Document:

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

                                                                  Exhibit 10.4.5

         THIS LEASE, made in duplicate this 1st day of August, 1976, by and
between SOUTHERN PACIFIC LAND COMPANY, a California corporation, hereinafter
called "Lessor" and PHILLIPS PETROLEUM COMPANY, a Delaware corporation,
hereinafter called "Lessee".

         W I T N E S S E T H:

         1. Lessor hereby grants, leases and lets, subject to the provisions
hereof, the exclusive right to explore, prospect, drill for, produce, treat,
extract, take, process, remove and utilize all products of geothermal processes,
including, but not limited to, hot brine, hot water, hot rock, and indigenous
steam; steam and other gases; hot water and hot brines resulting from water, gas
or other fluids (whether liquid or gaseous) artificially introduced into
geothermal formations hereinafter referred to as "geothermal energy"; and any
mineral or minerals (exclusive of oil, petroleum and hydrocarbon gas) which are
found in solution or in association with or entrained in such steam, hot water
or hot brines, hereinafter referred to as "substances", and storing, taking,
removing, transporting, and disposing of same, an undivided 50 percent interest
in that certain land situated, lying and being in the County of Churchill, State
of Nevada, hereinafter referred to as "Leased Premises", more particularly
described on Exhibit "A" attached hereto and made a part hereof.

         TOGETHER with the right to inject and reinject geothermal effluents
from operations hereunder in the leased premises and use so much of the leased
premises as may be required by Lessee for the drilling and operation of wells
thereon for the purposes hereof, and to construct and maintain thereon
buildings, structures and equipment, including, but not limited to generation
and transmission of electric power, mineral processing, waste water disposal,
pipe lines, transmission lines, power lines, ponds and roads, in connection with
operations hereunder;

provided however, that Lessee agrees to use for such purpose only so much of the
leased premises as shall be reasonably necessary for Lessee's operations
thereon.

         Subject to easements, leases, licenses and restrictions affecting the
         leased premises. Reserving unto Lessor, its successors and assigns, the
         following:

         (a) The right to construct, maintain and use tracks, roads, trails,
ditches, pipe lines, communication devices, and facilities relating thereto in,
upon, over and across the leased premises, and

         (b) The right to use the leased premises for all other purposes not
inconsistent with or which shall not interfere with the right of the Lessee
hereunder to use the leased premises.

         (c) The exclusive right to all minerals other than those leased
hereunder, including, but not limited to, oil, petroleum, natural hydrocarbon
gas, and other hydrocarbons.

         2. This lease shall be for a primary term of ten years from and after
the date first herein written and for so long thereafter, as there:

         (a) shall be commercial production of said geothermal energy and
substances from the leased premises and/or

         (b) drilling, re-drilling, deepening or remedial operations are being
prosecuted on a continuous basis on the leased premises.

         3. Lessee agrees to pay to Lessor in advance as of the date of this
lease the sum of $*** per acre of the leased premises as rental for the first
year of this lease and to pay to Lessor in advance for the second year of the
lease on or before the 1st day of August 1977, and annually thereafter during
the remaining period this lease is in effect, on or before the same day and
month of each succeeding year, an annual advance minimum royalty at the rate of
$*** per acre for each acre then covered by this lease.

*** Confidential material redacted and filed separately with the Commission.

                                       2

         In the event Lessee uses the surface of a portion or portions of the
leased premises for the construction and operation of facilities for mineral
processing, electric or power generation or waste water disposal, ponds or
plants, exclusive of the portions of the leased premises used for the drilling
and operation of wells and construction and maintenance of pipe lines,
transmission lines, roads and ditches, Lessee agrees to pay to Lessor, in
addition to the above minimum royalty, an annual advance surface rental during
the period of such use equivalent to 9 1/2 % of the current value used in the
assessment by the County in which lands are located as to the portions of the
leased premises so used, which is in effect for each year the use is made.

