UNDERWRITING AGREEMENT

Underwriting Agreement

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US GEOTHERMAL INC

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Title: UNDERWRITING AGREEMENT
Date: 5/2/2008
Law Firm: Dorsey Whitney;Arnold Porter

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UNDERWRITING AGREEMENT

Dated as of April 28, 2008

U.S. Geothermal Inc.

1505 Tyrell Lane

Boise, Idaho 83706

Attention:

Daniel Kunz

Chief Executive Officer, President and Director

Dear Sirs:

Re: Placement of Shares of Units

We understand that U.S. Geothermal Inc. (the “ Corporation ”) proposes to issue and sell 4,260,000 Units, each Unit consisting of one share of common stock par value US $0.001 (the “ Shares ”) and one-half of one Warrant (as defined below). Each whole common share purchase warrant (a “ Warrant ”) will entitle the holder thereof to acquire one share of common stock par value US$0.001 (the “ Warrant Shares ”) at any time after the date of issue until 4:00 p.m. (Vancouver time) on the date that is 24 months following the Closing Date (as defined below) for US$3.00 per Warrant Share.

1.	Offer to Purchase

Based upon the foregoing and subject to the terms and conditions set out below, Clarus Securities Inc. (“ Clarus ”), Toll Cross Securities Inc. and Loewen Ondaatje McCutcheon Limited (collectively, the “ Underwriters ” and, individually, an “ Underwriter ”) hereby severally and not jointly offer to purchase from the Corporation, if, as and when issued by the Corporation, and by its acceptance hereof the Corporation agrees to sell to the Underwriters, at the Closing Time (as defined below), the Units at a price (the “ Offering Price ”) of CAD$2.35 per Unit for an aggregate consideration of CAD$10,011,000 (the “ Offering ”).

The Underwriters shall have the option, exercisable at any time until 48 hours prior to the Closing Time, to purchase an additional 2,122,500 Units (the “ Optioned Units ”) at the Offering Price, such that the aggregate number of Units to be purchased by the Underwriters will be, if this option is exercised in full, 6,382,500 Units for an aggregate purchase price of CAD$14,998,875.00.

The several obligations of the Underwriters to purchase the Units shall be allocated to the Underwriters in accordance with the percentages in Section 13 hereof.

2.	Definitions

In this Agreement, unless otherwise defined herein, and in addition to the terms defined elsewhere herein, the following capitalized terms shall have the following meanings:

“ Accredited Investor ” means an “accredited investor” as that term is defined in Rule 501 of Regulation D and where a subscriber is a Canadian resident, National Instrument 45-106;

“ Additional Shares” means the Common Shares issuable to the Purchasers in the circumstances as provided in paragraph 6(d) of this Agreement;

“ Broker Shares ” has the meaning ascribed thereto in Section 7;

“ Broker Warrants” has the meaning ascribed thereto in Section 7;

“ business day ” means a day that is not a Saturday, a Sunday or a statutory or civic holiday in Vancouver, British Columbia or Boise, Idaho;

“ Closing ” means the completion of the issue and sale by the Corporation and the purchase by the Purchasers of the Units;

“ Closing Date ” means April 28, 2008 or such other date as the Corporation and the Underwriters may agree;

“ Closing Time ” means 6:00 a.m. (Vancouver time) on the Closing Date or such other time on the Closing Date as the Corporation and the Underwriters may agree;

“ Common Shares ” means the shares of common stock par value US $0.001 in the capital of the Corporation;

“ Corporation’s Auditors ” means Williams & Webster, P.S., the auditors of the Corporation;

“ Corporation’s Counsel ” means the law firms of Dorsey & Whitney LLP insofar as the laws of the United States are concerned and Goodmans in so far as the laws of Canada are concerned, each being counsel to the Corporation;

“ Directed Selling Efforts ” means directed selling efforts, as used under Rule 902(c) of Regulation S under the 1933 Act;

