Exhibit 10.1

EXECUTION VERSION

 

 

 

FINANCE AGREEMENT

between

ORPOWER 4 INC.

and

OVERSEAS PRIVATE INVESTMENT CORPORATION

Dated as of August 23, 2012

OPIC/615-2011-039-IG

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS AND INTERPRETATION

     1   

SECTION 1.01.

 

DEFINITIONS AND INTERPRETATION.

     1   

ARTICLE II AMOUNT AND TERMS OF THE LOANS

     1   

SECTION 2.01.

 

AMOUNT AND DISBURSEMENT.

     1   

SECTION 2.02.

 

INTEREST; DEFAULT INTEREST.

     2   

SECTION 2.03.

 

REPAYMENT OF THE LOANS.

     3   

SECTION 2.04.

 

VOLUNTARY PREPAYMENT.

     3   

SECTION 2.05.

 

MANDATORY PREPAYMENT.

     4   

SECTION 2.06.

 

LOAN FEES AND CANCELLATION.

     5   

SECTION 2.07.

 

TAX GROSS-UP; STAMP DUTIES; PROPER LEGAL FORM.

     6   

SECTION 2.08.

 

MISCELLANEOUS.

     6   

ARTICLE III REPRESENTATIONS AND WARRANTIES

     7   

SECTION 3.01.

 

REPRESENTATIONS AND WARRANTIES.

     7   

ARTICLE IV CONDITIONS PRECEDENT TO THE FIRST DISBURSEMENT OF LOANS

     12   

SECTION 4.01.

 

AUTHORIZATION.

     12   

SECTION 4.02.

 

TRANSACTION DOCUMENTS.

     12   

SECTION 4.03.

 

OWNERSHIP.

     13   

SECTION 4.04.

 

CONSENTS.

     13   

SECTION 4.05.

 

SITE.

     13   

SECTION 4.06.

 

SECURITY INTEREST.

     14   

SECTION 4.07.

 

INSURANCE.

     14   

SECTION 4.08.

 

AUDITORS.

     14   

SECTION 4.09.

 

LEGAL OPINIONS.

     14   

SECTION 4.10.

 

APPOINTMENT OF AGENT.

     14   

SECTION 4.11.

 

ACCOUNTS.

     15   

SECTION 4.12.

 

D-U-N-S NUMBER; TIN.

     15   

SECTION 4.13.

 

FINANCIAL PROJECTIONS.

     15   

SECTION 4.14.

 

CONSTRUCTION BUDGET; CONSTRUCTION SCHEDULE.

     15   

SECTION 4.15.

 

ENVIRONMENTAL AND SOCIAL REQUIREMENTS.

     15   

SECTION 4.16.

 

DUE DILIGENCE.

     15   

SECTION 4.17.

 

REPORTS.

     15   

SECTION 4.18.

 

OPERATIONAL MATTERS.

     16   

SECTION 4.19.

 

GEOTHERMAL RESOURCE.

     16   

SECTION 4.20.

 

RATIO OF CASH FLOW TO DEBT SERVICE.

     16   

SECTION 4.21.

 

FUNDING ARRANGEMENTS.

     16   

SECTION 4.22.

 

ANTI-CORRUPTION HANDBOOK.

     17   

SECTION 4.23.

 

PPA NOTICE REQUIREMENTS.

     17   

ARTICLE V CONDITIONS PRECEDENT TO EACH DISBURSEMENT

     17   

SECTION 5.01.

 

DISBURSEMENT REQUEST.

     17   

SECTION 5.02.

 

REPRESENTATIONS AND DEFAULTS.

     17   

SECTION 5.03.

 

NO EVENT OF DEFAULT; CHANGE IN CIRCUMSTANCES.

     17   

SECTION 5.04.

 

NOTE.

     17   

SECTION 5.05.

 

CLOSING CERTIFICATE.

     18   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 5.06.

 

FINANCIAL INFORMATION AND PROJECT PROGRESS.

     18   

SECTION 5.07.

 

PAYMENT OR REIMBURSEMENT OF EXPENSES.

     18   

SECTION 5.08.

 

CENTRAL BANK REGISTRATION; CONSENTS.

     18   

SECTION 5.09.

 

EQUITY CONTRIBUTIONS.

     18   

SECTION 5.10.

 

DEBT SERVICE RESERVE REQUIREMENT.

     18   

SECTION 5.11.

 

DEBT TO EQUITY RATIO.

     18   

SECTION 5.12.

 

PROJECT COSTS.

     19   

SECTION 5.13.

 

FUNDING ARRANGEMENTS.

     19   

SECTION 5.14.

 

INSURANCE.

     19   

SECTION 5.15.

 

INDEPENDENT ENGINEER CERTIFICATE.

     19   

SECTION 5.16.

 

LIEN WAIVERS.

     19   

SECTION 5.17.

 

OTHER DOCUMENTS.

     19   

ARTICLE VI AFFIRMATIVE COVENANTS

     20   

SECTION 6.01.

 

USE OF PROCEEDS; PROJECT COMPLETION.

     20   

SECTION 6.02.

 

COMPANY CONSTRUCTION, DRILLING AND OPERATIONS.

     20   

SECTION 6.03.

 

MAINTENANCE OF RIGHTS AND COMPLIANCE WITH LAWS.

     21   

SECTION 6.04.

 

MAINTENANCE OF INSURANCE.

     22   

SECTION 6.05.

 

ACCOUNTING AND FINANCIAL MANAGEMENT.

     22   

SECTION 6.06.

 

FINANCIAL STATEMENTS AND OTHER INFORMATION.

     22   

SECTION 6.07.

 

ANNUAL OPERATING BUDGET.

     23   

SECTION 6.08.

 

ACCESS TO RECORDS; INSPECTION; MEETINGS.

     24   

SECTION 6.09.

 

NOTICE OF DEFAULT AND OTHER MATTERS.

     24   

SECTION 6.10.

 

SECURITY DOCUMENTS.

     24   

SECTION 6.11.

 

FINANCIAL RATIOS; DEBT SERVICE RESERVE.

     24   

SECTION 6.12.

 

ENVIRONMENTAL, HEALTH AND SAFETY COMPLIANCE.

     25   

SECTION 6.13.

 

WORKER RIGHTS.

     26   

SECTION 6.14.

 

ANTI-CORRUPTION HANDBOOK.

     28   

SECTION 6.15.

 

ADDITIONAL PROJECT DOCUMENTS.

     28   

SECTION 6.16.

 

DRILLING PROGRAM.

     28   

SECTION 6.17.

 

POST-PROJECT COMPLETION DATE YIELD TESTING.

     28   

ARTICLE VII NEGATIVE COVENANTS

     28   

SECTION 7.01.

 

LIENS.

     28   

SECTION 7.02.

 

INDEBTEDNESS.

     28   

SECTION 7.03.

 

NO ALTERATION OR ASSIGNMENT OF AGREEMENTS; PPA.

     29   

SECTION 7.04.

 

RESTRICTED PAYMENTS AND SHAREHOLDER PAYMENTS.

     30   

SECTION 7.05.

 

CONDUCT OF BUSINESS WITH AFFILIATES.

     30   

SECTION 7.06.

 

NO SALE OF ASSETS; MERGERS.

     30   

SECTION 7.07.

 

LEASE OBLIGATIONS.

     31   

SECTION 7.08.

 

ORDINARY CONDUCT OF BUSINESS.

     31   

SECTION 7.09.

 

OFAC COMPLIANCE.

     31   

SECTION 7.10.

 

PROHIBITED PAYMENTS.

     31   

SECTION 7.11.

 

ACCOUNTS.

     32   

SECTION 7.12.

 

EXPENDITURES.

     32   

SECTION 7.13.

 

AMENDMENT OF ANNUAL OPERATING BUDGET.

     32   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE VIII DEFAULTS AND REMEDIES

     32   

SECTION 8.01.

 

EVENTS OF DEFAULT.

     32   

SECTION 8.02.

 

REMEDIES UPON EVENT OF DEFAULT.

     35   

SECTION 8.03.

 

JURISDICTION AND CONSENT TO SUIT; WAIVERS.

     35   

SECTION 8.04.

 

ARBITRATION.

     36   

SECTION 8.05.

 

BORROWER CONSENT TO SUIT; EXCLUSIVE FORUM SELECTION FOR CERTAIN ACTIONS.

     36   

SECTION 8.06.

 

JUDGMENT CURRENCY.

     37   

SECTION 8.07.

 

NO IMMUNITY.

     38   

ARTICLE IX MISCELLANEOUS

     38   

SECTION 9.01.

 

NOTICES.

     38   

SECTION 9.02.

 

ENGLISH LANGUAGE.

     39   

SECTION 9.03.

 

GOVERNING LAW.

     39   

SECTION 9.04.

 

SUCCESSION; ASSIGNMENT.

     39   

SECTION 9.05.

 

SURVIVAL OF AGREEMENTS.

     39   

SECTION 9.06.

 

INTEGRATION; AMENDMENTS.

     40   

SECTION 9.07.

 

SEVERABILITY.

     40   

SECTION 9.08.

 

NO WAIVER.

     40   

SECTION 9.09.

 

WAIVER OF JURY TRIAL.

     40   

SECTION 9.10.

 

INDEMNITY.

     40   

SECTION 9.11.

 

FURTHER ASSURANCES.

     41   

SECTION 9.12.

 

COUNTERPARTS.

     41   

SECTION 9.13.

 

WAIVER OF LITIGATION PAYMENTS.

     41   

SECTION 9.14.

 

COOPERATION; LOAN SERVICING.

     42   

SECTION 9.15.

 

REINSTATEMENT.

     42   

SCHEDULES

 

  X      Defined Terms and Rules of Interpretation   Y      Original Wells   Z
     DFI Security Documents and Releases   2.08      OPIC Payment Instructions  
3.01(c)      Shareholder Payments   3.01(d)      Capitalization   3.01(l)     
Financial Plan   3.01(x)      Payment of Contractors and Subcontractors   4.04
     Consents   4.19-A      Drilling Program   4.19-B      Reservoir Monitoring
Plan

 

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TABLE OF CONTENTS

(continued)

 

                Page   4.19-C      Form of Reservoir Monitoring Report     
6.02(d)      O&M Parameters      6.04      Minimum Insurance Requirements     
6.06(c)      Construction Period Report      6.06(d)      Operating Report     
6.07      Form of Annual Operating Budget      7.07      Lease Obligations     
8.04      Arbitration Provisions   

EXHIBITS

 

     A      Form of Disbursement Request      B-1      Form of Secretary’s
Certificate of the Borrower (pursuant to Section 4.01)      B-2      Form of
Certificate of the Shareholder (pursuant to Section 4.01)      C     
Independent Engineer’s Closing Certificate (pursuant to Sections 4.17 and 5.15)
     D      Form of Borrower’s Closing Certificate (pursuant to Section 5.05(a))
     E      Borrower’s Completion Certificate      F      Independent Engineer’s
Completion Certificate      G      Resource Consultant’s Completion Certificate

 

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FINANCE AGREEMENT

THIS FINANCE AGREEMENT, dated as of August 23, 2012 (this “Agreement”), is made
by and between ORPOWER 4 INC., a limited liability company incorporated and
existing under the laws of the Cayman Islands and registered in the Republic of
Kenya as a foreign company (the “Borrower”), and OVERSEAS PRIVATE INVESTMENT
CORPORATION, an agency of the United States of America (“OPIC”).

The Borrower intends to design, construct, finance, furnish, install, test,
commission, operate and own an integrated eighty-four (84) MW geothermal power
generation facility located in Hell’s Gate National Park in the Rift Valley
Province of Kenya (the “Project”), consisting of Plant 1, certain upgrades of
Plant 1 and related infrastructure and Plant 2.

In connection therewith, the Borrower has requested that OPIC provide a credit
facility pursuant to Section 234(c) of the Foreign Assistance Act of 1961, as
amended, which OPIC is willing to do on the terms and conditions set forth
herein. Accordingly, in consideration of the foregoing and of the agreements
contained herein, it is agreed as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.01. Definitions and Interpretation.

In this Agreement, including the Exhibits and Schedules hereto, (a) capitalized
terms used but not otherwise defined have the meanings set forth in the attached
Schedule X (Defined Terms and Rules of Interpretation), and (b) the rules of
interpretation set forth in Schedule X (Defined Terms and Rules of
Interpretation) apply.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

SECTION 2.01. Amount and Disbursement.

(a) Tranche I Commitment. Subject to the terms and conditions hereof, OPIC
agrees to make, and the Borrower agrees to accept, a Tranche I Loan for the
Project in a principal amount not to exceed eighty-five million Dollars
($85,000,000).

(b) Tranche II Commitment. Subject to the terms and conditions hereof, OPIC
agrees to make, and the Borrower agrees to accept, a Tranche II Loan for the
Project in a principal amount not to exceed one hundred eighty million Dollars
($180,000,000).

(c) Disbursement; Term. During the Commitment Period, the Borrower may request a
Disbursement by delivering to OPIC a Disbursement Request not less than twenty
(20) Business Days prior to the Closing Date. The Disbursement of the Tranche I
Loan and the first Disbursement of the Tranche II Loan shall be made no later
than the first anniversary of the date of this Agreement. Each Disbursement
shall be evidenced by a Note, dated the Closing Date, in the principal amount of
the Disbursement and maturing on the applicable Note Maturity Date. The Tranche
I Loan shall not exceed the amount of the Tranche I Commitment and the Tranche
II Loan shall not exceed the amount of the Tranche II Commitment. Loan amounts
repaid or prepaid may not be reborrowed.

 

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(d) Number and Amount of Disbursements.

(i) There shall be a single Disbursement of the Tranche I Loan in an amount not
to exceed the Tranche I Commitment (the “Tranche I Disbursement”) which shall be
made simultaneously with the first Disbursement of the Tranche II Loan;

(ii) There shall be no more than one (1) Disbursement of the Tranche II Loan in
each fiscal quarter and no more than ten (10) total Disbursements of the Tranche
II Loan (each, a “Tranche II Disbursement”). Except as set forth below, each
Tranche II Disbursement shall be in an amount of not less than ten million
Dollars ($10,000,000), in multiples of one hundred thousand Dollars ($100,000)
in excess thereof, but in any event not greater than:

 

  (A) in the case of the first Tranche II Disbursement, one hundred thirty-five
million Dollars ($135,000,000); and

 

  (B) in the case of each other Tranche II Disbursement, thirty-five million
Dollars ($35,000,000); and

(iii) Notwithstanding the foregoing, the Borrower may request the last Tranche
II Disbursement in an amount not to exceed the total undisbursed and entire
remaining amount of the Tranche II Loan Commitment; provided, that, such
Disbursement shall be for an amount not less than five million Dollars
($5,000,000).

(e) Expansion Loan. Subject to terms and conditions to be agreed between the
Borrower and OPIC in subsequent documentation (“Expansion Loan Documents”), OPIC
will agree to make, and the Borrower will agree to accept, a loan (an “Expansion
Loan”) in a principal amount not to exceed forty-five million Dollars
($45,000,000) to finance the development, construction and start-up operating
costs of an up to 16 MW expansion of the Project.

SECTION 2.02. Interest; Default Interest.

(a) Payment of Interest; OPIC Note Interest Rate. On each Payment Date, (i) in
the case of the Tranche I Loan, beginning on the Initial Payment Date and ending
on the Tranche I Maturity Date and (ii) in the case of the Tranche II Loan,
beginning on the Initial Payment Date and ending on the Tranche II Maturity
Date, the Borrower shall pay to the order of OPIC interest in arrears on the
daily outstanding principal balance of each Note, less any amount of principal
on which interest is payable at the Default Rate pursuant to Section 2.02(b),
accrued at a rate per annum, subject to Section 2.02(c), equal to the sum of the
following (subject to Section 2.02(c), the “OPIC Note Interest Rate” with
respect to each Note):

 

  (i) the Certificate Interest Rate; and

 

  (ii) the OPIC Guaranty Fee.

(b) Default Rate. If the Borrower fails to pay when due any amount due to OPIC
under any Financing Document, such unpaid amount shall bear interest at the
Default Rate from the date such amount is due until the date on which such
amount is paid in full.

(c) Adjustment to OPIC Note Interest Rate. If OPIC shall have made payment of
any principal, interest or other guaranteed amount on account of a defaulted
payment pursuant to OPIC’s guaranty under the Funding Documents under any Note
(an “OPIC Guaranty Payment”), then, with respect to the amount of such OPIC
Guaranty Payment, the OPIC Note Interest Rate from the date of such

 

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OPIC Guaranty Payment to the date of payment in full to OPIC of the amount of
such OPIC Guaranty Payment may, at OPIC’s option, be converted to a fixed per
annum rate of interest equal to the sum of the following:

 

  (i) The U.S. Treasury Cost; and

 

  (ii) The OPIC Guaranty Fee,

and, the Borrower shall, on demand, pay to OPIC the amount of such OPIC Guaranty
Payment, together with interest thereon at the Default Rate, adjusted as
provided in this Section 2.02(c).

(d) Conversion of Weekly Rate Note. On the Conversion Date with respect to any
Weekly Rate Note, the Borrower shall issue to OPIC one or more (as OPIC may
specify) Fixed Rate Notes aggregating the principal amount of such Weekly Rate
Note and dated the Conversion Date and OPIC shall return such Weekly Rate Note
to the Borrower in exchange therefor. All Fixed Rate Notes in respect of the
Tranche II Loan shall be issued for a term ending on or before the Tranche II
Maturity Date.

SECTION 2.03. Repayment of the Loans.

The Borrower shall repay:

(a) the Tranche I Loan in seventy-three (73) approximately equal quarterly
installments (collectively, the “Tranche I Principal Installments”) on each
Payment Date beginning on the Initial Payment Date and ending no later than the
Tranche I Maturity Date; and

(b) the Tranche II Loan in up to sixty-nine (69) approximately equal quarterly
installments (collectively, the “Tranche II Principal Installments”) beginning
on the Tranche II Initial Payment Date and ending no later than the Tranche II
Maturity Date.

SECTION 2.04. Voluntary Prepayment.

Subject to the requirements of the Funding Documents, including payment of any
Redemption Premium payable thereunder, on any Business Day following the last
day of the Commitment Period, the Borrower may, upon not less than thirty
(30) calendar days nor more than forty-five (45) calendar days prior notice to
OPIC, prepay the Loans, in whole or in part, in a minimum partial prepayment
amount of five million Dollars ($5,000,000), together with the payment to OPIC
of (a) interest accrued to the date of prepayment on the portion of the
principal amount of each Note that is to be prepaid in the case of a prepayment
on a Payment Date or a prepayment in whole, (b) the Redemption Premium (if
applicable) and (c) a premium (the “Prepayment Premium”), calculated as a
percentage of the Loan amount prepaid, in accordance with the following
schedule:

 

Year Following Plant 2 COD    Prepayment Premium  

Year 1

     2 % 

Year 2

     2 % 

Year 3

     1 % 

Year 4 and thereafter

     None   

All voluntary prepayments shall be applied in accordance with Section 4.03(e) of
the OPIC Funding Agreement, or as OPIC may otherwise determine.

 

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SECTION 2.05. Mandatory Prepayment.

The Borrower shall prepay the Loans as follows and in the manner provided in the
Funding Documents:

(a) in the event that the aggregate amount of property and casualty insurance
proceeds or other compensation proceeds for loss or damage (excluding business
interruption insurance proceeds) to an asset (including by expropriation or
governmental action) received by the Borrower during any Fiscal Year (i) in
excess of one million Dollars ($1,000,000) is not applied to the repair or
replacement of assets insured thereby where such funds will be spent within one
hundred-eighty (180) days (or such other longer period as OPIC may agree in its
sole discretion) after receipt by the Borrower, in the amount of any amounts not
so applied and (ii) equal to or less than one million Dollars ($1,000,000) if
the Borrower has not certified to OPIC within thirty (30) days (or such other
longer period as OPIC may agree in its sole discretion) after receipt by the
Borrower that the Borrower’s failure to apply such amount to the repair or
replacement of assets insured thereby will not impair the Project, result in a
failure to meet Contracted Plant Capacity or a breach of any of the Borrower’s
obligations under the Project Documents, in the amount of any amounts not so
applied;

(b) in the event there are performance liquidated damages paid pursuant to the
Supply Agreement or the Coordination Contract, in the amount of any such
damages;

(c) in the event there is a purchase payment made by KPLC pursuant to Clause 10
of the PPA, in the amount equal to the lesser of (i) the Secured Obligations and
(ii) such purchase payment;

(d) in the event there is a downward revision of the Contracted Plant Capacity
(as contemplated in Clause 9.8A of the PPA, including following any repeated
Contracted Plant Capacity Test conducted due to a failed Contracted Plant
Capacity Test pursuant to the final sentence of Clause 9.10 of the PPA) such
that the Contracted Plant Capacity following such downward revision is less than
the Required Contracted Plant Capacity, by an amount sufficient to restore the
projected ratio of Cash Flow to Debt Service to the projected level set forth in
the then current Financial Model. Any prepayment under this clause (d) shall be
made by utilizing funds on deposit in the Equity Sub-Account or in the Equity
Distribution Account until the projected ratio of Cash Flow to Debt Service has
been so restored; provided, that no mandatory prepayment shall be required to be
made under this clause (d) if the projected ratio of Cash Flow to Debt Service
in any year during the remaining term of the Loan is 1.7:1 or higher;

(e) unless otherwise agreed by OPIC, in the event the Borrower receives any Sale
Proceeds (excluding proceeds from the Disposition of Certified Emissions
Reductions pursuant to the CER Documents) in excess of two hundred and fifty
thousand Dollars ($250,000) resulting from one or more Dispositions in any year
of all or any part of the Property of the Borrower, in the amount of such Sale
Proceeds; and

(f) in the event the Borrower receives any Termination Payment or Expropriation
Proceeds, in the amount equal to the lesser of (i) the Secured Obligations and
(ii) such Termination Payment or Expropriation Proceeds, as the case may be.

Prepayments under this Section 2.05 shall be subject to any Redemption Premium
or other amounts payable pursuant to the Funding Documents and shall be applied
in the same manner as if made pursuant to Section 2.04 (Voluntary Prepayment),
except that no Prepayment Premium shall be due. For purposes of Section 2.05(a),
the prepayment shall be applied against payments due to OPIC taking into

 

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account the Redemption Premium, if payable pursuant to the Funding Documents in
connection with such prepayment.

SECTION 2.06. Loan Fees and Cancellation.

(a) Commitment Fee. During the applicable Commitment Period, the Borrower shall
pay to OPIC, in arrears, on each Payment Date beginning on the first Payment
Date after the date of this Agreement and on the last day of such Commitment
Period, or, if earlier, the date this Agreement is terminated, a commitment fee
(the “Commitment Fee”) accruing on a daily basis for each day of such Commitment
Period at the rate of twenty-five hundredths of one percent (0.25%) per annum on
an amount calculated for each day during the Commitment Period equal to the sum
of the Tranche I Commitment and the Tranche II Commitment on such day.

(b) Cancellation Fee. The Borrower may cancel all or any part of the Commitments
at any time upon written notice and payment to OPIC of a cancellation fee (the
“Cancellation Fee”) equal to one percent (1.0%) of the amount of the Commitment
canceled, provided that, with respect to the Tranche II Commitment, the Borrower
demonstrates to OPIC’s satisfaction that there are sufficient funds available to
construct and operate the Project. Any part of the Commitments not disbursed at
the end of the applicable Commitment Period or that is terminated for any reason
shall be deemed to have been canceled, and such Cancellation Fee shall be
payable with respect thereto.

(c) Facility Fee. The Borrower shall pay OPIC a facility fee (the “Facility
Fee”) in an amount equal to seventy-five hundredths of one percent (0.75%) of
the Commitments on or prior to the initial Closing Date.

(d) Maintenance Fee. The Borrower shall pay to OPIC an annual maintenance fee
(the “Maintenance Fee”) in the amount of fifty thousand Dollars ($50,000) on the
first anniversary of the Payment Date immediately following the first Closing
Date and on each anniversary of such Payment Date for so long as any portion of
the Loan remains outstanding.

(e) Modification Fee. In the event that the Borrower requests an amendment to or
waiver of any provision of this Agreement or any other Financing Document
(including any restructuring under this Agreement or any other Financing
Document) that relates to the term or the amortization of the Loans, the
applicable OPIC Note Interest Rates, any fees due hereunder or thereunder, or
any covenants, OPIC will consider such an amendment or waiver on its merits upon
payment by the Borrower, at the time of such request, of a fee, determined by
OPIC acting reasonably, commensurate with the complexity and timing constraints
of such amendment or waiver (the “Modification Fee”); provided, however, that no
Modification Fee will be required or payable if the amendment or waiver is
necessary: (i) to correct an error or omission in any Financing Document,
(ii) to comply with changes in Applicable Law, (iii) to address any matters
related to the making of the Expansion Loan or the negotiation and preparation
of the Expansion Loan Documents, or (iv) in OPIC’s determination, to improve the
operations of the Project without materially altering the risks undertaken by
OPIC. OPIC is under no obligation to agree to any amendment or waiver of any
provision of this Agreement or any other Financing Document. The Borrower
acknowledges that OPIC may request a Modification Fee in connection with
restructurings of any kind or any prepayment requiring releases of collateral or
other similar actions by OPIC; provided, however, that OPIC shall not request a
Modification Fee and no Modification Fee shall be payable in connection with any
repayment of the Loan in its entirety (whether as a result of a refinancing or
otherwise). OPIC’s agreement in clause (iii) of the proviso above shall not
prejudice OPIC’s ability to charge any other customary fee in connection with
the making of the Expansion Loan or the negotiation and preparation of the
Expansion Loan Documents.

 

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SECTION 2.07. Tax Gross-Up; Stamp Duties; Proper Legal Form.

(a) All sums payable by the Borrower hereunder and under any other Financing
Document shall be paid in full, free of any deductions or withholdings of any
and all present and future Taxes. If the Borrower is required by Applicable Law
to deduct any Taxes from or to withhold any Taxes in respect of any amount
payable to OPIC hereunder or under any Financing Document, then the Borrower
shall pay such additional amount as may be necessary so that the actual amount
received by OPIC after such deductions or withholdings equals the full amount
stated to be payable under the Financing Documents.

(b) In addition to the obligations set forth in Section 6.03(c) (Maintenance of
Rights and Compliance with Laws), the Borrower shall pay before they become
overdue any and all present and future Taxes payable on or in connection with
the execution, delivery, registration, or notarization, or for the legality,
validity, or enforceability of this Agreement or any other Transaction Document
directly to the Governmental Authority responsible for collecting such Taxes,
except for any Taxes that the Borrower is contesting in good faith by
appropriate proceedings and for which adequate reserves have been set aside in
accordance with the Accounting Principles; provided, that the Borrower hereby
indemnifies OPIC and holds OPIC harmless from and against any and all
liabilities, fees, or additional expenses with respect to or resulting from any
delay in paying, or omission to pay, any such Taxes. Within thirty (30) days
after payment by the Borrower of any such Taxes, the Borrower shall furnish OPIC
with the original or a Certified copy of the receipt evidencing payment thereof,
together with any other information OPIC may reasonably request. OPIC shall have
the right, but not the obligation, to pay any Taxes not paid by the Borrower and
the Borrower shall, upon OPIC’s demand, promptly reimburse OPIC in full for all
such payments.

SECTION 2.08. Miscellaneous.

(a) Payment or Reimbursement of Expenses. OPIC may retain such consultants as
determined by OPIC to be necessary, including U.S. and local legal counsel, at
any time until the Loans are indefeasibly repaid in full. Upon request, the
Borrower shall promptly pay or reimburse OPIC for all of OPIC’s out-of-pocket
fees and expenses incurred in connection with the negotiation, preparation,
execution, delivery, notarization, recordation and implementation of the
Financing Documents and, if applicable, the Expansion Loan Documents and the
other documents, instruments and approvals required to be delivered thereunder,
including (i) the reasonable fees and expenses of outside U.S. and local legal
counsel and business consultants, and (ii) the costs of communications,
preparation of any documents, authentication, registration, and recordation of
any of the Financing Documents, preparation of bound volumes, dvds or cds of the
Financing Documents for OPIC’s use, and termination of the Liens created
pursuant to the Security Documents. The Borrower shall also reimburse OPIC, upon
demand, for all costs and expenses (including attorneys’ fees and expenses and
costs of travel) incurred by OPIC (A) in preserving in full force and effect, or
enforcing its rights under, any of the Financing Documents or (B) in addition to
the Modification Fee, in connection with the modification, amendment, or waiver
of any provision of any Financing Document.

(b) Currency and Place of Payment. All payments to OPIC shall be made in Dollars
by wire transfer in immediately available funds without counterclaim, offset, or
deduction:

(i) if to the Paying Agent, as provided for in the Funding Documents; or

(ii) to OPIC, formatted as described in Schedule 2.08.

Whenever any payment would otherwise fall due on a day that is not a Business
Day, the due date for payment shall be the immediately succeeding Business Day,
and interest and fees shall be computed

 

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through such immediately succeeding Business Day in accordance with
Section 2.08(c); provided, however, that the last payment shall include interest
to but excluding the actual date of receipt of such payment.

(c) Computation of Interest on Notes and of Certain Fees. Except as otherwise
provided herein, in the Funding Documents or in any Note:

(i) interest on any Note (including interest calculated at any OPIC Note
Interest Rate or the Default Rate) shall accrue on a daily basis and shall be
computed as provided therein;

(ii) the Commitment Fee and the Default Rate (as provided in Section 2.08(c)(i)
above) shall accrue on a daily basis and shall be computed on the basis of
360-day years composed of twelve (12) thirty (30)-day months.

(d) Application of Payments to OPIC. Except as otherwise provided herein, in the
Funding Documents or in any Note, payments received by OPIC under any of the
Financing Documents shall be applied to amounts due to OPIC in such manner as
OPIC in its sole discretion may determine.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.01. Representations and Warranties.

The Borrower represents and warrants to OPIC that:

(a) Existence and Power. The Borrower (i) is a limited liability company duly
incorporated, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (ii) is duly authorized to do business in
each jurisdiction in which it conducts business; and (iii) has the power to own
its properties, carry on its business and the Project, borrow money, create
Liens on its properties, and execute, deliver, and perform each of the Borrower
Documents.

(b) Authority. The Borrower’s execution, delivery, and performance of each of
the Borrower Documents: (i) have been duly authorized by all necessary corporate
action; (ii) will not violate any Corrupt Practices Laws, Environmental Laws and
Worker Rights Requirements or, in any material respect, any other Applicable
Law; and (iii) will not breach, or result in the imposition of any Lien upon any
of its assets (other than Permitted Liens) under, any of its Charter Documents
or any agreement or other requirement by which it or any of its properties may
be bound or affected. Each of the Borrower Documents has been duly executed and
delivered by the Borrower and is a legal, valid, and binding obligation of the
Borrower, enforceable in accordance with its terms. Except for Consents referred
to in Schedule 4.04 (Consents), all of which have been or shall be duly
obtained, taken, given or made on or prior to the time set forth therein, no
Consent of any Person is required in connection with the Borrower’s execution,
delivery, performance, validity, or enforceability of any of the Borrower
Documents.

(c) Financial Condition. The Borrower’s audited Financial Statements for the
year ended December 31, 2011, which have been furnished to OPIC and any other
Financial Statements that have been furnished to OPIC pursuant to Section 6.06
(Financial Statements and Other Information), are complete and correct and
fairly present its financial condition and results of its operations for the
period then ended, subject, in the case of quarterly unaudited financial
statements, to the absence of footnotes and customary year-end adjustments. The
Borrower has no material financial obligation, contingent or otherwise, of any
kind except as disclosed in such Financial Statements. No change has occurred in
the

 

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Borrower’s financial condition or prospects from that set forth in such
Financial Statements that could be a Material Adverse Effect, and, since the
date thereof, no dividend, Restricted Payment or Shareholder Payment has been
declared or paid to the Shareholder or any other Person, except as permitted in
Section 7.04 (Restricted Payments and Shareholder Payments) or, prior to the
Cut-Off Date (except as set forth in Schedule 3.01(c)), as permitted under the
Subordinated DFI Credit Agreements.

(d) Capitalization. (i) The Borrower’s issued share capital is as set forth on
Schedule 3.01(d) (Capitalization). All such shares have been duly authorized and
validly issued and are fully paid and nonassessable. There are no rights or
claims of any character that restrict the transfer of, require the issuance of,
or otherwise relate to any class of the Borrower’s shares other than (x) prior
to the first Disbursement, as set forth in the DFI Share Pledge (as defined in
Schedule Z) and (y) from and after the first Disbursement, as set forth in the
Share Pledge. (ii) One hundred percent (100%) of the Borrower’s shares are
directly owned by the Intermediate Shareholder and indirectly owned by the
Shareholder in the manner set forth in Schedule 3.01(d) (Capitalization). The
Borrower does not own or otherwise control any voting stock of, or have any
ownership interest in, any other Person.

(e) Liens. The Security Documents are, or upon filing and registration will be,
effective to create in favor of OPIC legal, valid, and enforceable first
priority Liens (subject only to Permitted Liens) on all of the Borrower’s assets
intended to be covered thereby. The Borrower does not have outstanding, nor is
it contractually bound to create, any Lien on or with respect to any of its
assets, rights, or revenues, except as permitted by Section 7.01 (Liens).

(f) Taxes and Reports. The Borrower has filed all tax returns and reports
required by Applicable Law to be filed and has paid (or provided adequate
reserves for) all Taxes due.

(g) Defaults. No Default or Event of Default has occurred and is continuing.
Neither the Borrower nor, to the best of the Borrower’s knowledge, any other
party is in breach of any provision of any contract to which the Borrower is a
party, which breach could be a Material Adverse Effect.

(h) Litigation. No action, suit, other legal or arbitral proceeding, or
investigation is pending by or before any domestic or foreign court or
Governmental Authority or in any arbitral or other forum or, to the best of its
knowledge after due inquiry, is threatened in writing, that (i) relates to any
of the transactions contemplated by any Transaction Document, or (ii) if
adversely determined, could be a Material Adverse Effect.

(i) Compliance with Law; Corrupt Practices; Anti-Money Laundering;
Anti-Corruption Handbook.

(i) The Borrower has conducted and is conducting its business in compliance with
(A) Corrupt Practices Laws, Environmental Laws and Worker Rights Requirements
and (B) in all material respects, all other Applicable Laws, all Consents set
forth on Part A of Schedule 4.04 (Consents) and its Charter Documents. Part A of
Schedule 4.04 (Consents) sets forth each Consent necessary for the conduct of
the Borrower’s business as presently conducted and that is required for the
implementation of the Project and each such Consent has been obtained, or, in
the case of the ERC Consent, will be clarified as described in Schedule 4.04
(Consents) prior to the first Disbursement of the Loans, by the Borrower and is,
or, in the case of the ERC Consent, will be, in full force and effect. Part B of
Schedule 4.04 (Consents) sets forth each Consent that is required to be obtained
at a later date for the implementation of the Project and is ministerial in
nature or is of a type that can reasonably be expected to be obtained, as
required, in a timely fashion in the normal course of development and
construction of the Project.

 

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(ii) Without limiting the effect of clause (i) above, the Borrower and its
officers, directors, employees, and agents have complied with applicable Corrupt
Practices Laws in obtaining all Consents in respect of the Borrower’s business
and the Project and are otherwise conducting the Project and the Borrower’s
business in compliance with applicable Corrupt Practices Laws. The Borrower’s
internal management and accounting practices and controls are sufficient to
provide reasonable assurances of compliance with applicable Corrupt Practices
Laws and the prevention of Prohibited Payments. Neither the Borrower nor any
Person acting on behalf of the Borrower has made any Prohibited Payment.

(iii) The Borrower is in compliance with the applicable requirements of (A) the
Anti-Money Laundering Laws, (B) OFAC Regulations, and (C) all other applicable
export control, anti-boycott and economic sanctions laws of the U.S. and other
jurisdictions relating to its business and facilities.

(iv) None of the Borrower, its directors, members of senior management, or the
Persons listed on Schedule 3.01(d) (Capitalization), is a Person included in the
OFAC List.

(v) An Authorized Officer of the Borrower has received and reviewed the
Anti-Corruption Handbook.