         4. Lessee shall commence drilling a well for said geothermal energy and
substances on the leased premises within the primary term, and shall continue
the work of drilling said well with due diligence until completion, and
thereafter shall commence and drill such other wells as may be required to
assure Lessee of a supply of said geothermal energy and substances or any of
them in such amounts as its requirements from the leased premises may demand,
provided that the spacing of wells drilled upon the leased premises shall not be
less than the spacing of wells drilled upon adjoining land, and provided further
that this lease shall terminate at the end of the tenth year from the date
hereof as to the acreage hereunder then in excess of the result of multiplying
the number of wells then capable of producing said geothermal energy and
substances in paying quantities times six hundred and forty acres, and that the
locations of the portions of the leased premises which shall remain subject to
this lease shall be selected by Lessee.

         Lessee shall keep each well drilled on the leased premises producing at
the rate deemed by Lessee to be most conducive to efficient operation of the
well and to maximum production of said geothermal energy and substances covered
hereby; provided, however, that if Lessee's well

                                       3

or wells on land adjoining the leased premises are not produced to capacity,
then Lessee may produce from the wells on the leased premises at the same ratio
that the actual production bears to potential production of Lessee's well or
wells being produced on adjoining land.

         In the event Lessee fails to commence drilling a well within the
primary term of this lease or the leased premises or land pooled therewith as
provided herein, this lease shall terminate except as otherwise provided.

         5.  A well shall be deemed completed:

         (a) when formations or mechanical difficulties are encountered which,
in Lessee's judgment, render further drilling of such well unprofitable or
unsuccessful and because of such fact further drilling operations thereon are
discontinued;

         (b) when a well has been drilled to a depth of at least five thousand
feet and the drilling operation is discontinued, or

         (c) Lessee has ceased drilling a well and it is tested and deemed
capable of producing said geothermal energy and substances or any of them in
quantities deemed by Lessee sufficient to warrant the continuance of its
operation.

         6. Lessee agrees to pay to Lessor as royalty:

         (a) *** of the gross proceeds received by Lessee from the sale of
geothermal energy at the point of sale.

         (b) on all other leased substances produced therefrom, *** percent of
the gross proceeds during the first ten years of the commercial production of
said substance and *** percent of the gross proceeds thereafter received by
Lessee. Gross proceeds, for the purpose of this lease, shall be the sales price
received by Lessee at the point of sale, less transportation costs from Lessee's
plant to sales point.

*** Confidential material redacted and filed separately with the Commission.

                                       4

         Lessor shall have the right to receive its royalty in kind.

         7. Lessor does hereby lease to Lessee the exclusive right to use said
leased premises for the slant drilling of wells having their surface locations
upon either the leased premises or adjoining land and having their well bores
passing through the subsurface of the leased premises, for the production of
said geothermal energy and substances, and having their production intervals
beneath land other than the leased premises or land included in any unit created
under provisions of Section 11 hereof, such wells being hereinafter referred to
as "slant wells", together with the exclusive right to drill core holes through
the subsurface of the leased premises to other land to obtain geological
information.

         Unless sooner terminated, either in whole or in part as hereinafter
provided, the primary term of this lease of rights for slant wells shall be
contemporaneous with the primary term of this lease, and for as long thereafter
as said geothermal energy and substances are produced in paying quantities from
land other than the leased premises by slant wells, or Lessee in good faith
conducts slant drilling operations in the leased premises.

         As payment for the slant well rights, hereby leased, Lessee agrees to
pay to Lessor, at the times and in the manner hereinafter provided, an
overriding royalty on the production from each slant well, drilled by Lessee as
follows:

         (a) *** percent of the gross proceeds received by Lessee from the sale
of geothermal energy, at the point of sale.

         (b) *** percent of the gross proceeds received by Lessee on all other
leased substances produced therefrom. Gross proceeds, for the purpose of this
lease, shall be the sales price received by Lessee at the point of sale, less
transportation costs from Lessee's plant to sales point.

*** Confidential material redacted and filed separately with the Commission.

                                       5

         The advance minimum royalty paid by Lessee to Lessor, under the
provisions of Section 3 hereof, shall not be credited against any overriding
royalties from production from slant wells drilled under the provisions hereof.

         Lessor agrees to pay a pro rata share, which shall be in the proportion
that its overriding royalty bears to the total production from slant wells
drilled under this section, of the amount of any license, severance, or
production tax levied by any governmental agency on, or measured by, the
substances produced. Lessor agrees to pay the same pro rata share of the mineral
rights taxes upon the land beneath which slant wells have their producing
intervals. Lessee agrees to pay, or cause to be paid, the remainder of any and
all such taxes.