“ Disclosure Documents ” means each document (as such term is defined in Section 138.1 of the Securities Act (Ontario)) released by the Corporation since March 31, 2007;

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“ Effectiveness Date ” means with respect to the Registration Statement required to be filed in accordance with the terms of this Agreement and the Subscription Agreement, the day that is the five months following the Closing Date. For purposes of clarification, the declaration of a Delay Period (as such term is defined in Schedule F of the Subscription Agreement) prior to the effectiveness of the Registration Statement does not modify the Effectiveness Date;

“ Empire Project ” means the assets proposed to be acquired under a purchase and sale agreement dated March 31, 2008 (the “ Empire Acquisition Agreement ”) between the Corporation, Michael B. Stewart and Empire Geothermal Power LLC in connection with a 3.6 megawatt operating geothermal power plant and approximately 18,000 acres of geothermal energy leases and certain ground work rights all located north of Reno, Nevada, as further described in the Disclosure Documents;

“ Environmental Laws ” has the meaning ascribed thereto in paragraph 5(s);

“ FINRA” has the meaning ascribed thereto in Section 3(e);

“ General Solicitation or General Advertising ” means “general solicitation or general advertising”, as used under Rule 502(c) under the U.S. Securities Act, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television, or telecommunications, including electronic display or the Internet, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising;

“ Governmental Authority ” means any domestic or foreign government, whether federal, provincial, state, territorial, local, regional, municipal or other political jurisdiction, and any agency, authority, instrumentality, court, tribunal, board, commission, bureau, arbitrator, arbitration tribunal or other tribunal, or any quasi-governmental or other entity, insofar as it exercises a legislative, judicial, regulatory, administrative, expropriation or taxing power or function of or pertaining to government;

“Hazardous Substances” has the meaning ascribed thereto in paragraph 5(s);

“ Indemnified Party ” has the meaning ascribed thereto in paragraph 11(d);

“ Intellectual Property ” has the meaning ascribed thereto in paragraph 5(nn);

“ Material Subsidiaries ” means the Subsidiaries whose assets or revenues, calculated on an individual basis, represent more than 10% of the consolidated assets or revenues of the Corporation;

“ misrepresentation ”, “ material fact ” and “ material change ” have the respective meanings ascribed thereto in the Securities Act (Ontario);

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“ Neal Hot Springs Project” means the Neal Hot Springs exploration project located in eastern Oregon as described in the Disclosure Documents;

“ Offering Jurisdictions ” means the Provinces of Canada, any state of the United States of America and such other jurisdictions where the Underwriters choose to sell Units in accordance with this Agreement;

“ Offering Price” means the price of CAD$2.35 per Unit;

“ Optioned Units ” has the meaning ascribed thereto in Section 1;

“ Purchasers ” means the purchasers of the Units under the terms of this Agreement, which term includes the Underwriters and all Substituted Purchasers as contemplated by Section 3;

“ Raft River Energy I LLC ” means Raft River Energy I LLC, a Delaware limited liability company, the joint venture entity established to facilitate the financing of Phase 1 of the Raft River Project;

“ Raft River Project ” means Phase 1 of development at Raft River located in Southern Idaho, resulting in the construction and operation of a 13 megawatt binary cycle geothermal power plant (Unit 1), as described in the Disclosure Documents;

“ Registration Statement” has the meaning ascribed thereto in the Subscription Agreements;

“ Regulation D ” means Regulation D adopted by the SEC under the 1933 Act;

“ SEC ” means the United States Securities and Exchange Commission;

“ Securities Laws ” means the applicable securities laws, regulations, rules, policy statements and prescribed forms, collectively, of each of the Offering Jurisdictions;

“ Securities Regulators ” means the securities commissions or applicable regulatory authorities in each of the Offering Jurisdictions;

“ Shares ” shall have the meaning ascribed thereto in the first paragraph of this Agreement and shall, upon the exercise by the Underwriters of the right to acquire Optioned Units, include the Common Shares underlying the Optioned Units;