(j) Good Title, Use of Site; Easements, Property Interests, Utilities, Etc. The
Borrower owns and has good, legal and marketable title to the Project Property
(which comprises part of the Site) comprised in and subject to the provisions
set forth in the Land Grant. The Borrower has (subject only to the provisions of
the Land Grant, the Site Agreement, and the License) a lawful, valid, exclusive
and irrevocable right of use of those parcels of land comprising the Site, in
each case free and clear of all Liens (other than Permitted Liens). There is no
parcel of land comprised in the Land Grant that will not be subject to a valid,
effective and first-priority Lien created by the Legal Charge. The Borrower has
(subject only to the provisions of the Land Grant, the Site Agreement, and the
License) a lawful, valid, exclusive and irrevocable right of use and a
possessory interest in all necessary easements and other rights of ingress to
and egress from the Site and lawfully possesses a valid and subsisting leasehold
estate in and to all of its leased property (if any) in each case free and clear
of all Liens (other than Permitted Liens). Other than the rights referred to in
the preceding sentences, no property rights (including easements or other rights
of ingress or egress) are required or can reasonably be expected to be necessary
for the design, development, construction, supply, start-up, commissioning,
testing, financing, implementation, operation or maintenance of the Project in
accordance with Applicable Law and the Transaction Documents. All utility and
other services, means of transportation, facilities, other materials, and other
rights that are or can reasonably be expected to be necessary for the Project in
accordance with Applicable Law and the Transaction Documents have been procured
or are commercially available to the Project. The Borrower validly owns and has
a valid right to use all Intellectual Property Rights necessary for the Project.
The Borrower is not aware of any non-compliance with respect to the Land Grant,
the Site Agreement or the License that would adversely affect the Borrower's
right to use the Site to implement the Project.

(k) Environmental, Health and Safety Matters. The Borrower has duly complied,
and its business, operations, and assets, and the Project, are materially in
compliance, with (i) the Environmental and Social Requirements and (ii) all
Applicable Laws regarding the environment, health and safety and social
performance. With respect to air emissions, discharges to surface water or
ground water, noise emissions, solid or liquid waste disposal, the use,
generation, storage, transportation, or disposal of toxic or hazardous
substances or wastes, or other environmental, health, or safety matters, the
Borrower (A) has been issued and will maintain all required Consents, (B) has
received no written complaint, order, directive, claim, citation, or, since
January 5, 2009, notice by any Governmental Authority and (C) has received no
written complaint or claim from any Person seeking damages, contribution,
indemnification,

 

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cost recovery, compensation, or injunctive relief that in the Borrower’s
reasonable judgment has had, or could reasonably be expected to have, a Material
Adverse Effect.

(l) Project Cost and Completion. The Borrower’s estimate of total Project Costs
(including contingencies) is the equivalent of three hundred eighty one million
seven hundred sixty five thousand Dollars ($381,765,000) based on the financial
plan set forth on Schedule 3.01(l) (Financial Plan) (the “Financial Plan”), and
the Borrower’s good faith estimate of the date on which it will achieve Project
Completion is not later than June 30, 2013.

(m) Disclosure. All documents, reports, and other written information that have
been furnished to OPIC are true and correct in all material respects and do not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained herein or therein when taken
as a whole not materially misleading in light of the circumstances in which the
same were made at the time such statements were made, provided, however, that
with respect to any information that is in the nature of projections or
estimates of future performance, including without limitation any information
relating to the performance of the geothermal reservoir, the Borrower represents
and warrants only that such projections and such other information were prepared
and provided in good faith based on assumptions that are reasonable, but makes
no representation or warranty as to the accuracy of such projections. There is
no fact known to the Borrower the existence of which could be a Material Adverse
Effect. No condition has arisen since the Borrower’s application for the Loans
dated as of June 2nd, 2011 (submission code jBRT922F), that has or could be a
Material Adverse Effect.

(n) Accounts. The Borrower does not own or maintain any accounts with a bank or
other financial institution other than the Accounts, the CER Account and, prior
to the first Disbursement of the Loans, the DFI Accounts.

(o) Suspension and Debarment. No event has occurred and no condition exists that
is likely to result in the debarment or suspension of the Borrower from
contracting with the U.S. Government or any agency or instrumentality thereof,
and the Borrower is not now and has not been subject to any such debarment or
suspension.

(p) ERISA and Employees. Neither the Borrower nor any ERISA Affiliate sponsors,
maintains, administers, contributes to, participates in, or has any obligation
to contribute to or any liability or potential liability under, any Guaranteed
Pension Plan or Multiemployer Plan and neither the Borrower nor any ERISA
Affiliate has ever sponsored, maintained, administered, contributed to,
participated in, or had any obligation to contribute to or any liability or
potential liability under, any Guaranteed Pension Plan or Multiemployer Plan.
The Borrower does not sponsor, maintain, administer, contribute to, participate
in, or have any obligation to contribute to or any liability or potential
liability under, any Employee Benefit Plan.

(q) Investment Company Act. The Borrower is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(r) Margin Regulation. No part of the proceeds of the Loans will be used for
purchasing or carrying any margin stock within the meaning of Regulation U, or
for any purpose that violates any regulation of the Board of Governors of the
Federal Reserve System.

(s) Regulation of Parties. None of the Borrower, its Affiliates nor OPIC is or
will be, solely as a result of the participation by such parties separately or
as a group in the transactions contemplated hereby or by any other Transaction
Document, or as a result of the ownership, use, or operation of the

 

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Project (including ownership, use, or operation of the Project upon an exercise
of remedies under the Security Documents), subject to regulation by any
governmental authority of the U.S. as a “public utility”, an “electric utility”,
an “electric utility holding company”, a “public utility holding company”, a
“holding company”, or an “electrical corporation” or a subsidiary or affiliate
of any of the foregoing under any Applicable Law, as a “public utility” or the
equivalent under any Applicable Law of the Project Country.

(t) Other Liabilities. (i) The Borrower is not a party to, or committed to enter
into, any contract other than the Transaction Documents which individually or in
the aggregate could reasonably be expected to materially affect the judgment of
a prospective investor, (ii) other than the Subordinated DFI Loans and the
PROPARCO Loan, the Borrower has not engaged in any business other than such
business resulting from the implementation of the Transaction Documents to which
it is a party and participating in the transactions contemplated thereby, and
(iii) except as provided in the Transaction Documents, the Borrower is not a
party to any contracts or agreements with, or obliged with respect to any other
commitments to, whether or not in the ordinary course of business, any Affiliate
of the Borrower.

(u) Other Parties; Transaction Documents. (i) To the Borrower’s knowledge after
due inquiry, each of the Transaction Documents constitutes the legal, valid and
binding obligation of each party thereto (other than the Borrower and OPIC)
enforceable against such party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors’ rights and general principles of equity; and (ii) following the date
of this Agreement, none of the Transaction Documents to which the Borrower is a
party has been amended, modified or terminated, except in accordance with this
Agreement or as disclosed to OPIC and consented to in writing by OPIC.

(v) Project Documents. Except for services, materials or rights that can
reasonably be expected to be available on commercially reasonable terms at the
time required, the Project Documents required to be executed by the relevant
Closing Date in accordance with the terms hereof constitute all contracts,
agreements, leases, or other documents or instruments that are necessary for the
(i) construction, completion, operation and ownership of the Project as of such
date and (ii) the conduct of the business of the Borrower as contemplated by the
Transaction Documents and the Financial Model.

(w) Ranking. The Obligations constitute unconditional and unsubordinated
Indebtedness of the Borrower and rank at all times at least pari passu in
priority of payment with all other present and future unsubordinated
Indebtedness of the Borrower.

(x) Payment of Contractors and Subcontractors. All contractors and suppliers
performing Works before the Cut-Off Date (other than the Key Contractors) have
been paid in full for such Works, except for amounts (i) that are, in the
aggregate, less than one hundred thousand dollars ($100,000) and (ii) that the
failure to pay could not reasonably be expected to materially adversely affect
the Project or impair operation of the Project. Part A of Schedule 3.01(x) sets
forth a complete list of all contractors and suppliers (other than the Key
Contractors) that, since the Cut-Off Date and until July 31, 2012, have
performed Works. All such Works have been paid in full except as set forth in
Part B of Schedule 3.01(x). Part B of Schedule 3.01(x) sets forth a list of all
contractors and suppliers (other than the Key Contractors) that, since July 31,
2012, have performed or will perform Works and all amounts remaining to be paid
(or projected to be paid) to each such contractor and supplier that, since the
Cut-Off Date, is performing or will perform Works.

(y) Each of the foregoing representations and warranties (a) through (x) shall
be deemed to be made as of the date hereof and as of each Closing Date. To the
extent that any schedule referred to in this Section 3.01 shall need to be
updated in order to permit such representation to be true and correct when made
or deemed to be made, the Borrower shall provide OPIC with such updated schedule
in

 

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writing prior to the date such representation is deemed made and shall request
that this Agreement be amended in accordance with Section 9.06 (Integration;
Amendments). Unless this Agreement is amended to reflect the changes in any such
schedule, no change shall be deemed to have been made and no Modification Fee
shall be due and payable by the Borrower for any such update.

ARTICLE IV

CONDITIONS PRECEDENT TO THE FIRST DISBURSEMENT OF LOANS

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make the
Disbursement of the Tranche I Loan and the first Disbursement of the Tranche II
Loan is subject to the prior fulfillment, to OPIC’s satisfaction in its sole
discretion, of the following conditions precedent and to their continued
fulfillment on the first Closing Date:

SECTION 4.01. Authorization.

OPIC shall have received a certificate of an Authorized Officer of the Borrower
dated the Closing Date, substantially in the form of Exhibit B-1 and of the
Shareholder, dated as of the Closing Date, substantially in the form of Exhibit
B-2.

SECTION 4.02. Transaction Documents.

(a) OPIC shall have received the following documents, each of which shall be
satisfactory to OPIC in form and substance, shall have been duly executed by the
parties thereto, and shall be in full force and effect in accordance with its
terms without default:

(i) duly executed originals (or, at OPIC’s election, Certified copies) of
(i) each of the following documents (the “Loan Documents”):

 

  (A) this Agreement;

 

  (B) the Note issued in connection with the Disbursement; provided that any
Note executed after the date hereof in connection with a subsequent Disbursement
shall be included in the definition of “Loan Document”;

 

  (C) the Equity Contribution and Share Retention Agreement;

 

  (D) the Accounts Agreement;

 

  (E) the DFI Subordination Agreement;

 

  (F) the Closing Coordination Agreement; and

 

  (G) the Funding Documents; and

(ii) each of the following documents (the “Security Documents”):

 

  (A) the New York Security Agreement;

 

  (B) the Share Pledge;

 

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  (C) the Debenture;

 

  (D) the Legal Charge;

 

  (E) the Direct Agreements;

 

  (F) each Release; and

 

  (G) each document that is necessary for the creation and perfection, in favor
of OPIC, of a valid and enforceable, first-priority Lien on all of the
Borrower’s assets, of whatever kind and nature, whether tangible or intangible,
and wherever situated, both now owned and hereafter acquired, including all
accounts receivable, inventory, general intangibles, equipment, real and
personal property, accounts, rights under all project agreements, and in the
proceeds thereof and certain other collateral specified in the Security
Documents.

(b) OPIC shall have received copies of the Original Project Documents, each of
which shall be satisfactory to OPIC in form and substance, shall have been duly
executed by the parties thereto, and shall have been Certified.

SECTION 4.03. Ownership.

OPIC shall have received evidence satisfactory to it that the Shareholder holds
100% of the legal and beneficial title to the equity of the Intermediate
Shareholder, and the Intermediate Shareholder holds 100% of the legal and
beneficial title to the equity of the Borrower, as set forth in Schedule 3.01(d)
(Capitalization).

SECTION 4.04. Consents.

OPIC shall have received Certified copies of all Consents (a) listed in Part A
of Schedule 4.04 (Consents) and (b) that are necessary or advisable, in each
case, for (i) the Financing Documents, and the payment of all amounts due or to
become due with respect thereto, not to be subject to any Taxes and (ii) the
execution, delivery, and performance by the Borrower and by the Shareholder of
each Transaction Document to which they are a party, and all such Consents shall
be in full force and effect and not subject to appeal. All Consents required at
a later date are listed in Part B of Schedule 4.04 (Consents) and each such
Consent shall be capable of being obtained as and when indicated in such
schedule.

SECTION 4.05. Site.

OPIC shall have received evidence in form and substance satisfactory to it that
the Borrower, holds lawful, valid, exclusive and irrevocable leasehold rights
(only in the case of the Project Property) and rights to use the entire Site and
the geothermal resource (in all such cases subject only to the provisions of the
Land Grant, the Site Agreement, and the License), together with lawful, valid,
exclusive and irrevocable right of use and a possessory interest in all
necessary easements and other rights of ingress and egress for the development,
construction, operation and maintenance of the Project free and clear of any
Liens other than Permitted Liens (in all such cases subject only to the
provisions of the Land Grant, the Site Agreement, and the License), and that
such Site (together with such easements and rights of ingress and egress) is
sufficient for the Borrower to develop, construct, operate and maintain the
Project as contemplated by the Transaction Documents.

 

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SECTION 4.06. Security Interest.

Each Lien created by the Security Documents shall be of first priority (subject
only to Permitted Liens) and (a) to the extent it arises or attaches under the
Uniform Commercial Code enacted in any jurisdiction in the U.S., shall be
perfected, and (b) in all other cases, shall be enforceable against the Borrower
and third parties (including any holder of a subsequently established Lien).
Each of the Security Documents shall be in full force and effect and shall have
been duly filed and registered or recorded in every jurisdiction in which such
filing and registration or recording is necessary to make valid and effective
the Liens intended to be created thereby and the rights of OPIC thereunder, and
OPIC shall have received evidence satisfactory to it that such filing and
registration or recording has been made. In addition, the Borrower shall have
executed all such other agreements or documents, or taken any actions that, in
the opinion of counsel to OPIC, are necessary or advisable to secure the payment
of all amounts due or to become due hereunder and under the Notes with valid,
enforceable, first-priority Liens on all of the Borrower’s assets and the shares
of capital stock of the Borrower. Each DFI Lien shall have been released and
each DFI Security Document shall have been terminated.

SECTION 4.07. Insurance.

OPIC shall have received Certified copies of the Insurance Policies (and
reinsurance policies, as applicable) required by and issued in accordance with
Section 6.04 (Maintenance of Insurance), together with evidence that all
premiums then due and payable under such Insurance Policies have been paid and
such policies are in full force and effect without default.

SECTION 4.08. Auditors.

OPIC shall have received evidence that the Borrower has irrevocably instructed
its auditors to respond directly to written communications from OPIC at any time
regarding the Borrower’s accounts and operations, provided, that, OPIC shall
provide the Borrower with copies of its communications to the auditors,
including notices and requests for information, and will provide the Borrower
with reasonable prior written notice of any discussions or meetings and a
reasonable opportunity to participate in the same.

SECTION 4.09. Legal Opinions.

OPIC shall have received acceptable written opinions, dated the Closing Date,
satisfactory to OPIC in form and substance, of (a) Walker Kontos Advocates, its
legal counsel in the Project Country, (b) Kaplan & Stratton Advocates, the
Borrower’s legal counsel in the Project Country, (c) Maples and Calder, the
Borrower’s legal counsel in the Cayman Islands, (d) Clifford Chance US LLP, its
legal counsel in the U.S., with respect to OPIC funding matters,
(e) Chadbourne & Parke LLP, the Borrower’s legal counsel in the U.S.,
(f) Chadbourne & Park LLP, the Supplier’s legal counsel in the U.S.,
(g) Chadbourne & Park LLP, the Coordinator’s legal counsel in the U.S.,
(h) Hamilton Harrison & Mathews, KPLC’s legal counsel in Kenya, (i) Adrian
Burke & Associates, Marriott’s legal counsel in Kenya, and (j) Chadbourne &
Parke LLP, Geodrill’s legal counsel in the U.S.

SECTION 4.10. Appointment of Agent.

OPIC shall have received evidence that each agent for service of process
(a) referred to in Section 8.03(c) (Jurisdiction and Consent to Suit; Waivers)
with relation to the Borrower and (b) required to be appointed by any other
party pursuant to the Financing Documents has been duly appointed and holds such
appointment without reservation until six (6) months after the Tranche II
Maturity Date, together with evidence of the prepayment in full of the fees of
such agent.

 

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SECTION 4.11. Accounts.

Each of the Accounts shall have been established and, if applicable, funded in
accordance with the terms of the Accounts Agreement, all amounts on deposit in
each DFI Account shall have been transferred pursuant to the Closing
Coordination Agreement and the DFI Accounts shall have been closed pursuant to
the Closing Coordination Agreement.

SECTION 4.12. D-U-N-S Number; TIN.

The Borrower shall have (a) obtained a D-U-N-S® number issued by Dun &
Bradstreet, Inc. and provided such number to OPIC in writing and (b) the
Borrower shall have provided to OPIC (i) its U.S. Taxpayer Identification Number
or (ii) an explanation as to why it does not have or need a U.S. Taxpayer
Identification Number.

SECTION 4.13. Financial Projections.

OPIC shall have received a Financial Model, including projected financial
statements prepared on the basis of the Accounting Principles, which shall be
satisfactory to OPIC in form and substance.

SECTION 4.14. Construction Budget; Construction Schedule.

OPIC shall have received an updated Construction Budget and Construction
Schedule for completion of the Project, each of which shall be satisfactory to
OPIC.

SECTION 4.15 Environmental and Social Requirements.

The Borrower shall deliver a copy of the Environmental Monitoring Program, which
shall be prepared in accordance with the Environmental and Social Requirements
and will incorporate, inter alia, (a) an overarching policy statement of
environmental and social objectives and principles appropriate to the size and
nature of the Project and of the Borrower’s organization that will be used to
permit the Project to achieve sound and sustainable environmental and social
performance; and (b) a grievance mechanism appropriate to the size and nature of
the Project and of the Borrower’s organization for the Borrower to receive and
facilitate resolution of concerns and grievances about the environmental and
social performance of the Project and the Borrower’s organization.

SECTION 4.16 Due Diligence.

OPIC shall have completed to its satisfaction its due diligence investigation of
the Borrower, the Shareholder, the Project and all other matters relating
thereto, and the results of such investigations shall be satisfactory to OPIC.

SECTION 4.17 Reports.

OPIC shall have received copies of the following reports in each case in form
and substance satisfactory to OPIC: (a) the final report from OPIC’s Independent
Engineer confirming: (i) the satisfactory operational performance of Plant 1,
(ii) matters relating to the construction of Plant 2, (iii) the adequacy of the
geothermal resource to comply with the Borrower’s obligations under the PPA in
respect of Plant 1 and Plant 2 (without giving effect to any reduction pursuant
to Section 9.8A thereof), and (iv) any Disbursement is needed to pay Project
Costs incurred in excess of the Equity Contributions required to be made
pursuant to the Equity Contribution and Share Retention Agreement prior to the
date of the Disbursement of the Tranche I Loan and the first Disbursement of the
Tranche II Loan or that are due or will become due and payable within ninety
(90) days of the Disbursement Request for the Tranche I Loan

 

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and the first Disbursement of the Tranche II Loan; (b) the Independent
Engineer’s Closing Certificate, dated as of the date of the first Disbursement
substantially in the form of Exhibit C; (c) the final report from OPIC’s
Financial Model auditor; (d) the final report and opinion letter from OPIC’s tax
consultant and (e) the final report and certificate dated the date of the first
Disbursement from OPIC’s insurance advisor. Each such report shall, unless
otherwise provided, (x) be dated not more than five (5) days prior to the first
Closing Date or (y) be accompanied by a bring-down certificate (dated not more
than five (5) days prior to the first Closing Date) from the relevant party
certifying the statements made in its report remain true, correct and complete.

SECTION 4.18 Operational Matters.

(a) OPIC shall have received an Annual Operating Budget and Maintenance Plan for
operation and maintenance of Plant 1 for the remainder of the Fiscal Year that
includes the first Disbursement, each of which shall be satisfactory to OPIC.

(b) OPIC shall have received a complete set of as-built plans and specifications
for Plant 1 and a copy of the O&M Manual, together with copies of all operating
procedures agreed with (or specified by) KPLC pursuant to Section 8.5 of the PPA
(if any).

(c) OPIC shall have received a complete list of the then current spare parts
inventory with respect to Plant 1, including a reasonable cost estimate for such
inventory.

(d) OPIC shall have received a copy of the then current Plant 1 maintenance log.

SECTION 4.19 Geothermal Resource.

Each of the following shall have occurred with respect to the geothermal
resource: (i) the Borrower is diligently pursuing the Drilling Program, (ii) the
Borrower shall be in compliance with the Reservoir Monitoring Plan and
(iii) OPIC shall have received the Reservoir Monitoring Report most recently
required to be delivered pursuant to Section 6.02(e) hereof.

SECTION 4.20 Ratio of Cash Flow to Debt Service.

As of the date of such Disbursement, after giving effect to the Disbursements
made on such date, the minimum projected ratio of Cash Flow to Debt Service,
calculated as provided in Section 6.11(a) (Financial Ratios; Debt Service
Reserve), shall be not less than 1.4:1.0.

SECTION 4.21 Funding Arrangements.

Suitable arrangements shall have been made for funding the Loan (all agreements
and documents required in connection with such funding arrangements are
collectively referred to herein as the “Funding Documents”), which funding
arrangements and Funding Documents shall be satisfactory to OPIC in form and
substance, including without limitation satisfaction by the Borrower of all
conditions precedent to the obligations of any other party to the Funding
Documents and performance by the Borrower of all other obligations on its part
to be performed prior to the making of the first Disbursement pursuant to any
Transaction Document.

 

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SECTION 4.22 Anti-Corruption Handbook.

OPIC shall have received confirmation in the form of an acknowledgement
Certified by an Authorized Officer of the Borrower, that each of the Senior
Officers of the Borrower has received and reviewed a copy of the Anti-Corruption
Handbook.

SECTION 4.23 PPA Notice Requirements.

OPIC shall have received copies of each Project Document delivered to KPLC
pursuant to Section 21.1(d) of the PPA, both for Plant 1 and Plant 2 (together
with transmittal letters to KPLC evidencing delivery thereof).

ARTICLE V

CONDITIONS PRECEDENT TO EACH DISBURSEMENT

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make each
Disbursement of the Loans (including the Disbursement of the Tranche I Loan and
the first Disbursement of the Tranche II Loan) is subject to the prior
fulfillment, to OPIC’s satisfaction in its sole discretion, of the following
conditions precedent and to their continued fulfillment on each Closing Date:

SECTION 5.01. Disbursement Request.

The Borrower shall have delivered a Disbursement Request in accordance with
Section 2.01(c) (Disbursement; Term).

SECTION 5.02. Representations and Defaults.

Each of the representations and warranties of the Borrower set forth in this
Agreement and of the Borrower and the Shareholder in each of the other Financing
Documents to which either is a party shall be true and correct in all material
respects (except with respect to any provision including the word “material” or
words of similar import, with respect to which such representations and
warranties shall be true and correct) on such Closing Date as if made on such
Closing Date after giving effect to such Disbursement or if such representation
relates exclusively to an earlier date, as of such earlier date, and on such
Closing Date no Default or Event of Default shall have occurred and be
continuing or will result from the making of such Disbursement or from the
application of the proceeds thereof.

SECTION 5.03. No Event of Default; Change in Circumstances.

Both before and after giving effect to the Disbursement, no Default or Event of
Default shall have occurred or be continuing and nothing shall have occurred and
be continuing that, in the reasonable judgment of OPIC, could be a Material
Adverse Effect.

SECTION 5.04. Note.

The Borrower shall have furnished OPIC with one or more executed Notes issued in
connection with the Disbursement, dated the Closing Date.

 

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SECTION 5.05. Closing Certificate.

The Borrower shall have furnished OPIC with a certificate of an Authorized
Officer, dated the Closing Date, substantially in the form of Exhibit D, which
shall include Certified copies of all Project Documents entered into subsequent
to the immediately preceding Closing Date.

SECTION 5.06. Financial Information and Project Progress.

(a) Not less than ten (10) Business Days before such Closing Date, OPIC shall
have received all Financial Statements, reports, and other information that the
Borrower, pursuant to Section 6.06 (Financial Statements and Other Information),
would otherwise be required to furnish to OPIC on or before such Closing Date,
provided, that, the Borrower shall not be required to provide a statement from
the Borrower’s auditor required to be provided under Section 6.06(b)(ii)
(Financial Statements and Other Information) in connection with the first
Disbursement.

(b) Not more than ten (10) Business Days before such Closing Date, OPIC shall
have received a certificate from the Borrower, satisfactory to OPIC in form and
substance, confirming that, with respect to each report delivered pursuant to
clause (a), such report is true and correct in all material respects as of such
date or, if there has been a change in the matters set forth therein, updating
the relevant information.

SECTION 5.07. Payment or Reimbursement of Expenses.

All Fees and other amounts due, payable or reimbursable by the Borrower with
respect to the Loans on or prior to the Closing Date shall have been paid in
full.

SECTION 5.08. Central Bank Registration; Consents.

OPIC shall have received evidence satisfactory to it, as may be required by
Applicable Law with respect to each Disbursement other than the first
Disbursement, that the Borrower has taken all steps necessary to obtain any
Consents necessary with respect to each such Disbursement. OPIC shall have
received Certified copies of such Consents or copies of such certificates, legal
opinions, or other documents, satisfactory to OPIC in form and substance, as
OPIC shall have requested to evidence such Consents.

SECTION 5.09. Equity Contributions.

The Shareholder (either directly, through the Intermediate Shareholder or from
the Borrower’s Cash Flow available for distribution in accordance with this
Agreement) shall have made all equity investments in, or loans to, the Borrower
in cash as required by the Equity Contribution and Share Retention Agreement and
OPIC shall have received evidence satisfactory to it that such equity
investments have been made as provided therein.

SECTION 5.10. Debt Service Reserve Requirement.

OPIC shall have received evidence that funds or assets on deposit in the Debt
Service Reserve Account have a market value at least equal to the Debt Service
Reserve Requirement.

SECTION 5.11. Debt to Equity Ratio.

The Debt to Equity Ratio shall be no greater than 75:25 after giving effect to
such Disbursement.

 

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SECTION 5.12. Project Costs.

OPIC shall have (i) in consultation with the Independent Engineer, received,
reviewed and approved the milestones reached and invoices received in respect of
Project Costs incurred (a) after the Cut-Off Date, in connection with the first
Disbursement, and (b) since the previous Disbursement, in connection with any
subsequent Disbursement and (ii) received written confirmation from the
Borrower’s auditor confirming that the Project Costs incurred through the end of
the fiscal quarter most recently ended prior to such Disbursement are in
accordance with the accounting records of the Borrower.

SECTION 5.13. Funding Arrangements.

Suitable arrangements shall have been made for funding such Disbursement, in
accordance with the Funding Documents, which funding arrangements shall be
satisfactory to OPIC in form and substance, including without limitation
satisfaction by the Borrower of all conditions precedent to the obligations of
any other party to the Funding Documents and performance by the Borrower of all
other obligations on its part to be performed prior to the making of such
Disbursement pursuant to any Transaction Document.

SECTION 5.14. Insurance.

OPIC shall have received evidence that all Insurance Policies (and reinsurance
policies, as applicable) required by and issued in accordance with Section 6.04
(Maintenance of Insurance) are in full force and effect.

SECTION 5.15. Independent Engineer Certificate.

Except as provided pursuant to Section 4.17(a) (Reports) in connection with the
initial Closing Date, OPIC shall have received from the Independent Engineer not
later than ten (10) Business Days prior to any other Closing Date (or such
shorter period as OPIC shall have agreed) a certificate dated as of such Closing
Date substantially in the form of Exhibit C.

SECTION 5.16. Lien Waivers.

OPIC shall have received copies of all Lien waivers related to the Works
required to be obtained pursuant to Section 6.02(h) hereof.

SECTION 5.17. Other Documents.

OPIC shall have received any document required to have been delivered pursuant
to Section 6.03 (Maintenance of Rights and Compliance with Laws) or Section 6.15
(Additional Project Documents), Project Documents delivered to KPLC pursuant to
Section 21.1(d) of the PPA (together with transmittal letters to KPLC evidencing
delivery thereof) not previously delivered pursuant to Section 4.23 hereof (PPA
Notice Requirements) and any such other certificates, opinions, agreements, and
documents customary for transactions of the type contemplated by this Agreement,
and translations of any of the foregoing, each satisfactory to OPIC in form and
substance, as it may reasonably request.

 

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ARTICLE VI

AFFIRMATIVE COVENANTS

Unless OPIC otherwise agrees in writing, so long as the Commitments remain
outstanding or until all amounts due and to become due hereunder and under the
Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

SECTION 6.01. Use of Proceeds; Project Completion.

(a) The Borrower shall (i) implement the Project promptly in accordance with the
Construction Budget and the Construction Schedule and (ii) apply the proceeds of
the Tranche I Loan exclusively to (A) fund the Intermediate Shareholder Loan,
(B) prepay the PROPARCO Indebtedness and, subject to OPIC’s consent, a portion
of the Subordinated DFI Indebtedness, and (C) subject to Section 5.11 (Debt to
Equity Ratio), repay Pre-Closing Costs.

(b) The Borrower shall apply the proceeds of the Tranche II Loan exclusively to
(i) the development, construction and start-up of Plant 2, (ii) make certain
modifications to Plant 1, and (iii) subject to Section 5.11 (Debt to Equity
Ratio), repay Pre-Closing Costs.

(c) The Borrower shall use its best efforts to cause Project Completion to be
achieved on or prior to June 30, 2013. The Borrower shall not make any
investments or conduct any business unrelated to the Project. If the Borrower
becomes unable to achieve Project Completion, or becomes unable to meet its
other obligations prior to Project Completion, the Borrower shall promptly so
notify OPIC.

SECTION 6.02. Company Construction, Drilling and Operations.

(a) The Borrower shall duly and punctually perform its obligations under each of
the Borrower Documents.

(b) The Borrower shall in accordance with and subject to the terms of the PPA,
the other GoK Agreements, the Consents set forth in Part A of Schedule 4.04
(Consents), the Consents set forth in Part B of Schedule 4.04 (Consents) to the
extent then applicable to the Project, applicable legal requirements and Good
Industry Practice, (i) diligently, duly and properly perform and complete (or
cause to be performed and completed) the Works in accordance with the
Construction Budget and the Construction Schedule; (ii) procure, provide and pay
for all items and services necessary for the proper execution and completion of
the Works, including all design, engineering, procurement, installation and
construction services, all administration, management, training and
coordination, all commissioning, testing and verification services, and all
labor, plant, materials, permits, licenses, inspections, storage and
transportation, and all other items, facilities and services necessary to
perform the Works, (iii) complete the design, engineering, construction and
installation of the Project as required by the PPA, the Supply Agreement and
Coordination Contract, (iv) provide advance notice of completion testing so that
the Independent Engineer may attend such testing, (v) provide a test report for
review by the Independent Engineer that presents the results of the completion
testing including all calculations to correct the Plant 1 and Plant 2
performance to the ambient conditions that are the basis for the guarantees in
the Supply Agreement and the Coordination Contract, and (vi) promptly remedy
defects in the Works in accordance with Good Industry Practice.

(c) The Borrower shall comply with the Reservoir Monitoring Plan and maintain
the geothermal resource, the wells and the surface facilities at all times in
compliance with its obligations under the PPA and in accordance with Good
Industry Practice.

 

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(d) The Borrower shall conduct its business and operations in accordance with
the O&M Parameters and otherwise in accordance with (i) Good Industry Practice
and on an arm’s-length basis, with due diligence and efficiency and under the
supervision of qualified and experienced management, (ii) the conditions to the
Borrower’s warranties under the PPA, (iii) the terms and conditions of all
Insurance Policies, (iv) all requirements of Applicable Law, all Consents set
forth in Part A of Schedule 4.04 (Consents) and all Consents set forth in Part B
of Schedule 4.04 (Consents) to the extent then applicable to the Project, and
(v) the terms of the Project Documents and its Charter Documents, in each of the
foregoing cases, in all material respects. The Borrower shall repair, replace,
and protect each of its assets (ordinary wear and tear excepted) so that its
business and the Project can be conducted in accordance with Good Industry
Practice.

(e) Within thirty (30) days of the end of each of April and October, the
Borrower shall provide a Reservoir Monitoring Report to OPIC.

(f) The Borrower shall provide OPIC prior written notice of any additional
Contracted Plant Capacity Test (as such term is defined in the PPA).

(g) The Borrower shall provide OPIC with copies of all reports and material
notices delivered by the Borrower to KPLC pursuant to the PPA.

(h) With respect to all Project Costs incurred in connection with the Works
(i) after the Cut-Off Date but before the first Disbursement, the Borrower shall
obtain Lien waivers from each Key Contractor related to such Works and deliver
them prior to the first Disbursement as required by Section 5.16 and (ii) after
the first Disbursement, the Borrower shall obtain Lien waivers from each
relevant Key Contractor related to such Works within five (5) days of payment
for any substantial portion of such Work. Any other contractor or supplier
performing Works after the Cut-Off Date shall be listed in Part A of Schedule
3.01(x) and an estimate of all amounts owed or owing to such contractor or
supplier shall be listed in Part B of Schedule 3.01(x), in each case as required
pursuant to Section 3.01(x).

SECTION 6.03. Maintenance of Rights and Compliance with Laws.

The Borrower shall (a) obtain, maintain in full force and effect, and renew all
Consents, leases and other rights in land, and franchises necessary for the
conduct of its business and the performance of its obligations hereunder and
under the other Transaction Documents; (b) conduct its business in compliance
with all Environmental Laws, Corrupt Practices Laws, Worker Rights Requirements
and its Charter Documents and, in all material respects, all other Applicable
Laws and Consents; and (c) duly pay before they become overdue all Taxes levied
or imposed in any jurisdiction upon its property, earnings, or business that, if
not paid, could be a Material Adverse Effect, and all Indebtedness and other
liabilities in a timely manner in accordance with normal business practices and
with the terms governing the same, except amounts being contested in good faith
by appropriate proceedings diligently pursued for which adequate reserves shall
have been set aside in accordance with the Accounting Principles. To the extent
that any Consent was not obtained by the Borrower prior to the first
Disbursement, in accordance with Schedule 4.04 (Consents), the Borrower shall
promptly deliver to OPIC a Certified copy of any such Consent obtained after the
first Disbursement.

 

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SECTION 6.04. Maintenance of Insurance.

The Borrower shall:

(a) maintain or cause to be maintained in effect at all times insurance, with
respect to the Project, against such risks and hazards, in such amounts, and in
such form, as is usually carried by companies of a similar size that are engaged
in the same or a similar business and that own similar properties in the same or
similar geographic area as the Project, and in any event in compliance with the
minimum insurance requirements set out in Schedule 6.04 (Minimum Insurance
Requirements);

(b) apply all Insurance Proceeds in accordance with the terms of Schedule 6.04
(Minimum Insurance Requirements);

(c) enforce its rights under the Project Documents, to the extent that it has
such rights, so as to ensure that any Person (other than the Borrower) required
to provide insurance under a Project Document obtains and maintains Insurance
Policies as required thereby; and

(d) observe and comply with each other obligation and agreement set forth in
Schedule 6.04 (Minimum Insurance Requirements).

SECTION 6.05. Accounting and Financial Management.

(a) The Borrower shall (i) comply with Corrupt Practices Laws, (ii) maintain
adequate accounting, management information and cost control systems;
(iii) prepare its Financial Statements in accordance with the Accounting
Principles; (iv) engage Kesselman & Kesselman, Certified Public Accountant
(Isr.), a member of PricewaterhouseCoopers International Limited, or other
independent internationally recognized accountants satisfactory to OPIC as its
regular independent auditors; (v) notify OPIC of any change in such accountants
and the reason therefor; and (vi) instruct such accountants to communicate
directly with OPIC regarding the Borrower’s accounts and operations. Without
limiting the foregoing, the Borrower shall maintain the systems described in
clause (i) and related management and accounting policies and controls that are
sufficient to provide reasonable assurances of compliance with applicable
Corrupt Practices Laws and the prevention of Prohibited Payments.

(b) The Borrower shall comply with the applicable requirements of (i) the
Anti-Money Laundering Laws, (ii) OFAC Regulations, and (iii) all other
applicable export control, anti-boycott and economic sanctions laws of the U.S.
and other jurisdictions relating to its business and facilities.

SECTION 6.06. Financial Statements and Other Information.