         The obligation of Lessee hereunder with respect to the drilling and
operating of all slant wells, and its right to suspend or delay operations
therein, shall be those provided in such leases in which Lessee has or may
acquire an interest embracing the land beneath which slant wells drilled
hereunder have their producing intervals.

         Lessee shall keep true and correct records of its operations conducted
in, and of the production from, slant wells. Lessee shall, when requested to do
so by Lessor, furnish to Lessor a copy of the drilling log and electric log, and
of the directional survey of the bore of, each slant well drilled by Lessee
hereunder. Lessee shall furnish Lessor, with each overriding royalty payment, a
statement of the production from each slant well showing in detail the
computation of Lessor's overriding royalty. Lessee's records shall be open for
inspection by Lessor at all reasonable times.

         8. Lessee shall have the right to commingle, for the purpose of
utilizing, selling or processing minerals, geothermal energy and substances
produced from the leased land, with geothermal energy and substances produced
from other land and to meter or gauge the

                                       6

production of said geothermal energy and substances from the leased premises,
and to compute and pay royalty to Lessor on the basis of such production as so
determined. Lessee agrees to pay to Lessor on or before the last day of each and
every month the royalties accrued and payable hereunder for the preceding
calendar month, and in making such royalty payments Lessee shall deliver to
Lessor statements setting forth the basis for determination of such royalty. In
the event that the production of said geothermal energy and substances from the
leased premises or from land in the general area of the leased premises should
at any time exceed the demand therefor or the facilities for use thereof, and
Lessee elects to reduce the total volume of said geothermal energy and
substances produced or consumed, then in that event, wells participating on a
commingling basis shall be reduced in a percentage amount equal to the
proportion of the whole in light of good engineering practices.

         In the event all or any part of the leased premises is pooled (as
provided for in Section 11), with other land, then Lessor shall receive as
royalty on production from the pooled acreage only such portion of the royalty
as the amount of Lessor's acreage placed in the unit, bears to the total acreage
so pooled in the unit involved.

         Lessee shall not be required to account to Lessor for, or to pay
royalty on said geothermal energy and substances produced by Lessee on the
leased premises which are not utilized, saved or sold, or on power generated by
Lessee and used by Lessee in Lessee's operations on or with respect to the
leased premises for or in connection with the development, processing and
production of said geothermal energy and substances.

         The annual advance minimum royalty provided in Section 3 payable by
Lessee to Lessor shall be credited against the obligation of Lessee to pay the
royalties which accrue only during the annual period for which paid, but the
annual surface rental provided for in Section 3 shall not

                                       7

be so credited. The surface rental and royalties hereinabove provided for shall
be a lien upon any and all of said geothermal energy and substances removed from
or stored upon the leased premises and upon any improvements or personal
property of Lessee upon the leased premises.

         9. In the event Lessor at the time of making this lease owns a less
interest in the leased premises than one hundred per cent of the rights herein
leased to Lessee, then the rentals and royalties accruing hereunder shall be
paid to Lessor only in the same proportions which Lessor's interest bears to a
one hundred per cent interest in the leased premises. Notwithstanding the
foregoing, should Lessor hereafter acquire any additional right, title or
interest in or to the leased premises, it shall be subject to the provisions
hereof to the same extent as if owned by Lessor at the date hereof, and any
increase in payments of money hereunder necessitated thereby shall commence with
the payment next following receipt by Lessee of satisfactory evidence of
Lessor's acquisition of such additional interest.

         10. In the event Lessee shall, except by Lessor, be lawfully deprived
of possessing, or rights hereunder to, the leased premises, or any portion or
portions thereof, Lessee shall notify Lessor as to the circumstances thereto;
whereupon Lessor may, at Lessor's option, either reinstall Lessee in possession
as to said rights or terminate this lease as to the leased premises, or the
portion or portions thereof, as to which Lessee is so deprived, by notice to
Lessee to that effect and the tender of the sum of One Hundred Dollars, plus the
total amount of any sums other than taxes, theretofore paid by the Lessee
hereunder, for said rights; whereupon no claims for damages whatsoever kind or
character incurred by Lessee by reason of such de-possession shall be chargeable
against Lessor.