“ Subscription Agreements ” means the agreements to be executed by each of the Substituted Purchasers in respect of the Units to be purchased by them, and accepted by the Corporation, in the form annexed hereto as Schedule “C” to this Agreement;

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“ Subsidiary ” means Raft River Energy I LLC and any entity of which more than 50 percent of the voting securities are directly or indirectly owned by the Corporation and the financial statements of which are consolidated with those of the Corporation;

“ Substituted Purchasers ” means each of the Purchasers, other than the Underwriters, whose Subscription Agreement has been accepted by the Corporation in accordance with Section 3;

“ this Agreement ” means the agreement resulting from the acceptance by the Corporation of the offer made by the Underwriters herein;

“ to the knowledge of ” means (unless otherwise expressly stated), with respect to the Corporation, a statement of the actual knowledge, after having made reasonable enquiries or investigations of the executive officers of the Corporation of the facts or circumstances to which such phrase relates;

“ Underwriters’ Counsel ” means the law firms of Arnold & Porter LLP insofar as the laws of the United States are concerned and Borden Ladner Gervais LLP in so far as the laws of Canada are concerned, each being counsel to the Underwriters;

“ Underwriters’ Personnel ” has the meaning ascribed thereto in Section 11(a);

“ Units ” shall have the meaning ascribed thereto in the first paragraph of this Agreement and, upon the exercise by the Underwriters of the right to acquire Optioned Units, shall include the Optioned Units;

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

“ U.S. Affiliate ” of any Underwriter means the U.S. registered broker-dealer affiliate of such Underwriter;

“ U.S. Person ” means a U.S. Person as defined in Rule 902(k) of Regulation S under the 1933 Act;

“ U.S. Securities Laws ” means the applicable blue sky or securities legislation in the United States, together with the 1934 Act and the 1933 Act and the rules and regulations of the SEC or state securities authority thereunder;

“ Warrants ” has the meaning ascribed thereto in paragraph 1 of this Agreement and, upon the exercise by the Underwriters of the right to acquire Optioned Units, shall include the Warrants underlying the Optioned Units and which shall be evidenced by the Warrant Certificates;

“ Warrant Certificates ” means the Warrant certificates evidencing the Warrants in the form attached hereto as Schedule “D”;

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“ Warrant Shares ” has the meaning ascribed thereto in paragraph 1 of this Agreement;

“ 1933 Act ” means the United States Securities Act of 1933, as amended; and the rules and regulations promulgated thereunder, including judicial and administrative interpretations thereof; and

“ 1934 Act” means the United States Securities and Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, including judicial and administrative interpretations thereof.

Any reference in this Agreement to any Section, Subsection, paragraph or subparagraph shall refer to a Section, Subsection, paragraph or subparagraph of this Agreement.

3.	Substituted Purchasers and Compliance with Securities Laws

(a)

The Underwriters and their U.S. Affiliates will have the right to arrange for Substituted Purchasers for the Units in one or more of the Offering Jurisdictions in accordance with the terms of this Agreement.

(b)

The Underwriters and their U.S. Affiliates hereby severally represent, warrant and covenant with the Corporation that they are duly qualified and registered to carry on business as securities dealers in each of the Offering Jurisdictions where the sale of the Units requires such qualification and/or registration.

(c)

The Underwriters agree that they shall offer the Units in such manner that, pursuant to the Securities Laws:

(i)

no prospectus or similar document need be delivered or filed, other than any prescribed reports of the issue and sale of the Units; and

(ii)

the Corporation will not be required to register or (except for the filings referred to in paragraph 3(c)(i) above) be subject to continuous disclosure obligations in a jurisdiction in which it is not presently subject to such obligations.

(d)

The Underwriters covenant and agree to hold all non-public information concerning the Corporation and its subsidiaries obtained in the strictest of confidence and not to disclose such information to any other party (except where disclosure is required by law) and not to use such information for any purpose other than in connection with this Offering.