At its cost, the Borrower shall furnish to OPIC each of the following:

(a) Within forty-five (45) days after the end of each of the first three fiscal
quarters of each Fiscal Year, its unaudited Financial Statements, all Certified
by a Financial Officer as being true and complete and fairly presenting in all
material respects the financial position, results of operations and cash flows
of the Borrower as of the dates indicated and for the periods specified, subject
to the absence of disclosures normally made in footnotes and to customary
year-end adjustments, together with such officer’s certificate (i) that his or
her review has not disclosed the existence of any Default or Event of Default,
or, if any such Default or Event of Default then exists, specifying the nature
and period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto and (ii) demonstrating in reasonable
detail the Borrower’s compliance with the financial ratios set forth in
Section 6.11 (Financial Ratios; Debt Service Reserve) and the basis for such
calculations;

 

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(b) (i) Within one hundred twenty (120) days after the end of each Fiscal Year,
its audited Financial Statements, together with an auditor’s report in
accordance with the Accounting Principles and (ii) a statement from the
Borrower’s auditors to the effect that based on their examination, as of the
date of the audited financial statements, the Borrower was in compliance with
the financial ratios under Section 6.11 (Financial Ratios; Debt Service Reserve)
of this Agreement;

(c) Until Project Completion, within twenty-one (21) days after the end of each
month, a Construction Period Report substantially in the form set out in
Schedule 6.06(c) (Construction Period Report);

(d) (i) until Project Completion, not less than ten (10) Business Days prior to
each Closing Date, an Operating Report for Plant 1 and, after Plant 2 COD, for
Plant 2, substantially in the form set out in Schedule 6.06(d) (Operating
Report), and (ii) after Project Completion, semi-annually, beginning on the
first to occur of June 30 or December 31, an Operating Report substantially in
the form set out in Schedule 6.06(d) (Operating Report);

(f) Within forty-five (45) days after the end of each fiscal quarter, a
Certified report setting forth in reasonable detail all transactions during the
preceding fiscal quarter between the Borrower, on the one hand, and the
Shareholder or any Affiliate of the Shareholder, on the other hand;

(g) Not later than June 30 of each year, beginning on June 30, 2013, the
Self-Monitoring Questionnaire; and

(h) Copies of all other annual or interim reports and management letters
submitted to the Borrower by its independent accountants, and such other
information and data with respect to the Borrower’s operations, condition
(financial or otherwise), assets, and prospects (including supporting
information as to compliance with this Agreement) as OPIC may reasonably request
from time to time.

SECTION 6.07. Annual Operating Budget.

(a) As soon as it is available, but in any event at least thirty (30) days prior
to the commencement of each Fiscal Year, the Borrower shall submit to OPIC for
approval by OPIC the Annual Operating Budget for such Fiscal Year prepared by
the Borrower. Each Annual Operating Budget shall be consistent with the
Financial Model and be accompanied by a certificate of an Authorized Officer of
the Borrower certifying that the budget is a reasonable estimate for the period
covered thereby and is in compliance with the requirements of this Section 6.07.

(b) A proposed Annual Operating Budget shall become effective on the later of
(i) the first day of the relevant Fiscal Year and (ii) the date OPIC advises the
Borrower that OPIC has approved such Annual Operating Budget. If OPIC does not
approve an Annual Operating Budget, OPIC shall advise the Borrower of the items
that are disapproved and the reason for such disapproval.

(c) If all or any part of an Annual Operating Budget is disapproved, the
Borrower shall comply with all approved aspects of such Annual Operating Budget.
With respect to those aspects of any Annual Operating Budget that are not
approved, the Borrower and OPIC shall continue to discuss such aspects in good
faith and the Annual Operating Budget for the preceding fiscal year related to
such disapproved items shall be applicable and shall for all purposes hereof be
deemed to be part of the approved Annual Operating Budget for the current Fiscal
Year until such time as such aspects of the Annual Operating Budget for the
current Fiscal Year have been approved in writing by OPIC.

 

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SECTION 6.08. Access to Records; Inspection; Meetings.

The Borrower shall, upon OPIC’s prior written request, give, or cause to be
given, to any representatives of OPIC access during normal business hours to the
Project (and, if maintained at a different location, the Borrower’s principal
place of business) and permit them to (a) examine, copy, and make extracts from,
any and all records and documents in the possession or subject to the control of
the Borrower relating to its operations and financial affairs, and (b) inspect
any of its facilities or properties. During the continuance of an Event of
Default, the Borrower shall give OPIC not less than five (5) Business Days’
notice of, and shall permit an OPIC representative to attend (either in person
or telephonically), each formal meeting of the Borrower’s shareholders and of
its directors. In conducting any visit or inspection under this Section 6.08,
OPIC and its representatives shall abide by and comply with all applicable
health, safety and environmental policies and insurance requirements relating to
the Project.

SECTION 6.09. Notice of Default and Other Matters.

The Borrower shall notify OPIC immediately of (a) the occurrence, to its
knowledge, of any Default, (b) the occurrence of any Event of Default, and
(c) any legal or arbitral proceedings against the Borrower that involve claims
that either individually or in the aggregate at any given time exceed the
equivalent of $500,000.

SECTION 6.10. Security Documents.

(a) The Borrower, at its own cost, shall take all actions necessary to maintain
each of the Security Documents in full force and effect and enforceable in
accordance with its terms, and to preserve OPIC’s security interests thereunder,
including (i) maintaining all filings and recordations, (ii) paying fees and
other charges, (iii) issuing supplemental documentation and continuation
statements, (iv) discharging all Liens or other claims adversely affecting the
rights of OPIC in the property subject to any Security Document (other than
Permitted Liens), (v) publishing or otherwise delivering notice to third
parties, (vi) delivery of title documents, and (vii) taking all actions
necessary to ensure that all after-acquired property of the Borrower is subject
to a valid and enforceable, perfected first priority Lien in favor of OPIC
within sixty (60) days after the acquisition of such property.

(b) Without limiting the generality of subsection (a) above, in the event that
any Governmental Authority issues or adopts any new Applicable Law relating to
the creation, preservation, registration, perfection, protection or enforcement
of security interests in assets of the same character as those covered by the
Security Documents, or issues any clarifications of any existing Applicable Law
relating to the same, the Borrower shall, at its own cost, execute and deliver
all such additional amendments, assignments, certificates, instruments,
notifications, or other documents and give further assurances and do all such
other acts and things as OPIC shall reasonably request or as may be provided for
in such new Applicable Law or any clarifications of any existing Applicable Law,
to create, preserve, register, perfect, protect or enforce the security interest
provided for in the Security Documents. All actions to be performed by the
Borrower shall be taken by the Borrower within sixty (60) days after the
issuance and applicability of such Applicable Law or clarification to OPIC’s
security interest as provided in the preceding sentence (whether by the receipt
of notice from OPIC or otherwise).

SECTION 6.11. Financial Ratios; Debt Service Reserve.

(a) The Borrower shall maintain immediately following the Grace Period and at
all times thereafter, (i) a historic ratio of Cash Flow for the most recently
completed four (4) consecutive full fiscal quarters, taken as a single
accounting period, to Debt Service for the most recently completed four (4)

 

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consecutive full fiscal quarters, taken as a single accounting period, of not
less than 1.1 to 1.0; and (ii) a projected ratio of Cash Flow for the next
succeeding four (4) consecutive full fiscal quarters, taken as a single
accounting period, to projected Debt Service for the next succeeding four
(4) consecutive full fiscal quarters of not less than 1.1 to 1.0, in each case
based on projections set forth in the then-current Financial Model; provided,
that (i) until the Project Completion Date, “Debt Service” as used in clause
(i) or (ii) above shall not include principal and interest in respect of Plant 2
and (ii) during the first year of commercial operations for Plant 2 after the
Grace Period, the foregoing historical ratio of Cash Flow to Debt Service shall
be adjusted to annualize historical Cash Flow for such periods.

(b) At all times, the Borrower shall (i) maintain funds or assets on deposit in
the Debt Service Reserve Account with a market value at least equal to (x) the
Debt Service Reserve Requirement or (y) if there has been a draw on the Debt
Service Reserve Account pursuant to Section 6.8.2 of the Accounts Agreement, the
amount then required to be on deposit in the Debt Service Reserve Account
pursuant to Section 6.8.1 of the Accounts Agreement and (ii) maintain funds or
assets on deposit in the Well Reserve Account with a market value at least equal
to the then-current Well Reserve Requirement.

SECTION 6.12. Environmental, Health and Safety Compliance.

(a) The Borrower shall comply with, and shall conduct its business and
operations, and maintain its assets, equipment, property, leaseholds, and other
facilities in compliance with, the provisions of (i) the Environmental and
Social Requirements, (ii) the EIA, (iii) the Management Services Agreement
(iv) the Environmental Monitoring Program; and (v) all Applicable Laws regarding
the environment, health and safety and social performance. The Borrower shall
maintain all required Consents relating to: (A) air emissions; (B) discharges to
surface water or ground water; (C) noise emissions; (D) solid or liquid waste
disposal; (E) the use, generation, storage, transportation, or disposal of toxic
or hazardous substances or wastes; and (F) other environmental, health, or
safety matters. The Environmental Monitoring Program should be updated to take
into account the expansion activities and phases, and copies of all updates
should be provided to OPIC. The Project should continue to focus on
environmental and social management to achieve continuous improvement in the
following areas:

 

  (1) soil erosion on exposed, steep slopes needs to be carefully monitored and
barren areas need to be rapidly re-vegetated;

 

  (2) the brine discharge system (piping and reinjection wells) need to be
regularly inspected and leaks immediately repaired;

 

  (3) dust from vehicular movement and areas cleared for construction needs to
be suppressed with water as necessary;

 

  (4) no exotic floral species should be introduced into the area. Opportunistic
species should be removed when detected;

 

  (5) disturbance to wild animals should be minimized. Structures that may
obstruct the free movement of wildlife (such as disused fences, pipe, metal and
timber structures) should be removed;

 

  (6) consultation and engagement with the local Maasai community should
continue;

 

  (7) consultations and collaboration with other stakeholders (KenGen, KWS and
the Lake Naivasha Riparian Association) should continue; and

 

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  (8) training on environmental, health and safety should continue.

(b) The Borrower shall submit to OPIC a copy of each Annual Environmental Audit
Report prepared in accordance with the Kenyan Environmental Management and
Coordination Act, 1999 (the “Environmental Audit Report”). Such report shall be
submitted to OPIC no later than 30 days following acceptance of the reports by
the Kenyan National Environmental Management Agency. In addition to the
Environmental Audit Report, the submission to OPIC shall address any actions
that the Borrower must undertake to address any deficiencies identified in the
Environmental Audit Report.

(c) Without limiting Section 6.02 (Company Construction, Drilling and
Operations), the Borrower shall promptly notify OPIC of any material changes to
the Project including details of any expansions, change in well drilling
locations, change in routing of steam piping or change in transmission line
route.

(d) The Borrower shall notify OPIC immediately, and in no event later than
thirty-six (36) hours after the Borrower becomes aware, through the exercise of
reasonable due diligence and care, of any accident directly or indirectly caused
by the Project, occurring at the Site or affecting any Worker engaged in their
official duties that results in the loss of life or that has, or that could
reasonably be foreseen to have a material adverse impact on the environment. The
Borrower shall submit to OPIC within thirty (30) days after the occurrence of
such event a summary report thereof.

(e) Any reports or other documentation required under this Section 6.12 shall be
delivered electronically to eia@opic.gov and copied to notices@opic.gov and in
hard copy to Director, Environmental Affairs, Overseas Private Investment
Corporation, 1100 New York Avenue, NW, Washington, DC 20527.

(f) The Borrower shall require each Project Contractor, with respect to itself
and any of its Project Subcontractors, to comply with the foregoing requirements
with respect to any continuous on-Site work performed by such Project Contractor
that is either (i) of substantial duration or (ii) material to the primary
operations of the Project.

SECTION 6.13. Worker Rights.

(a) The Borrower shall:

(i) not take any actions to prevent Workers from lawfully exercising their right
of association and their right to organize and bargain collectively;

(ii) observe Applicable Laws relating to a minimum age for employment of
children, acceptable conditions of work with respect to minimum wages, hours of
work, and occupational health and safety;

(iii) not use forced or compulsory labor, including, but not limited to any form
of slavery, bonded labor or serfdom;

(iv) explain, document, and make available in writing and orally to each Worker,
information regarding all of their working conditions and terms of employment,
including their entitlement to wages and any benefits and the Worker Rights
Requirements, prior to the later of (A) thirty (30) days after the date hereof
or (B) each Worker commencing work;

 

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(v) not employ persons, formally or informally, under the age of sixteen
(16) for general work, or eighteen (18) for work involving hazardous activity,
which is work that, by its nature or the circumstances in which it is carried
out, is likely to harm the health, safety, or morals of those persons;

(vi) not make employment decisions or discriminate with respect to aspects of
the employment relationship on the basis of personal characteristics unrelated
to inherent job requirements, including gender, race, religion, nationality,
political opinion, or social or ethnic origin;

(vii) operate in a manner consistent with the requirements of Performance
Standard 2 on Labor and Working Conditions;

(viii) with respect to Workers, not take any actions, or otherwise interfere
with, coerce or penalize, on the basis of the right of association or on the
basis of organization and collective bargaining activities or membership that
may result in any form of retaliation, including, but not limited to,
termination, suspension, demotion, blacklisting or transfer of any Worker by the
Borrower, or by an officer, agent or representative thereof;

(ix) not require hourly or quota-based wage Workers to work more than
forty-eight (48) standard hours of work per week and that Workers shall be
guaranteed a weekly twenty-four (24) hour rest period;

(x) pay all wages, including all legally-mandated bonus pay and premium pay for
overtime work, in full, in legal tender, and in a timely fashion, to Workers
except when Workers have agreed otherwise;

(xi) ensure that Workers have the right to remove themselves from hazardous
situations without jeopardizing their continued employment;

(xii) require each Project Contractor, with respect to itself and any of its
Project Subcontractors, to comply with the foregoing requirements; provided that
if any Applicable Law, or collective bargaining agreement, imposes a requirement
that is more protective of worker rights than any of the foregoing requirements,
the Borrower shall, and shall cause the Project Contractor(s) and Project
Subcontractor(s) to, observe such Applicable Law or collective bargaining
agreement (the requirements set forth in this Section 6.13(a), collectively, the
“Worker Rights Requirements”).

(b) In the event that information concerning non-compliance or potential
non-compliance with the Worker Rights Requirements (a “Worker Rights
Non-Compliance”) comes to the attention of a responsible officer of the
Borrower, the Borrower shall give prompt notice thereof to OPIC’s Director of
Labor and Human Rights by email to the following address labor@opic.gov. The
Borrower shall use all reasonable efforts, including remediation, to cure or to
cause the relevant Project Contractor or Project Subcontractor to cure, or
prevent the recurrence of, any Worker Rights Non-Compliance.

(c) Notwithstanding the foregoing, the Borrower shall not be responsible for any
Worker Rights Non-Compliance resulting from the actions of a government.

 

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SECTION 6.14. Anti-Corruption Handbook.

The Borrower shall provide a copy of the Anti-Corruption Handbook to (a) all
officers of the Borrower directly involved in the management of the Project and
(b) the Shareholder.

SECTION 6.15. Additional Project Documents.

The Borrower shall promptly deliver to OPIC a Certified copy of any Project
Document entered into after the first Closing Date, which Project Document shall
be in form and substance satisfactory to OPIC.

SECTION 6.16. Drilling Program.

The Borrower shall comply with the provisions of the Drilling Program and shall
use commercially reasonable efforts to complete the Drilling Program by
March 15, 2013.

SECTION 6.17. Post-Project Completion Date Yield Testing.

Within thirty (30) days following the third (3rd) anniversary of the Project
Completion Date, the Borrower shall conduct well testing (and the Resource
Consultant shall be entitled to attend such testing). As a result of such
testing and modeling, (a) the (i) actual yield (MW) and (ii) the historical and
predicted rates of decline of all Original Wells and Expansion Wells shall have
been determined by the Borrower and confirmed by the Resource Consultant, and
(b) Schedule 2 to the Accounts Agreement shall have been revised to the
satisfaction of OPIC, in consultation with the Resource Consultant, to set forth
an updated Well Reserve Transfer Amount (as defined in the Accounts Agreement)
that is sufficient to fund the Well Reserve Account in an amount equal to the
Well Reserve Target Amount (as defined in the Accounts Agreement) in a
reasonable time period, as determined by the Resource Consultant based on the
historical and predicted rates of decline.

ARTICLE VII

NEGATIVE COVENANTS

Unless OPIC otherwise agrees in writing, so long as the Commitments remain
outstanding or until all amounts due and to become due hereunder and under the
Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

SECTION 7.01. Liens.

The Borrower shall not, directly or indirectly, create, assume, or otherwise
permit to exist any Lien on any of its assets, whether now owned or hereafter
acquired, or in any proceeds or income therefrom, except for Permitted Liens.

SECTION 7.02. Indebtedness.

The Borrower shall not incur, assume, guarantee, or permit to exist, or
otherwise become liable for Indebtedness except:

(a) the Loans;

(b) the Subordinated DFI Loans;

 

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(c) any Expansion Loan(s);

(d) prior to the first Disbursement of the Loans, the PROPARCO Loan;

(e) Subordinated Affiliate Loans or other Indebtedness fully subordinated to the
Loans on terms satisfactory to OPIC;

(f) Indebtedness consisting of suppliers of goods or services incurred in
connection with the improvements of Plant 1 or the construction of Plant 2;
provided that such Indebtedness is contemplated in the Construction Budget and
approved by OPIC;

(g) royalty payments to the Government of the Republic of Kenya pursuant to
Schedule 5 of the PPA (solely to the extent reimbursable or payable by KPLC);

(h) other than as described in Sections 7.02(e) and (f) above, Indebtedness
consisting of trade credit from suppliers of goods or services incurred in the
ordinary course of business in an aggregate amount not to exceed $250,000 and on
terms requiring payment in full in not more than ninety (90) days; and

(i) Indebtedness consisting of unsecured short-term credit facilities not
exceeding $250,000, in the aggregate, from commercial banks requiring repayment
in not more than one hundred and eighty (180) days,

provided, that in no event shall any Indebtedness described above, when
incurred, cause the Borrower to fail to meet the financial ratios set forth in
Section 6.11 (Financial Ratios; Debt Service Reserve).

SECTION 7.03. No Alteration or Assignment of Agreements; PPA.

(a) The Borrower shall not terminate, amend, grant any waiver of, or assign any
of the respective duties or obligations under, any provision of any Borrower
Document or any Consent other than (i) ordinary course annual replacement of any
KPLC Letter of Credit pursuant to the KPLC Security Agreement (as defined under
the PPA) and (ii) amendments or waivers, either to correct manifest error or
which are of a formal, minor, or technical nature and do not change materially
any Person’s rights or obligations, provided, that the Borrower shall promptly
give OPIC notice of any such replacement, amendment or waiver;

(b) The Borrower shall not enter into any additional Project Documents without
OPIC’s prior written consent;

(c) The Borrower shall not make any change to the Construction Budget without
OPIC’s prior written consent;

(d) The Borrower shall not make any changes to the assumptions in the Financial
Model for the Project without OPIC’s prior written consent;

(e) The Borrower shall not deliver a Notice of Third Plant Exercise under and as
defined in the PPA without OPIC’s consent; and

(f) The Borrower shall not compromise or settle any claim against any Person,
the compromise or settlement of which in the manner contemplated by the Borrower
would materially reduce

 

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the amount of any payment due to the Borrower or could reasonably be expected to
adversely affect the Borrower’s ability to perform its obligations under the
Transaction Documents.

SECTION 7.04. Restricted Payments and Shareholder Payments.

The Borrower shall not make, or incur any obligation to make, any Restricted
Payment or any Shareholder Payment (other than (i) repayment of Pre-Closing
Costs solely to the extent permitted by Section 6.01(a)(ii)(B) or
Section 6.01(b)(iii) (Use of Proceeds; Project Completion) and (ii) any such
payments made under the Project Documents) until all amounts due or to become
due hereunder or under the Notes have been indefeasibly paid in full; provided,
however, that the Borrower may make such payment in accordance with the terms of
the Accounts Agreement and if, but only if, each of the following conditions is
satisfied both before and after giving effect to such Restricted Payment or
Shareholder Payment:

(a) prior to the Project Completion Date, (i) the Borrower has paid at least one
(1) Tranche I Principal Installment to OPIC from revenue generated by Plant 1 in
full and on time and (ii) the historic and projected ratio of Cash Flow to Debt
Service for the Borrower, calculated in accordance with Section 6.11(a)
(Financial Ratios; Debt Service Reserve), shall be no less than 1.2:1.0;

(b) on and after the Project Completion Date, (i) OPIC shall have confirmed that
Project Completion Date has occurred, (ii) the Borrower has paid at least one
Tranche I Principal Installment and one Tranche II Principal Installment to OPIC
in full and on time, and (iii) the historic and projected debt service coverage
ratio (calculated as set forth in Section 6.11(a) (Financial Ratios; Debt
Service Reserve)) for the Borrower shall be no less than 1.2:1.0 after giving
effect to such payment; and

(c) at any time, (i) no Default or Event of Default shall have occurred and be
continuing or will occur as a result of such Restricted Payment or Shareholder
Payment and (ii) if a prepayment is required to be made pursuant to Section 2.05
(Mandatory Prepayment), such prepayment shall have been paid in full.

SECTION 7.05. Conduct of Business with Affiliates.

The Borrower shall not conduct any business with or enter into any business
transaction involving the Shareholder, or any Affiliate of the Shareholder,
except on an arm’s-length basis and subject to the reporting requirement set
forth in Section 6.06(f) (Financial Statements and Other Information).

SECTION 7.06 No Sale of Assets; Mergers.

The Borrower shall not:

(a) sell, assign, convey, lease, or otherwise dispose of all or a material
portion of its assets, other than the sale of power and Certified Emissions
Reductions in accordance with the PPA and other than (i) the replacement of a
capital asset with a capital asset of equal or greater value and/or (ii) the
disposition of assets that are surplus, worn out or obsolete in the ordinary
course and which are not necessary for the operation of the Project;

(b) dissolve, liquidate, or otherwise cease to do business; or

(c) merge or consolidate with any Person.

 

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SECTION 7.07. Lease Obligations.

The Borrower shall not enter into any agreement or arrangement to acquire by
lease the use of any property or equipment of any kind, if the annual rental
payable under such lease, when aggregated with the annual rentals payable under
all other leases already entered into by the Borrower, would exceed $500,000 or
its equivalent in any Fiscal Year with the exception of any leases listed on
Schedule 7.07 or otherwise approved by OPIC.

SECTION 7.08. Ordinary Conduct of Business.

The Borrower shall not:

(a) engage in any business other than the Project;

(b) change the Project in any material respect;

(c) change its Charter Documents in a manner that would be inconsistent with the
provisions of any Transaction Document;

(d) change its name or take any action that might adversely affect the Liens
created by the Security Documents;

(e) other than the Original Project Documents and the other GoK Agreements,
enter into any partnership, profit-sharing or royalty agreement, or other
similar arrangement whereby the Borrower’s income or profits are, or might be,
shared with any other Person;

(f) (i) create any subsidiaries, (ii) acquire by purchase or otherwise any of
the shares of capital stock, other equity interests, or assets of another
Person, or (iii) make or permit to exist any loans or advances to, or assume,
guarantee, endorse, or otherwise become directly or contingently liable for, any
obligation or Indebtedness of any Person other than the endorsement of
negotiable instruments for collection in the ordinary course of business and the
prudent investment of idle surplus funds in readily marketable
Dollar-denominated debt securities;

(g) fail to maintain its corporate existence and its right to carry on its
operations; or

(h) adopt, establish, maintain, sponsor, administer, contribute to, participate
in, or incur any liability under or obligation to contribute to, any Employee
Benefit Plan, Guaranteed Pension Plan, or Multiemployer Plan or incur any
liability to provide post-retirement welfare benefits, except such liability to
provide post-retirement welfare benefits as may be required by Applicable Law or
other non-material post-retirement welfare benefits.

SECTION 7.09. OFAC Compliance.

The Borrower shall ensure that none of the Borrower, Borrower’s directors,
members of senior management, the Shareholder, or the Intermediate Shareholder
shall be a Person included in the OFAC List.

SECTION 7.10. Prohibited Payments.

Neither the Borrower nor any Person acting on behalf of the Borrower shall make
any Prohibited Payment.

 

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SECTION 7.11. Accounts.

The Borrower shall not establish or maintain any account with a bank or other
financial institution other than the Accounts, the CER Account and, prior to the
first Disbursement of the Loans, the DFI Accounts.

SECTION 7.12. Expenditures.

The Borrower shall not, without having first proposed an amendment to the
then-current Annual Operating Budget in accordance with Section 7.13 (Amendment
of Annual Operating Budget) (and OPIC having approved such amendment in
accordance with such Section), make expenditures that are not contemplated in
any line item or category contained in such Annual Operating Budget, other than
expenditures that do not exceed 110% of the aggregate amount contemplated in the
Annual Operating Budget. The Borrower shall promptly (and in any event within
five (5) Business Days) provide notice to OPIC of any expenditure in excess of
such threshold.

SECTION 7.13. Amendment of Annual Operating Budget.

If at any time during any Fiscal Year (a) operating and maintenance costs to be
paid during the balance of such Fiscal Year exceed or could reasonably be
expected to exceed the allowance provisions of Section 7.12 (Expenditures) or
(b) the Borrower believes such costs for the balance of such year will exceed
the allowance provisions of Section 7.12, then the Borrower shall deliver a
proposed amendment to the then current Annual Operating Budget to OPIC and such
proposed amendment shall become effective on the date on which it is approved by
OPIC. At the time the Borrower submits such proposed amendment, the Borrower
shall certify the purpose of such amendment and that such amendment is
reasonably necessary or advisable for the operation and maintenance of Project.
The Borrower shall comply with the approved Annual Operating Budget (subject to
the allowance provisions of Section 7.12 (Expenditures)) until the proposed
amendment is approved by OPIC.

ARTICLE VIII

DEFAULTS AND REMEDIES

SECTION 8.01. Events of Default.

Each of the following events or circumstances shall constitute an “Event of
Default”:

(a) Payment Default. The Borrower fails to pay when due any amount payable to
OPIC pursuant to this Agreement, any Note, or any other Financing Document.

(b) Cross-Default. (i) The Borrower fails to pay any amount due on any of its
Indebtedness (including principal, interest and any premium or fee thereon, but
excluding Indebtedness evidenced by this Agreement and the Notes) (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise)
having an aggregate principal amount (including undrawn revolving or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $250,000, and such failure continues
beyond the applicable cure period, if any, or (ii) a default occurs under any
agreement or instrument evidencing, or under which the Borrower has outstanding
at the time, any such Indebtedness and such default continues beyond the
applicable cure period, if any, and such Indebtedness shall be declared to be
due and payable, or required to be prepaid, prior to the stated maturity thereof
as a result of a default or other similar adverse event.

 

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(c) Representation Default. Any representation or warranty made or deemed made
by or on behalf of the Borrower, the Shareholder or any of their Affiliates in
any Financing Document proves to have been incorrect in any material respect
when made or deemed made.

(d) Covenant Default. The Borrower fails to comply with any covenant or
provision set forth in Sections 6.09 (Notice of Default and Other Matters), 6.10
(Security Documents), 6.11 (Financial Ratios; Debt Service Reserve), 6.12
(Environmental, Health and Safety Compliance), 6.13 (Worker Rights) (except as
provided in Section 8.01(e)) or Article VII (excluding Sections 7.12
(Expenditures) and 7.13 (Amendment of Annual Operating Budget)).

(e) Worker Rights Non-Compliance. With respect to any Worker Rights
Non-Compliance caused by a Project Contractor or Project Subcontractor, the
Borrower fails to cause the relevant Project Contractor or Project Subcontractor
to cure, or prevent the recurrence of, any Worker Rights Non-Compliance and such
failure continues for ninety (90) days after the first occurrence of such Worker
Rights Non-Compliance.

(f) Approvals Default. Any Consent necessary for the execution, delivery, or
performance of any Transaction Document or for the validity or enforceability of
any of the Borrower’s, the Shareholder’s or Orda 9’s obligations under any of
the Transaction Documents is not effected or given or is withdrawn or ceases to
remain in full force and effect and (unless the lack of such Consent could have
a Material Adverse Effect) such Consent remains not effected or given or is
withdrawn or ceases to remain in full force and effect for a period of thirty
(30) days.

(g) Obligation Default. The Borrower fails to comply with or perform any
agreement or covenant contained herein other than those referred to in Sections
8.01(a), (b), (c), (d), (e) or (f) above and such failure continues for thirty
(30) days after the occurrence thereof; provided, that, if (i) the Borrower has
diligently sought to remedy such breach or default but through its good faith
efforts has been unable to do so, and (ii) such breach or default is capable of
cure within sixty (60) days, then such thirty (30) day period shall be extended
to such date, not to exceed a total of sixty (60) days, as shall be necessary
for the Borrower to cure such breach or default.

(h) Transaction Document Default. Any Transaction Document at any time for any
reason (i) ceases to be in full force and effect, (ii) is declared to be void or
is repudiated, (iii) is suspended or revoked, or terminated (other than upon
expiration in accordance with its terms when fully performed), (iv) the validity
or enforceability thereof is at any time contested by the Borrower, the
Shareholder, or any other counter-party, or (v) ceases to give or provide the
respective rights, titles, remedies, powers, or privileges intended to be
created thereby.

(i) Security Default. (i) Any Security Document, once executed and delivered,
ceases at any time for any reason to provide the Liens, rights, titles,
interests, remedies, powers or privileges created thereby, (ii) any Lien created
in any portion of the collateral pledged pursuant to the Security Documents
shall cease to be effective or fail to have the priority originally created
under the Security Documents, (iii) the validity of the Security Documents or
the applicability thereof to the obligations of the Borrower hereunder or any
part thereof, shall be disaffirmed by or on behalf of the Borrower, or
(iv) OPIC’s security interest or other rights in any portion of the collateral
pledged pursuant to the Security Documents shall terminate in any manner other
than that contemplated by the Financing Documents.

(j) Other Agreements Default. The Borrower, the Shareholder, or any other party
fails to comply with or perform any of its material obligations or undertakings
set forth in any Transaction

 

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Document (other than this Agreement or the Notes) and such failure continues
beyond the applicable cure period, if any.

(k) Expropriation Default. Any Governmental Authority condemns, nationalizes,
seizes, or otherwise expropriates any substantial portion of the assets or the
capital stock of the Borrower or takes any action that would prevent the
Borrower from carrying on any material part of its business or operations.

(l) Voluntary Bankruptcy Default. The Borrower or, prior to Project Completion,
the Shareholder or Orda 9 (or any successor in interest thereto) (i) applies
for, or consents to the appointment of, a receiver, trustee, custodian,
intervenor, or liquidator of itself or of all or a substantial part of its
assets, (ii) files a voluntary petition in bankruptcy, admits in writing that it
is unable to pay its debts as they become due, or generally fails to pay its
debts as they become due, (iii) makes a general assignment for the benefit of
creditors, (iv) files a petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, or insolvency laws, (v) files an answer admitting the material
allegations of, or consents to, or defaults in answering, a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding where such
action or failure to act will result in a determination of bankruptcy or
insolvency against it, or (vi) takes any corporate action to authorize any of
the foregoing.

(m) Involuntary Bankruptcy Default. Without its application, approval, or
consent, a proceeding is instituted in any court of competent jurisdiction or by
or before any government or governmental agency of competent jurisdiction,
seeking in respect of the Borrower or, prior to Project Completion, the
Shareholder or Orda 9 (or any successor in interest thereto): adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a composition
or arrangement with creditors, a readjustment of Indebtedness, the appointment
of a trustee, receiver, liquidator, or the like of it or of all or any
substantial part of its property or assets, or other like relief in respect of
it under any bankruptcy, reorganization, or insolvency law; and, if such
proceeding is being contested by it in good faith, the same continues
undismissed for a period of thirty (30) days.

(n) Judgment Default. A final judgment or litigation settlement for the payment
of money in an aggregate amount in excess of $500,000 or its equivalent in
another currency is rendered against, or entered into by, the Borrower, and
(i) such judgment is not satisfied or discharged within thirty (30) days of
entry or (ii) there is a period of thirty (30) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect.

(o) Material Adverse Effect Default. Any event, development or circumstance
shall have occurred that has or could reasonably be expected to have a Material
Adverse Effect.

(p) Political Violence Default. Any acts of war (whether declared or
undeclared), revolution, insurrection, civil war, strife of a lesser degree,
terrorism, or sabotage occur that cause the destruction, disappearance or
physical damage of a substantial portion of the assets of the Borrower or
prevent the Borrower from carrying on any material part of its business or
operations.

(q) Change of Control Default. Any Change of Control of the Borrower occurs
without the prior approval of OPIC unless otherwise permitted under the
Transaction Documents.

(r) Rights to Project Site. Except pursuant to the Security Documents, the
Borrower ceases to have the right to possess the Project Property or the
Borrower ceases to have the right to use the Site or any material portion
thereof for the purpose of owning, constructing, maintaining and operating the

 

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Project in the manner contemplated by the Transaction Documents or shall be
prevented from using any of the same, and such loss of right has or could
reasonably be expected to have a Material Adverse Effect.

(s) Abandonment Default. The Borrower voluntarily Abandons the Project.

SECTION 8.02. Remedies upon Event of Default.

(a) Except as otherwise provided in Section 8.02(b), if any Event of Default has
occurred and is continuing, OPIC may at any time do any one or more of the
following (i) suspend or terminate the Commitments, (ii) declare, by written
demand for payment, any portion or all of the Loans to be due and payable,
whereupon such portion or all of the Loans, together with interest accrued
thereon and all other amounts due under the Financing Documents, shall
immediately mature and become due and payable, without any other presentment,
demand, diligence, protest, notice of acceleration, or other notice of any kind,
all of which the Borrower hereby expressly waives, or (iii) except as required
by Applicable Law, without notice of default or demand, proceed to protect and
enforce its rights and remedies by appropriate proceedings or actions, whether
for damages or the specific performance of any provision of any Financing
Document, or in aid of the exercise of any power granted in any Financing
Document, or by law, or may proceed to enforce the payment of any Note. In
addition, upon the occurrence of an Event of Default referred to in
Section 8.01(e) (Events of Default; Worker Rights Non-Compliance), OPIC may
require the Borrower to terminate, or cause the relevant Project Contractor to
terminate, such Project Contractor’s or Project Subcontractor’s Project
Document, as the case may be.

(b) Upon the occurrence of an Event of Default referred to in Sections 8.01(l)
(Events of Default; Voluntary Bankruptcy Default) or (m) (Events of Default;
Involuntary Bankruptcy Default), (i) the Commitments shall automatically
terminate, and (ii) the Loans, together with interest accrued thereon and all
other amounts due under the Financing Documents, shall immediately mature and
become due and payable, without any other presentment, demand, diligence,
protest, notice of acceleration, or other notice or action of any kind, all of
which the Borrower hereby expressly waives.

SECTION 8.03. Jurisdiction and Consent to Suit; Waivers.

The Borrower hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and any other Financing Document, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York sitting in The City of New
York and the courts of the United States of America for the Southern District of
New York;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees to irrevocably designate and appoint HIQ Corporate Services, Inc.,
located at 19 W. 34th Street, Suite 1018, New York NY 10001-3006, as agent for
service of process in New York as its authorized agent to receive, accept, and
acknowledge on its behalf service of process in any such proceeding, and shall
provide OPIC with evidence of the prepayment in full of the fees of such agent
until six (6) months after the Loan Maturity Date. The Borrower agrees that
service of process, writ, judgment, or other notice of legal process upon said
agent shall be deemed and held in every respect to be effective personal service
upon it. The Borrower shall maintain such appointment (or that of a successor

 

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satisfactory to OPIC) continuously in effect at all times while the Borrower is
obligated under this Agreement or any Note. Nothing herein shall affect OPIC’s
right to serve process in any other manner permitted by Applicable Law;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by Applicable Law or shall limit the right
to sue in any other jurisdiction; and

(e) agrees that judgment against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction with or without the
U.S. by suit on the judgment or otherwise as provided by law, a Certified or
exemplified copy of which judgment shall be conclusive evidence of the fact and
amount of the Borrower’s obligation.

SECTION 8.04. Arbitration.

(a) Any Dispute shall be finally settled by arbitration in accordance with the
Rules; provided, however, that this agreement to arbitrate Disputes shall not
include the arbitration of (i) any Excluded Claims; and (ii) any Disputes that
are subject to a pending action, suit or proceeding brought by OPIC in
accordance with Section 8.05 (Borrower Consent to Suit; Exclusive Forum
Selection for Certain Actions).

(b) Arbitration pursuant to this Section 8.04 is not a waiver of and shall not
impair the enforcement rights of OPIC with respect to any Lien or the right of
OPIC to exercise any other similar remedy under this Agreement or any other
Financing Document to which the Borrower is a party, pursuant to Section 8.05(a)
(Borrower Consent to Suit; Exclusive Forum Selection for Certain Actions) or
otherwise, and such enforcement by OPIC shall not be deemed to be inconsistent
with or a violation of the arbitration provisions of this Section 8.04.

(c) Any awards issued by the Arbitral Tribunal shall be final and binding on the
Arbitration Parties; any orders so issued shall be binding on the Arbitration
Parties. Judgment upon any award issued by the Arbitral Tribunal may be entered
by any court having jurisdiction thereof or having jurisdiction over the
relevant Arbitration Party or its assets. The Borrower hereby submits to the
jurisdiction of the United States District Court for the Southern District of
New York for the limited purpose of enforcing this agreement to arbitrate.