         11. Lessee is hereby given the right to combine or pool all or part of
said leased premises with land either adjoining the leased premises or in the
immediate vicinity thereof, so as to create

                                       8

by such combining or pooling one or more operating units of contiguous acreage
for the production of said substances; provided, however, that no such unit
shall substantially exceed 2,560 acres, or the land embraced in four sections of
land according to United States survey and that the designation of such unit
shall be made of the land to be pooled not later than thirty days after the
first well drilled on the unit is placed upon production, and shall define the
area which shall constitute the pool. In the event production of said geothermal
energy and substances is obtained from any land included within any such unit,
whether or not from land covered by this lease, there shall be allocated to the
leased premises included in such unit, for the purpose of royalty determination,
only that proportion of the entire production from such unit that the acres of
the leased premises in such unit bears to the total acres in such unit, and
royalty payable under this lease with respect to leased premises included in
such unit shall be computed only on that portion of such production so allocated
to the leased premises. In the event of the failure of Lessor's or any other
owner's title as to any portion of the land included in such pooled unit, such
portion of such land shall be excluded in allocating production from such pooled
unit; provided, however, Lessee shall not be held to account for any production
allocated to any land excluded from any such pooled unit unless and until Lessee
has actual knowledge of the circumstances requiring such exclusion. For the
purpose of determining drilling obligations in such unit, the entire acreage so
pooled shall be treated as if it were covered by one lease and the drilling of a
well in any part of such unit, whether or not on land covered by this lease,
shall fulfill Lessee's drilling obligations under this lease to the same extent
as if it were drilled on the leased premises and no offset obligations shall
accrue as between the several tracts of land included within any pooled unit. As
to such unit (unless a producing well is located on such pooled unit at the time
the unit is created), Lessee agrees to commence drilling operations within one
year after it is so

                                       9

created, but in any event within the primary term of this lease, and shall be
obligated to drill at least one well for each six hundred and forty acres in the
unit.

         12. Lessee shall have the right to use such water in, on, from or
appurtenant to the leased premises as Lessee may reasonably require in
connection with Lessee's operations hereunder on the leased premises, without
payment therefor to Lessor other than such cost as Lessor may have incurred
therefor; provided that such use by Lessee shall not interfere with Lessor's
requirements with respect to the use thereof on the land subject to this lease
or Lessor's contractual commitments for the use thereof on land other than the
leased premises, and that Lessee shall obtain any necessary governmental
permission therefor and shall comply with applicable statutes, ordinances and
governmental orders and regulations with respect thereto. Applications to
governmental agencies for permission to appropriate water and geothermal energy
within and underlying the leased premises shall be made on behalf of Lessor and
shall be made for beneficial use appurtenant to Lessor's land described in
Section 1 hereof. The permission so granted shall be subject to the leasehold
interest of Lessee and all the terms, covenants and conditions under this lease.

         13. If at any time during the term of this lease, a well is drilled for
said geothermal energy and substances upon land not in the ownership of Lessor,
which is adjacent to the leased premises and within 1,320 feet of the boundary
lines of a unit into which the leased premises or portions thereof may be
pooled, and said well is placed in commercial production for a period of six
months, Lessee shall commence drilling within six months thereafter on the
leased premises and within 1,320 feet from the common boundary line, an offset
well within approximately the same distance from the common boundary line as
said well on adjoining land is located, but in any event either on the leased
premises or on land with which the leased premises may be

                                       10

pooled, and to proceed diligently to drill to completion said offset well to the
zone or horizon from which said well on the adjacent land is producing,
provided, however, that Lessee shall not be required to commence drilling said
offset well if there is already a well being drilled or there is a producing
well on the leased premises or on land with which the leased premises is pooled
within such offset distance of said well on adjoining land.

         14. Lessee may, at Lessee's option, at any time surrender and quitclaim
Lessee's rights under this lease in and to all or any portion of the leased
premises and shall be released thereupon from all obligations thereafter with
respect to the land surrendered and quitclaimed.