(e)

The Underwriters will not offer or sell the Units in any jurisdiction other than the Offering Jurisdictions (unless subsequently agreed to by the Corporation) in accordance with the terms of this Agreement.

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(f)

The Underwriters represent, warrant and covenant that any offers or sales of Units: (i) will be conducted in such a manner so as not to require registration thereof or the filing of a prospectus (except as required by the Subscription Agreements) or an offering memorandum with respect thereto under the applicable securities legislation of the 1933 Act; (ii) will be conducted through an affiliate of each Underwriter duly registered with the SEC and the Financial Industry Regulatory Authority Inc. (the “ FINRA ”) and in compliance with U.S. Securities Laws; (iii) shall not be made (1) by any form of General Solicitation or General Advertising, or (2) in any manner involving a public offering within the meaning of Section 4(2) of the 1933 Act; (iv) at Closing, each U.S. Affiliate who sold any Units together with its Canadian affiliate will provide a certificate, substantially in the form of annexed hereto as Schedule “B”, relating to the manner of the offer and sale of the Units.

(g)

The Underwriters shall notify the Corporation with respect to the identity of all Purchasers and, subject to the foregoing, the Corporation shall use all commercially reasonable efforts to secure compliance, prior to the Closing Time, with all applicable regulatory requirements of the Offering Jurisdictions whose Securities Laws are applicable to the sale of Units.

(h)

The Underwriters agree that if they offer to sell or sell any of the Units in jurisdictions other than Canada or the United States, such offers or sales shall be effected in accordance and compliance with the applicable laws of such jurisdictions and shall be effected in such manner so as not to require registration of the Units, or the filing of a prospectus, registration statement or any other notice or document with respect to the distribution of the Units, under the laws of any jurisdiction outside the Offering Jurisdictions.

(i)

The Underwriters represent, warrant and covenant that, during the period in which the Units are offered for sale, neither the Underwriters, nor any of their affiliates, nor any person acting on their behalf has taken or will take, directly or indirectly, any action that would constitute a violation of Regulation M of the SEC under the 1934 Act.

4.	Notice of Material Change

During the period of distribution of the Units, which shall be the period from the date hereof to the Closing Time, the Corporation shall promptly notify the Underwriters in writing of:

(a)

any material change (actual, anticipated, contemplated or threatened, whether financial or otherwise) in the business, affairs, operations, assets, liabilities or obligations (contingent or otherwise), financial condition or capital of the Corporation; and

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(b)

any material fact that arises or is discovered and which was not previously disclosed in the Disclosure Documents;

which material change or new material fact is, or may be, of such a nature as:

(i)

to render any Disclosure Document misleading or untrue;

(ii)

would result in any Disclosure Document not being in compliance with any Securities Laws;

(iii)

would reasonably be expected to have a significant effect on the market price or value of the Common Shares; or

(iv)

would be material to a prospective Purchaser.

The Corporation shall in good faith discuss with the Underwriters any change in circumstances (actual, proposed or prospective) which is of such a nature that there is reasonable doubt whether notice need be given to the Underwriters pursuant to this Section 4.

5.	Representations and Warranties of the Corporation

The Corporation represents and warrants to each of the Underwriters and acknowledges that each of the Underwriters is relying upon such representations and warranties in connection with its execution and delivery of this Agreement that:

(a)

the Corporation and each Subsidiary was duly incorporated and is validly existing under the laws of the jurisdiction of incorporation and has all requisite power and authority and is duly qualified to carry on its business as now conducted and to own, lease and operate its property and assets;

(b)

all necessary corporate action has been taken by the Corporation to authorize the execution and delivery of and the performance of its obligations under this Agreement;

(c)

this Agreement and the Subscription Agreements have been and, as at the Closing Time, the Warrant Certificates and certificates evidencing the Broker Warrants will be, duly authorized, executed and delivered by the Corporation and (assuming due execution and delivery by the other parties thereto) is, or will be, a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms, except as that enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction;