(d) The Arbitral Tribunal shall have no jurisdiction to grant any interim
measure that limits or prevents, or seeks to limit or prevent, OPIC from
exercising any enforcement right with respect to any Lien or enforcing any
similar remedy under this Agreement or any other Financing Document to which the
Borrower is a party, including without limitation any enforcement action
pursuant to Section 8.05 (Borrower Consent to Suit; Exclusive Forum Selection
for Certain Actions). The Borrower covenants and agrees not to seek any such
interim measure, either in any arbitration pursuant to this Section 8.04 or
otherwise.

(e) Notwithstanding Section 9.05 (Survival of Agreements), this Section 8.04 and
any arbitration pursuant thereto shall be governed by Title 9 (Arbitration) of
the United States Code.

SECTION 8.05. Borrower Consent to Suit; Exclusive Forum Selection for Certain
Actions.

(a) Notwithstanding Section 8.04, OPIC in its sole discretion shall have the
option at any time and from time to time to bring against the Borrower any
action, suit or proceeding in respect of any Dispute, in any of (i) the courts
of the State of New York in the County of New York or the United States District
Court for the Southern District of New York, or (ii) the courts in any other
jurisdiction where the

 

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Borrower or any of its property may be found; provided, however, with regard to
any Dispute that has been referred to arbitration pursuant to Section 8.04
(Arbitration) by the Borrower, OPIC may, in its discretion, initiate an action,
suit or proceeding as provided herein in lieu of such arbitration and in respect
of such Dispute, so long as OPIC exercises its option to do so prior to the last
day on which OPIC’s statement of defense (or equivalent submission) in respect
of such Dispute is to be submitted.

(b) The Borrower hereby: (i) irrevocably waives any present or future objection
to any such action, suit or proceeding in any such venue, and irrevocably
consents and submits unconditionally to the non-exclusive jurisdiction of any
such court for itself and in respect of any of its property; (ii) irrevocably
waives any claim in any such court that any such action, suit, or proceeding
brought therein has been brought in an inconvenient forum; (iii) agrees that
final judgment against it in any such action, suit or proceeding shall be
conclusive and may be enforced in any other jurisdiction within or outside the
United States of America by suit on the judgment or otherwise, a certified or
exemplified copy of which shall be conclusive evidence of the fact and of the
amount of its obligation; and (iv) covenants and agrees not to resist
enforcement of any such final judgment in any jurisdiction where OPIC commences
enforcement proceedings.

(c) Prior to the first Disbursement, the Borrower shall irrevocably designate
and appoint an agent satisfactory to OPIC for service of process in The City of
New York, New York, with respect to any action or proceeding in New York, as its
authorized agent to receive, accept and acknowledge on its behalf service of
process in any such proceeding, and shall provide OPIC with evidence of the
prepayment in full of the fees of such agent until six (6) months after the Loan
Maturity Date. The Borrower agrees that service of process, writ, judgment or
other notice of legal process upon said agent shall be deemed and held in every
respect to be effective personal service upon it. The Borrower shall maintain
such appointment (or that of a successor satisfactory to OPIC) continuously in
effect at all times while the Borrower is obligated under this Agreement or any
Note. Nothing herein shall affect OPIC’s right to effect service of process in
any other manner permitted by Applicable Law.

(d) Any enforcement action, suit, or other judicial, administrative or arbitral
proceeding by the Borrower against OPIC (or the United States government) in
respect of an Excluded Claim shall be brought exclusively in a United States
federal court of competent jurisdiction in the District of Columbia.

SECTION 8.06. Judgment Currency.

This is an international loan transaction in which the specification of Dollars
is of the essence and such currency shall be the currency of account in all
events. The payment obligations of the Borrower to OPIC under any Financing
Document shall only be discharged by an amount paid in another currency, whether
pursuant to a judgment or otherwise, to the extent of the amount in Dollars
received by OPIC (after any premium and costs of exchange) on the prompt
conversion to Dollars in the U.S. of the amount so paid in another currency
under normal banking procedures. In the event that any payment by the Borrower
in another currency, whether pursuant to a judgment or otherwise, upon
conversion and transfer, does not result in the payment of the amount of Dollars
then due at the place such amount is due, OPIC shall be entitled to demand
immediate payment of and shall have a separate cause of action against the
Borrower for the additional amount necessary to yield the amount of Dollars then
due. In the event that OPIC upon the conversion of a payment in another currency
into Dollars receives an amount greater than that to which it was entitled, the
Borrower shall be entitled to prompt reimbursement of the excess amount.

 

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SECTION 8.07. No Immunity.

The Borrower represents and warrants that it is subject to civil and commercial
law with respect to its obligations under each of the Borrower Documents, that
the making and performance of such Borrower Documents and the borrowings by the
Borrower pursuant hereto constitute private and commercial acts rather than
governmental or public acts, and that neither the Borrower nor any of its
properties or revenues has any right of immunity from suit, court jurisdiction,
attachment prior to judgment, attachment in aid of execution of a judgment,
set-off, execution of a judgment, or from any other legal process with respect
to its obligations under such Borrower Documents. To the extent that the
Borrower may hereafter be entitled, in any jurisdiction in which judicial or
arbitral proceedings may at any time be commenced with respect to any Borrower
Document, to claim for itself or its revenues or assets any such immunity, and
to the extent that in any such jurisdiction there may be attributed to the
Borrower such an immunity (whether or not claimed), the Borrower hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity. The
foregoing waiver of immunity shall have effect under the United States Foreign
Sovereign Immunities Act of 1976.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Notices.

Except as provided in Sections 6.12(e) (Environmental, Health and Safety
Compliance) and 6.13(b) (Worker Rights), each notice, demand, or other
communication relating to this Agreement shall be in writing, shall be
hand-delivered or sent prepaid by mail or overnight delivery service or e-mail
or facsimile transmission (in the case of email or facsimile transmission, with
a copy by mail to follow, receipt of which copy shall not be required to effect
notice), and shall be deemed duly given when sent to the following addresses:

To the Borrower:

OrPower 4 Inc.

Off Moi South Lake Road

Hellsgate National Park

P.O. Box 1566- 20117

Naivasha

Kenya

E-mail: orpower4office@ormat.com

Phone: 254 50 50664

Attn.: Plant Manager

Facsimile: 254 50 50668

with a copy to: Ormat International, Inc.

6225 Neil Road

Reno, NV 89511-1136

USA

Facsimile: 775-356-9039

Attn: President

 

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To OPIC:

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

United States of America

[Attn.: Vice President, Structured Finance

Facsimile: 1-202-842-0290]1

[Attn.: Director, Portfolio Management Division

Facsimile: 1-202-408-9862]2

E-mail: notices@opic.gov

Re: Olkaria III (Kenya) Loan No.: 615-2011-039-IG

Either party may, by written notice to the other, change the address to which
such notices, demands, or other communications should be sent to it. No notice
to OPIC, including notices delivered pursuant to Sections 6.12(e)
(Environmental, Health and Safety Compliance) and 6.13(b) (Worker Rights), shall
be effective unless such notice includes the project name and number, as listed
above, and, prior to the first Disbursement, attention to Vice President,
Structured Finance and, subsequent to the first Disbursement, attention to
Director, Portfolio Management Division.

SECTION 9.02. English Language.

All documents to be furnished or communications made under each of the Financing
Documents shall be in English or, if in another language, shall be accompanied
by a Certified translation into English, which translation shall govern between
the Borrower and OPIC.

SECTION 9.03. GOVERNING LAW.

THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

SECTION 9.04. Succession; Assignment.

This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the parties hereto, provided, however, that the
Borrower shall not, without the prior written consent of OPIC, assign or
delegate all or any part of its interest herein or obligations hereunder.

SECTION 9.05. Survival of Agreements.

Each agreement, representation, warranty, and covenant contained or referred to
in this Agreement shall survive any investigation at any time made by OPIC and
shall survive all disbursements of the Loans, except for changes permitted
hereby, and, except as otherwise provided in this Section, shall terminate only
when all amounts due or to become due under the Financing Documents are
indefeasibly paid in full. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.07 (Tax Gross-Up; Stamp Duties; Proper Legal
Forum), 2.08(a) (Miscellaneous; Payment or Reimbursement of Expenses), and 9.10
(Indemnity) shall survive the payment in full of principal and interest
hereunder and under the Notes.

 

1 

For notices delivered prior to first Disbursement.

2 

For notices delivered after first Disbursement.

 

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SECTION 9.06. Integration; Amendments.

This Agreement, including the Exhibits and Schedules hereto, and the agreements
referred to herein embody the entire understanding of the parties and supersede
all prior negotiations, understandings, and agreements between them with respect
to the subject matter hereof. The provisions of this Agreement may be waived,
supplemented, or amended only by an instrument in writing signed by the parties
hereto.

SECTION 9.07. Severability.

If any provision of this Agreement is prohibited or held to be invalid, illegal,
or unenforceable in any jurisdiction, the parties hereto agree to the fullest
extent permitted by law that it shall not affect the validity, legality, and
enforceability of the other provisions of this Agreement and shall not render
such provision prohibited, invalid, illegal, or unenforceable in any other
jurisdiction. If, and to the extent that, any obligation of the Borrower
(including that under Section 9.10 (Indemnity)) is unenforceable for any reason
it agrees, independently of any other obligation hereunder, to make the maximum
contribution to the payment and satisfaction thereof as is permissible under
Applicable Law.

SECTION 9.08. No Waiver.

(a) No failure or delay by OPIC in exercising any right, power, or remedy shall
operate as a waiver thereof or otherwise impair any of its rights, powers, or
remedies. No single or partial exercise of any such right, power, or remedy
shall preclude any other or further exercise thereof or the exercise of any
other legal right, power or remedy. No waiver of any such right, power, or
remedy shall be effective unless given in writing.

(b) The rights, powers, or remedies provided for herein are cumulative and are
not exclusive of any other rights, powers or remedies provided by law. The
assertion or employment of any right, power or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion of any other right, power or remedy.

SECTION 9.09. WAIVER OF JURY TRIAL.

THE BORROWER AND OPIC EACH IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING
OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
BETWEEN THEM ESTABLISHED BY ANY FINANCING DOCUMENT.

SECTION 9.10. Indemnity.

The Borrower shall, at all times, indemnify and hold harmless OPIC and its
directors, officers, and employees (each, an “Indemnified Person”) in connection
with any Loss (as defined below), any Costs of Defense (as defined below) and
any litigation, investigation or proceeding relating to any Loss regardless of
whether any Indemnified Person is a party thereto (the “Borrower Indemnity”).
The term “Loss” shall mean any losses, claims, damages, liabilities, penalties,
or other costs relating to the Loans, this Agreement, any other Transaction
Document, the Project, the Commitments, or the intended use of the proceeds
thereof to which an Indemnified Person may become subject. The term “Costs of
Defense” shall mean costs, fees, and expenses incurred by or imposed on any
Indemnified Person in defending, analyzing, settling, or resolving a Loss or
Potential Loss (as defined below), and the expenses associated with the making
of any affirmative claim in connection therewith (provided, that costs, fees,
and expenses

 

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in connection with a proceeding by any Indemnified Person to enforce his, her,
or its rights under the Borrower Indemnity shall not be considered to be “Costs
of Defense”). The term “Potential Loss” shall mean any event, fact, condition,
or circumstance that is reasonably likely to give rise to a Loss. The Borrower
Indemnity shall not apply to the extent that a court or arbitral tribunal with
jurisdiction over the Loss and each Indemnified Person who has a Loss or Costs
of Defense in connection therewith renders a final determination that the Loss
or Costs of Defense resulted from (a) the gross negligence or willful misconduct
of the Indemnified Person, or (b) the failure of OPIC to perform any act
required of it relating to the Loans or otherwise under any Financing Document.
The Borrower Indemnity is independent of and in addition to (i) any rights of
any party hereto in connection with any Loss or Costs of Defense, and (ii) any
other agreement, and shall survive the execution, modification, and amendment of
this Agreement and the other Financing Documents, the expiration, cancellation,
or termination of the Commitments, the disbursement and repayment of the Loans,
and the provisions of any other indemnity. Any exclusion of an obligation to pay
any amount under this Section shall not affect the requirement to pay such
amount under any other Section hereof or under any other agreement. OPIC and
each Indemnified Person shall have the right to control its, his, or her
defense, provided, however, that each Indemnified Person shall: (A) notify the
Borrower in writing as soon as practicable of any Loss, Potential Loss, or Costs
of Defense, and (B) keep the Borrower reasonably informed of material
developments with respect thereto. In exercising the right and power to control
his, her, or its actions in connection with a Loss or Potential Loss, including
a decision to settle any such Loss, each Indemnified Person shall, taking into
account the nature and policies of such Indemnified Person (I) consult with the
Borrower, and (II) act as such Indemnified Person would act if the Costs of
Defense or settlement were to be paid by such Indemnified Person. The Borrower
acknowledges and agrees that each Indemnified Person is an express, third-party
beneficiary of the Borrower’s obligations under this Section 9.10.

SECTION 9.11. Further Assurances.

The Borrower shall execute and deliver to OPIC such additional documents and
take such additional action as OPIC may require to carry out the purposes of the
Financing Documents, to cause the Financing Documents to be duly registered,
notarized, and stamped in any applicable jurisdiction, and to preserve and
protect OPIC’s rights as contemplated herein or therein.

SECTION 9.12. Counterparts.

This Agreement may be executed in counterparts, each of which when so executed
and delivered shall be deemed an original and all of which together shall
constitute one and the same instrument.

SECTION 9.13. Waiver of Litigation Payments.

In the event that any action or lawsuit is initiated by or on behalf of OPIC
against the Borrower or any other party to any Transaction Document, the
Borrower, to the fullest extent permissible under Applicable Law, irrevocably
waives its right to, and agrees not to request, plead, or claim that OPIC and
its successors, transfers, and assigns (any such Person, an “OPIC Plaintiff”)
post, pay, or offer, any cautio judicatum solvi bond, litigation bond, or any
other bond, fee, payment, or security measure provided for by any provision of
law applicable to such action or lawsuit (any such bond, fee, payment, or
measure, a “Litigation Payment”), and the Borrower further waives any objection
that it may now or hereafter have to an OPIC Plaintiff’s claim that such OPIC
Plaintiff should be exempt or immune from posting, paying, making, or offering
any such Litigation Payment.

 

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SECTION 9.14. Cooperation; Loan Servicing.

OPIC may assign or delegate, with written notice to the Borrower, all or part of
the responsibility for servicing the Loans to a loan servicer. Any Person who
acquires the right to service the Loan shall benefit from all of the rights of
OPIC hereunder, and any provision hereof that requires that any notice, report,
statement, financial ratio or financial requirement be satisfactory to OPIC
shall be deemed to mean that such notice, report, statement, financial ratio or
financial requirement be satisfactory to such Person or each such Person; any
provision hereof that requires or permits a determination by OPIC or the
application of OPIC’s discretion shall be deemed to require or permit a
determination or the application of the discretion of any such Person, and any
indemnity or agreement to pay any fee or reimburse any expense of OPIC shall be
deemed to be an indemnity or agreement to pay any fee or reimburse the expenses
of any such Person (in each case as if the name of such Person had been stated
in such provision).

SECTION 9.15. Reinstatement.

To the extent that OPIC receives any payment by or on behalf of the Borrower,
which payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to the Borrower
or to its estate, trustee, receiver, custodian or any other party under any
Bankruptcy Law or otherwise, then to the extent of the amount so required to be
repaid, the obligation or part thereof which has been paid, reduced or satisfied
by the amount so repaid shall be reinstated by the amount so repaid and shall be
included within the obligations hereunder as of the date such initial payment,
reduction or satisfaction occurred.

 

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IN WITNESS WHEREOF, each of the parties has caused this Finance Agreement to be
executed and delivered on its behalf by its authorized representative as of the
date first above written.

 

ORPOWER 4 INC.

 

Name: Title: OVERSEAS PRIVATE INVESTMENT CORPORATION

 

Name: Title:

[Olkaria III: Finance Agreement Signature Page]

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SCHEDULE X

DEFINED TERMS AND RULES OF INTERPRETATION

1. Defined Terms. As used in the Finance Agreement, including the Exhibits and
Schedules hereto, the following terms shall have the following meanings.

“Abandon” means (a) cease to have the right to possess and use the Site for the
Project in the manner contemplated in the Transaction Documents or (b) suspend
all or substantially all of its activities in connection with the Project for a
period of fifteen (15) or more consecutive days.

“Accounting Principles” means IFRS.

“Account Banks” means, collectively, the Offshore Account Bank or the Onshore
Account Banks, and any duly appointed successor or permitted assigns thereof.

“Accounts Agreement” means the Accounts Agreement dated as of the date hereof
among the Borrower, OPIC, the Offshore Account Bank and the Onshore Account
Banks.

“Accounts” means, collectively, the Offshore Accounts and the Onshore Accounts,
each as defined in the Accounts Agreement.

“Act of Political Violence” means any act of war (whether declared or
undeclared), revolution, insurrection, civil war, strife of a lesser degree,
terrorism, or sabotage.

“Actual Equity Contribution” has the meaning set forth in the Equity
Contribution and Share Retention Agreement.

“Administrator” means the International Centre for Dispute Resolution, a
division of the American Arbitration Association, or any successor thereof as
may be identified by the Rules.

“Affiliate” means, with respect to any Person, (i) any other Person that is
directly or indirectly controlled by, under common control with, or controlling
such Person; (ii) any other Person owning beneficially or controlling five
percent (5%) or more of the equity interest in such Person; (iii) any officer or
director of such Person; or (iv) any spouse or relative of such Person. As used
herein, the term “control” means possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of partnership interests or voting
securities, by contract or otherwise.

“Agreement” has the meaning set forth in the preamble.

“Annual Operating Budget” means, for any Fiscal Year, the operating budget
(including the then required levels of maintenance capital expenditures) and
operating plan for such Fiscal Year prepared by the Borrower in the form of
Schedule 6.07, submitted by the Borrower to OPIC and approved by OPIC.

“Anti-Corruption Handbook” means the OPIC Anti-Corruption Policies and
Strategies Handbook dated September 2006, posted on OPIC’s website at
http://www.opic.gov/corruptpractices.

 

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“Anti-Money Laundering Laws” means (i) the USA PATRIOT Act of 2001 (Pub.L.
No. 107-56) and (ii) any other law, regulation, order, decree or directive of
any relevant jurisdiction having the force of law and relating to anti-money
laundering.

“Applicable Law” means, with respect to a given Person on a given date, any
constitution, statute, law, rule, regulation, ordinance, judgment, order,
decree, Consent of a Governmental Authority, or any published directive,
guideline, requirement or other governmental restriction that has the force of
law, or any determination by, or interpretation of any of the foregoing by, any
judicial authority, that is binding on such Person whether in effect as of the
date hereof or as of any date thereafter.

“Arbitral Tribunal” means the arbitral tribunal constituted in accordance with
the Rules.

“Arbitration Parties” means each of (i) OPIC, (ii) the Borrower and (iii) any
other party to an arbitration pursuant to Section 8.04; and “Arbitration Party”
means any of them, as the context requires.

“Authorized Officer” means, with respect to any Person, any officer designated
in such Person’s Charter Documents or otherwise in writing as having been
authorized to execute and deliver any of the Transaction Documents.

“Bankruptcy Law” means Title 11 of the United Stated Code entitled “bankruptcy”,
as now or hereafter in effect, or any successor statute.

“Board of Governors of the Federal Reserve System” means the Board of Governors
of the Federal Reserve System, which is an agency of the United States of
America responsible for the analysis of domestic and international financial and
economic developments, and for regulating the operations of the Federal Reserve
Banks and payment systems.

“Borrower” has the meaning set forth in the preamble to this Agreement.

“Borrower Documents” means each of the Transaction Documents to which the
Borrower is or will be a party.

“Borrower Indemnity” has the meaning set forth in Section 9.10.

“Borrower’s Completion Certificate” means a certificate of an Authorized Officer
substantially in the form of Exhibit E.

“Business Day” means any day other than (i) a Saturday, Sunday, or day on which
commercial banks are authorized by law to close in the City of New York or
Washington, D.C., United States of America, (ii) with respect to any
communication to OPIC, a day on which OPIC is not open for business, and
(iii) with respect to any Disbursement or payment to OPIC, a day on which OPIC
or the United States Department of the Treasury is not open for business.

“Cancellation Fee” has the meaning set forth in Section 2.06(b).

“Cash Flow” of the Borrower, for any period, means the amount resulting from
(i) its Net Income for such period, plus (ii) all interest expense, any expense
for any Fees, and depreciation, amortization, deferred income taxes, political
risk insurance expenses, and other non-cash expenses for such period (but only
to the extent deducted in determining Net Income) plus (iii) any funds released
from

 

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the Debt Service Reserve Account and transferred to the Offshore Revenue Account
unless such funds were included in the determination of Net Income in such
period, plus (iv) any funds released from Well Reserve Account and transferred
to the Offshore Revenue Account unless such funds were included in the
determination of the Net Income in such period, minus (v) any funds deposited
into the Debt Service Reserve Account except for the initial deposit to Debt
Service Reserve Account to the extent it was financed by the Loan and/or Equity
Contributions, minus (vi) any funds deposited to the Well Reserve Account except
for the initial deposit to Well Reserve Account to the extent it was financed by
any Loan and/or Equity Contributions, minus (vii) the amount of net increase or
net decrease in Working Capital between the first day of such period and the
last day of such period except for initial increases in Working Capital due to
Plant 2 COD that are financed by the Loan and/or Equity Contributions, minus
(viii) any capital expenditure, excluding Plant 1 modification expenditures and
any other expenditure prior to Project Completion to the extent such
expenditures were financed with the proceeds of the Loan, Equity Contributions
or paid from reserves, incurred in such period for repair or replacement of a
capital asset.

“CDM Registry” means the standard electronic database for accurate accounting of
the issuance, holding and acquisition of Certified Emissions Reductions in
accordance with the Clean Development Mechanism established pursuant to Article
12 of the Kyoto Protocol as well as all other relevant international agreements.

“CER Accounts” means one or more accounts established in the name of the
Borrower or its agent appointed pursuant to the CER Documents with the CDM
Registry.

“CER Documents” means any documents entered into by the Borrower in respect of
the sale or commercializing of Certified Emissions Reductions in relation to the
Project.

“Certificate Interest Rate” has the meaning set forth in the OPIC Funding
Agreement.

“Certified” means, in respect of any document, that such document is being
delivered accompanied by a certification from an Authorized Officer that it is
true and complete (or a true and complete copy, as the case may be), including
all amendments to date, and, if applicable, is in full force and effect in
accordance with its terms as of the date of such certification.

“Certified Emissions Reductions” means a unit issued pursuant to Article 12 of
the Kyoto Protocol as well as all other relevant international agreements and
resolutions and is equal to one metric tonne of carbon dioxide equivalent,
calculated in accordance with such agreements and resolutions.

“Change of Control” means:

(a) before the Closing Date on which the final Tranche II Disbursement is made,
(i) the failure of the Sponsor to be listed on the New York Stock Exchange;
(ii) the failure of the Sponsor, directly or indirectly, to own one hundred
percent (100%) of the issued and outstanding share capital and economic
interests of the Shareholder; (iii) the failure of the Shareholder, directly or
indirectly, to own one hundred percent (100%) of the issued and outstanding
share capital and economic interests of the Intermediate Shareholder;

(b) from the Closing Date on which the final Tranche II Disbursement is made
until the Project Completion Date: (i) the failure of the Sponsor, directly or
indirectly, to own at least 50.1% of the issued and outstanding share capital
and economic interests of, and to exercise control over, the Shareholder;
(ii) the failure of the Shareholder, directly or indirectly, to own at least
50.1% of the issued and outstanding share capital and economic interests of, and
to exercise control over, the Intermediate

 

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Shareholder; (iii) the failure of the Intermediate Shareholder to directly or
indirectly own one hundred percent (100%) of the issued and outstanding share
capital and economic interests of the Borrower; and

(c) from and after the Project Completion Date, the failure of the Shareholder,
directly or indirectly (i) to own at least 50.1% of the issued and outstanding
share capital and economic interests of the Borrower or (ii) to control the
Borrower.

“Charter Documents” means, in respect of any Person, such Person’s founding act,
charter, articles of incorporation and by-laws, memorandum and articles of
association, statute, or similar instrument.

“Closing Coordination Agreement” means the Closing Coordination and Escrow
Agreement to be entered into among the Subordinated DFI Lender, PROPARCO, OPIC,
the Borrower, the escrow agent named therein, and the other agents and other
parties thereto in form and substance satisfactory to OPIC.

“Closing Date” for any Disbursement means the Business Day on which a
Disbursement is made.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute and all rules and regulations promulgated thereunder.

“Commitment Fee” has the meaning set forth in Section 2.06(a).

“Commitment Period” means, with respect to any Loan, the period beginning on the
date hereof and expiring on the earliest to occur of (a) the first date on which
the amount of such Loan equals the amount of the relevant Commitments,
(b) December 31, 2017, and (c) the date the relevant Commitment has been
terminated;

“Commitments” means, collectively, the Tranche I Commitment and the Tranche II
Commitment.

“Consents” means any registration, declaration, filing, consent, license, right,
approval, authorization, or permit required under Applicable Law, or any
approval, consent, ratification, waiver or other authorization from any other
Person with respect to the Transaction Documents or to achieve Project
Completion.

“Construction Budget” means the budget in respect of the costs to complete the
Project delivered to OPIC in accordance with Section 4.14.

“Construction Schedule” means the schedule in respect of the design,
construction, testing and placing into service of the Project delivered to OPIC
in accordance with Section 4.14.

“Construction Period Report” means a report in the form set forth in Schedule
6.06(c) (Construction Period Report).

“Contracted Plant Capacity” has the meaning set forth in the PPA.

“Contracted Plant Capacity Test” has the meaning set forth in the PPA.

“Conversion Date” has the meaning set forth in the OPIC Funding Agreement.

 

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“Coordination Contract” means the Contract Regarding Pricing, Coordination and
Security dated as of June 28, 2012, among the Borrower, the Supplier and the
Coordinator.

“Coordinator” means Orda 9, Inc.

“Corrupt Practices Laws” means (i) the Foreign Corrupt Practices Act of 1977
(Pub. L. No. 95-213, §§101-104), as amended, and (ii) any other Applicable Law
relating to bribery, kick-backs, or similar business practices.

“Costs of Defense” has the meaning set forth in Section 9.10.

“Current Assets” means assets of the Borrower treated as current assets under
the Accounting Principles, which, for the avoidance of doubt, does not
include amounts that may be on deposit in (i) the Debt Service Reserve Account
or otherwise held to satisfy the Debt Service Reserve Requirement or (ii) the
Well Reserve Account.

“Current Liabilities” means liabilities of the Borrower treated as current
liabilities under the Accounting Principles.

“Cut-Off Date” means December 31, 2011.

“Debenture” means the instrument entered into or to be entered into by the
Borrower in favor or OPIC as security for the repayment of the Secured
Obligations creating fixed legal charges over all the present and future
undertaking and assets of the Borrower (other than stock-in-trade, if any) and a
floating charge over stock-in-trade (if any) and assigning (by way of security)
certain rights, property and other undertaking of the Borrower.

“Debt Service”, for any period, means the sum of all payments of principal,
interest, and fees made or required to be made by the Borrower in respect of its
Indebtedness (excluding any Indebtedness owed to the Shareholder or the
Intermediate Shareholder and any other Indebtedness that is fully subordinated
to the Loans on terms acceptable to OPIC) during such period.

“Debt Service Reserve Account” means a Dollar-denominated account established by
the Borrower in a U.S. financial institution acceptable to OPIC and pledged to
OPIC pursuant to the terms of the New York Security Agreement.

“Debt Service Reserve Requirement” means, as of any date of determination, an
amount equal to the aggregate amount of Debt Service on Long-term Indebtedness
due in the six month period next succeeding such date of determination.

“Debt to Equity Ratio” means, as of any date of determination, the ratio of
(i) the principal amount of the Loan then outstanding to (ii) the aggregate
amount of Actual Equity Contributions made on or prior to such date.

“Default” means an event or condition that, with the passage of time or the
giving of notice, or both, could constitute an Event of Default.

“Default Rate” means at the time any amount due to OPIC under any Financing
Document is not paid when due (a) with respect to amounts due under a Note, an
amount equal to the sum of (i) the applicable OPIC Note Interest Rate (as such
rate may be adjusted as provided in Section 2.02(c)) and (ii) the Default Spread
and (b) with respect to any other amounts due, an amount equal to the sum of

 

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(i) the applicable OPIC Note Interest Rate set forth in any Note then
outstanding (as such rate may be adjusted as provided in Section 2.02(c)) and
(ii) the Default Spread.

“Default Spread” means two per cent (2%) per annum.

“DFI Accounts” means each of the accounts established pursuant to the DFI
Accounts Agreement (as defined in Schedule Z).

“DFI Global Agent” means DEG, in its capacity as the global agent under the
Subordinated DFI Credit Agreements and the PROPARCO Loan Agreement.

“DFI Liens” means any and all Liens created and existing under any Subordinated
DFI Credit Agreement, the PROPARCO Loan Agreement, or any DFI Security Document
in favor of the DFI Onshore Security Agent or the DFI Offshore Security Agent.

“DFI Offshore Account Bank” shall mean Union Bank, N.A., as Offshore Account
Bank appointed pursuant to the terms of the DFI Accounts Agreement.

“DFI Offshore Security Agent” shall mean BNY Corporate Trustee Services Limited,
in its capacity as offshore security agent to the Subordinated DFI Lender and
PROPARCO.

“DFI Onshore Security Agent” shall mean Barclays Bank of Kenya Limited, in its
capacity as onshore security agent for Subordinated DFI Lender and PROPARCO.

“DFI Security Documents” means each of the documents listed in Part A to
Schedule Z.

“DFI Subordination Agreement” means the Subordination Agreement to be entered
into among the Subordinated DFI Lender, OPIC and the Borrower in form and
substance satisfactory to OPIC.

“DEG” means DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH.

“Direct Agreements” means:

(i) the KPLC Direct Agreement;

(ii) the Direct Agreement to be entered into among the Supplier, OPIC and the
Borrower in form and substance satisfactory to OPIC;

(iii) the Direct Agreement to be entered into among the Coordinator, the
Supplier, OPIC and the Borrower in form and substance satisfactory to OPIC;

(iv) the Direct Agreement to be entered into among Ormat International, Inc.,
OPIC and the Borrower in form and substance satisfactory to OPIC;

(v) the Direct Agreement to be entered into among Marriott, PR Marriott
Drilling, Ltd., OPIC and the Borrower in form and substance satisfactory to
OPIC; and

(vi) the Direct Agreement to be entered into among Geodrill, OPIC and the
Borrower in form and substance satisfactory to OPIC.

“Dispute” means any dispute, controversy or claim arising out of, relating to,
or in connection with this Agreement, the Notes or any other Financing Document
to which the Borrower or

 

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OPIC is a party, including any dispute, controversy or claim relating to the
formation, existence, validity, interpretation, enforceability, breach,
performance or termination of thereof.

“Disbursement” means (i) in the case of the Tranche I Loan, any disbursement of
the Tranche I Loan and (ii) in the case of the Tranche II Loan, any disbursement
of the Tranche II Loan.

“Disbursement Request” means a request for disbursement of either a Tranche I
Loan or a Tranche II Loan, in each case substantially in the form of Exhibit A
and acceptable to OPIC and the Independent Engineer.

“Disposition” means, with respect to any Property, any sale, license,
assignment, exchange, conveyance, liquidation or lease or other transfer or
disposition thereof, whether by agreement, operation of law or otherwise (and
the verb “Dispose” shall be construed accordingly).

“Dollars” or “$” means U.S. dollars.

“Drilling Program” shall mean the drilling program set forth in Schedule 4.19-A
(Drilling Program).

“EAC” means the regional intergovernmental organization of the Project Country,
Uganda, the United Republic of Tanzania, Republic of Rwanda and Republic of
Burundi with its headquarters in Arusha, Tanzania.

“EIA” means the Environmental Impact Assessment for the Project, dated August,
2000, and Supplementary Report dated May 2001, prepared by Prof Mwakio P. Tole
and Colleagues.

“Employee Benefit Plan” means any employee benefit plan within the meaning of
§3(3) of ERISA that is subject to ERISA maintained or contributed to by the
Borrower, other than a Guaranteed Pension Plan or a Multiemployer Plan.

“Environmental and Social Requirements” means (a) IFC’s Environmental, Health,
and Safety General Guidelines (April 30, 2007), (b) IFC’s Environmental, Health
and Safety Guidelines for Geothermal Power Generation (April 30, 2007), (b) the
IFC’s Performance Standards on Social and Environmental Sustainability (April
30, 2006), and (c) the ESPS.

“Environmental Audit Report” has the meaning set forth in Section 6.12(b).

“Environmental Law” means, with respect to any Person, any and all laws
applicable to such Person relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

“Environmental Monitoring Program” means the Borrower’s Environmental Monitoring
Program, as updated from time to time.

“Equity Contribution” has the meaning set forth in the Equity Contribution and
Share Retention Agreement.

“Equity Contribution and Share Retention Agreement” means the Equity
Contribution, Subordination, and Share Retention Agreement, dated as of the date
hereof, among the Borrower, the Sponsor, the Shareholder, the Intermediate
Shareholder and OPIC.

 

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“Equity Distribution Account” has the meaning set forth in the Accounts
Agreement.

“Equity Sub-Account” has the meaning set forth in the Accounts Agreement.

“ERC Consent” shall mean the Consent in item 1.3 of Part A of Schedule 4.04
(Consents).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and all rules and regulations
promulgated thereunder.

“ERISA Affiliate” shall mean any Person that is treated as a single employer
with the Borrower under §414 of the Code.

“ESPS” means the Consolidated Environmental and Social Policy Statement/Labor
and Human Rights Policy Statement dated as of October 15, 2010, which is posted
on OPIC’s website at http://www.opic.gov/environment, as the same may be revised
and supplemented by OPIC from time to time.

“Event of Default” has the meaning set forth in Section 8.01.

“Event of Loss” means, with respect to any Property of the Borrower, any loss
of, destruction of or damage to, such Property (including any such loss,
destruction or damage resulting from an Act of Political Violence).

“Excluded Claims” means any dispute, controversy or claim (including any
counterclaim, defense or set-off) against OPIC, the United States of America, or
any instrumentality or agency of the United States of America sounding in tort
or other non-contractual basis for liability.

“Expansion Loan” has the meaning set forth in Section 2.01(e).

“Expansion Loan Documents” has the meaning set forth in Section 2.01(e).

“Expropriation Event” means (a) any condemnation, nationalization, seizure or
expropriation by a Governmental Authority of all or a substantial portion of the
Project or the Property of the Borrower or of its shares, (b) any assumption by
a Governmental Authority of control of all or a substantial portion of the
Property, assets or business operations of the Borrower or of its shares,
(c) any taking of any action by a Governmental Authority for the dissolution or
disestablishment of the Borrower, or (d) any taking of any action by a
Governmental Authority that would prevent the Borrower from carrying on its
business or operations or a substantial part thereof for a period of thirty
(30) or more consecutive days.

“Expropriation Proceeds” means, with respect any Expropriation Event, any
condemnation awards or other compensation, awards, damages and other payments or
relief paid or payable by a Governmental Authority with respect to such
Expropriation Event.

“Expansion Wells” means, collectively, all wells listed in Part A of the
Drilling Program.

“Facility Fee” has the meaning set forth in Section 2.06(c).

“Fees” means the Commitment Fee, the Cancellation Fee, the Facility Fee, the
Maintenance Fee and the Modification Fee (if applicable).

 

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“Financial Model” means a financial model prepared by the Borrower setting forth
financial projections for the Project through December 15, 2033.

“Financial Plan” has the meaning set forth in Section 3.01(l).

“Financial Officer” the chief financial officer, chief operating officer,
president, principal accounting officer, treasurer, controller or asset manager
of the Borrower or an Affiliate of the Borrower, to the extent such officer is
responsible for overseeing the financial operations of the Borrower.

“Financial Statements” means, with respect to any Person, its quarterly or
annual consolidated balance sheet and statements of income, retained earnings,
and sources and uses of funds for such fiscal period, together with all notes
thereto and with comparable figures for the corresponding period of its previous
Fiscal Year, each prepared in English and in Dollars in accordance with the
Accounting Principles.

“Financing Documents” means the Loan Documents and the Security Documents,
together with any other agreements or instruments entered into in connection
with any of the foregoing or pursuant to which the Loans are made and designated
by the Borrower and OPIC as a Financing Document.