         15. Lessee's obligations hereunder, except for payment of taxes,
advance annual minimum royalty and surface rentals under Section 3, and to drill
wells under Section 13, shall be suspended and the primary term of this lease
shall be extended, while Lessee is prevented from complying therewith by
strikes, lockouts, riots, action of the elements, accidents, delays in
transportation, inability to secure labor or materials in the open market, laws,
rules or regulations by any governmental agency, authority or representative
having jurisdiction, inability to secure or absence of a market for commercial
sale of substances developed on or from the leased premises, or other matters or
conditions beyond the reasonable control of Lessee, whether or not similar to
the conditions or matters in this paragraph specifically enumerated.

         16. If at the expiration of the primary term or at any time or times
thereafter while this lease shall remain in force and effect, Lessee has
discovered on the leased premises geothermal energy and substances in quantities
which in Lessee's opinion, may be commercially produced, but said leased
geothermal energy and substances are not being produced, processed or marketed
because of technical or other problems or due to lack of market for such
geothermal energy and substances which is acceptable to Lessee and Lessee is not
then engaged in operations for the

                                       11

purpose of producing, processing or marketing leased geothermal energy and
substances, Lessee may pay as a minimum royalty for the next ensuing twelve
months on or before the expiration date of the primary term hereof or within
ninety days from the suspension of all operations contemplated hereby, the sum
of one dollar per acre for each acre then covered by this lease and if such
payment is made or tendered, it will be considered that the geothermal energy
and substances covered by this lease are being produced from said premises in
paying quantities. In like manner and upon like payments annually this lease may
be extended for additional twelve month periods, provided, however, that this
lease cannot be extended beyond the primary term by reason of the royalty
payments provided in this paragraph for a longer term than five consecutive
years.

         17. Upon the violation by Lessee of any of the terms, covenants or
conditions of this lease, and failure to take steps to remedy the default within
sixty days after receipt of written notice from Lessor to do so, then at the
option of Lessor, this lease shall forthwith cease and terminate, and all rights
of Lessee in and to said leased premises shall be at an end, except that Lessee
shall have the right to retain and hold under this lease any forty acre
subdivision in which a well is producing commercially or is being drilled, and
with respect to which Lessee is not in default. The waiver by Lessor of any
breach of any covenant or condition hereof shall not be a waiver of any other or
subsequent breach hereof, nor of any other covenant or condition hereof.

         18. Upon surrender by Lessee of Lessee's rights hereunder in while or
in part, or upon termination of Lessee's rights hereunder, or any part hereof,
in any manner herein provided, Lessee shall peaceably surrender possession
thereof to Lessor and Lessee shall quitclaim to Lessor all right, title and
interest of Lessee in the leased premises in the condition received.

                                       12

         19. Derricks, buildings, structures, improvements, equipment,
machinery, appliances and personal property placed by Lessee upon the leased
premises shall be and remain the property of Lessee, and Lessee shall have the
obligation, at the option of the Lessor at any time prior to the expiration of
six months after the termination of this lease, to remove the same.

         20. Lessee agrees to keep full records of the operations on, and
production and sales of said geothermal energy and substances from the leased
premises independently of and separate from any other property operated by
Lessee and to notify Lessor promptly of discovery of any of said geothermal
energy and substances on the leased premises, and to furnish to Lessor on or
before the last day of each month a true statement of all production and sales
of said geothermal energy and substances during the preceding month in a form
satisfactory to Lessor. All records of such production and sales shall, at all
reasonable times, be open to the inspection of Lessor's agents and
representatives.

         21. Lessee will keep an accurate log and casing record showing the
progress of drilling, character of formations encountered or drilled through,
and casing in each well in which drilling shall have been done on the leased
premises, and furnish Lessor a copy thereof upon the completion of or the
abandonment of each well, and a true copy of all surface and subsurface surveys
made of each well drilled under this lease. Lessor's duly appointed agents and
representatives shall have access at all reasonable times to all of the wells
and to Lessee's property in and upon said leased premises. Lessor shall make
such observations and measurements at its sole risk and expense and agrees to
indemnify and hold Lessee harmless against all claims and demands of such agents
and representatives arising as a result of such observations and measurements.

                                       13

         Lessee shall carry on Lessee's operations hereunder in a careful and
workmanlike manner, and in accordance with all laws, ordinances and governmental
orders and regulations governing the same.

