.

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).

Terms and Conditions of Subscriptions for Offered Shares

Term Sheet

Certificate of Subscribers

Canadian Accredited Investor Certificate

Certificate of Non-Canadian Subscribers (Other than U.S. Subscribers)

Form 4C – Corporate Placee Registration Form

Appendix 6A – Acknowledgment – Personal Information

Terms and Conditions of Registration Rights

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.”.

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

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

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”.

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

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

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”;

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

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

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

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

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

If the Subscriber is:

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;

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

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.

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.

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.

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.

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.

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.

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.

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

No person has made any written or oral representations:

that any person will resell or repurchase the Offered Shares;

that any person will refund the Subscription Amount; or

as to the future price or value of the Offered Shares.

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.

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

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).

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.

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.

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

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>.

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,

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>.

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.

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.

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.

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.

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:

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;

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;

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

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

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.

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;

the sale is to the Corporation; or

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

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

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

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.

There is no government insurance or other insurance covering the Securities.

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.

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.

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.

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:

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

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

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.

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).

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.

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.

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

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;

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;

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

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

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;

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

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

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;

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

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

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

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

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

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.

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:

in the case of the Corporation, to:

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

Attention:           Daniel Kunz, President
Fax:                       ###-###-####

with a copy to:

Goodmans LLP

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

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

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

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.

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.

U.S. Geothermal Inc. (the “Company”).

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

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.

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

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

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

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.

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”.

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

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

5% of the gross proceeds of the Offering.

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.

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.

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

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

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

SUBSCRIPTION FOR OFFERED SHARES OF THE CORPORATION

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

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

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

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

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

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

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

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

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

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

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;

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);

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);

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;

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;

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

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;

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;

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;

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

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;

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;

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;

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;

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;

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;

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;

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;

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

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.

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

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;

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

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

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

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;

cash,

securities, or

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

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

that does not invest,

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

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

that is not a mutual fund;

an individual,

a corporation,

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

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

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

liabilities that are secured by financial assets;

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

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

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);

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,

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

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

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

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

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;

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;

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.

Name: _________________________________________________________________________________________________

Complete Address: _______________________________________________________________________________________

Jurisdiction of Incorporation or Creation: ______________________________________________________________________

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

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

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;

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;

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

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

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

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

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.

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

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

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”).

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.

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.

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.

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.

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

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).

(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.

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.

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.

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.

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.

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.

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.

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.

Comply with all applicable rules and regulations of the Commission.

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

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

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.

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.

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).

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

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.

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).

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.

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.

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.

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.

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.

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

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.

NAME.

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Full Legal Name of Selling Securityholder

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

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Securities are held:

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

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questionnaire):

ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

BROKER-DEALER STATUS:

Are you a broker-dealer?

          Yes ___ No ___

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

          Yes ___ No ___

Are you an affiliate of a broker-dealer?

          Yes ___ No ___

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

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:
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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:
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