“Fiscal Year” means, with respect to the Borrower, the period beginning on
January 1and ending on December 31 of each year.

“Fixed Rate Note” means any promissory note issued by the Borrower pursuant to
this Agreement substantially in the form of Exhibit A-1 of the OPIC Funding
Agreement.

“Funding Documents” has the meaning set forth in Section 4.21.

“Geodrill” means Geodrill LLC.

“Geodrill Service Agreement” means the Rent and Technical Support Agreement for
the Olkaria III Field Development and Drilling dated as of January 19, 2012,
among Geodrill and the Borrower.

“GoK Agreements” means, collectively, the PPA, KPLC Security Agreement, the KPLC
Letter of Credit, the GoK Support Letter, the Land Grant, the License, the Site
Agreement and the Management Services Agreement and “GoK Agreement” means any of
them.

“GoK Support Letter” means the letter, dated June 18, 2012, from the Government
of the Republic of Kenya issued to the Borrower and the Financing Parties (as
defined therein) thereto, including OPIC, which acceded to such letter pursuant
to a Deed of Adherence, dated July 10, 2012, among the Government of the
Republic of Kenya, the Borrower and OPIC.

“Good Industry Practice” means any of the practices, methods, standards and acts
employed by, engaged in or approved by a significant portion of the
international geothermal power industry and related installation business with
respect to the engineering, design, construction, operation and maintenance of
geothermal power infrastructure of the type to be incorporated into the Works
and which practices, methods and standards shall conform to the requirements of
the equipment suppliers and manufacturers of the plant and materials used in the
Works, or any of the practices, methods, standards and acts that, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
a reasonable cost consistent with

 

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good business practices, reliability, safety and expedition. Good Industry
Practice is not intended to be limited to the optimum practice, method, or act
to the exclusion of all others, but rather to be practices, methods, or acts
generally accepted in the industry.

“Governmental Authority” means any national, state, county, city, town, village,
municipal or other local governmental department, commission, board, bureau,
agency, authority or instrumentality of the Project Country, the EAC or the
U.S., as applicable, or any political subdivision thereof, and any person
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any of the foregoing entities, having jurisdiction
over the Persons or matters in question.

“Grace Period” means the period commencing on the Initial Payment Date and
ending on the second anniversary thereof.

“Guaranteed Pension Plan” means any employee pension benefit plan within the
meaning of §3(2) of ERISA which is maintained or contributed to by the Borrower
or any ERISA Affiliate, the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.

“Hedge Agreement” means any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate insurance, currency
swap agreement, currency option, futures contract, forward contract or any other
similar agreement or arrangement with respect to interest rates and currency
exchange rates, currencies, commodities or indices or to the hedging of assets
or liabilities.

“IFC” means the International Finance Corporation, a member of the World Bank
Group.

“IFRS” means the International Financial Reporting Standards (formerly
International Accounting Standards), which are the standards issued by the
International Accounting Standards Board together with the interpretations
issued by the International Financial Reporting Interpretations Committee of the
International Accounting Standards Board (as amended, supplemented or re-issued
from time to time), applied on a consistent basis both as to classification of
items and amounts.

“Indebtedness” means, with respect to any Person at any date, total liabilities
as defined by the Accounting Principles and any obligation created, issued,
incurred, or assumed by such Person for borrowed money or arising out of any
credit facility, financial accommodation or Hedge Agreement, or for the deferred
purchase price of goods or services, including, any credit to such Person under
any conditional sale or other title retention agreement, all guaranties by such
Person of liabilities or Indebtedness of any other Person, liabilities or
Indebtedness of any other Person secured by any assets or revenue of such
Person, and the net aggregate rentals under any lease by such Person as lessee
that under the Accounting Principles would be capitalized on the books of the
lessee or that is the substantial equivalent of the financing of the property so
leased.

“Indemnified Person” has the meaning set forth in Section 9.10.

“Independent Engineer” means Shaw Consultants International, Inc.

“Independent Engineer’s Completion Certificate” means a certificate of the
Independent Engineer substantially in the form of Exhibit F.

“Initial Payment Date” means December 15, 2012.

 

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“Insurance Policy” means each policy, contract or other instrument of insurance
or reinsurance of any kind which is or is required to be taken out by or on
behalf of any Obligor or any Project Subcontractor pursuant to Section 6.04 and
Schedule 6.04 (Minimum Insurance Requirements) hereof and in which the Borrower
has any interest (including any of the foregoing taken out by or on behalf of
the Borrower under the PPA).

“Insurance Proceeds” means, with respect to any Event of Loss relating to any
Property of the Borrower, any insurance or reinsurance (and any other amounts
received pursuant to any Insurance Policy), with respect to such Event of Loss
(excluding, in each case, the proceeds of general liability insurance,
employers’ liability insurance, automobile liability insurance, marine cargo
consequential loss insurance, advance loss of profits insurance and business
interruption insurance and Expropriation Proceeds).

“Intellectual Property Rights” means rights in inventions, patents, copyrights,
design rights, trademarks and trade names, service marks, trade secrets,
know-how and other intellectual property rights (whether registered or
unregistered) and all applications for any of them, anywhere in the world.

“Intermediate Shareholder” means Ormat Holding Corp., an exempted company
incorporated with limited liability under the laws of the Cayman Islands.

“Intermediate Shareholder Loan” means a loan by the Borrower to the Intermediate
Shareholder in the principal amount equal to the principal amount of the
Subordinated DFI Loan outstanding as of the date of the DFI Subordination
Agreement, such amount not to exceed $75,000,000.

“Intermediate Shareholder Loan Agreement” means the Loan Agreement to be entered
into between the Borrower and the Intermediate Shareholder providing for the
Intermediate Shareholder Loan, in form and substance satisfactory to OPIC.

“Key Contractors” means the Supplier, the Coordinator, Geodrill and Marriott.

“KPLC” means Kenya Power and Lighting Company Limited, a company incorporated in
Kenya.

“KPLC Direct Agreement” means the Direct Agreement, to be entered into among
KPLC, OPIC and the Borrower in form and substance satisfactory to OPIC.

“KPLC Letter of Credit” means each irrevocable and transferrable standby Letter
of Credit, dated as of May 21, 2010, and May 18, 2011, respectively, issued by
Barclays Bank of Kenya Limited in favor of KPLC, as renewed or replaced from
time to time in the ordinary course in accordance with Sections 2.2, 2.3 and 2.4
of the KPLC Security Agreement.

“KPLC Security Agreement” means the Amended and Restated Olkaria III Project
Security Agreement, dated 29th March 2011 between KPLC and the Borrower.

“Land Grant” means the grant registered at the Land Titles Registry at Nairobi
as Number I.R.85444 relating to the Project Property and issued in favor of the
Borrower.

“Legal Charge” means a legal charge over the Project Property, to be entered
into by the Borrower in favor of OPIC to secure the repayment of the Secured
Obligations, in form and substance satisfactory to OPIC.

 

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“License” means the Geothermal Resources Licence No. 1/99 dated 4th March, 1999
issued by the Government of Kenya in favor of the Borrower.

“Lien” means any lien, pledge, mortgage, security interest, deed of trust,
charge, assignment, hypothecation, title retention, or other encumbrance on or
with respect to, or any preferential arrangement having the practical effect of
constituting a security interest with respect to the payment of any obligation
with, or from the proceeds of, any asset or revenue of any kind.

“Litigation Payment” has the meaning set forth in Section 9.13.

“Loan” means (i) the Tranche I Loan and the Tranche II Loan or (ii) the Tranche
I Loan or the Tranche II Loan, as the context may require.

“Loan Documents” has the meaning set forth in Section 4.02(a)(i).

“Loan Maturity Date” means the latest of the Note Maturity Dates.

“Long-term Indebtedness” means, in accordance with the Accounting Principles,
any Indebtedness, the final maturity of which, by its terms or by the terms of
any agreement related to it, falls due more than one year after the date of its
incurrence.

“Loss” has the meaning set forth in Section 9.10.

“Maintenance Fee” has the meaning set forth in Section 2.06(d).

“Maintenance Plan” means the forecast activities and schedule, and the required
parts and equipment for planned maintenance events that require a full or
partial Plant outage to complete.

“Management Services Agreement” means the Environmental Management Agreement in
Respect of OrPower’s Project in Hell’s Gate National Park, dated 30th March
2001, between the Kenya Wildlife Service and the Borrower.

“Marriott” means Marriott Drilling Africa, Ltd.

“Marriott Drilling Agreement” means that certain Drilling Services Contract
dated as of August 9, 2010, by and between Marriott and the Borrower, as
amended.

“Material Adverse Effect” means any event, development, or circumstance having a
material adverse effect on (i) the Project, (ii) the business, operations,
property, condition (financial or otherwise), or prospects of the Borrower, the
Shareholder, the Intermediate Shareholder, or any other Person whose continuing
viability, because of its guaranty or other undertaking, is essential to the
Project, (iii) the ability of the Borrower or any other party to carry out the
Project or to perform in a timely manner its obligations under any Transaction
Document, (iv) the validity or enforceability of any material provision of any
Transaction Document, (v) the rights and remedies of OPIC under any Transaction
Document, or (vi) the Liens provided to OPIC under the Security Documents.

“MIGA” means the Multilateral Investment Guarantee Agency, a member organization
of the World Bank Group, or any successor agency thereto.

“Minimum Yield Requirement” means an actual yield (MW) of at least 106MW.

“Modification Fee” has the meaning set forth in Section 2.06(e).

 

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“Multiemployer Plan” means any multiemployer plan within the meaning of §3(37)
of ERISA which is maintained or contributed to by the Borrower or any ERISA
Affiliate and subject to Title IV of ERISA.

“Net Income” means, with respect to the Borrower, for any period, the net income
(loss) of the Borrower for such period, as determined in accordance with the
Accounting Principles, provided, that there shall be excluded in such
determination (i) any restoration to income of any contingency reserve, except
to the extent that provision for such reserve was made out of income accrued
during such period, (ii) any aggregate net gain during such period arising from
the sale, conversion, exchange, or other disposition of capital assets,
(iii) any gains resulting from the write-up of any assets, (iv) any net gain
arising from the extinguishment, under the Accounting Principles, of any
Indebtedness of the Borrower, and (v) any net income or gain during such period
resulting from (A) any change in accounting principles in accordance with the
Accounting Principles, (B) any prior period adjustments resulting from any
change in accounting principles in accordance with the Accounting Principles,
(C) any extraordinary items, and (D) any discontinued operations or the
disposition thereof.

“New York Security Agreement” means the Security Agreement, dated as of the date
hereof, between the Borrower and OPIC.

“Note” means (i) each Tranche I Note and Tranche II Note or (ii) any Tranche I
Note or Tranche II Note, as the context may require.

“Note Maturity Date” means the Tranche I Maturity Date or any Tranche II
Maturity Date, as applicable.

“Notice of Arbitration” means the written notice issued by an Arbitration Party
to the Administrator and at the same time to the other Arbitration Party,
referring a Dispute to arbitration pursuant to Section 8.04.

“O&M Parameters” shall mean the operation and maintenance parameters set forth
in Schedule 6.02(d) (O&M Parameters).

“O&M Manual” has the meaning set forth in the O&M Parameters.

“Obligor” means each of the Borrower, the Shareholder, each other Person that
owns equity interests in the Borrower, the Intermediate Shareholder and the
Sponsor (without duplication).

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the
Treasury, which administers and enforces economic and trade sanctions based on
U.S. foreign policy and national security goals against targeted individuals,
organizations, and foreign countries and regimes.

“OFAC List” means the Specially Designated Nationals and Blocked Persons List,
as published by OFAC from time to time, and is available at the following
website: http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf or any
official successor website.

“OFAC Regulations” means (a) the rules and regulations promulgated by OFAC, as
may be published in Chapter 31, Part 500 of the Code of Federal Regulations from
time to time, and (b) any Executive orders imposing economic sanctions on
individuals, organizations or foreign countries and regimes.

 

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“Official” means any officer of a political party or candidate for political
office in the Project Country or the U.S. or any officer or employee (i) of the
government of the Project Country or the U.S. (including any Governmental
Authority of the Project Country or the U.S.) or (ii) of a public international
organization.

“Offshore Account Bank” means a U.S. financial institution acceptable to OPIC,
as account bank under the Accounts Agreement.

“Offshore Revenue Account” has the meaning set forth in the Accounts Agreement.

“Onshore Account Bank” means a financial institution acceptable to OPIC, as
onshore account bank under the Accounts Agreement.

“Operating Report” means a report in the form set forth in Schedule 6.06(d)
(Operating Report).

“OPIC” has the meaning set forth in the preamble to this Agreement.

“OPIC Funding Agreement” means the Funding and OPIC Guaranty Agreement to be
entered into among the Borrower, U.S. Bank National Association as OPIC Paying
Agent, Merrill Lynch, Pierce, Fenner & Smith, Incorporated, as OPIC Placement
Agent and OPIC in form and substance satisfactory to OPIC.

“OPIC Guaranty Fee” has the meaning set forth in the Funding Documents.

“OPIC Guaranty Payment” has the meaning set forth in Section 2.02(c).

“OPIC Note Interest Rate” has the meaning set forth in Section 2.02(a).

“OPIC Plaintiff” has the meaning set forth in Section 9.13.

“OPIC Spread” means two and seventy-five hundredths of one percent (2.75%).

“Orda 6” means Orda 6, Inc.

“Orda 9” means Orda 9, Inc.

“Original Project Documents” means (i) the Supply Agreement; (ii) the
Coordination Contract; (iii) the PPA; (iv) the KPLC Security Agreement; (v) the
KPLC Letter of Credit; (vi) the GoK Support Letter; (vii) the Site Agreement;
(viii) the Land Grant; (ix) the Management Services Agreement; (x) the Marriott
Drilling Agreement; (xi) the Geodrill Service Agreement; (xii) the Intermediate
Shareholder Loan Agreement; (xiii) all contracts relating to the design,
engineering, procurement and construction of the Project exceeding a value of
$200,000; (xiv) all contracts for the lease of equipment or facilities for the
Project exceeding a value of $100,000; (xv) all contracts to provide services to
the Project exceeding a value of $200,000; (xvi) all contracts described in
subsections (xii) through (xv) above that are entered into by the Borrower
subsequent to the date hereof and prior to the date of the first Closing Date;
and (xvii) all other material documents, contracts and agreements (other than
the Financing Documents) executed subsequent to the date hereof and prior to the
date of the first Closing Date and relating to the Project, including documents
relevant to the construction, variation, operation or maintenance of the Project
or ownership or management of the Borrower, in each case designated as a Project
Document by the Borrower and OPIC. Contracts solely for the purchase of
commodities,

 

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consumables or supplies to be utilized in connection with any contract described
in subsections (i) through (xvii) above shall not be an “Original Project
Document”.

“Original Wells” means, collectively, all wells listed on Schedule Y.

“Ormat Energy Converter” means the OEC, as defined in Section 1.1.1(ii)(c) of
Exhibit A to the Supply Agreement.

“Paying Agent” means US Bank N.A.

“Payment Date” means the 15th day of each June, September, December and March
after the date hereof until the Loans and all amounts due hereunder or under the
Notes are paid in full, unless such Payment Date is not a Business Day, in which
case the Payment Date will be the next succeeding Business Day.

“PBGC” means the Pension Benefit Guaranty Corporation created by §4002 of ERISA
and any successor entity or entities having similar responsibilities.

“Performance Standard 2 on Labor and Working Conditions” means the IFC
Performance Standard 2 on Labor and Working Conditions.

“Permitted Liens” means:

(a) Liens created under the Security Documents;

(b) Liens for any Taxes, assessments and other governmental charges, not yet due
and arising in the ordinary course of business, or being contested in good faith
and by appropriate proceedings, so long as:

(i) such proceedings shall not involve any substantial danger of the sale,
forfeiture or loss of the Project, the Site or any easements that are material
to the ownership, operation or maintenance of the Project, as the case may be;

(ii) title thereto or any interest therein and shall not interfere in any
material respect with the use of the Project, the Site or any easements that are
material to the ownership, operation or maintenance of the Project; and

(iii) a bond or other reasonable security has been posted or provided in such
manner and amount as to assure that any Taxes, assessments or other governmental
charges determined to be due will be promptly paid in full when such contest is
determined;

(c) Liens, deposits or pledges in favor of a Governmental Authority and arising
by operation of Applicable Law;

(d) material men’s, mechanics’, workers’, repairmen’s, employees’ or other like
Liens, arising in the ordinary course of business or in connection with the
development, construction, operation and/or maintenance of the Project, either
for amounts not yet due or for amounts being contested in good faith and by
appropriate proceedings so long as:

 

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(i) the Borrower reasonably determines that such proceedings shall not involve
any substantial danger of the sale, forfeiture or loss of the Project, the Site
or any easements that are material to the ownership, operation or maintenance of
the Project, as the case may be;

(ii) title thereto or any interest therein and shall not interfere in any
material respect with the use or disposition of the Project, the Site or any
easements that are material to the ownership, operation or maintenance of the
Projects; and

(iii) such Liens have been outstanding for a period of less than ninety
(90) days;

(e) Liens arising out of judgments or awards that would not otherwise constitute
an Event of Default hereunder so long as enforcement of such Lien has been
stayed and an appeal or proceeding for review is being prosecuted in good faith
and for the payment of which adequate reserves, bonds or other reasonable
security have been provided or are fully covered by insurance;

(f) servitudes, easements, rights-of-way, restrictions, minor errors in title
and such other encumbrances or charges against real property or interests
therein arising by operation of Applicable Law and which do not in a material
way interfere with the value or use thereof or the Borrower’s business, the
Project, or the Site;

(g) any Liens encumbering rights to the Certified Emissions Reductions arising
under the CER Documents; and

(h) until the date of the first Disbursement, the DFI Liens.

“Person” means an individual, a legal entity, including, a partnership, a joint
venture, a corporation, a trust, and an unincorporated organization, and a
government or any department or agency thereof.

“Plant” means either Plant 1 or Plant 2 and “Plants” means both of them.

“Plant 1” means an existing 48 MW geothermal power plant located in the Republic
of Kenya approximately 75 kilometers northwest of Nairobi consisting of
geothermal production and injection wells, gathering and injection system
piping, steam separators, an electrical switchyard, three Ormat Energy
Convertors that have been operational since 2000 and three Ormat Energy
Convertors added in 2008.

“Plant 2” means a 36 MW expansion of Plant 1 which is to include new geothermal
wells, new gathering system piping, a new steam separator, a new switchyard and
three new Ormat Energy Convertors located on a site adjacent to Plant 1.

“Plant 2 COD” means the date on which the Full Commercial Operation Date (as
defined in the PPA) of Plant 2 has occurred under the PPA and has been notified
to KPLC pursuant to Clause 7.10 (b) of the PPA.

“Potential Loss” has the meaning set forth in Section 9.10.

“PPA” means the Second Amended and Restated Power Purchase Agreement, dated
29th March 2011, between the Borrower and KPLC.

 

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“Pre-Closing Costs” means an amount equal to the sum of (i) Project Costs in the
aggregate amount of $226,121,000.00 incurred in connection with the Project
until (and including) the Cut-Off Date and (ii) any amounts paid by the Sponsor
or any of its Affiliates to finance Project Costs incurred after the Cut-Off
Date until the date of the first Disbursement.

“Pre-Funded Equity Contribution” has the meaning set forth in the Equity
Contribution and Share Retention Agreement.

“Prepayment Premium” has the meaning set forth in Section 2.04.

“Principal Installments” means (i) the Tranche I Principal Installments and the
Tranche II Principal Installments or (ii) the Tranche I Principal Installments
or the Tranche II Principal Installments, as the context may require.

“Prohibited Payment” means the giving or making by any Person (such Person, the
“Payor”) of any offer, gift, payment, promise to pay or authorization of the
payment of any money or anything of value, directly or indirectly, to or for the
use or benefit of any Official (including to or for the use or benefit of any
other Person if the Payor knows, or has reasonable grounds for believing, that
the other Person would use such offer, gift, payment, promise or authorization
of payment for the benefit of any such Official), for the purpose of influencing
any act or decision or omission of any Official in order to obtain, retain or
direct business to, or to secure any improper benefit or advantage for, the
Borrower or the Project, or any other Person; provided that any such offer,
gift, payment, promise or authorization of payment shall not be considered a
Prohibited Payment if it (i) is expressly permitted by Applicable Law or (ii) is
made for the purpose of expediting or securing the performance of a routine
governmental action (as such term is construed under Applicable Law).

“Project” has the meaning set forth in the Recitals of this Agreement.

“Project Completion” means the occurrence of each of the following:

(a) Technical Completion:

(i) Completion (as such term is defined in the Supply Agreement) shall have
occurred;

(ii) Expanded Plant Completion (as such term is defined in the Coordination
Contract) shall have occurred;

(iii) Plant 2 COD shall have occurred;

(iv) Plant 1 shall have (x) been tested in accordance with the terms set forth
in Schedule 4 of the PPA, and (y) achieved 48 MW of Plant Capacity (as such term
is defined in the PPA);

(v) Plant 2 shall have (x) been tested in accordance with the terms set forth in
Schedule 4 of the PPA, and (y) and has achieved 36 MW of Plant Capacity (as such
term is defined in the PPA);

(vi) all buildings, equipment, facilities, and necessary infrastructure for the
Project shall have been procured, constructed, and installed utilizing
acceptable standards of workmanship and materials and in accordance with the
Project plans and specifications, shall be

 

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operational and in good working condition, and shall meet manufacturers’
specifications and the terms of the PPA and the other Project Documents;

(vii) the Borrower shall be in compliance with the Reservoir Monitoring Plan and
shall have developed and maintained the geothermal resource, the wells and the
surface facilities at all times in compliance with its obligations under the PPA
and in accordance with Good Industry Practice;

(viii) the punch list under Section 3.2 of the Coordination Contract shall have
been agreed among the Borrower, the Coordinator and OPIC (acting in consultation
with the Independent Engineer) and all items set forth on such punch list shall
have been completed or a segregated cash reserve in the amount of one hundred
and fifty percent (150%) of the estimated cost (as proposed by the Borrower and
agreed by OPIC acting in consultation with the Independent Engineer) to complete
all items set forth on such punch list shall have been established by the
Borrower;

(ix) the Borrower shall have received Lien waivers executed by each Key
Contractor releasing all claims and liens against the Borrower, the Project, the
Plants or any part thereof arising under or in connection with the Works;

(x) all Expansion Wells and all other Resource Works (as defined in the
Coordination Contract) shall have been completed by the Borrower and are fully
operational;

(xi) each of (x) the actual yield (MW) of all Original Wells and Expansion Wells
and (y) whether such actual yield (MW) satisfies the Minimum Yield Requirement
shall have been determined, as certified by the Borrower and confirmed by the
Resource Consultant in the form of Exhibit G;

(xii) all delay liquidated damages payable pursuant to Section 2.3 of the
Coordination Contract and all performance deficiency liquidated damages payable
pursuant to Section 2.4.2 of the Coordination Contract, shall have been paid in
full; and

(xiii) all damages payable under the Supply Agreement shall have been paid in
full;

(b) no Event of Default (or condition or event that, with the giving of notice,
or lapse of time, or both, could constitute an Event of Default) has occurred
and is continuing;

(c) the Borrower shall have submitted the most recent semi-annual Reservoir
Monitoring Report as described in Section 6.02(e), together with confirmation
from the Borrower that such report is true and correct in all material respects
as of the Project Completion Date or, if there has been a change in the matters
set forth therein, updating the relevant information;

(d) the Borrower owns and has good, legal and marketable title to the Project
Property (which comprises part of the Site) comprised in and subject to the
provisions set forth in the Land Grant and the Borrower has (subject to the
provisions of the Land Grant, the Site Agreement and the Licence) a lawful,
valid, exclusive and irrevocable right of use of those parcels of land
comprising the Site, in each case free and clear of all Liens (other than
Permitted Liens);

(e) the Liens purported to be granted by the Borrower in favor of OPIC with
respect to all of its assets pursuant to the Security Documents shall be in full
force and effect;

 

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(f) the Borrower shall have furnished OPIC with a Borrower’s Completion
Certificate substantially in the form of Exhibit E hereto;

(g) the Independent Engineer shall have furnished OPIC with an Independent
Engineer’s Completion Certificate substantially in the form of Exhibit F hereto;
and

(h) the Resource Consultant shall have furnished OPIC with a certificate
confirming (i) the matters reference in clause (a)(xi) above; and (ii) that the
Borrower’s Steam Field Facilities as defined in the PPA (including the wells)
are compliant with the requirements of Section 5.10A of the PPA, the Reservoir
Monitoring Plan and this Agreement; and

(i) OPIC shall have determined that each of the requirements set forth in
clauses (a) through (h) above has been satisfied and shall have notified the
Borrower in writing.

“Project Completion Date” means the date on which Project Completion occurs.

“Project Contractor” means any Person that is a party to a Project Document with
the Borrower.

“Project Costs” means all costs incurred or to be incurred by the Borrower to
develop, finance and construct the Project, including, but not limited to
(i) amounts payable under the Project Documents, (ii) interest, fees and
expenses payable with respect to the Loans, (iii) expenses incurred to obtain
use of the Site, (iv) costs and expenses of legal, engineering, accounting,
construction management and other advisors incurred in connection with the
Project, (iv) insurance premiums, (v) funding of the Debt Service Reserve
Account, (vi) general and administrative costs such as payroll, rent, utilities,
office equipment and supplies, vehicles, communications expenses and travel
expenses, (vii) Taxes, and (viii) initial Working Capital.

“Project Country” means the Republic of Kenya.

“Project Documents” means (i) each Original Project Document; (ii) any amendment
to, modification to, supplement to or replacement of any Original Project
Document entered into subsequent to the first Closing Date; and (iii) all
contracts described in subsections (xii) through (xv) of the definition of
Original Project Documents (other than contracts solely for the purchase of
commodities, consumables or supplies to be utilized in connection with any
contract described in subsections (i) through (xv) of the definition of Original
Project Documents) that are entered into by the Borrower subsequent to the first
Closing Date.

“Project Property” means the real estate property with Land Reference Number
12881/3 comprised in Grant Number I.R. 85444 registered in the Land Titles
Registry at Nairobi, Kenya.

“Project Subcontractor” means any Person, other than the Borrower, that is a
party to a Project Document with a Project Contractor.

“PROPARCO” means Société de Promotion et de Participation pour la Coopération
Economique.

“PROPARCO Indebtedness” means all amounts owed by the Borrower to PROPARCO in
respect of the PROPARCO Loan Agreement.

 

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“PROPARCO Loan Agreement” means the Proparco A Loan Agreement, dated January 5,
2009 (as amended, amended and restated, supplemented or otherwise modified from
time to time), among the Borrower, PROPARCO and the DFI Global Agent.

“Property” means any present or future right or interest in, to or under any
assets, equipment, facilities, contracts, leaseholds, business, receivables,
revenues, accounts or other property of any kind whatsoever, whether real,
personal, mixed and whether tangible or intangible.

“Redemption Premium” has the meaning set forth in the Funding Documents.

“Required Contracted Plant Capacity” means 84MW.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve of the United States (or any successor).

“Releases” means, collectively, the documents listed in Part B to Schedule Z and
“Release” means any of them.

“Reservoir Monitoring Plan” shall mean the Borrower’s reservoir monitoring plan
set forth in Schedule 4.19-B (Reservoir Monitoring Plan).

“Reservoir Monitoring Report” shall mean reservoir monitoring report prepared
semi-annually by the Borrower in the form set forth in Schedule 4.19-C (Form of
Reservoir Monitoring Report).

“Resource Consultant” means GeothermEx, Inc.

“Restricted Payment” means any of the following made directly or indirectly by
the Borrower: (i) any dividend or distribution on any share of the Borrower,
including any reduction of capital; (ii) any payment of principal or interest on
any Indebtedness of the Borrower to or for the benefit of the Intermediate
Shareholder or any Affiliate of the Intermediate Shareholder, other than
accounts payable for goods or services provided on an arm’s-length basis; and
(iii) any purchase, redemption, acquisition, or retirement of any shares of the
Borrower or any Indebtedness of the Borrower held by the Intermediate
Shareholder or any Affiliate of the Intermediate Shareholder.

“Rules” means the International Arbitration Rules of the American Arbitration
Association in effect as of the date of the Notice of Arbitration, except as
modified by Section 8.04 and Schedule 8.04 (Arbitration Provisions) or as may be
modified by mutual agreement of the Arbitration Parties.

“Sale Proceeds” shall mean proceeds from any Disposition of all or any part of
any Property of the Borrower, the enforcement of remedies under the Security
Documents or otherwise, but excluding any such proceeds (a) included in any
Termination Payment, (b) included in any Expropriation Proceeds or insurance
proceeds described in Section 2.05(a), or (c) to the extent used in the ordinary
course of business to replace the Property so disposed of.

“Secured Obligations” means all obligations owing to OPIC by the Borrower under
or in connection with the Financing Documents including any liability in respect
of further advances made under the Financing Documents whether present or
future, actual or contingent and whether incurred by the Borrower alone or
jointly and whether as principal or surety or in some other capacity.

 

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“Security Documents” has the meaning set forth in Section 4.02(a)(ii).

“Self-Monitoring Questionnaire” means the Annual Self-Monitoring Questionnaire
used by OPIC to monitor compliance with OPIC’s policy requirements, a copy of
which is available and which may be completed online at http://smq.opic.gov.

“Senior Officer” means any officer, director or manager.

“Share Pledge” means the Equitable Mortgage Over Shares, to be entered into
among the Intermediate Shareholder, the Borrower, and OPIC in form and substance
satisfactory to OPIC.

“Shareholder” means Ormat International, Inc., a Delaware corporation.

“Shareholder Payment” means any payment by the Borrower to, or on behalf of, the
Shareholder or any Affiliate of the Shareholder other than a Restricted Payment,
including any payment in respect of compensation, fees, salaries, bonuses, or
commissions or any payment made on behalf of the Shareholder or any Affiliate of
the Shareholder that is for the benefit of such party.

“Site” means the “License Area” described in Appendix I of the Site Agreement.

“Site Agreement” means the Site Agreement for Olkaria III Geothermal Plant,
dated 5th November 1998 between the Borrower and the Government of the Republic
of Kenya.

“Sponsor” means Ormat Technologies, Inc., a Delaware corporation.

“Subordinated Affiliate Loan” means a subordinated loan made by the Shareholder
or any of its Affiliates to the Borrower in accordance with the terms of the
Equity Contribution and Share Retention Agreement.

“Subordinated DFI Credit Agreements” means collectively (i) the Common Terms
Agreement, dated as of January 5, 2009 (as amended, amended and restated,
supplemented or otherwise modified from time to time), among the Borrower, the
Subordinated DFI Lender, PROPARCO, the DFI Global Agent and the DFI Offshore
Security Agent, (ii) the DEG A Loan Agreement, dated January 5, 2009 (as
amended, amended and restated, supplemented or otherwise modified from time to
time), among the Borrower, the Subordinated DFI Lender and the DFI Global Agent,
(iii) the DEG B Loan Agreement, dated January 5, 2009 (as amended, amended and
restated, supplemented or otherwise modified from time to time), among the
Borrower, the Subordinated DFI Lender and the DFI Global Agent, and (iv) the DEG
C Loan Agreement, dated January 5, 2009 (as amended, amended and restated,
supplemented or otherwise modified from time to time), among the Borrower, the
Subordinated DFI Lender and the DFI Global Agent.

“Subordinated DFI Indebtedness” means all amounts owed by the Borrower to the
Subordinated DFI Lender in respect of the Subordinated DFI Loans.

“Subordinated DFI Lender” means DEG, as lender of each Subordinated DFI Loan.

“Subordinated DFI Liens” means the second priority Liens created and existing
under any of the Subordinated DFI Credit Agreements.

“Subordinated DFI Loans” means the loans advanced to the Borrower by the
Subordinated DFI Lender pursuant to the Subordinated DFI Credit Agreements.

 

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“Supplier” means Orda 6, Inc.

“Supply Agreement” means the Supply Contract, dated as of June, 28, 2012,
between the Borrower and the Supplier.

“Taxes” means all taxes, charges, fees, levies or other assessments, including
without limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, value added, turnover, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, severance, stamp duties,
occupation, property or other taxes, customs duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority and any
political subdivision, instrumentality, agency or similar body of any taxing
authority.

“Term Conversion Date” means the Payment Date next succeeding Plant 2 COD.

“Termination Payment” means any indemnity or other payment received by the
Borrower or any Affiliate thereof from any counterparty other than OPIC under or
in connection with any termination of a Project Document or a Consent, including
any such payment made by KPLC or the Government of the Republic of Kenya
pursuant to the GoK Agreements, KPLC pursuant to the PPA or by any counterparty
to any Direct Agreement.

“Tranche I Commitment” means OPIC’s commitment to lend an amount up to
$85,000,000 less (i) the portion thereof that pursuant to Section 2.06(b) has
been canceled or has been deemed canceled, and (ii) any Tranche I Loan amounts
disbursed pursuant to Section 2.01(c) and (d).

“Tranche I Disbursement” has the meaning set forth in Section 2.01(d)(i).

“Tranche I Loan” means, on any date, the aggregate of the outstanding unpaid
principal amounts of the Tranche I Notes then outstanding.

“Tranche I Maturity Date” means the maturity date set forth in the Tranche I
Note.

“Tranche I Note” means any promissory note issued by the Borrower pursuant to
this Agreement evidencing a Tranche I Loan substantially in the form of a Fixed
Rate Note.

“Tranche I Principal Installments” has the meaning set forth in Section 2.03(a).

“Tranche II Commitment” mean OPIC’s commitment to lend an amount up to
$180,000,000 less (i) the portion thereof that pursuant to Section 2.06(b) has
been canceled or has been deemed canceled, and (ii) any Tranche II Loan amounts
disbursed pursuant to Section 2.01(c) and (d).

“Tranche II Disbursement” has the meaning set forth in Section 2.01(d)(ii).

“Tranche II Initial Payment Date” means, the earlier to occur of (i) the Payment
Date following sixty (60) days after Plant 2 COD and (ii) September 15, 2013.

“Tranche II Loan” means, on any date, the aggregate of the outstanding unpaid
principal amounts of the Tranche II Notes then outstanding.

“Tranche II Maturity Date” means the maturity date set forth in the applicable
Tranche II Note.

 

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“Tranche II Note” means any promissory note issued by the Borrower pursuant to
this Agreement evidencing a Tranche II Loan substantially in the form of a
Weekly Rate Note or a Fixed Rate Note.

“Tranche II Principal Installments” has the meaning set forth in Section
2.03(b).

“Transaction Documents” means the Financing Documents and the Project Documents,
together with all closing certificates required to be delivered thereunder, any
other agreements or instruments entered into in connection with any of the
foregoing or pursuant to which the Loans are made and such other documents as
OPIC may reasonably request and designated by the Borrower and OPIC as a
Transaction Document.

“Uniform Commercial Code” means the uniform rules created by the National
Conference of Commissioners on Uniform State Laws in 1952 coordinating the sale
of goods and other commercial transactions.

“U.S.” means the United States of America.

“U.S. Government” means the government of the United States of America and its
agencies and instrumentalities.

“U.S. Taxpayer Identification Number” means an identification number used by the
Internal Revenue Service, an agency of the United States of America, in the
administration of tax laws. It is issued either by the Social Security
Administration, an agency of the United States of America, or the Internal
Revenue Service.

“U.S. Treasury Cost” has the meaning set forth in the Funding Documents.

“Weekly Rate Note” means any promissory note issued by the Borrower pursuant to
this Agreement substantially in the form of Exhibit A-2 of the OPIC Funding
Agreement.

“Well Reserve Account” means a Dollar-denominated account established by the
Borrower in a U.S. financial institution acceptable to OPIC and pledged to OPIC
pursuant to the terms of the New York Security Agreement.

“Well Reserve Requirement” means, at any time, an amount equal to (i) the sum of
all transfers required to have been made on or before such date from the Revenue
Account (as defined in the Accounts Agreement) to the Well Reserve Account
pursuant to Section 6.3.2(e) of the Accounts Agreement minus (ii) any amounts
withdrawn from the Well Reserve Account and applied to pay Well Drilling Costs
(as defined in the Accounts Agreement) in accordance with Section 6.9.2 of the
Accounts Agreement minus (iii) any amounts released from the Well Reserve
Account under Section 6.9.3 of the Accounts Agreement.

“Worker Rights Non-Compliance” has the meaning set forth in Section 6.13(b).

“Worker Rights Requirements” has the meaning set forth in Section 6.13(a)(xii).

“Workers” means, collectively, (i) individuals that are employed directly by the
Borrower, and (ii) individuals that, under a Project Document, perform
continuous on-site work that is either (x) of substantial duration or
(y) material to the primary operations of the Project.