         22. Lessee agrees to pay before delinquency all taxes and assessments
which have been or shall be lawfully levied and assessed on the mineral rights
covered hereunder in the leased premises, and on the buildings, structures,
equipment and other personal property or improvements placed, maintained or used
by Lessee on the leased premises, and on the geothermal energy and substances
stored thereon and not belonging to Lessor. Lessee may deduct the royalty
proportion of the taxes and assessments on mineral rights covered hereunder in
the leased premises in each fiscal year, paid by Lessee, from the royalties due
and payable to Lessor for production during each successive twelve months'
period subsequent to the day and month in such fiscal year on which the first
installment of such taxes and assessments become delinquent. The above amount of
the taxes and assessments for a particular fiscal year so paid shall be
deductible only from the royalties due and payable during the twelve months'
period which immediately succeeds the date of delinquency of the first
installment in such fiscal year. Lessee agrees to pay to Lessor annually, within
fifteen days after demand, an amount equal to the working interest proportion of
the real property taxes and assessments paid by Southern Pacific Land Company or
Southern Pacific Transportation Company on the land overlying or occupied by the
leased premises (except on buildings, structures and other improvements thereon
not owned, maintained or used by Lessee) each fiscal year of the term of this
lease, prorated from the date of this lease, for the first such year and for
each fiscal year thereafter during the term of this lease. Lessee shall pay any
production or severance tax computed or based upon production of geothermal
energy and substances which may be imposed by the Federal Government, the State

                                       14

of Nevada, or any of its political subdivisions, and Lessor shall reimburse
Lessee for the same proportion of said taxes as Lessor's shares of the taxes on
the mineral rights covered hereunder.

         23. All labor performed and materials furnished for purposes of the
operations of Lessee hereunder shall be at the cost and expense of Lessee and
Lessee shall give reasonable notice to Lessor before commencement of operations
hereunder. Lessor shall not be chargeable with, or liable for, any part thereof,
and Lessee agrees to protect the leased premises against liens of every
character and to indemnify Lessor against liens of every character and to
indemnify Lessor against all liability, cost and expense incurred by Lessor due
to such liens arising from Lessee's operations thereon.

         Lessee further agrees to indemnify Lessor against claims, causes of
action, and liability and for injuries to, or deaths of persons and destruction
or loss of, or damage to property arising out of the operations of Lessee
hereunder.

         24. In the event any buildings or personal property of Lessor shall be
damaged, destroyed or required to be removed because of Lessee's operations on
the leased premises, Lessee shall be liable for payment of the reasonable values
thereof. In the event Lessee shall elect to locate a well site and an access
road thereto on agricultural land of Lessor's at the time under cultivation,
Lessee shall pay to Lessor the fair value of the crop destroyed. Upon the
written request of Lessor, Lessee agrees to lay below plow depth all pipe lines,
except steam-gathering and transmission lines or other hot water lines, which
Lessee constructs through cultivated fields, and to fence all sump holes or
other excavations to safeguard livestock on the land subject to this lease. Upon
completion or abandonment of any well drilled on the leased premises, or upon
the termination of this lease, Lessee shall abandon all wells in accord with
applicable regulations level and fill all sump holes and excavations and shall
remove all debris

                                       15

and shall leave the premises in a clean and sanitary condition. Lessee, in
Lessee's operations, on the leased premises shall at all times have due and
proper regard for the health, welfare and safety of Lessor and of Lessor's
tenants occupying the land subject to this lease. Any wells drilled by Lessee
hereunder shall be drilled in such manner so as not to affect any existing
potable water well or water wells of Lessor on the leased premises. Sufficient
casing shall be set and cemented in such wells drilled by Lessee so as to seal
off and protect known potable waters developed in any such water well or water
wells.

         25. In the event Lessor deems it necessary to file an action to enforce
Lessor's rights hereunder, the prevailing party shall be entitled to recover
reasonable attorney's fees and court costs for the prosecution or defense of the
litigation.