(d)

the authorized and issued capital of the Corporation consists of 100 million Common Shares of which 55,339,253 Common Shares have been

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validly issued as at the date hereof, are outstanding as fully paid and non-assessable shares and were not issued in violation of any pre-emptive rights or other contractual rights to issue securities issued by the Corporation or of any applicable law;

(e)

no person has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any un-issued shares or other securities of the Corporation, except for:

(i)

the Shares, the Warrant Shares, the Additional Shares and the Broker Shares issuable pursuant to this Agreement and the Subscription Agreements;

(ii)

2,899,878 Common Shares issuable by the Corporation pursuant to stock options held by directors, officers and employees, and 295,454 Common Shares issuable pursuant to outstanding warrants; and

(iii)

the 290,000 common shares issuable to The Kosmos Company pursuant to a letter Agreement dated March 18, 2008 (the “ Kosmos Agreement ”);

(f)

the Shares, the Additional Shares, the Warrants, the Warrant Shares, the Broker Warrants and the Broker Shares to be issued by the Corporation and/or sold pursuant to this Agreement and the Subscription Agreements will be duly authorized for that issuance and sale by all necessary action on the part of the Corporation and, when issued and delivered by the Corporation against payment of the applicable consideration, the Shares, the Additional Shares, the Warrants, the Warrant Shares, the Broker Warrants and the Broker Shares pursuant to this Agreement and the Subscription Agreements, will have been validly issued, will be outstanding as fully paid and non-assessable and will not have been issued in violation of or subject to any pre-emptive rights or other contractual rights to purchase securities issued by the Corporation or in violation of any applicable law;

(g)

each of the Corporation and each Subsidiary:

(i)

has complied with, and has conducted and is conducting its business in compliance in all material respects with all applicable laws, statutes, ordinances, regulations and rules in each jurisdiction in which it conducts business;

(ii)

is duly licensed, registered or qualified in all jurisdictions to enable its business to be carried on in all material respects as now conducted and its property and assets owned, leased and operated,

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and all such licences, registrations and qualifications are valid and subsisting and no such licence, registration or qualification contains any term, provision, condition or limitation which has or is likely to have any material adverse effect on its business as now conducted; and

(iii)

is not in default in filing any government returns, or payment of any licence or registration or qualification fee owing to any Governmental Authority under the laws of each jurisdiction in which it conducts business which has or is likely to have any material adverse effect on its business as now conducted;

(h)

the only Material Subsidiaries are U.S. Geothermal Inc., an Idaho corporation, Raft River Energy 1 LLC and USG Nevada LLC and the Corporation has not entered into any agreement of any nature to acquire any additional Material Subsidiary;

(i)

except as disclosed in the Disclosure Documents, the Corporation is the beneficial and registered owner of all of the issued and outstanding shares of each of its Subsidiaries, in each case free and clear of all mortgages, liens, charges, pledges, hypothecs, security interests, encumbrances, claims or other demands whatsoever, and all those shares have been validly issued, are issued and outstanding as fully paid and non-assessable shares and were not issued in violation of any pre-emptive rights or other contractual rights to issue securities issued by the Subsidiary or of any applicable law;

(j)

(k)

the consolidated financial statements of the Corporation for the years ended March 31, 2007 and 2006, including the notes thereto, and for the 9-month period ending December 31, 2007, including notes thereto, have been prepared in accordance with United States generally accepted accounting principles consistently applied throughout the periods indicated and present fairly in all material respects the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Corporation on a consolidated basis as at the respective dates indicated and the sales, earnings and results of operations of the Corporation on a consolidated basis throughout the periods indicated;

(l)

the execution, delivery and performance of this Agreement and the Subscription Agreements by the Corporation and the completion of the

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transactions provided for in this Agreement will not (whether after the passage of time or notice or both) result in, any material respect:

(i)

the breach or violation of any of the provisions of, or constitute a default under, or a conflict with or cause the acceleration of, any obligation of the Corporation under:

(A)

any indenture, agreement or other instrument to which the Corporation or any Subsidiary is a party or by which it or its properties are bound or affected;

(B)

any provision of the articles, by-laws or resolutions of the board of directors (or any committee thereof) or shareholders of, the Corporation or any Subsidiary;

(C)

any judgment, decree, order or award of any Governmental Authority having jurisdiction over the Corporation;

(D)

any licence, permit, approval, consent or authorization issued to, held by or for the benefit of the Corporation or necessary to the operation of its business as now conducted; or

(E)

any applicable law or statute, or any ordinance, rule, regulation, policy, order or ruling made thereunder; or

(ii)

the creation or imposition of any mortgage, lien, charge, pledge, hypothec, security interest, encumbrance, claim or other demand whatsoever on any of the property or assets of the Corporation;

(m)

each of the contracts which is material to the Corporation is described in the Disclosure Documents and none of the Corporation, any of its Subsidiaries or, to the knowledge of the Corporation, any other party, is, in any material respect, in default or alleged to be in default in the performance of any term or obligation to be performed by it under any material contract to which the Corporation or any Subsidiary is a party or by which the Corporation or any Subsidiary is bound or affected, and no event, condition or occurrence exists that, after notice or lapse of time or both, would constitute such a default which in any way materially adversely affects or may materially adversely affect the business, operations, assets, liabilities, capital, prospects, condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries on a consolidated basis;

(n)

no legal or governmental proceedings are pending to which the Corporation and/or any Subsidiary is a party or to which the property of the Corporation and/or any Subsidiary is subject that would result individually or in the aggregate in a material adverse change in the

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operation, business or condition of the Corporation and its Subsidiaries on a consolidated basis, and no such proceedings have been threatened against or, to the knowledge of the Corporation, are contemplated with respect to the Corporation and/or any Subsidiary or with respect to any of their respective properties which would be material to the Corporation and its subsidiaries on a consolidated basis;

(o)

except as provided herein, there is no person, firm or corporation which has been engaged by the Corporation to act for the Corporation and which is entitled to any brokerage or finder’s fee in connection with this Agreement or the transactions contemplated hereunder;

(p)

the Corporation and each Subsidiary has paid or made adequate provision for the payment of all taxes (or payments in lieu of taxes) levied on its property or income which are due and payable, including interest and penalties, or has accrued such amounts in its financial statements for the payment of such taxes except for charges, fees or dues which are not material in amount or which are not delinquent or if delinquent are being contested, and there is no material action, suit, proceeding, investigation, audit or claim no pending, or to its knowledge, threatened by any governmental authority regarding any taxes;

(q)

the Corporation and each Subsidiary is in material compliance with all applicable material laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and for the purposes described in the Disclosure Documents; the Corporation has not received a notice of material non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially adversely affect the business of the Corporation or the business or legal environment under which the Corporation operates;

(r)

to its knowledge the Corporation, and except as previously disclosed, in writing, to the Underwriters, each Subsidiary and the Empire Project has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “ Hazardous Substances ”) on or from any of its properties or assets nor has it received any notice that it is potentially responsible for a material, on a consolidated basis, clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment (the “ Environmental Laws ”), occupational health and safety or otherwise relating to dealing with Hazardous Substances;

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(s)

the Corporation and each Subsidiary holds all material licences, registrations, qualifications, permits and consents necessary or appropriate for carrying on its business as currently carried on and for the purposes described in the Disclosure Documents, and all such licences, registrations, qualifications, permits and consents are valid and subsisting and in good standing in all material respects except where the failure to hold or the lack of good standing in respect to such licences, registrations, qualifications, permits and consents would not materially adversely affect the assets, business, results of operations, or condition of the Corporation and its Subsidiaries on a consolidated basis;

(t)

the Corporation has, or, in the case of the Empire Project, will acquire on the closing under the purchase and sale agreement relating to the Empire Project (the “ Empire Closing ”), all the leases, easements, rights of way, access rights, including but not limited to any mineral and geothermal rights in respect of lands related to the Raft River Project, Empire Project and the Neal Hot Springs Project, and rights and allocation to water, that are necessary to conduct its business as currently conducted and, except for the proposed replacement power plant at the Empire Project, proposed to be conducted as described in the Disclosure Documents, except where the failure to hold such leases easements, rights of way, access rights, and rights and allocation to water would not materially adversely affect the assets, business, results of operations or condition of the Corporation and its Subsidiaries on a consolidated basis.