 

- 23 -

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“Working Capital” means the amount resulting from Current Assets (excluding
cash) minus Current Liabilities (excluding Debt Service for the Loans and for
all other Long-term Indebtedness).

“Works” means the Plant Works (as defined in the Coordination Contract), the
Resource Works (as defined in the Coordination Contract) and any other
engineering, procurement, construction, drilling, commissioning or testing
required to achieve Project Completion.

2. Rules of Interpretation.

In this Agreement, including Exhibits and Schedules hereto, unless otherwise
indicated or required by the context: (a) reference to and the definition of any
document (including this Agreement) shall be deemed a reference to such document
as it may be amended, supplemented, replaced, revised, or modified from time to
time; (b) all references to an “Article,” “Section”, “Schedule,” or “Exhibit”
are to an Article or Section of this Agreement or to a Schedule or an Exhibit
attached thereto and shall be deemed to have been made a part thereof; (c) the
table of contents and article and section headings and other captions are for
the purpose of reference only and do not limit or affect the meaning of the
terms and provisions thereof; (d) defined terms in the singular include the
plural and vice versa, and the masculine, feminine and neuter gender include all
genders; (e) accounting terms not defined in this Schedule X have the meanings
given to them under the Accounting Principles; (f) the words “hereof,” “herein”
and “hereunder” and words of similar import refer to this Agreement as a whole
and not to any particular provision of this Agreement; (g) the words “include,”
“includes,” and “including” mean include, includes and including “without
limitation” and “without limitation by specification”; (h) terms capitalized for
other than grammatical purposes that are defined in (i) the preamble, (ii) the
recitals, or (iii) the Sections of this Agreement have the meanings ascribed to
them therein; (i) phrases such as “satisfactory to OPIC”, “in such manner as
OPIC may determine,” “to OPIC’s satisfaction,” “acceptable to OPIC”, “at OPIC’s
election”, and phrases of similar import authorize and permit OPIC to approve,
disapprove, act or decline to act in its sole discretion; (j) a reference to a
“Person” includes a reference to its successors and assigns, (k) any reference
to any Applicable Law shall be construed so as to include such Applicable Law as
amended, modified, extended, re enacted, redesignated or replaced from time to
time, (l) accounting terms shall have the respective meanings given to them
under the Accounting Principles, (m) references to any condition or any
representation by any Person being to the (i) best knowledge of such Person
shall be deemed to be to the best knowledge of an Authorized Officer of such
Person and (ii) knowledge of such Person shall be deemed to be to the knowledge
of an Authorized Officer of such Person; and (n) the words “reasonable”,
“reasonably”, “unreasonably”, and words of similar import, when applied to
OPIC’s satisfaction, acceptance, determination, consent, discretion or approval,
take into account any special consideration affecting decisions of OPIC in its
capacity as a governmental entity or its responsibilities as such.

 

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SCHEDULE Y

ORIGINAL WELLS

The following wells are the Original Wells, available for use as of the date
hereof for Plant 1:

 

     Name of Well    Location of Well

1.

   A-1    A-Pad

2.

   A-2    A-Pad

3.

   A-4    A-Pad

4.

   A-5    A-Pad

5.

   B-3    B-Pad

6.

   B-7    B-Pad

7.

   B-9    B-Pad

8.

   C-2    C-Pad

9.

   OW-301    301

TOTAL CAPACITY OF ORIGINAL WELLS: 47 MW (LATE 2008) –TO- 44 MW (MID-2011)

 

- 1 -

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SCHEDULE Z

DFI SECURITY DOCUMENTS AND RELEASES

Part A: DFI Security Documents:

 

  1. the Amended and Restated Project Accounts Agreement dated April 4, 2011,
among the Borrower, the DFI Offshore Account Bank, the DFI Global Agent and each
DFI Security Agent, as amended, amended and restated, supplemented or otherwise
modified from time to time (the “DFI Accounts Agreement”).

 

  2. the Debenture dated January 23, 2009, among the Borrower and the DFI
Onshore Security Agent (the “DFI Debenture”).

 

  3. the Legal Charge Over Land Reference Number 12881-3 dated January 23, 2009,
among the Borrower and the DFI Onshore Security Agent (the “DFI Legal Charge”).

 

  4. the Share Charge dated January 23, 2009, among the Intermediate
Shareholder, as chargor, and the DFI Offshore Security Agent (“DFI Share
Charge”).

 

  5. the English Security Agreement dated January 23, 2009, among the Borrower
and the DFI Offshore Security Agent (the “DFI English Security Agreement”).

 

  6. the Loan Assignment and Security Agreement, dated as of January 23, 2009,
among the Intermediate Shareholder, the Shareholder, the Borrower and the
Offshore Security Agent (the “DFI Loan Assignment and Security Agreement”).

 

  7. the Kenya Reinsurance Assignment Agreement dated February 17, 2009, among
the Onshore Security Agent., Real Insurance Company Limited and the Borrower
(the “DFI Kenyan Reinsurance Assignment Agreement”).

 

  8. the Security Trust and Intercreditor Deed, dated January 23, 2009, among
the Borrower, the Intermediate Shareholder, the Shareholder, the lenders
thereunder, the DFI Global Agent, the DFI Onshore Security Agent and the DFI
Offshore Security Agent, as amended, amended and restated, supplemented or
otherwise modified from time to time (the “DFI Security Trust and Intercreditor
Deed”).

Part B: Releases:

 

  1. the Letter of Termination to be entered into among the Borrower, the DFI
Offshore Account Bank, the DFI Global Agent, the DFI Onshore Security Agent and
the DFI Offshore Security Agent with respect to closing of the DFI Accounts and
termination of DFI Accounts Agreement, in form and substance satisfactory to
OPIC.

 

  2. the Deed of Release to be entered into among the Borrower and the DFI
Onshore Security Agent with respect to the release of all security under and
termination of the DFI Debenture, in form and substance satisfactory to OPIC.

 

  3. the Deed of Release to be entered into among the Borrower and the DFI
Onshore Security Agent with respect to the release of all security under and
termination of the DFI Legal Charge, in form and substance satisfactory to OPIC.

 

- 1 -

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  4. the Deed of Release to be entered into among the Intermediate Shareholder
and the DFI Offshore Security Agent with respect to the release of all security
under and termination of the DFI Share Charge, in form and substance
satisfactory to OPIC.

 

  5. the Deed of Release to be entered into among the Borrower and the DFI
Offshore Security Agent, with respect to the release of all security under and
termination of the DFI English Security Agreement.

 

  6. the Deed of Release to be entered into among the Intermediate Shareholder,
the Shareholder, the Borrower and the Offshore Security Agent, with respect to
the release of all security under and termination of the DFI Loan Assignment and
Security Agreement.

 

  7. the Deed of Release to be entered into among the Onshore Security Agent,
Real Insurance Company Limited and the Borrower, with respect to the release of
all security under and termination of the DFI Kenya Reinsurance Assignment
Agreement.

 

  8. the Deed of Release to be entered into among the Borrower, the Intermediate
Shareholder, the Shareholder, the lenders thereunder, the DFI Global Agent, the
DFI Onshore Security Agent and the DFI Offshore Security Agent with respect to
the release of all security under and termination of the DFI Security Trust and
Intercreditor Deed.

 

  9. the Payment and Release Letter to be delivered from PROPARCO to the
Borrower and the DFI Global Agent, with respect to the prepayment in full of the
PROPARCO Loan Agreement.

 

- 2 -

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SCHEDULE 2.08

OPIC PAYMENT INSTRUCTIONS

All payments to OPIC shall be made in Dollars by wire transfer in immediately
available funds without counterclaim, offset, or deduction, via a U.S. domestic
bank. Unless instructed otherwise by OPIC, wires should be sent to OPIC’s
account with the U.S. Treasury Department in New York and must include the
following required information:

 

Fedwire
Field
Tag

  

Fedwire Field Name

  

Required Information

{2000}    Amount (Mandatory)    (12 numeric, right-justified with leading zeros,
no commas, or decimal point. Example: $39,287.21 becomes 000003928721) {3400}   
Receiver ABA routing number    021030004 {3400}    Receiver ABA short name    US
TREAS NYC {3600}    Business Function Code    CTR {4200}    Beneficiary ID-code
   D {4200}    Beneficiary Identifier (account number – AGENCY ALC)    71000001
{4200}    Beneficiary Name    Overseas Private Investment Corporation {5000}   
Originator-ID-Code    D {5000}    Originator-Identifier (Mandatory)    (34
characters maximum, Account Number of Borrower at their Financial Institution)
{5000}    Originator-Name (Mandatory)    (35 characters maximum, Borrower Name,
truncate if necessary) {6000}    Originator to Beneficiary Information – OPIC
Loan Number    OPIC/615-2011-039-IG {6000}    Originator to Beneficiary
Information – Loan Payment Purpose (e.g., Interest, Principal, etc.) (Mandatory)
  

 

- 1 -

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SCHEDULE 3.01(c)

SHAREHOLDER PAYMENTS

 

Payment Date

  

Recipient

   Amount  

June 18, 2012

   Ormat Holding Corp.    $ 9,700,000   

 

- 1 -

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SCHEDULE 3.01(d)

CAPITALIZATION

 

Entity

   Number of issued and
authorized shares     

Entity holding the Shares

   Percentage of
shares held  

OrPower 4 Inc.

     1000       Ormat Holding Corp.      100 % 

Ormat Holding Corp.

     999.9       Ormat International, Inc.      100 % 

 

- 1 -

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SCHEDULE 3.01(l)

FINANCIAL PLAN

 

     US$ (‘000)  

Total Plant 1 Costs

   $ 155,103   

Total Plant 2 Costs

   $ 226,662   

Total Project Costs

   $ 381,765   

Total OPIC Debt

   $ 265,000   

Total Equity

   $ 116,765   

Total Sources

   $ 381,765   

 

- 1 -

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SCHEDULE 3.01(x)

PAYMENT OF CONTRACTORS AND SUBCONTRACTORS

Part A: Set forth below is a complete list of all contractors and suppliers
(other than the Key Contractors) that, since the Cut-Off Date and until July 31
2012, have performed Works. All such Works have been paid in full except as set
forth in Part B of this schedule:

 

    

Contractor/Subcontractor

1.    AAR Health Services Limited 2.    Alpine Coolers Ltd 3.    Auto Scope
Limited 4.    Baja Geo Systems, Inc 5.    Barico Maintenances Ltd 6.    BCD
Travel 7.    Beecher Carlson Insurance Services, LLC. 8.    Bonfide C & F Co.
Limited 9.    Bragg Crane Service 10.    Business Logistics 11.    Bytech
Engineering Limited 12.    Callkey(E.A) Limited 13.    Car Track Kenya Limited
14.    Cashman Equipment Company 15.    Charles Odhiambo 16.    Chege Kuria 17.
   Christian Jacobsen 18.    Civicon Limited 19.    Crystal Impex Ltd 20.   
Davis & Shirtliff Ltd 21.    Davis-Lynch, Inc 22.    DHL Worldwide Express Kenya
Limited 23.    Drilling Services Limited 24.    Economic Housing Group Limited
25.    Eli Holdings Limited 26.    Ephamu General Merchants 27.    Etichy
Agencies 28.    Express Kenya Limited 29.    Fast World Computers Ltd 30.   
Fish Eagle Inn 31.    Fortitude Consultants 32.    Freese Scan 33.    G4S
Security Services Kenya Limited 34.    Galana Oil (K) Limited 35.    Geomatics
Civil Engineering Surveyors Ltd 36.    Geo-Survey International Inc. 37.   
Geothermal Consultants New Zealand Limited 38.    GIGI Motors Ltd 39.   
Halliburton Energy Services, Inc. 40.    Harrison Muiruri Refrigeration 41.   
Haynie Consulting Co.

 

- 1 -

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Contractor/Subcontractor

42.    Heritage AII Insurance Co. Ltd 43.    Hobra Manufacturing Limited 44.   
Hopkins Oil Tool, Inc 45.    Horizon Well Logging Inc 46.    Howard Humphreys
(East Africa) Limited 47.    Image Plus Limited 48.    IntraSearch-MapMart 49.
   Jabada Consulting Company 50.    James & Michael Tyres 51.    Jim Pairish
Surveying Co. 52.    Joseph A. Bunce 53.    Joseph A. Bunce 54.    K & R
Drilling Tools 55.    Kabiria Enterprises Ltd 56.    Kaplan & Stratton Advocates
57.    Kenya Bureau of Standards 58.    Kenya Electricity Generating Co. Ltd 59.
   Kenya Power & Lighting Co.Ltd 60.    Keystone Drill Services LLC 61.   
Kuster Co. 62.    La Pieve Limited 63.    Lake Naivasha Simba Lodge 64.    Lee D
Weiss II 65.    Madgetech Inc 66.    Madris Petrochem 67.    Mahaver Stores
Limited 68.    Mantrack Kenya Ltd 69.    Maruti Office Supplies Ltd 70.   
Mathew N. Njuguna 71.    Matthew Well Consulting 72.    Mayaki Investments 73.
   MFI Office Solutions Limited 74.    Michael R Needham 75.    Mueller
Consulting 76.    Multichoice Kenya Limited 77.    Naivas Ltd 78.    Naivasha
Bidii Investments 79.    Naivasha Municipal Council 80.    Narasha Community
Dev. Project 81.    Ndonyo Health Care 82.    Nigel and Sarah Carnelley 83.   
Oceanic Marine Surveyors Kenya Limited 84.    Oil Field Tubulars and Supply Co.
85.    Onase Logistics Ltd 86.    Oriental General Stores Ltd 87.    Ortitlan,
Limitada 88.    Pacocean Forwarding 89.    Penibrah (K) Ltd 90.    Porto Safari
Consultancy 91.    Precious Exhausters

 

- 2 -

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Contractor/Subcontractor

92.    Pro Fire Pro Design 93.    Projection Solutions Ltd 94.    Radoine
Ololgisoi Nkamasiai 95.    Real Insurance Company Limited 96.    Reykjavik
Geothermal ehf 97.    Richfield Engineering Limited 98.    Riley Falcon Security
Services Limited 99.    Riva Petroleum Dealers Limited 100.    Robert M. Cobb
101.    Royal Oilfield Logistics Services & Sup 102.    Safaricom Limited 103.
   Sam Meeker 104.    San Joaquin Bit Service, Inc. 105.    Scan-Trans Carriers
106.    Service Charge 107.    Shaffer Oil Tool Services, Inc 108.    Siemens
Limited 109.    Signature Cars Ltd 110.    Solutel Kenya 111.    Specialised
Hardwares Limited 112.    Steel Structures Ltd 113.    Techspa General Supplies
Limited 114.    Telkom Kenya Limited 115.    The Poly-Clinic Hospital 116.   
The University of Arizona 117.    The University of Arizona 118.    Thermochem,
Inc. 119.    Tiger Energy Services, Inc 120.    Toplis & Harding International
Ltd 121.    Total Kenya Limited 122.    Trefi East Africa Limited 123.    VIVA
Shipping Inc, 124.    Waki Clearing And Forwarding Agents 125.    Weatherford
Services & Rentals Ltd 126.    Weatherford U.S., LP-Gemoco 127.    Weatherford
U.S., LP-Houston 128.    William S.Ole Molo

 

- 3 -

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Part B: Set forth below is a list of all contractors and suppliers (other than
the Key Contractors) that, since July 31, 2012, have performed or will perform
Works and all amounts remaining to be paid (or projected to be paid) to each
such contractor and supplier that, since the Cut-Off Date, is performing or will
perform Works:

 

Contractor/Supplier

  

Project Document/Agreement

  Amounts owed or estimated to be
owed through Project Completion
(US$/KES)  

Civicon Limited

   Mechanical Construction Services   $ 9,454,000   

Hobra Manufacturing Limited

   Civil Construction Services   $ 609,000   

Siemens Limited

   Agreement for Engineering, Supply, and Construction of the Substation   $
1,742,000   

Mehta Electrical

   Electrical Construction Services   $ 980,000   

Halliburton (various entities)

   Halliburton Master Service Agreement for Drilling Services   $ 6,300,000   

Weatherford (various entities)

   Weatherford Master Service Agreement for Drilling Services   $ 4,600,000   

Other Miscellaneous Contractors/Suppliers

   Various Agreements   $ 4,400,000   

 

- 4 -

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SCHEDULE 4.04

CONSENTS

PART A: CONSENTS ALREADY OBTAINED

 

     

Particulars

  

Relevant Legislation

  

Relevant Authority

  

Status

1. ELECTRICAL AUTHORIZATIONS

1.1.    Generation Licence    Energy Act 2006    Electricity Regulatory
Commission    Obtained 1.2.    Geothermal Resources Licence    Geothermal
Resources Act 1982    Minister of Energy    Obtained 1.3    Approval of Power
Purchase Agreement    Energy Act 2006    Electricity Regulatory Commission   
Approval Letter obtained from ERC includes reference to incorrect PPA date.
Borrower to provide letter from ERC referencing correct PPA date (i.e.,
March 29, 2011).

2. GENERAL DEVELOPMENT AUTHORIZATIONS

2.1.    Development Permission    Physical Planning Act    Naivasha Municipal
Council    Obtained 2.2.    Licence for use of Radio Communication Apparatus   
Kenya Communications Act 1998    Communications Commission of Kenya    Obtained

3. LAND AND CONSTRUCTION AUTHORIZATIONS

3.1.    Approval of building plans for the Plant    Occupational Safety and
Health Act 2007    Director of Occupational Safety and Health Services.   
Obtained 3.2.    Registration as a factory/workplace    Occupational Safety and
Health Act 2007    Director of Occupational Safety and Health Services   
Obtained 3.3.    Manufacturer’s test certificate for new steam boilers or a
report from an authorised boiler inspector for    Occupational Safety and Health
Act, 2008 section 67 (8)    Safety and Health Officer.    Obtained for Plant 1

 

- 1 -

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   previously used steam boilers         

4. ENVIRONMENTAL AUTHORIZATIONS

4.1.    Environmental Impact Assessment Licence    Environmental Management and
Co-ordination Act    NEMA    Obtained

5. IMMIGRATION AND EMPLOYMENT CONSENTS

5.1.    Registration as an employer    National Social Security Fund Act,
chapter 258    The Managing Trustee, NSSF    Obtained 5.2.    Registration as an
employer    Industrial Training Act, chapter 237 and Industrial Training
(Training Levy) Order, 2007    Director of Industrial Training    Obtained

6. BUSINESS, TAX AND ACCOUNTING RELATED AUTHORIZATIONS

6.1.    Registration as a manufacturer    Standards Act, Chapter 496    Kenya
Bureau of Standards    Obtained 6.2.    Single Business Permit    Local
Government Act    Naivasha Municipal Council    Obtained 6.3.    Personal
Identification Numbers for the Borrower    Income Tax Act, chapter 470   
Commissioner for Income Tax (Kenya Revenue Authority)    Obtained 6.4.    VAT
Registration    Value Added Tax Act, chapter 476    Commissioner of Value Added
Tax (Kenya Revenue Authority)    Obtained 6.5.    Registration as a foreign
company with a place of business in Kenya    Companies Act, chapter 486   
Registrar of Companies    Obtained

PART B: CONSENTS TO BE OBTAINED AT A LATER DATE

 

     

Particulars

  

Relevant Legislation

  

Relevant Authority

  

Status

7. LAND AND CONSTRUCTION AUTHORIZATIONS 7.1.    Manufacturer’s test certificate
for new steam boilers or a report from an authorised boiler inspector for   
Occupational Safety and Health Act, 2008 section 67 (8)    Safety and Health
Officer.    To be obtained for Plant 2 only upon Plant 2 commissioning.

 

- 2 -

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   previously used steam boilers          8. IMMIGRATION AND EMPLOYMENT CONSENTS
8.1.    Entry permits and work permits for non-residents in Kenya    Immigration
Act, Chapter 172    Principal Immigration Officer (Immigration Department)    To
be obtained as and when the need arises.

 

- 3 -

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SCHEDULE 4.19-A

DRILLING PROGRAM

 

A. Number of Wells.

The following wells shall be drilled in respect of Plant 2:

 

     Name of Well    Location of Well    Expected output/capacity

1.

   A-9    A-Pad    21.3 MW (actual)

2.

   A-8    A-Pad    12.5 MW (actual)

3.

   A-7    A-Pad    10.0 MW (actual)

4.

   A-10    A-Pad    7 MW (projected)

5.

   B-14    B-Pad    7 MW (projected)

6.

   E-1    E-Pad    7 MW (projected)

7.

   F-1    F-Pad    7 MW (projected)

8.

   E-2    E-Pad    7 MW (projected)

 

B. Performance of Wells.

The aggregate capacity capable of being generated by the output of the Expansion
Wells, in addition to the Original Wells, is expected to be at least 120MW.

 

C. Drilling Parameters.

The Borrower shall ensure that all drilling and well testing activities are
conducted in accordance with Good Industry Practice, and that all relevant
drilling and testing records have been made available to the Independent
Engineer.

 

- 1 -

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SCHEDULE 4.19-B

RESERVOIR MONITORING PLAN

[See Attached]

 

- 2 -

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SCHEDULE 4.19-B

RESERVOIR MONITORING PLAN

 

Operating Data (a)

         Maximum
Measurement
Interval        

Maximum
Measurement
Interval

Plant Operating Data (per unit and total for all quantities)

  (g)      

Field Operating Data - Production

           Per Well    Generation        

Wellhead Pressure

   Daily

Gross Output

     6 hours   

Wellhead Temperature

   Daily

Net Output

     6 hours   

Mass Production Flow Rate - 2 phase

   Daily Operating Parameters            (b)

Brine Flow

     6 hours    Per Separation system   

Brine Inlet Temperature

  (h)    6 hours   

Inlet Pressure

   Daily

Brine Inlet Pressure

  (h)    6 hours   

Outlet Pressure

   Daily

Brine Outlet Temperature

     6 hours      

Brine Outlet Pressure

  (h)    6 hours      

Steam Flow

     6 hours      

Steam Inlet Pressure

  (h)    6 hours   

Field Operating Data - Injection (per well)

  

Ambient Temperature

  (i)    6 hours   

Mass Flow Rate

   Daily (j)        

Wellhead Pressure

   Daily (j)        

Wellhead or Line Temperature

   Daily (j)

 

- 1 -

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Reservoir Pressure Monitoring

Number of wells instrumented (minimum):    2 (c) Instrumentation method:   
Capillary tubing / chamber below water level Measurement interval (maximum):   
6 hours

Chemical Monitoring

Brine Samples (per production well and per injection stream)   

Sampling interval (maximum):

   12 months

Components analyzed:

   Standard geothermal suite (d) Steam Samples (per Plant)   

Sampling interval (maximum):

   6 months

Components analyzed:

   Standard geothermal suite (d) Other Sample Points (specify)   

Sampling interval (maximum):

  

Components analyzed:

  

Other

Temperature / Pressure Surveys (per well)   

Survey Frequency (maximum)

   2 years (e) Well Inspections   

Inspection Type:

   Go Devil

Inspection Interval (maximum):

   (f) Other (specify)   

Notes:

 

(a) Spot (instantaneous) measurements, not averaged values.

 

- 2 -

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(b) Continuous per-well enthalpy monitoring is precluded by current wellfield
configuration and instrumentation.

(c) Wells must have locations suitable for reservoir pressure monitoring.

(d) Analyte suite per Thermochem standards

Brine samples (well) - minimum analyte suite:

-pH (lab), Ca, Mg, Na, K, alkalinity, SO4, Cl, B, SIO2

-Ion balances (difference/sum) of 5% or less.

Steam samples (plant) - minimum analyte suite:

-total (gases/steam) plus gas components CO2, H2S, N2, Ar, O2, CH4, NH3, H2

 

(e) Greater frequency prior to plant start-up and in first year of operation.
Once - adjacent to COD, once - 1 year after COD, thereafter - every two years.

(f) Frequency to be determined based on indications of well condition.

(g) Early generation is considered and monitored as a single unit, and not
separately for each of the OECs.

(h) This data is measured at a plant level.

(i) Ambient Temperature is measured for the Site, and not for each unit or
Plant.

(j) Required instruments will be installed and ready for monitoring by Project
Completion.

 

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SCHEDULE 4.19-C

RESERVOIR MONITORING REPORT

[See Attached]

 

- 1 -

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SCHEDULE 4.19-C

FORM OF RESERVOIR MONITORING REPORT1

Semiannual Period Ending: [Insert Date]

 

  I. Production Wells:

 

  A. Typical Monthly Values.

 

  i. For each production well list a typical value set on one day mid-month for
each month of the semiannual period.

 

  ii. Include wells that are shut-in.

 

  iii. Total [six (6) records] per well. Add rows as needed to be complete.

 

Measured on Date

   Other     

Well

  

Date

  

WHP (Barg)

  

Valve open
(%)

  

Enthalpy
(kJ/kg)

  

Total
production
rate (T/hr)

  

Rate Basis

two-phase
orifice meter
measurements

  

Status/Comments

OW-301                      OW-301                      OW-301                  
   A-1                      A-1                      A-1                     
Etc                     

 

1 

NOTES: TFT and Chemistry Data can be available every two years or so.

               Surveys will be conducted every 5 years. Remedial Work Reports
can be provided when work is done.

 

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  B. End of Semiannual Period Data.

 

  i. For each production well list the applicable data at end-of- semiannual
period.

 

  ii. Include wells that are shut-in.

 

  iii. Total one (1) record per well. Add rows as needed to be complete.

 

Well

  

Hours
operated
during
quarter

   Date last
enthalpy test    Enthalpy
(kJ/kg)    Period to
Date
Cumulative
total mass
(metric T)    Typical or
assumed
separation
pressure
(Barg)    Period to Date
Cumulative
steam (metric T)    Period to Date
Cumulative
brine (metric T)   

Status/Comments

OW-301

                       

A-1

                       

A-2

                       

Etc

                       

 

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  II. Injection Wells:

 

  A. Typical Monthly Values.

 

  i. For each production well list a typical value set on one day mid-month for
each month of the semiannual period.

 

  ii. Include wells that are shut-in.

 

  iii. Total [six (6) records] per well. Add rows as needed to be complete.

 

Well

  

Date

  

Injection rate (T/h)

  

Wellhead pressure
(Barg)

  

Valve open (%)

  

Status/
Comments

B1                B1                B1                OW-307               
OW-307                OW-307                Etc               

 

  B. Each Semiannual Period of Data.

 

  i. For each production well list the applicable data at end-of-semiannual
period.

 

  ii. Include wells that are shut-in.

 

  iii. Total one (1) record per well. Add rows as needed to be complete.

 

- 3 -

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

Well

  

Hours operated this
6 months period

  

Period to date
Cumulative total
mass injected
(metric T)

  

Status/
Comments

B1          OW-307          OW-401          Etc         

 

- 4 -

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

  III. Tracer Flow and Enthalpy Tests (TFT):

 

  A. For each production well, injection well or other sampling point list the
associated data and append the TFT test report to this document.

 

  B. Add rows as needed to be complete.

 

  C. If the TFT report contains all applicable data, it is not necessary to fill
out this table.

 

Sample Point
(Header or
Well)

 

Date

 

Wellhead
Pressure
(Barg)

 

Steam-Brine
Pressure
(Avg or
Normalized)
(Barg)

 

Normalized
Brine Flow
(Kg/sec)

 

Normalized
Steam
Flow

(Kg/sec)

 

Production
Enthalpy
(kJ/kg)

 

Total
Production
Flow

(kg/sec)

 

Are Data
NCG-

corrected?
(y/n)

 

NCG/Steam
wt.%

 

Status/
Comments

                                                                               
                   

 

- 5 -

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

  IV. Chemical Sampling (wells and production header(s)):

 

  A. For each sample point list the activities undertaken and append the
associated chemical analysis report to this document.

 

  B. Add rows as needed to be complete.

 

  C. If the analysis report contains all applicable data, it is not necessary.

 

Sample Point
(Header or
Well)

 

Date of
Sample
Collection

 

Sample
Port ID

 

Portable
Separator
Used
(x if yes)

 

Brine
sample
(x if
collected)

 

Steam/gas
sample
(x if
collected)

 

Steam-Brine
Separation
Pressure (psig)

 

Steam-Brine
Separation
Temperature
(°C)

 

Analytical
Report
Appended

 

Status/
Comments

production
header (name)                   Injection
header (name)                   Well                   Well                  
Etc                   Other                  

 

- 6 -

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

  V. TPS and other Well Logs:

 

  A. For each log run list the activities taken and append an electronic copy of
the associated well log.

 

  B. Add rows as needed to be complete.

 

Well

 

Date

 

Flowing? (days)

  

S/I?
(days)

  

Type of Log

  

Log Data
Appended

  

Status/
Comments

                                                                               
                                               

 

  VI. Remedial Well Work:

 

  A. For each well worked on list the activities taken and outcomes.

 

  B. Add rows as needed to be complete.

 

Well

 

Date

 

Description of Operation and Outcome

               

 

- 7 -

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

  VII. Other Wellfield/Reservoir – Related Activities:

 

  A. List and describe other activities and tests such as:

 

  i. Use of scale inhibitors

 

  ii. ‘James Tube Flow tests and data obtained.

 

  iii. Reservoir Tracer Tests

 

  B. Add rows as needed to be complete.

 

  C. Any activity may be represented by appending an associated report.

 

- 8 -

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

SCHEDULE 6.02(d)

O&M PARAMETERS

ARTICLE I

DEFINITIONS

1.1 As used in this Schedule, the following terms shall have the meanings set
forth below, such definitions to be equally applicable to the singular and
plural form of the terms defined:

“O&M Manual” shall mean the Olkaria III OEC Operation and Maintenance Manual,
dated as of January 8, 2012, as amended or modified from time to time in
accordance with Section 2.4.

“Maintenance Plan” shall mean a maintenance plan prepared by the Borrower with
respect to the Plant in form and substance satisfactory to the Independent
Engineer and OPIC, as amended or modified from time to time in accordance with
Section 2.4.

“Project Operating Procedures” shall mean all procedures required to safely
operate the Project during normal operations and in all emergency situations.

“Project Operating Standards” shall mean, collectively: (i) the O&M Manual,
(ii) the Maintenance Plan, (iii) the Routine Maintenance Procedures, (iv) the
Reservoir Monitoring Plan, and (v) the Annual Operating Budget, each of which
shall not contradict or require any action in contravention of any of the
following: (a) Applicable Law, (b) Good Industry Practice, (c) these O&M
Parameters, (d) the Project Operating Procedures, (e) any Consent applicable to
the Project, (f) any manuals, mechanical catalogues, as-built drawings and any
other operating procedures agreed with (or specified by) KPLC pursuant to
Section 8.5 of the PPA in connection with the operation of the Plant, and
(g) all other Project Documents and other agreements that affect or relate to
the operation and maintenance of the Plant. In the event of any inconsistency
among the requirements, standards and procedures described herein, the Borrower
shall comply with the most stringent applicable standard.

“Routine Maintenance Procedures” shall mean those detailed procedures for the
preventive maintenance that must be performed routinely on an ongoing basis to
maintain the Plant in good working order, which shall be in form and substance
acceptable to OPIC (acting in consultation with the Independent Engineer), as
amended or modified from time to time in accordance with Section 2.4.

“Spare Parts” shall mean the spare parts that a prudent operator would maintain
in inventory in order to undertake any repairs and/or operate the Plant in a
good, workmanlike, and commercially reasonable manner in accordance with Routine
Maintenance Procedures and Good Industry Practice.

“Substantial Equipment Problem” shall mean any equipment malfunction requiring
repairs beyond the scope of routine maintenance or repairs not contemplated by
the then current Annual Operating Budget.

1.2 Capitalized terms not otherwise defined have the meanings ascribed to them
in the Finance Agreement.

 

- 1 -

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

ARTICLE II

DUTIES OF BORROWER

2.1 Until the indefeasible repayment in full of the Loans, the Borrower shall at
all times be in care, custody and control of Plant 1 and, after Plant 2 COD,
Plant 2. The Borrower shall perform all customary services necessary or
appropriate for the operation and maintenance of each Plant in accordance with
the Project Operating Standards, Applicable Law and all Consents applicable to
the Project, except to the extent specified otherwise in these O&M Parameters.
Without limiting the foregoing, the Borrower shall:

a. purchase for the Plants operating and maintenance supplies, safety equipment,
and other items normally used and supplied for a geothermal power plant of the
type and size of the Plant;

b. promptly repair, in a good and workmanlike manner, any equipment that fails
or malfunctions or performs at a level or in a manner inconsistent with Good
Industry Practice;

c. maintain and document the Project’s inventory of Spare Parts, and requisition
replacements of such items as they are used, in accordance with the Project
Operating Standards;

d. take all action that the Borrower considers necessary or advisable in the
event of an emergency to protect (i) the Project and ensure the continued safe
and efficient operation of the same to the maximum extent possible, (ii) all
operations and maintenance personnel, (iii) all equipment located at the Site,
and (iv) the Spare Parts, all in compliance with Good Industry Practice;

e. make all reasonable efforts to achieve or exceed the capacity of the Project
and maximize net operating revenues by operating the Plant at optimum achievable
conditions;

f. monitor and analyze critical operating parameters to confirm that the design
capacity and product quality can be met and sustained for the term of the
Finance Agreement;

g. make the necessary arrangements for safe offsite disposal of all waste
collected or produced at the Site in accordance with Applicable Law and other
Consents applicable to the Project. The Borrower shall not requisition, generate
or otherwise bring onto the Site any chemical, material or other substance that
is prohibited by Applicable Law or any other Consent applicable to the Project;

h. comply with all reporting obligations (if any) relating to the Plant pursuant
to Applicable Law and other Consents applicable to the Project;

i. staff the Plant with qualified operators during all hours of operation;

j. ensure that at all times there shall be available at the Site, operation
personnel, and during normal working hours (as well as “on call” availability
outside of normal working hours), maintenance personnel, adequately trained to
operate and maintain the Plant properly and efficiently within all Project
Operating Standards and in accordance with Good Industry Practice;

k. perform the routine maintenance for the Plant and each Ormat Energy Converter
so as to keep them in good working order in accordance with the Project
Operating Standards;

 

- 2 -

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

l. make a requisition for all materials and arrange for the provision of all
services to the extent necessary for routine maintenance of the Plant and in the
event of Substantial Equipment Problems. All maintenance and repair work shall
be performed in accordance with all applicable manufacturers’ recommendations
and Good Industry Practice;

m. interface with all Governmental Authorities in relation to the PPA and the
Project as and when necessary;

n. comply with the terms and requirements of all insurance contracts and any
other insurance policies applicable to the Project; and

o. operate and maintain the Plant and perform all obligations pursuant to these
O&M Parameters and the Annual Operating Budget.

2.2 Personnel. The Borrower shall provide supervisory personnel and shall
employ, or contract for, qualified operating and maintenance personnel in
accordance with the Project Operating Standards in sufficient numbers to perform
all obligations hereunder. Such personnel shall have had experience and/or
training in operating and maintaining geothermal facilities sufficient for the
positions for which they are employed and shall possess experience and/or
training equal to standards generally accepted within the industry for operating
and maintaining similar equipment in accordance with the Project Operating
Standards. To the extent required by Applicable Law, all personnel shall be
validly licensed to perform the work to be performed by such personnel.

2.3 Records. The Borrower shall maintain maintenance and operating records with
sufficient detail and accuracy so as to provide an accurate and complete history
of the operation and maintenance of the Project in accordance with Good Industry
Practice. All records prepared pursuant to this section shall be retained by the
Borrower until all Secured Obligations have been indefeasibly paid in full. All
records prepared pursuant to this section shall be maintained at a location at
the Plants and made known to OPIC upon prior written request.

2.4 Changes in O&M Manual, Maintenance Plan and Routine Maintenance Procedures.
The Borrower shall have the right from time to time to make changes in the O&M
Manual, Maintenance Plan and Routine Maintenance Procedures that are consistent
with (a) Good Industry Practices, (b) Applicable Law, (c) these O&M Parameters,
(d) the Project Operating Procedures, (e) any Consent applicable to the Project,
(f) any manuals, mechanical catalogues, as-built drawings and any other
operation and maintenance procedures and/or documents agreed with (or specified
by) KPLC or any Governmental Authority in connection with the operation of the
Plant and (g) all other Project Documents. Any such changes shall be reflected
in the O&M Manual, Maintenance Plan and Routine Maintenance Procedures, as
applicable.

2.5 Testing. The Borrower shall perform routine operating tests designed to
monitor the safety and performance of the Project and such other tests as are
generally accepted for the operation of facilities similar to the Project.

 

- 3 -

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

SCHEDULE 6.04

MINIMUM INSURANCE REQUIREMENTS

 

1. Insurance covering the Borrower: The Borrower shall:

 

  1.1 procure not later than the first Closing Date and maintain, or cause to be
procured and maintained, and in all cases at its own expense, at all times
thereafter in full force and effect until all Secured Obligations are paid in
full (unless otherwise specified below), insurance with insurers that meet the
requirement set forth in Annex A hereto (i) as required by (x) Project Documents
and (y) Applicable Law, (ii) of the types set forth in Annex A hereto and
(iii) that insure and keep insured the Project and all its property and business
that can be insured against insurable losses for which coverage is commonly
purchased by prudent owners and operators of geothermal power plants comparable
to the Project on a replacement cost basis in the case of casualty insurance,
utilizing current full replacement values;

 

  1.2 promptly following the receipt of a notice from OPIC (which notice shall
be provided after consultation with the Borrower) from time to time, obtain such
additional insurance coverage of risks or liabilities that are not specified in
this Schedule 6.04 as would from time to time be obtained by a prudent power
plant operating company (operating an asset or assets similar to the Project)
that does not self-insure, and in such amounts and deductibles as are specified
in that notice; provided that the purchase of such additional insurance coverage
is generally accepted industry practice and is available on commercially
reasonable terms to a prudent power plant operating company (operating an asset
or assets similar to the Project) that does not self-insure;

 

  1.3 promptly following the receipt of notice from OPIC from time to time,
obtain such additional insurance(s) or make such modifications to the terms,
conditions, amounts or deductibles of any Insurance Policy required pursuant to
Sections 1.2 and 1.3 of this Schedule 6.04 as OPIC may determine in consultation
with the Borrower and specify in such notice to be necessary to cover any
material change in the identified risk exposure of the Borrower, its business or
its property and to take account of inflationary and other relevant factors,
provided that such modifications are available on commercially reasonable terms
to a prudent power plant operating company (operating an asset or assets similar
to the Project) that does not self-insure; provided further, that the purchase
of such additional insurance coverage is generally accepted industry practice
and is available on commercially reasonable terms to a prudent power plant
operating company (operating an asset or assets similar to the Project) that
does not self-insure;

 

  1.4 comply with all warranties under each Insurance Policy;

 

  1.5 not vary (except in accordance with the terms hereof), rescind, terminate,
cancel, or cause or consent to a material change to any Insurance Policy unless
OPIC has approved such proposed action;

 

  1.6 on each date that the Insurance Policies in effect on the first
Disbursement Date are first renewed, ensure that only the Persons contemplated
by this Schedule 6.04 are listed as loss payees on such Insurance Policies; and

 

  1.7 for the renewal of the Insurance Policies relating to all risk policies,
ensure that the terms of such renewal takes into account the revised replacement
cost value of the covered assets;

 

- 1 -

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

provided always that:

(a) OPIC shall be entitled from time to time to review, in consultation with the
Borrower, the monetary limits and deductibles of each Insurance Policy, such
review not to be conducted more frequently than once every calendar year with
respect to each such policy.

 

2. Borrower Conditions and Requirements:

 

  2.1 Loss Notification: The Borrower shall promptly notify OPIC of any single
loss for an amount that is or could reasonably be expected to be in excess of
five hundred thousand Dollars ($500,000) covered by any Insurance Policies.

 

  2.2 Loss Adjustment and Settlement: A loss under any Insurance Policies
providing property damage and business interruption insurance for the Project,
shall be adjusted with the insurance companies, including the filing in a timely
manner of appropriate proceedings, by the Borrower, subject to the approval of
OPIC if such loss is in excess of $1,000,000 Dollars. In addition, the Borrower
may, in its reasonable judgment, consent to the settlement of any loss, provided
that in the event that the amount of the loss exceeds $1,000,000 Dollars the
terms of such settlement is concurred with by OPIC. OPIC shall have and reserves
the right to participate in settlement negotiations with the insurers.

 

  2.3 Compliance With Policy Requirements: The Borrower shall not violate or
permit to be violated any of the conditions, provisions or requirements of any
Insurance Policy, and the Borrower shall (i) in all material respects perform,
satisfy and comply with, or (ii) cause to be in all material respects performed,
satisfied and complied with, all conditions, provisions and requirements of all
Insurance Policies.

 

  2.4 Waiver of Subrogation: The Borrower hereby waives any and every claim for
recovery from OPIC for any and all loss or damage covered by any of the
Insurance Policies. Furthermore, the Borrower shall cause its insurers (and
reinsurers, if applicable) to waive any and all rights of subrogation against
OPIC.

 

  2.5 Annual Overview of Insurances: On an annual basis, the Borrower shall
furnish OPIC with an annual overview of its insurances, which shall include a
list of all insurance policies and description of all renewals and other changes
to the insurances for the previous year. Any certificates of insurance/binders,
certificates from Borrower’s insurance broker or copies of insurance policies
required to be delivered pursuant to Section 5.1 of this Schedule 6.04 that have
not previously been delivered to OPIC shall be delivered together with such
annual overview of insurances. Upon request, the Borrower will promptly furnish
OPIC with copies of all Insurance Policies, binders and cover notes, reinsurance
policies (if any) or other evidence of such insurance relating to the insurance
required to be maintained by the Borrower, which documents, to the extent
available, shall be provided in English.

 

  2.6 Payments: The Borrower shall pay when due any premium, commission and any
other amounts and take such other action as may be necessary for effecting and
maintaining in force each Insurance Policy.

 

  2.7 Notification: The Borrower shall promptly notify the relevant insurer of
any event entitling the Borrower to make a claim in excess of the deductible
amount in respect of such claim under any Insurance Policy written by such
insurer and diligently pursue such claim, unless the Borrower and OPIC have
decided not to pursue such claim.

 

  2.8 No omissions: The Borrower shall not do or omit to do, or permit to be
done or not done, anything to:

 

- 2 -

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

  2.8.1 render any Insurance Policy, or any provision of that policy, void or
voidable or lead to its suspension or impair or defeat any such policy in whole
or in part; or

 

  2.8.2 prejudice the Borrower’s or, where OPIC is the loss payee or an
additional or named insured, OPIC’s right to claim or recover under any
Insurance Policy.

 

  2.9. Enforcement of Rights: The Borrower shall enforce its rights under the
Project Documents, to the extent that it has such rights, so as to ensure that
any Person (other than the Borrower) required to provide insurance under a
Project Document obtains and maintains Insurance Policies as required thereby.

 

  2.10 Additional Undertakings:

 

  2.10.1 The Borrower shall procure that each insurer under all Insurance
Policies:

(a) is promptly notified of the Lien created in favor of OPIC under the Security
Documents in the Borrower’s title to, and rights, interest and benefits under,
such policies by the delivery by the Borrower to each such insurer of the notice
related to the fiduciary assignment of each such insurance under the Security
Documents;

(b) provides OPIC sixty (60) days (or ten (10) days if due to non-payment of a
premium) notice of the issuance of any notice of cancellation or suspension of
the relevant policy; and

(c) acknowledges that OPIC, as lenders and beneficiaries under the relevant
policy and the Transaction Documents, are not liable to the insurers (or
reinsurers, if applicable) for the payment of any insurance (or reinsurance, if
applicable) premiums nor for any other obligations of the Borrower or any
obligations of any kind but have the right but not the obligation to pay
premiums on behalf of the Borrower.

 

  2.10.2 The Borrower shall procure that (a) its insurance broker with respect
to all Insurance Policies provides OPIC sixty (60) days (or ten (10) days if due
to non-payment of a premium) notice of the issuance of any notice of
cancellation or suspension of any policy and of any fact of which it becomes
aware that could affect the coverage under any policy and (b) provides a
certificate covering the matters set forth in Section 5.1(a) of this Schedule
6.04 with respect to the Insurance Policies as a condition to the first
Disbursement.

 

  2.10.3 The Borrower shall provide OPIC sixty (60) days (or ten (10) days if
due to non-payment of a premium) notice of the issuance of any notice of
cancellation or suspension of any policy and of any fact of which it becomes
aware that could affect the coverage under that policy and of such other matters
as specified in this Schedule 6.04.

 

3. Insurance Policy Conditions and Requirements:

 

  3.1 Language: Each Insurance Policy (and reinsurance policy, if applicable)
shall be in the English language, on terms and conditions acceptable to OPIC and
consistent with market practice for prudent operators of power plants.

 

  3.2 Additional Insured: OPIC shall be named as additional insured or
additional named insured under all insurances except workers compensation and
employers liability.

 

- 3 -

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

  3.3 Separate Policies: All policy terms and conditions (except those relating
to limits of liability) shall operate as if they were a separate policy covering
each insured party and providing that each insured party is insured individually
by such policy.

 

  3.4 Loss Payee: On every Insurance Policy (except for Third Party Liability
Insurance) on the Borrower’s property which is the subject of the Security
Documents and for delay in start-up (if any) and business interruption OPIC
shall be the sole loss payee.

 

  3.5 Rights of OPIC: All terms and conditions of each First Party policy
including Property, Business Interruption, Terrorism and Machinery Insurance
Policy conferring any right, protection or benefit on OPIC (including sole loss
payee and additional or additional named insured terms and conditions, notice
requirements, etc.) shall at all times remain in full force and effect
notwithstanding any act or failure to act on the part of the Borrower, its
agents or employees or on the part of its construction contractors or
subcontractors, unless such Insurance Policies are permitted to be terminated in
accordance with this Schedule 6.04 and so long as 438 BFU Lender’s Loss Payable
Clause or a generally accepted equivalent or alternative is commercially
available.

 

  3.6 Separation of Interests: All policies shall insure the interests of OPIC
regardless of any breach or violation by the Borrower or any other party of
warranties, declarations or conditions contained in such policies, any action or
inaction of the Borrower or others, or any foreclosure relating to the Project
or any change in ownership of all or any portion of the Project.

 

  3.7 All liability Insurance Policies, except workers’ compensation and
employer’s liability, to be maintained by Borrower, shall be endorsed to include
a cross liability clause.

 

  3.8 Provide that the insurance shall be primary and not excess to or
contributing with any other insurance or self-insurance maintained by the
Borrower or any other party.

 

4. Failure to Maintain Insurance: In the event the Borrower fails to take out or
maintain the full insurance coverage required by this Schedule 6.04, OPIC, upon
thirty (30) days’ prior notice (unless the aforementioned insurance would lapse
within such period, in which event notice should be given as soon as reasonably
possible) to the Borrower of any such failure, may (but shall not be obligated
to) take out the required policies of insurance and pay the premiums on the
same. All amounts so advanced therefore by OPIC shall become an additional
obligation of the Borrower, and the Borrower shall forthwith pay such amounts to
OPIC, together with default interest thereon from the date so advanced in
accordance with the Finance Documents.

 

5. Reporting Requirements:

 

  5.1 Copies of Insurance Policies: From time to time after the first
Disbursement Date, the Borrower shall provide to OPIC:

 

  (a)

within ten (10) days after any Insurance Policy (or reinsurance policy, if any)
is issued (or renewed) to the Borrower, certificates of insurance or binders
issued by the Borrower’s insurance broker. Such certificates of
insurance/binders shall identify insurers, the type of insurance, the policy
numbers, the insurance limits, the policy term, shall include evidence that
values reported to the relevant insurers and reflected in the Insurance
Policies’ limits are up-to-date and shall specifically list the special
provisions and endorsements including endorsements for the benefit of OPIC
required by this Schedule 6.04. Such certificates of insurance/binders shall be
accompanied by a certificate from the Borrower’s insurance broker in form and
substance acceptable to OPIC and confirming, inter alia, that such Insurance
Policy has been issued or renewed, as applicable, is in full force and effect
and all

 

- 4 -

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

  premiums then due and payable under such Insurance Policies have been paid,
the renewal period, the premium, the amounts insured for each asset or item and
any changes in terms or conditions from the policy’s original issue date or last
renewal, and, with respect to any Insurance Policy renewal, confirmation that
terms and conditions naming OPIC as sole or first loss payee and additional or
named insured, as applicable remain in effect; and

 

  (b) within sixty (60) days after any Insurance Policy (or reinsurance policy,
if any) is issued to the Borrower, a copy of such policy incorporating the loss
payee terms and conditions required under this Schedule 6.04. The Borrower will
provide copies of any facultative reinsurance policies to OPIC.

 

  5.2 Evidence of Premium Payment: The Borrower shall provide to OPIC such
evidence of premium payment as OPIC may from time to time reasonably request.

 

  5.3 Other Information: The Borrower shall provide to OPIC any other
information or documents on each Insurance Policy as OPIC reasonably requests
from time to time.

 

6. Application of Proceeds: The Borrower shall apply all proceeds of Insurance
Policies in the manner specified in the Accounts Agreement.

 

- 5 -

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

ANNEX A TO SCHEDULE 6.04

The Borrower will place all local insurance as is required by law and in
accordance with the contractual specifications of the PPA.

Insurances shall be placed with insurers (and reinsurers, if applicable) rated
at least A-, X by A.M. Best or A- by Standard and Poor’s (these alternative
ratings being the “Minimum Carrier Rating”) or other insurers reasonably
acceptable and approved by OPIC.

The Policies required below shall be effective on and from the date and time of
the Closing Date or as otherwise specified below.

 

  1. Construction Insurance

 

  a. Builders All Risk

Including Machinery Breakdown, Delay in Start Up and/or Advance Loss of Profits
written with a replacement cost basis of settlement on terms, conditions and
with deductibles sublimits and aggregate sub limits acceptable to OPIC on the
advice of the insurance consultant but in any event at a minimum as follows:

 

  a. Physical Damage including Machinery Breakdown: Full replacement and
automatic reinstatement

 

  b. Delay in Start Up: 12 months loss of revenues less variable expenses or the
equivalent

 

  c. Earthquake, Flood and Volcanic Eruption: Not less than $30,000,000 per
occurrence and in the aggregate

 

  d. Inland Transit: $2,500,000

 

  e. Offsite Storage: $1,000,000 per unit, $5,000,000 limit

 

  f. Expediting Expense: 20% of property damage up to a maximum of $2,000,000

 

  g. Debris Removal: The lesser of 25% of loss or $5,000,000

 

  h. Testing and Commissioning cover for hot and cold testing with a minimum of
30 days for hot testing and extensions permitted

 

  i. LEG2/DE3 or the equivalent for Machinery Breakdown

 

  j. Deductibles not higher than $1,000,000 for machinery breakdown and 45 days
waiting for Delay in Start Up except 5% of loss subject to a minimum of
$1,000,000 for Earthquake, Flood and Volcanic Eruption.

 

  k. Interim Payment clause

 

  l. Standard exclusions permitted including nuclear, chemical, terrorism, war
risks, the costs of making good latent defects (but not consequential loss) and
gradual wear and tear

 

  b. Marine Cargo, Transit and Offsite Storage

Written on a replacement cost basis of settlement covering assets from suppliers
premises to the project site and including Delay in Start Up and/or Advance Loss
of Profits on terms, conditions and with deductibles and limits acceptable to
OPIC on the advice of the insurance consultant but in any event at a minimum as
follows:

 

  a. Limit sufficient to cover the replacement cost of the largest single
conveyance

 

  b. Coverage to include Terrorism, War and Piracy

 

  c. Marine 50/50 Clause

 

- 6 -

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

  d. Institute Strikes Clause (cargo and air cargo)

 

  e. Institute War Clause (air cargo, cargo)

 

  f. Institute War Cancellation Clause (cargo)

 

  g. General Average/Salvage Clause

 

  h. Sue & Labor Clause

 

  i. Error and Omission Clause

 

  j. Overland Transits

 

  k. Other customary clauses

 

  l. Delay in Start Up/ALOP of not less than 12 months loss of revenues less
variable expenses

 

  m. Deductibles not greater than $250,000 and 45 days waiting

 

  2. Operational Insurance

 

  a. Property All Risk Insurance

To be maintained at all times on operating assets (except underground pipelines
and other assets as may be agreed by OPIC) written on a replacement cost basis
of settlement and including Machinery Breakdown, Business Interruption and
Contingent Business Interruption with terms, conditions, deductibles, sublimit
and aggregated sub limits acceptable to OPIC on the advice of the insurance
consultant but in any event at a minimum as follows:

 

  a. Property Damage and Machinery Breakdown: Full Replacement

 

  b. Earthquake and Flood: Not less than $50,000,000 per occurrence and in the
aggregate

 

  c. Volcanic Eruption: Not less than $10,000,000 per occurrence and in the
aggregate

 

  d. Business Interruption: 12 months gross earnings less variable expenses

 

  e. Contingent Business Interruption: not less than $10,000,000 for FLEXA
perils

 

  f. 72 Hour Utility Service Interruption

 

  g. LEG2/DE3 of the equivalent for machinery breakdown

 

  h. Deductibles not greater than $750,000 and 45 days except 5% of loss for
Earthquake, Flood, Wind and Volcanic Eruption subject to a minimum of $750,000.

 

  i. Other customary sub limits in accordance with industry practice including
sabotage and malicious mischief

 

  j. Standard exclusions permitted including nuclear, chemical, war risks,
terrorism, the cost of making good latent defects (but not consequential loss)
and gradual wear and tear

 

  b. Control of Well/Operators Extra Expense

To be maintained at all times with a limit of not less than $20,000,000 combined
single limit per occurrence except $2,500,000 for property of others in care,
custody and control and deductibles not greater than $250,000.

 

- 7 -

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

  3. Other Insurances

At all times Borrower to maintain or cause to be maintained:

 

  a. General Liability

Written on “occurrence” policy form against claims for bodily injury (including
death) and property damage. Such general liability insurance shall provide
coverage for premises/operations, products-completed operations, blanket
contractual liability, explosion, collapse and underground overage, broad form
property damage, independent contractors, and personal injury insurance, and
sudden and accidental pollution legal liability of not less than $30,000,000 per
occurrence and in the aggregate at all times. This may be met through a
combination of primary, excess and umbrella insurance. Deductibles not greater
than $50,000.

 

  b. Workers Compensation Insurance.

As required by applicable laws or similar coverage as required by law and such
other forms of insurance which the Borrower are required by law to provide,
providing statutory benefits and covering loss resulting from injury, sickness,
disability or death of the employees of the Borrower.

 

  c. Employer’s Liability Insurance

As required by applicable laws or similar coverage as required by law and such
other forms of insurance which the Borrower are required by law to provide,
providing statutory benefits and covering loss resulting from injury, sickness,
disability or death of the employees of the Borrower but not less than
$10,000,000 which may be met through a combination of primary and excess
insurance with deductibles not greater than $50,000.

 

  d. Automobile Liability Insurance.

If Borrower has automobiles, automobile liability insurance against claims for
bodily injury (including death) and property damage covering all owned,
non-owned and hired motor vehicles, in amounts as required by law but in any
event not less than $10,000,000 which may be met through a combination of
primary and excess insurance with deductibles not greater than $50,000.

 

  e. Terrorism and Sabotage

Not less than $10,000,000 per occurrence and in the aggregate with a deductible
of $100,000 for property damage and 30 days for business interruption.

 

4. Other Conditions

 

a. Non-renewal; “Tail” Coverage.

In the event that any policy is written on a “claims-made” basis and such policy
is not renewed or the retroactive date of such policy is to be changed, the
Borrower shall obtain for each such policy or policies extended reporting period
coverage or “tail” coverage of at least three (3) years for each such policy or
policies and shall provide OPIC with proof that such basic and supplemental
extended reporting period coverage or “tail” has been obtained.

 

b. The governing law for the local policy is that of Kenya and for global
corporate insurance and reinsurance (if any) is United Kingdom or New York.

 

c. Payment of Loss Proceeds by insurers will be in the currency in USD unless
otherwise agreed by OPIC in its sole discretion.

 

- 8 -

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

SCHEDULE 6.06(c)

CONSTRUCTION PERIOD REPORT

Olkaria III Geothermal

Power Plant Project

EPC PROGRESS REPORT FOR OLKARIA III GEOTHERMAL PROJECT

THE MONTH ENDING [MONTH], [20XX]

 

- 1 -

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

1. Executive Summary

 

2. Work completed up to this Month

 

  2.1 General

 

  2.2 Engineering

[Reporting guidance: Provide discussion of any material progress and/or issues
related to work during the period.]

ORDA 6

 

Description

[Include line items as appropriate for scope]

   Percent
Complete   

Comments

Mechanical Engineering and Design

     

Engineering Subcontractors

 

Description

  

Subcontractor

   Percent
Complete   

Comments

Civil & Structural Engineering and Design

        

Electrical Engineering and Design

        

Fire Protection Engineering and Design

        

Substation Engineering

        

Record Drawings

        

 

  2.3

Procurement & Manufacturing1

 

  2.4 Wellfield Development

 

  2.4.1 Production

 

  2.4.2 Injection

 

1 

NOTE: Summarize the status of procurement for the Supply Contract and for each
subcontractor that has procurement responsibilities in their scope as
appropriate.

 

- 2 -

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

  2.5 Construction

 

  2.5.1 General

 

  2.5.2 Civil, foundations and buildings

 

  2.5.3 Mechanical and piping

 

  2.5.4 Electrical

 

  2.5.5 Sub-Station and T- line

 

  2.5.6 Manpower

 

     Total

Indirect Labor

  

Direct Labor

  

Total

  

 

  2.6 Start-up and Commissioning

 

  2.7 Activities Planned but not Carried out During the Month

 

  2.8 Quality Assurance

 

  2.8.1 Soil Compaction Tests

 

  2.8.2 Concrete Testing

 

Mix
Design

 

Number

of
Samples

this
Period

 

Total

Number

of

Samples

 

Avg. 7

day

Break

Strength

 

Avg. 28

day Break
Strength

 

STD

Dev.

28

day

 

Number

Failed @

28 days

 

Comments

                                         

 

- 3 -

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

  2.8.3 NDE Welds Testing

 

Tests This Month   Total Number Rejections and Repair Status

Test
Type

 

Tests
This
Month

 

Total
Rejected
This
Month

 

Total
Tested
to
Date

 

Total
Rejected
to Date

 

Location

 

Total
Repaired

 

%
Repairs

 

Comments

                                               

3. DESCRIPTION OF EXPECTED FUTURE ACTIVITIES

 

  3.1 General

Contractors currently on site:

 

No

  

Contractor

  

Responsibility

1.    [Name]    2.    [Name]    3.    [Name]    4.    [Name]    5.    [Name]   
6.    [Name]    7.    [Name]    8.    [Name]    9.    [Name]   

 

  3.2 Engineering

 

  3.3 Procurement & Manufacturing

 

  3.3.1 OEC Equipment

 

  3.3.2 Other Equipment

 

- 4 -

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

  3.4 Wellfield Development

 

  3.4.1 Production

 

  3.4.2 Injection

 

  3.5 Construction

 

  3.5.1 General

 

  3.5.2 Civil, foundations and buildings

 

  3.5.3 Mechanical and piping

 

  3.5.4 Electrical

 

  3.5.5 Sub-Station and T- line

 

  3.6 Start-up and Commissioning

4. PROGRESS PROJECT SCHEDULE

 

  4.1 Project schedule (PDF format)

5. ENVIRONMENTAL AND SAFETY

 

  5.1 Training

 

  •  

Mass Safety Meetings held on [                    ].

 

  •  

Tool Training for [        ] held on [                    ].

 

  •  

Fall Protection Training for [        ] held on [                    ].

 

  •  

Confined Space Training for [        ] held on [                    ].

 

  •  

Industrial Hygiene for [        ] held on [                    ].

 

- 5 -

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

  5.2 Safety

For the month there were [    ] near misses, [    ] lost time incidents and
[    ] fatalities.2 The project totals to date are [    ] near misses, [    ]
lost time incidents and [    ] fatalities. See Appendix 2 for tabulated data by
subcontractor.

 

  5.3

Environmental3

6. BUDGET

 

  6.1 Change Order Status

The following table gives a status of signed change orders as well as lists the
scope changes requested to date.

Change Order Request Log

 

Change
Order
Number

 

Description

 

Date
Submitted

 

Estimated
Amount

 

Approved
or
Resolved
and Date

 

Approved
Amount

 

Remarks

                                   

 

  6.2 Budget Summary and Forecast

THE ORIGINAL PROJECT BUDGET IS [    ]. THERE ARE [        ] OF APPROVED CHANGE
ORDERS RESULTING IN AN APPROVED BUDGET OF [        ]. THE FORECAST COST OF THE
PROJECT AT COMPLETION IS [        ]. SEE APPENDIX 4 FOR THE DETAILED BUDGET
SUMMARY AND FORECAST.

 

2 

NOTE: Please provide discussion of any LTI and/or fatalities that occurred
during the period.

3 

NOTE: Please provide discussion of any environmental issues and mitigation
measures that occurred during the period.

 

- 6 -

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

7. Appendices

Appendix 1 – Supply Contract Procurement Status

Appendix 2 – Project Schedule

Appendix 3 – Project Safety Statistics

Appendix 4 – Budget Summary and Forecast

Appendix 5 – Photographs from Site

 

- 7 -

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

SCHEDULE 6.06(D)

FORM OF OPERATING REPORT

[See Attached]

 

- 1 -

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

SCHEDULE 6.06(d)

FORM OF OPERATING REPORT1

Report Date: [                    ]

Subject: Operating report for the period between DD/MM/20XX and DD/MM/20XX

Operating Report

 

1 Generation Summary

 

Item

  

For the period

  

YTD 20XX

Net Energy Sales (MWh)       Avg. Daily Generation (MW)       Availability (%)
     

 

OEC

  

Operational
Hours during
Period

  

Periodical
MWh
Generation
(Gross)

  

Periodical
MW
(Gross)

  

YTD hr

  

YTD MWh
(Gross)

  

YTD MW
(Gross)

OEC-1

                 

OEC-2

                 

OEC-3

                 

 

1 

To be provided: (i) until Project Completion, prior to each Closing Date, an
Operating Report for Plant 1 and, after Plant 2 COD, Plant 2, and (ii) after
Project Completion, semi-annually, beginning on the first to occur of June 30 or
December 31.

 

- 1 -

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

OEC-4

                 

OEC-5

                 

OEC-6

                 

Total

                 

Summary of Power Generation:

 

Indicator

  

Units

  

During Reporting
Period

  

Accumulated
during Calendar
Year

Power Plant Gross Generation

Aux. Load

Net Energy Sales

   MWh      

Average Power Delivered

   MW      

Average Power corrected by ambient temperature

   MW      

Capacity Factor 48 MW

Availability Factor all OECs

   %      

Average Ambient Temperature

   °C      

 

2 Maintenance Summary

 

2.1 OEC down time.

Definition: OEC is not available if it is stopped for preventive or corrective
maintenance.

 

  •  

Maintenance Hours:

 

Preventive –          man hrs. total    OEC          hrs. down time registered
Corrective –          man hrs. total    OEC          hrs. down time registered

 

- 2 -

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

2.2 Corrective Maintenance

 

    

Date

  

Corrective Maintenance Events

  

Man

Hrs

  

Total

Man Hrs

  

Down

Time

BOP    [Date]    [Event]             [Date]    [Event]             [Date]   
[Event]             [Date]    [Event]          OEC 1    [Date]    [Event]      
      [Date]    [Event]             [Date]    [Event]             [Date]   
[Event]          OEC 2    [Date]    [Event]             [Date]    [Event]      
      [Date]    [Event]             [Date]    [Event]          OEC 3    [Date]
   [Event]             [Date]    [Event]             [Date]    [Event]         
   [Date]    [Event]          OEC 4    [Date]    [Event]             [Date]   
[Event]             [Date]    [Event]             [Date]    [Event]          OEC
5    [Date]    [Event]             [Date]    [Event]         

 

- 3 -

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

   [Date]    [Event]             [Date]    [Event]          OEC 6    [Date]   
[Event]             [Date]    [Event]             [Date]    [Event]            
[Date]    [Event]                  

 

  

 

  

 

Total                        

 

  

 

  

 

 

2.3 Maintenance Activities/Events Summary:

Power Grid:

 

  •  

[Preventive maintenance done as per schedule]

Balance of Plant:

 

  •  

[Monthly and weekly done as per schedule.]

 

  •  

[Early generation main steam line was repaired.]

 

  •  

[Annual maintenance for EG BOP was done.]

Well field and Gathering System:

 

  •  

[Weekly and monthly procedures done on schedule.]

OEC Units:

 

  •  

[Monthly and weekly PM done accordingly on all units.]

 

  •  

[OEC 4 feed pump 9300B failed and pulled out for farther investigation.]

 

  •  

[Commissioning of condensate bypass control valves.]

 

  •  

[Annual maintenance for EF units was done as scheduled.]

 

3 Environmental Compliance Status

 

- 4 -

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

[Reporting guidance: Please include results of monthly H2S monitoring program as
a report attachment]

 

4 Power Plant Safety Monthly Status

 

Event

  

Date

Last Safety and Health Committee Training

   [Date]

Last Safety and Health Committee Meeting

   [Date]

Last Basic Occupational Safety and Health Training

   [Date]

Last Safety and Health meeting held (all)

   [Date]

Last Annual Fire Fighting Course

   [Date]

Last CPR and First Aid course

   [Date]

Last safety emergency response plan review

   [Date]

Last Occupational Accident/Incident Committee Training

   [Date]

Health and Safety Report

(The total lost time work hours logged during the specified reporting period
should be reported to the appropriate regulatory agency.)

 

Non-Fatal Injures

   Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov   
Dec    Year
To-
Date

Number of Injuries (note 1)

                                      

Lost time less than one day

                                      

Lost time up to 3 days (note 2)

                                      

Lost time more than 3 days (note 2)

                                      

 

- 5 -

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

Total Number of Injuries

                                      

Time Lost (number of whole days)

                                      

Lost time up to 3 days

                                      

Lost time more than 3 days

                                      

Total Time Lost (days)

                                      

 

Note 1: Recorded on the day of the incident.

Note 2: The day on which an incident occurs is not included in the total

Occupational Illness

   Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov   
Dec    Year
To-
Date

Number of Positive Diagnoses (note 1)

                                      

Lost time less than one day

                                      

Lost time up to 3 days (note 2)

                                      

Lost time more than 3 days (note 2)

                                      

Total Number of Positive Diagnoses

                                      

Time Lost (number of whole days)

                                      

Lost time up to 3 days

                                      

Lost time more than 3 days

                                      

Total Time Lost (days)

                                      

 

Note 1: Recorded on the day of the positive diagnosis.

Note 2: The day on which an incident occurs is not included in the total

 

Fatalities

   Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov   
Dec    Year
To-
Date

Number of Fatalities (note 1)

                                      

Immediate

                                      

Within a Month of Injury

                                      

Within a Year of Injury

                                      

Total Number of Fatalities

                                      

 

- 6 -

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

Note 1: Recorded at time of death.

 

Contracted Plant Capacity (MW)    [Amount] Date of Last Contracted Capacity Test
   [Date]

[Reporting guidance: Please provide spreadsheet file that’s the basis for the
tabulated monthly report data below along with the semiannual report .pdf file]

 

     Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov
   Dec    YTD

OEC 1

                                      

Operating Hours

                                      

Gross Generation (MWh)

                                      

OEC 2

                                      

Operating Hours

                                      

Gross Generation (MWh)

                                      

OEC 3

                                      

Operating Hours

                                      

Gross Generation (MWh)

                                      

OEC 4

                                      

Operating Hours

                                      

Gross Generation (MWh)

                                      

OEC 5

                                      

 

- 7 -

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

     Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov
   Dec    YTD

Operating Hours

                                      

Gross Generation (MWh)

                                      

OEC 6

                                      

Operating Hours

                                      

Gross Generation (MWh)

                                      

Plant

                                      

Gross Generation (MWh)

                                      

Auxiliary Use (MWh)

                                      

Energy Sales (MWh)

                                      

Scheduled / Preventive Maintenance (MWh)

                                      

Unscheduled / Corrective Maintenance (MWh)

                                      

Maximum Load (MW)

                                      

Minimum Load (MW)

                                      

Average Load (MW)

                                      

 

- 8 -

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

     Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov
   Dec    YTD

Period Hours

                                      

Operating Hours

                                      

Total Plant Scheduled / Preventive Maintenance Man Hours

                                      

Total Plant Unscheduled / Corrective Maintenance Man Hours

                                      

Calculated Steam Usage (Ton)

                                      

Average Steam Temperature

                                      

Average Steam Pressure

                                      

Total Brine Usage (Ton)

                                      

Average Brine Temperature

                                      

Average Brine Pressure (bar g)

                                      

Injection

                                      

Total Injected (Ton)

                                      

Average Injection Temperature

                                      

 

- 9 -

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

     Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov
   Dec    YTD

Average Ambient Temperature

                                      

 

5 Comparison Between Operating Budget and Actual Financial Performance

 

     Actual*    Budget*
Total      1st Qtr    2nd Qtr    3rd Qtr    4th Qtr    Total   

1. Salaries, G&A, etc.

                 

1.1 Salaries (fixed monthly portion)

                 

1.2 Salaries (Other)

                 

1.3 Site G&A

                 

1.4 Property Insurance

                 

1.5 Owner G&A

                 

1.6 Housing

                 

1.7 Safety

                 

1.8 Other / Misc.

                    

 

  

 

  

 

  

 

  

 

  

 

Total Fixed Costs Budget

                    

 

  

 

  

 

  

 

  

 

  

 

2. Spare Parts, Consumables, etc.

                 

2.1 Spare parts, repairs and consumables

                 

2.2 Other / Misc.

                    

 

  

 

  

 

  

 

  

 

  

 

Total Variable Costs Budget

                    

 

  

 

  

 

  

 

  

 

  

 

3. Wellfield Maintenance / Capex (excluding draw on reserves)

                 

3.1 Wellfield Maintenance

                 

3.2 CapEx

                 

3.3 Misc.

                    

 

  

 

  

 

  

 

  

 

  

 

Total Wellfield Maintenance / Capex Budget

                    

 

  

 

  

 

  

 

  

 

  

 

4. O&M Contingencies & misc.

                 

 

- 10 -

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

4.1 O&M Contingencies & misc.

                    

 

  

 

  

 

  

 

  

 

  

 

5. Corporate Income Taxes

                    

 

  

 

  

 

  

 

  

 

  

 

5.1 Cash corporate income taxes

                    

 

  

 

  

 

  

 

  

 

  

 

6. TOTAL

                    

 

  

 

  

 

  

 

  

 

  

 

 

* Sums are in thousand dollars.

 

Generation and Revenue

   1st Qtr    2nd Qtr    3rd Qtr    4th Qtr    YTD

Projected Net Generation (MWh)

              

Actual Net Generation (MWh)

              

Budgeted Revenue (M$)

              

Invoiced Amounts (M$)

              

 

- 11 -

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

SCHEDULE 6.07

FORM OF ANNUAL OPERATING BUDGET

[See Attached]

 

- 1 -

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

SCHEDULE 6.07

FORM OF ANNUAL OPERATING BUDGET

 

From: January 1st [        ]    To: December 31st [        ]

 

(In US$ thousands)    [        ] OPERATING BUDGET      Annual    

Comments

1. Salaries, G&A, etc.

    

1.1 Salaries (Fixed Monthly Portion)

   $ [             ]    1/12 per month

1.2 Salaries other

   $ [             ]   

1.3 Site G&A

   $ [             ]    1/12 per month

1.4 Property insurance

   $ [             ]   

1.5 Owner G&A

   $ [             ]   

1.6 Housing

   $ [             ]   

1.7 Safety

   $ [             ]   

1.8 Other / Misc.

   $ [             ]      

 

 

   

Total Fixed Costs Budget

   $ [             ]      

 

 

   

2. Spare parts, Consumables, etc.

    

2.1 Spare parts, repairs and consumables

   $ [             ]   

2.2 Other / Misc.

   $ [             ]      

 

 

   

Total Variable Costs Budget    

   $                     

 

 

   

 

- 1 -

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

3. Wellfield Maintenance / Capex

     (exc, draw on reserves)

3.1 Wellfield maintenance

   $ [             ]   

3.2 CapEx

   $ [             ]   

3.3 Misc.(*)

   $ [             ]      

 

 

   

Total Wellfield Maintenance / Capex

   $ [             ]      

 

 

   

4. O&M Contingencies & misc.

       

 

 

   

4.1 O&M Contingencies & misc.

   $ [             ]      

 

 

   

5. Income Taxes

       

 

 

   

5.1 Cash Income Taxes

   $ [             ]      

 

 

   

6. TOTAL OPERATING BUDGET FOR PERIOD(**)

   $ [             ]   

The Annual Operating Budget above is not evenly spread across the months within
the year, with the exception of the items which are commented with “1/12 per
month”.

 

(*) If miscellaneous amount exceeds twenty percent (20%) of total Wellfield
Maintenance / Capex Amount, such costs should be further broken-down by
category.

(**) Excluding: deposits to reserve accounts, political risk insurance premiums,
royalty charges on revenue to KPLC, interest on debitory accounts (if any) and
hedging costs (if any).