(u)

all licenses, permits, authorizations and other approvals required under applicable law in connection with the leases, easements, rights of way and access rights are in full force and effect and are sufficient to permit the Corporation and each Subsidiary to conduct its business as currently conducted and, except for the proposed replacement power plant at the Empire Project, proposed to be conducted as described in the Disclosure Documents;

(v)

no event exists which, but for the passing of time or the giving of notice, or both, would constitute a default by any party to any of the leases, easements, rights of way or access rights and no party to any lease, easement, right of way or access right is claiming any such default or taking any action purportedly based upon any such default, except where the failure of such licenses, permits, authorizations and other approvals to be in full force and effect would not materially adversely affect the assets, business, results of operations or condition of the Corporation and its Subsidiaries on a consolidated basis;

(w)

the Corporation has not received any, nor to the Corporation’s knowledge are there any pending or threatened, notices of violation or alleged violation of any applicable laws affecting the Raft River Project, the Empire Project and the Neal Hot Springs Project or any of the assets

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previously acquired under the Empire Acquisition Agreement (the “ First Empire Assets ”);

(x)

the Corporation has, or, in the case of the Empire Project, will have, on the Empire Closing, such rights of entry and exit to and from the Raft River Project, Empire Project and the Neal Hot Springs Project as are reasonably necessary to carry on its business and operate (or, in the case of the Empire Project, as the Corporation proposes to operate) at the Raft River Project, the Empire Project and the Neal Hot Springs Project and in connection with the First Empire Assets;

(y)

there are no material restrictions imposed by any applicable law or by agreement which conflict with the proposed acquisition, development, construction, maintenance and operation of the Raft River Project, the Empire Project or the Neal Hot Springs Project and in connection with the first Empire Assets;

(z)

to the Corporation’s knowledge, the Raft River Project and the Empire Project are now zoned and otherwise regulated and serviced so as to permit the use of the sites for their intended uses and in accordance with applicable law;

(aa)

neither the Corporation nor any Subsidiary has received written notice of any claims for construction liens or other liens, charges, encumbrances, security interests or adverse claims with respect to work or services performed or materials supplied to, on or in connection with the Raft River Project, the Empire Project (including the First Empire Assets) and the Neal Hot Springs Project other than liens or encumbrances imposed in the ordinary course of business or liens that will be removed at the time of the Empire Closing;

(bb)

there are no outstanding judgments, writs of execution, seizures, injunctions or directives against the Corporation or any Subsidiary nor any work orders or directives or notices of deficiency capable of resulting in work orders or directives with respect to the Raft River Project, the Empire Project (including the First Empire Assets) and the Neal Hot Springs Project;

(cc)

to the Corporation's knowledge, the services to be performed, the materials to be supplied and the real property interests, leases, easements, rights of way, access rights and other rights relating to the Raft River Project and the Empire Project (including the First Empire Assets):

(i)

comprise all of the property interests necessary to secure any right material to the acquisition, leasing, development, construction, installation, completion, operation and maintenance of the Raft

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River Project and the Empire Project (including the First empire Assets), as applicable;

(ii)

are sufficient to enable the Raft River Project and the Empire Project (including the First Empire Assets), as applicable, to be located, constructed and operated on the Raft River Project and the Empire Project (including the First Empire Assets), as applicable; and

(iii)

the easements provide adequate ingress and egress from the Raft River Project, and the Em