 

- 2 -

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

SCHEDULE 7.07

LEASES / RENTALS INCLUDED IN CONSTRUCTION / DRILLING BUDGET

 

Lessor

 

Purpose

  Amount of Purchase
Orders Issued as of
August 6, 2012
(US$)     Amount of Purchase
Orders expected to be
issued by Project
Completion
(US$)  

1. Weatherford U.S., L.P., Houston

 

Rentals of Tools for Drilling

  $ 33,870      $ 60,000   

2. Weatherford Services & Rentals, Nairobi

 

Rentals of Tools for Drilling

  $ 4,298,320      $ 6,000,000   

3. Weatherford Services & Rentals, Al Barsha

 

Rentals of Tools for Drilling

  $ 951,374      $ 1,000,000   

4. Weatherford U.S., L.P., Gemoco

 

Rentals of Tools for Drilling

  $ 61,656      $ 100,000   

5. Bonfide C & F Co Ltd, Nairobi

 

Crane Services

  $ 315,312      $ 2,300,000   

6. Jabada Consulting Company Limited, Nairobi

 

Equipment Rentals

  $ 480,649      $ 800,000   

7. Shaffer Oil Tools Services, Inc, Fontana

 

Rentals of Tools for Drilling

  $ 447,762      $ 700,000   

 

- 1 -

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

SCHEDULE 8.04

ARBITRATION PROVISIONS

The provisions of this Schedule 8.04 shall apply to any arbitration under
Section 8.04 of this Agreement.

 

1. Place of Arbitration; Language.

 

  (a) The seat of the arbitration shall be The City of New York, New York,
U.S.A.

 

  (b) The language of the arbitration shall be English. All hearings shall be
conducted in English, all awards and orders shall be issued in English, and all
communications, pleadings and documentary evidence shall be presented in
English. If any documents are not in English, the offering Arbitration Party
shall provide English translations thereof at its own expense.

 

2. Arbitral Tribunal.

 

  (a) Number of Arbitrators

The Arbitral Tribunal shall consist of three arbitrators appointed in accordance
with Section 2(b) of this Schedule 8.04, unless, within twenty (20) days after
the receipt by the respondent of the Notice of Arbitration, the Arbitration
Parties shall have agreed that the Arbitral Tribunal consist of only one
arbitrator, and shall have agreed on the identity of such arbitrator.

 

  (b) Appointment of Arbitral Tribunal – Three Arbitrators

 

  (i) If the Arbitral Tribunal is to consist of three arbitrators, each
Arbitration Party shall nominate one arbitrator. The claimant shall nominate an
arbitrator at the same time as serving the Notice of Arbitration. The respondent
shall nominate an arbitrator within twenty (20) days of receipt of notice of the
claimant’s nomination. If either Arbitration Party fails to nominate an
arbitrator within such time limits, the other Arbitration Party may request that
the Administrator appoint such arbitrator. The Administrator shall promptly make
such appointment, and may exercise its discretion (subject to Section 2(c)
hereof) in making such appointment. The two arbitrators thus appointed shall
choose the third arbitrator who will act as the presiding arbitrator of the
Arbitral Tribunal.

 

  (ii) If within twenty (20) days after the appointment of the second arbitrator
the two arbitrators have not agreed on the choice of the presiding arbitrator,
the Administrator shall promptly appoint the presiding arbitrator using the
following list-procedure, unless (x) all Arbitration Parties agree that the
list-procedure should not be used or (y) the Administrator determines in its
discretion that the use of the list-procedure is not appropriate for the case:

(A) At the request of one of the Arbitration Parties the Administrator shall
communicate to the Arbitration Parties an identical list containing at least
seven names;

 

- 1 -

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

(B) Within ten (10) days after the receipt of this list, each Arbitration Party
may return the list to the Administrator after having deleted the name or names
of not more than two candidates to which it objects and numbered the remaining
names on the list in the order of its preference;

(C) After the expiration of the above period of time, the Administrator shall
promptly appoint the presiding arbitrator from among the names approved on the
lists returned to it and taking into account the order of preference indicated
by the Arbitration Parties; provided, however, that if this procedure has not
resulted in the appointment of a presiding arbitrator within 120 days (unless
the parties consent to an extension prior to the expiry of 120 days), then the
Administrator shall promptly appoint the presiding arbitrator in accordance with
the Rules.

 

  (c) Qualifications.

Each arbitrator, in addition to meeting the qualification requirements of the
Rules, (i) shall be fluent in the English language, and (ii) shall be an
attorney admitted to the bar of the State of New York, U.S.A., with experience
in international investment and finance.

 

3. Expedited Proceedings

Unless the Arbitration Parties agree otherwise, the Arbitral Tribunal shall
endeavor to issue its final award within nine (9) months from the date that the
Arbitral Tribunal is constituted. Any time limit set by the Rules, the
Administrator or the Arbitral Tribunal shall be extended only for extraordinary
reasons (as determined in the sole discretion of the Arbitral Tribunal), unless
otherwise agreed by the Arbitration Parties.

 

4. Consolidation

An Arbitral Tribunal shall have the power, at the request of an Arbitration
Party, to consolidate any two or more arbitrations commenced pursuant to
Section 8.04 of this Agreement; provided, however, that no such consolidation
shall be ordered unless (i) the time limits referred to in Section 3 of this
Schedule 8.04 can be complied with notwithstanding such consolidation, and
(ii) the Arbitration Parties in the consolidated arbitration confirm the
appointment of the Arbitral Tribunal.

 

- 2 -

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EXHIBIT A

FORM OF DISBURSEMENT REQUEST

[ON BORROWER LETTERHEAD]

[Date]

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

United States of America

 

Attention:      [Vice President, Structured Finance]1      [Director, Portfolio
Management Division]2

Disbursement Request

Dear Sir or Madam:

Reference is made to the Finance Agreement between OrPower 4 Inc., a limited
liability company incorporated and existing under the laws of the Cayman Islands
(the “Borrower”), and Overseas Private Investment Corporation, an agency of the
United States of America (“OPIC”), dated as of August 23, 2012 (the “Finance
Agreement”). Except as otherwise provided, capitalized terms used herein shall
have the meanings set forth in the Finance Agreement.

Pursuant to Section 5.01 of the Finance Agreement, notice is hereby given that
the undersigned requests Disbursement of the [Tranche I Loan][Tranche II Loan]
as follows:

 

  1. Amount of Disbursement: $[        ]

 

  2. Closing Date: [Not less than 20 Business Days from the date OPIC receives
this Disbursement Request]

 

  3. D-U-N-S® Number: 864403811

 

  4. U.S. Taxpayer Identification Number: 98-0610631

 

A. PROCEEDS AND ADDITIONAL INFORMATION

I, [            ], the [title of Authorized Officer] of the Borrower, DO HEREBY
CERTIFY that:

 

  1. [Attached hereto as Annex 1 is a schedule setting forth the Project Costs
to which the prior Disbursements have been applied, including each written
contract][confirmed purchase

 

1 

For notices delivered prior to first Disbursement.

2 

For notices delivered after first Disbursement.

 

- 1 -

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  order][invoice] for such costs, indicating the [amount paid], [due date],
[services performed] [and/or goods delivered], and evidence of such payment in
the form of [wire transfers][delivery receipt][customs declaration][copies of
cancelled checks or cashier’s checks][; and]3

 

  2. Attached hereto as Annex 2 is a schedule setting forth the Project Costs to
which the present Disbursement:

 

  a. will be applied, for which the proceeds of this Disbursement are presently
needed or will be needed in the ninety (90) days next following the Closing
Date, including each [written contract][confirmed purchase order][invoices][to
adjust to include forecast payments] for such costs, indicating the amount
payable, due date, and services performed and/or goods delivered (as
applicable);

[and/or]

 

  b.

have been applied and for which the Borrower seeks reimbursement through the
proceeds of this Disbursement[, including each [written contract][confirmed
purchase order][invoices][and audited financial statements]4 for such costs,
indicating the amount payable and [services performed] [and/or goods delivered],
and evidence of such payment in the form of [wire transfers][delivery
receipt][customs declaration].]5

 

  3. [Attached hereto as Annex 3 is evidence that an Equity Contribution in an
amount equal to [$        ] has been deposited in the Equity Sub-Account.][No
equity contribution is required to be made for this Disbursement.]

 

B. WIRE TRANSFER INFORMATION

The proceeds of the Disbursement should be transferred as follows:

 

Amount:

   $                   

 

 

 

Payee Name:

  

FOREIGN BANK INFORMATION

 

1.      Bank name:

   Barclays Bank of Kenya Limited

2.      City, Country:

   Nairobi, Kenya

3.      Account reference:

  

4.      Payee account number:

   [Borrower’s Account Number in Kenya/Account Bank Number in Kenya]

5.      SWIFT Code (If available):

  

 

3 

Not applicable for first Disbursement.

4 

Applicable for first Disbursement and for the last disbursement regarding costs
incurred for Plant 1.

5 

Revise as necessary for first Disbursement only to accommodate Pre-Funded Equity
Contribution mechanics.

 

- 2 -

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FOR DISBURSEMENT THROUGH

NEW YORK, NEW YORK CORRESPONDENT BANK INFORMATION6

 

6.      Bank Name:

7.      City, State:

8.      Account Title:

9.      ABA number (9 digits):

10.    Account Number:

 

C. CONDITIONS PRECEDENT SATISFIED

As of the Closing Date, each of the conditions set forth in [Articles IV and V]7
[Article V]8 will be satisfied.

 

D. AUTHORIZED OFFICER’S CERTIFICATION

I am an Authorized Officer of the Borrower and affirm that I am authorized to
make the above certifications on behalf of the Borrower.

 

Very truly yours,

ORPOWER 4 INC.

By:  

 

Name:  

 

Its:  

 

 

6 

This should be an account in NY, NY – the correspondent bank for Barclays Kenya

7 

Only applicable for first Disbursement.

8 

Only applicable for subsequent Disbursements.

 

- 3 -

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Annex 1 to

Disbursement Request

Application of Prior Disbursements

1.

2.

3.

Attached hereto, with respect to each item listed above, is the corresponding
[written contract][confirmed purchase order][invoices] for such costs,
indicating the [amount paid,] [due date,] [services performed][and/ or goods
delivered], and evidence of such payment in the form of [wire
transfers][delivery receipt][customs declaration] [copies of cancelled checks or
cashier’s checks].

 

- 4 -

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Annex 2 to

Disbursement Request

Project Costs

1. The present Disbursement will be applied to the following Project Costs to be
incurred:

 

  A. [            ]

 

  B. [            ]

 

  C. [            ]

2. The Project Costs referred to in item (1) above are evidenced by one of the
following, copies of which are attached:

For Goods: Supplier’s invoice, bill of lading, confirmed purchase orders or
customs declaration

For Services other than Construction Contractors: Service provider’s confirmed
purchase order, claim or invoice

For Construction Contractors: Confirmed purchase order claim or invoice from
contractor, as well as a summary of work progress certified by the Project’s
engineer and approved by an Authorized Officer

3. The present Disbursement will be applied to the following Project Costs which
have already been incurred:

 

  A. [            ]

 

  B. [            ]

 

  C. [            ]

4. The Project Costs referred to in item (3) are evidenced by one of the
following, in accordance with the Accounting Principles:

Third-party independent audit opinion: From a firm previously approved by OPIC,
opining as to scheduled capital and operating expenditures

Independent audited Financial Statements: For expenditures from a prior Fiscal
Year, if such audit provides sufficient detail as to the specific capital and
operating expenditures which to be reimbursed by the Disbursement

Other: each [written contract][confirmed purchase order][customs declaration]
for such costs, indicating the amount payable, due date, and services performed
or goods delivered; together with copies of such [written contract][confirmed
purchase order][customs declaration]

 

- 5 -

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Annex 3 to

Disbursement Request

Evidence of Cash Equity Contribution

Attached hereto is a bank statement evidencing the Equity Contribution made.

 

- 6 -

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EXHIBIT B-1

FORM OF SECRETARY’S CERTIFICATE OF THE BORROWER

[ON BORROWER LETTERHEAD]

This Certificate is given on behalf of OrPower 4 Inc., a limited liability
company incorporated and existing under the laws of the Cayman Islands (the
“Borrower”), pursuant to Sections 4.01 and 4.22 of the Finance Agreement entered
into between the Borrower, and Overseas Private Investment Corporation, dated as
of August 23, 2012 (the “Finance Agreement”).

All capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Finance Agreement.

The undersigned, [            ], Assistant Secretary of the Borrower, DOES
HEREBY CERTIFY that:

1. Attached hereto as Annex 1 are true and complete copies of (a) the
certificate of incorporation of the Borrower, as certified by the Assistant
Registrar of Companies of the Cayman Islands, and all amendments thereto, which
[is/are] in full force and effect as of the date hereof, and (b) the Borrower’s
memorandum and articles of association, including all amendments thereto, which
are in full force and effect as of the date hereof.

2. Attached hereto as Annex 2 are true and complete copies of resolutions duly
adopted by the Board of Directors of the Borrower to authorize inter alia the
execution, delivery and performance of the Finance Agreement, the Note(s) and
each of the other Transaction Documents to which it is or will be a party, and
such resolutions have not been modified, rescinded or amended and are in full
force and effect as of the date hereof.

3. The Persons whose names are listed on Annex 3 hereto (i) have been duly
elected or appointed to, and currently hold, the positions indicated opposite to
their respective names and (ii) are authorized to execute and deliver on behalf
of the Borrower the Finance Agreement, the Note(s), each of the other
Transaction Documents to which the Borrower is or will be a party, and all other
notices or instruments contemplated in the Finance Agreement.

4. The signature appearing opposite each name listed on Annex 3 is the true
signature of such Person.

5. Each Senior Officer of the Borrower has received and reviewed a copy of the
Anti-Corruption Handbook.

 

- 7 -

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

WITNESS my hand this [    ] day of [            ], 20[    ].

 

 

Name:   Title:   [Assistant Secretary]

I, [            ], the [                    ] of the Borrower, DO HEREBY CERTIFY
that [            ] is duly elected and qualified as [Assistant Secretary] of
the Borrower, and that the signature of such [Assistant Secretary] set forth
above is true and genuine.

WITNESS my hand this [    ] day of [            ], 20[    ].

 

 

Name: Title:

 

- 8 -

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

Annex 1

Certificate of Incorporation and Memorandum and Articles of Association

[see attached]

 

- 9 -

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

Annex 2

Resolutions

[see attached]

 

- 10 -

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

Annex 3

Incumbency Certificate

[see attached]

 

- 1 -

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

EXHIBIT B-2

FORM OF SECRETARY’S CERTIFICATE OF THE SHAREHOLDER

[ON SHAREHOLDER LETTERHEAD]

This Certificate is given on behalf of Ormat International, Inc., a corporation
organized and existing under the laws of Delaware (the “Shareholder”), pursuant
to Section 4.01 of the Finance Agreement entered into between the OrPower 4
Inc., a limited liability company incorporated and existing under the laws of
the Cayman Islands (the “Borrower”), and Overseas Private Investment
Corporation, dated as of August 23, 2012 (the “Finance Agreement”).

All capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Finance Agreement.

The undersigned, [            ], Assistant Secretary of the Shareholder, DOES
HEREBY CERTIFY that:

 

  1. Finance Agreement. I am familiar with the terms of the Finance Agreement
and have made or caused to be made such examination or investigation as is
necessary to enable me to express an informed opinion as to the matters set
forth below.

 

  2. Existence and Power. The Shareholder (i) is a company duly incorporated or
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (ii) is duly authorized to do business in
each jurisdiction in which it conducts business; and (iii) has the power to own
its properties, carry on its business, borrow money, create Liens on its
properties, and execute, deliver, and perform each Transaction Document to which
it is a party.

 

  3.

Charter Documents. Attached hereto as Annex 1 are true and complete copies of
the Charter Documents of the Shareholder [and all amendments thereto,]1 which
[is/are] in full force and effect as of the date hereof.

 

  4. Authority. The Shareholder’s execution, delivery, and performance of the
Transaction Documents to which it is a party: (i) have been duly authorized by
all necessary corporate action and (ii) will not violate any Applicable Law.
Each of the Transaction Documents to which it is a party has been duly executed
and delivered by it and is a legal, valid, and binding obligation of the
Shareholder, enforceable in accordance with its terms. No Consent of any Person
is required in connection with the Shareholder’s execution, delivery,
performance, validity, or enforceability of any Transaction Document to which it
is a party.

 

  5. Resolutions. Attached hereto as Annex 2 are true and complete copies of
resolutions duly adopted by the Board of Directors of the Shareholder to
authorize inter alia the execution, delivery and performance of the Transaction
Documents to which it is or will be a party, and such resolutions have not been
modified, rescinded or amended and are in full force and effect as of the date
hereof.

 

  6. Incumbency. The Persons whose names are listed on Annex 3 hereto (i) have
been duly elected or appointed to, and currently hold, the positions indicated
opposite to their respective names and the signatures appearing opposite their
respective names are the true signatures of such Persons,

 

1 Include if applicable.

 

- 2 -

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

and (ii) are authorized to execute and deliver on behalf of the Shareholder each
Transaction Document to which the Shareholder is or will be a party, and all
other notices or instruments (if any) contemplated in each such Transaction
Document.

 

  7. Adequate Financial Means. The Shareholder (i) has capital sufficient to
carry on its businesses and transactions and all businesses and transactions in
which it is about to engage, (ii) is able to pay its debts as they mature and
(iii) owns property and other assets having a value, both at fair valuation and
at present fair saleable value, greater than the total amount of the probable
liabilities of the Shareholder on its debts and obligations as they become
absolute and matured.

 

  8. No Default. No Default or Event of Default has occurred and is continuing.
Neither the Shareholder nor, to the best of the Shareholder’s knowledge, any
other party is in breach of any provision of any Transaction Document to which
the Shareholder is a party, which breach could be a Material Adverse Effect.

 

  9. Financial Condition. The Shareholder has furnished to OPIC copies of its
Financial Statements as required under Section 7.03 of the Equity Contribution
and Share Retention Agreement. Such Financial Statements are complete and
correct and fairly present its financial condition and results of its operations
for the period then ended, subject, in the case of quarterly unaudited financial
statements, to the absence of footnotes and customary year-end adjustments. The
Shareholder has no material financial obligation, contingent or otherwise, of
any kind except as disclosed in such Financial Statements.

 

  10. Bankruptcy; Insolvency; Winding-Up. The Shareholder has not taken any
corporate action and no other legal steps have been taken or legal proceedings
have been commenced or, to the best of its knowledge, threatened against it
seeking a reorganization, moratorium, bankruptcy, arrangement, adjustment or
composition or for the appointment of a receiver, liquidator, assignee,
sequestrator (or similar official) in relation to any part of its property, or
for its winding up, dissolution or re-organization or of any or all of its
property.

 

  11. Share Capital. (i) All Share Capital (as defined in the Equity
Contribution and Share Retention Agreement) of the Borrower is validly owned by
the Intermediate Shareholder and has been duly authorized, validly issued, fully
paid and is nonassessable and (ii) all Share Capital of the Intermediate
Shareholder is validly owned by the Shareholder, has been duly authorized,
validly issued, fully paid and is nonassessable.

 

- 3 -

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

WITNESS my hand this [    ] day of [            ], 20[    ].

 

 

Name:   Title:   Assistant Secretary

I, [            ], the [            ] of the Shareholder, DO HEREBY CERTIFY that
[            ] is duly elected and qualified as Assistant Secretary of the
Shareholder, and that the signature of such Assistant Secretary set forth above
is true and genuine.

WITNESS my hand this [    ] day of [            ], 20[    ].

 

 

Name: Title:

 

- 4 -

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

Annex 1

Charter Documents

[see attached]

 

- 5 -

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

Annex 2

Resolutions

[see attached]

 

- 6 -

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

Annex 3

Incumbency

[see attached]

 

- 1 -

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

EXHIBIT C

FORM OF INDEPENDENT ENGINEER’S CLOSING CERTIFICATE

[Date]

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

 

Attention:      [Vice President, Structured Finance]1      [Director, Portfolio
Management Division]2

Independent Engineer’s Closing Certificate

Dear Sir or Madam:

Reference is made to the Finance Agreement between OrPower 4 Inc., a limited
liability company incorporated and existing under the laws of the Cayman Islands
registered in the Republic of Kenya as a foreign company (the “Borrower”), and
Overseas Private Investment Corporation, an agency of the United States of
America (“OPIC”), dated as of August 23, 2012 (the “Finance Agreement”). Except
as otherwise provided, capitalized terms used herein shall have the meanings set
forth in the Finance Agreement.

Shaw Consultants International, Inc., acting as the “Independent Engineer” under
the Finance Agreement defined above, hereby submits this Certificate in
connection with the current Disbursement Request, dated [—], 201[—] (the
“Current Disbursement Request”).

The Independent Engineer has performed its review of the matters set forth in
this Certificate relating to the Project in a professional manner in accordance
with generally accepted engineering consulting practices and in accordance with
the standards of care practiced by other consulting engineers in performing
similar tasks on like projects and in accordance with its scope of services as
defined in the engagement letter between the OPIC and the Independent Engineer.
The Independent Engineer represents that it has the required skills and capacity
to perform its services in the foregoing manner.

The Independent Engineer has reviewed the Current Disbursement Request, for a
Closing Date of [                    ], monthly Construction Period Reports and
all other information that it has determined to be relevant for purposes of
providing this certification and has conducted a site visit on [—] in order to
enable it to deliver this Certificate.

On the basis of the foregoing and on the understanding and belief that the
Independent Engineer has been provided true, correct and complete information
from the Borrower as to the matters covered by this Certificate, the Independent
Engineer hereby certifies, as of the date hereof, that:

 

 

1 

For notices delivered prior to first Disbursement.

2 

For notices delivered after first Disbursement.

 

- 1 -

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

1. The Current Disbursement Request requests funding for Project Costs that have
been incurred or are reasonably expected to be incurred within ninety (90) days
next following the Closing Date in the Current Disbursement Request, as
documented in Annex 2 to the Current Disbursement Request.

2. The Disbursement requested in the Current Disbursement Request is within the
Construction Budget.

3. The Construction Schedule, dated [                    ], submitted to the
Independent Engineer is achievable for the Project.

4. To our knowledge, no event has occurred that could reasonably be expected to
delay the Project Completion Date as specified in the Construction Schedule and
in Section 6.01(c) of the Finance Agreement.

5. We have found no indications that the Works performed during the period
covered by this Certificate were not performed and completed, as applicable, in
accordance with the Project Documents, the Finance Agreement, the Construction
Budget, the Construction Schedule and Good Industry Practice.

6. We have found no indications that the Project has not been operated in
accordance with the PPA, the Finance Agreement, the Annual Operating Budget and
Good Industry Practice.

7. We have found no indications that the Borrower has not developed and
maintained the geothermal resource, the wells and the surface facilities in
accordance with the PPA, the Finance Agreement and Good Industry Practice.

8. We are not aware of any technical errors or omissions in the information
contained in the Current Disbursement Request.

9. To our knowledge, no event has occurred that would reasonably be expected to
cause Project Costs to exceed the Construction Budget at Project Completion.

 

- 2 -

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

IN WITNESS WHEREOF, the undersigned has executed this Certificate on the date
first above written.

 

Shaw Consultants International, Inc. By:  

 

  Name:     Title:  

 

- 3 -

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

EXHIBIT D

FORM OF BORROWER’S CLOSING CERTIFICATE

[ON BORROWER LETTERHEAD]

[DATE]

I, [                    ], the [title of Authorized Officer] of OrPower 4 Inc.,
a limited liability company incorporated and existing under the laws of the
Cayman Islands (the “Borrower”), DO HEREBY CERTIFY that:

A. I am familiar with the terms of the Finance Agreement between the Borrower
and Overseas Private Investment Corporation (“OPIC”), dated as of August 23,
2012 (the “Finance Agreement”) (capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Finance Agreement);

B. I have read the covenants, representations, warranties, and agreements of the
Borrower contained in the Finance Agreement and have been represented by counsel
in connection with the Finance Agreement;

C. I have made or caused to be made such examination or investigation as is
necessary to enable me to express an informed opinion as to the matters set
forth below;

and pursuant to Section 5.05 of the Finance Agreement DO HEREBY CERTIFY that:

 

  1. The representations and warranties set forth in Article III of the Finance
Agreement are true and correct in all material respects on the date hereof or,
if such representation and warranty relates exclusively to an earlier date, as
of such earlier date, and no Default or Event of Default exists on the date
hereof or will result from the making of the Disbursement or from the
application of the proceeds thereof;

 

  2. As of the date hereof, no Material Adverse Effect has occurred;

 

  3.

[Pursuant to Section 4.02(a) of the Finance Agreement, attached hereto as
Appendix A are true, correct and complete [originals][copies]1 of each Financing
Document, which are in full force and effect in accordance with their terms as
of the date hereof;2

 

  4. Pursuant to Section 4.02(b) of the Finance Agreement, attached hereto as
Appendix B are true, correct and complete copies (and their respective English
translations, if applicable) of each Original Project Document, including all
amendments to date, which are in full force and effect in accordance with their
terms as of the date hereof;

 

  5. With regard to Section 4.03 of the Finance Agreement, the Shareholder holds
100% of the legal and beneficial title to the equity of the Intermediate
Shareholder, and the

 

1 

NOTE: Section 4.2(a)(i) provides for, at OPIC’s election, delivery of certified
copies of each Loan Document.

2 

NOTE: Items 3 through 9 required for first Closing Date.

 

- 1 -

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

Intermediate Shareholder holds 100% of the legal and beneficial title to the
equity of the Borrower;

 

  6. Pursuant to Section 4.04 of the Finance Agreement, attached hereto as
(a) Appendix C-1 are copies of all Consents (a) listed in Part A of Schedule
4.04; and (b) Appendix C-2 are copies of all additional Consents necessary or
advisable, in each case, for (i) the Financing Documents, and the payment of all
amounts due or to become due with respect thereto, not to be subject to any
Taxes and (ii) the execution, delivery, and performance by the Borrower and by
the Shareholder of each Transaction Document to which they are a party, and all
such Consents shall be in full force and effect and not subject to appeal;

 

  7. Pursuant to Section 4.04 of the Finance Agreement, construction of Plant 2
began before March 22, 2012 in accordance with the Certificate of Variation of
Environmental Impact Assessment License, dated May 21, 2010, executed by the
Director General of The National Environmental Management Authority.

 

  8. Pursuant to Section 4.07 of the Finance Agreement, attached hereto as
Appendix D are true, correct and complete copies of the Insurance Policies (and
reinsurance policies, as applicable) required by and issued in accordance with
Section 6.04 of the Finance Agreement, which are in full force and effect in
accordance with their terms;

 

  9. Pursuant to Section 4.23 of the Finance Agreement, attached hereto as
Appendix E are copies of each Project Document delivered to KPLC pursuant to
Section 21.1(d) of the PPA, both for Plant 1 and Plant 2 (together with
transmittal letters to KPLC evidencing delivery thereof);

 

  10.

With respect to Section 8.5 of the PPA, (i) [the following procedures were
agreed between the Borrower and KPLC on or before the Plant Commissioning Date
for the First Plant: [DESCRIBE] [or] [no further procedures were agreed between
the Borrower and KPLC on or before the Plant Commissioning Date for the First
Plant] and (ii) since the Full Commercial Operation Date of the First Plant, no
further procedures have been specified by KPLC or otherwise mutually agreed
between KPLC and the Borrower.]3

 

  11. All of the certifications contained in the Disbursement Request dated
[                    ] remain true and correct and in full force and effect[.][,
except for the following:

 

  i. [                             ]

 

  ii. [                             ]]

 

  12.

[Pursuant to Section 5.08 of the Finance Agreement, attached hereto as Appendix
[    ] are [copies of each Consent][copies of certificates, legal opinions, or
other documents evidencing that the Borrower taken all steps necessary to obtain
any Consents] necessary with respect to the current Disbursement.]4

 

  13. With regard to Section 5.10 of the Finance Agreement, funds or assets on
deposit in the Debt Service Reserve Account have a market value at least equal
to the Debt Service Reserve Requirement.

 

3 

NOTE: Items 3 through 9 required for first Closing Date.

4 

NOTE: to be included, if applicable, for all Closing dates subsequent to the
first Closing Date.

 

- 2 -

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

  14.

[With regard to Section 5.14 of the Finance Agreement, all the Insurance
Policies (and reinsurance policies, as applicable) required by and issued in
accordance with Section 6.04 of the Finance Agreement are in full force and
effect.]5

 

  15. Pursuant to Section 5.16 of the Finance Agreement, attached hereto as
Appendix [    ] are true, correct and complete copies of all Lien waivers from
relevant Affiliates of the Borrower related to the Works required to be obtained
by the Borrower pursuant to Section 6.02(h) of the Finance Agreement.

 

  16.

[Pursuant to Section 5.17 of the Finance Agreement, attached hereto as Appendix
[    ] are all documents required to have been delivered pursuant to
Section 6.03 (Maintenance of Rights and Compliance with Laws) or Section 6.15
(Additional Project Documents), Project Documents delivered to KPLC pursuant to
Section 21.1(d) of the PPA (together with transmittal letters to KPLC evidencing
delivery thereof) not previously delivered pursuant to Section 4.23 hereof (PPA
Notice Requirements) and any such other certificates, opinions, agreements, and
documents customary for transactions of the type contemplated by the Finance
Agreement, and translations of any of the foregoing.]6

WITNESS my hand on the date first written above.

 

ORPOWER 4 INC. By:  

 

Name:  

 

Its:  

 

 

5 

NOTE: to be included for all Closing dates subsequent to the first Closing Date.

6 

NOTE: include any/all that are applicable.

 

- 3 -

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EXHIBIT E

FORM OF BORROWER’S COMPLETION CERTIFICATE

[BORROWER LETTERHEAD]

[Date]

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

 

Attention:      Director, Portfolio Management Division

Borrower’s Completion Certificate

Dear Sir or Madam:

Reference is made to the Finance Agreement between OrPower 4 Inc., a limited
liability company incorporated and existing under the laws of the Cayman Islands
and registered in the Republic of Kenya as a foreign company (the “Borrower”),
and Overseas Private Investment Corporation, an agency of the United States of
America (“OPIC”), dated as of August 23, 2012 (the “Finance Agreement”). Except
as otherwise provided, capitalized terms used herein shall have the meanings set
forth in the Finance Agreement.

 

1. We have read the provisions of the Finance Agreement which are relevant to
the furnishing of this Borrower’s Completion Certificate. To the extent that
this Borrower’s Completion Certificate evidences, attests or confirms compliance
with any covenants or conditions precedent provided for in the Finance
Agreement, we have made such examination or investigation as was, in our
opinion, reasonably necessary to enable us to express an informed opinion as to
whether such covenants or conditions have been complied with.

 

2. BORROWER HEREBY CERTIFIES, as of the date hereof, that:

 

  a. Each requirement set forth in clauses (a) through (e) of the definition of
“Project Completion” has been satisfied;

 

  b. With respect to item (a)(viii) of the definition of Project Completion,
[all items set forth in the agreed punch list have been completed][a segregated
cash reserve in the amount of one hundred and fifty percent (150%) of the
estimated cost (as proposed by the Borrower and agreed by OPIC acting in
consultation with the Independent Engineer) to complete all items set forth in
the agreed punch list has been established and a copy of the agreed punch list
is attached as Appendix [I] hereto].

 

  c. Each release referenced in Section (a)(ix) of the definition of Project
Completion is attached hereto as Appendix [I][II].

 

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  d. With respect to item (a)(xi) of the definition of Project Completion,
(x) the actual yield (MW) of all Original Wells and Expansion Wells is
[            ] and (y) the actual yield (MW) satisfies the Minimum Yield
Requirement.

 

  e. Attached as Appendix [II][III] is the most recent semi-annual Reservoir
Monitoring Report as described in Section 6.02(e) of the Finance Agreement
[updated to reflect [include narrative of change to semi-annual Reservoir
Monitoring Report since delivery pursuant to Section 6.02(e)]]. Such [updated]
semi-annual Reservoir Monitoring Report is true and correct in all material
respects as of the Project Completion Date.

IN WITNESS WHEREOF, the undersigned has executed this Certificate on the date
first above written.

 

OrPower 4 Inc. By:  

 

  Name:     Title:  

 

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Attachments

 

Appendix No.

    

Document

[I]      Punch List [I][II]      Releases [II][III]      Semi-annual Reservoir
Monitoring Report

 

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EXHIBIT F

FORM OF INDEPENDENT ENGINEER’S COMPLETION CERTIFICATE

[Date]

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

 

Attention:      Director, Portfolio Management Division

Independent Engineer’s Completion Certificate

Dear Sir or Madam:

Reference is made to the Finance Agreement between OrPower 4 Inc., a limited
liability company incorporated and existing under the laws of the Cayman Islands
and registered in the Republic of Kenya as a foreign company (the “Borrower”),
and Overseas Private Investment Corporation, an agency of the United States of
America (“OPIC”), dated as of August 23, 2012 (the “Finance Agreement”). Except
as otherwise provided, capitalized terms used herein shall have the meanings set
forth in the Finance Agreement.

Shaw Consultants International, Inc., acting as the “Independent Engineer” under
the Finance Agreement defined above, hereby submits this Certificate in
connection with the Borrower’s Completion Certificate, dated [—].

The Independent Engineer has performed its review of the matters set forth in
this Certificate relating to the Plant in a professional manner in accordance
with generally accepted engineering consulting practices and in accordance with
the standards of care practiced by other consulting engineers in performing
similar tasks on like projects and in accordance with its scope of services as
defined in the engagement letter between the OPIC and the Independent Engineer.
The Independent Engineer represents that it has the required skills and capacity
to perform its services in the foregoing manner.

The Independent Engineer has reviewed the Borrower’s Completion Certificate,
Plant Commercial Operations Tests (as defined in the PPA), Construction Period
Reports, and other information that it has determined to be relevant for
purposes of providing this certification and has conducted a site visit on [—]
in order to enable it to deliver this Certificate.

On the basis of the foregoing and on the understanding and belief that the
Independent Engineer has been provided true, correct and complete information
from the requisite parties as to the matters covered by this Certificate, the
Independent Engineer hereby certifies, as of the date hereof, that:

1. Each of the requirements set forth in clauses (a) through (c) of the
definition of “Project Completion” have been satisfied as of the date hereof.

 

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2. [The punch list is complete][The aggregate of all punch list items and other
amounts due and payable by Borrower (if any) is [—]].1

IN WITNESS WHEREOF, the undersigned has executed this Certificate on the date
first above written.

 

Shaw Consultants International, Inc. By:  

 

  Name:     Title:  

 

1 

Insert if applicable

 

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EXHIBIT G

FORM OF RESOURCE CONSULTANT’S COMPLETION CERTIFICATE

[RESOURCE CONSULTANT LETTERHEAD]

[Date]

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

 

Attention:      Director, Portfolio Management Division

Resource Consultant’s Completion Certificate

Dear Sir or Madam:

Reference is made to the Finance Agreement between OrPower 4 Inc., a limited
liability company incorporated and existing under the laws of the Cayman Islands
and registered in the Republic of Kenya as a foreign company (the “Borrower”),
and Overseas Private Investment Corporation, an agency of the United States of
America (“OPIC”), dated as of August 23, 2012 (the “Finance Agreement”). Except
as otherwise provided, capitalized terms used herein shall have the meanings set
forth in the Finance Agreement.

GeothermEx, Inc., acting as the “Resource Consultant” under the Finance
Agreement defined above, hereby submits this Certificate in connection with the
Borrower’s Completion Certificate, dated [—].

The Resource Consultant has performed its review of the matters set forth in
this Certificate relating to the Plant in a professional manner in accordance
with generally accepted engineering consulting practices and in accordance with
the standards of care practiced by other consulting engineers in performing
similar tasks on like projects and in accordance with its scope of services as
defined in the engagement letter between the OPIC and the Independent Engineer.
The Resource Consultant represents that it has the required skills and capacity
to perform its services in the foregoing manner.

The Resource Consultant has reviewed the Borrower’s Completion Certificate and
other information that it has determined to be relevant for purposes of
providing this certification and has conducted a site visit on [—] in order to
enable it to deliver this Certificate.

The Resource Consultant hereby certifies, as of the date hereof, as follows:

A. all Expansion Wells have been completed by the Borrower and are fully
operational;

B. with respect to item (a)(xi) of the definition of Project Completion, (x) the
actual yield (MW) of all Original Wells and Expansion Wells is [            ]
and (y) the actual yield (MW) satisfies the Minimum Yield Requirement; and

 

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C. the Borrower’s Steam Field Facilities as defined in the PPA (including the
wells) are compliant with the requirements of Section 5.10A of the PPA, the
Reservoir Monitoring Plan and the Finance Agreement.

 

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IN WITNESS WHEREOF, the undersigned has executed this Certificate on the date
first above written.

 

GeothermEx, Inc. By:  

 

  Name:     Title:  

 

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