         26. Any notice or statement herein requested or required to be given by
one party to the other shall be in writing. Delivery of such written notice or
statement to Lessor shall be conclusively taken as sufficient if and when
deposited in the United States mail, with the postage thereon fully prepaid,
certified, addressed to Lessor at:

                           Southern Pacific Land Company
                           Southern Pacific Building
                           One Market Plaza - Room 200
                           San Francisco, California 94105

         Payments to Lessor shall be made at the above address. Delivery of such
notice or statement to Lessee shall be conclusively taken as sufficient if and
when deposited in the United States mail, with postage thereon fully prepaid,
certified, addressed to Lessee at:

                           Phillips Petroleum Company
                           Attn:  Manager, Geothermal Operations
                           P.O. Box 752
                           Del Mar, California 92014

         Any party hereto may, by written notice, change their address to any
other location for the above purposes.

                                       16

         27. If Lessee is adjudicated a bankrupt, or shall make an assignment
for the benefit of creditors, or file a voluntary petition under any law having
for its purpose the adjudication of Lessee a bankrupt, or the extension of time
of payment, composition, adjustment, modification, settlement or satisfaction of
the liabilities of Lessee, or a receiver be appointed for the property of Lessee
by reason of the insolvency of Lessee, notwithstanding anything to the contrary
elsewhere in this lease, Lessor shall have the right to terminate this lease and
to take exclusive possession of the leased premises. The acceptance of rent or
other payments for the use of the leased premises shall not constitute a waiver
of Lessor's right to terminate this lease as above set forth.

         28. This instrument is a lease and is not and shall not ever be held or
interpreted to be a mining partnership or partnership of any kind, or in any
sense whatsoever, the intention of the parties hereto being to establish and
create between themselves only the relationship of Lessor and Lessee in
accordance with the provisions hereof.

         29. The rate of $*** per acre in Sections 3 and 16 hereof and the
obligation of Lessee to reimburse Lessor for real property taxes and assessments
equal to Lessee's working interest proportion in Section 22 hereof shall be
subject to pro-ration in the same percentage as the undivided interest of Lessee
specified in Section 1 hereof.

         30. This lease shall not be assigned nor sublet, in whole or in part
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld. Subject to the above, the provisions hereof shall inure
to the benefit of, and be binding upon the successors and assigns of the parties
hereto.

         31. The parties hereto agree to enter into a memorandum form of this
lease for recording purposes which shall incorporate by reference the provisions
hereof.

*** Confidential material redacted and filed separately with the Commission.

                                       17

         32.  Time and specific performance are the essence of this lease.

         IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed as of the day and year first hereinabove written.

                              PHILLIPS PETROLEUM COMPANY, Lessee

                              By        /s/ Indecipherable
                                ------------------------------------------------
                                                              Attorney-in-Fact

                              SOUTHERN PACIFIC LAND COMPANY, Lessor

                              By        /s/ Indecipherable
                                ------------------------------------------------
                                 Assistant General Manager, Natural Resources

                              Attest    /s/ T.F. O'Donnell
                                    --------------------------------------------
                                                          Assistant Secretary

                                       18

                                    EXHIBIT A

Attached to and made a part of Lease No. SPL-655 dated August 1, 1976, between
Southern Pacific Land Comapny, "Lessor" and Phillips Petroleum Company "Lessee".

Churchill County, Nevada
Township 21 North, Range 27 East, M.D.M.

     Section 1:    All - 640.96 acres
     Section 3:    All - 644.72
     Section 5:    All - 639.76
     Section 7:    All - 640.00
     Section 9:    All - 640.00
     Section 11:   All - 640.00
     Section 13:   All - 640.00
     Section 15:   All - 640.00
     Section 17:   All - 640.00
     Section 19:   All - 640.00
     Section 21:   All - 640.00
     Section 23:   All - 640.00
     Section 25:   All - 640.00
     Section 27:   All - 640.00
     Section 29:   All - 640.00
     Section 31:   All - 640.32
     Section 33:   All - 640.00
     Section 35:   All - except 6.80 acres in Southern Pacific Transportation
                         Company right-of-way, 633.20 acres

Township 21 North, Range 28 East, M.D.M.

     Section 1:    All - except 55.63 acres in Southern Pacific Transportation
                         Company right-of-way, 581.89 acres
     Section 3:    All - 633.28
     Section 5:    All - 634.00
     Section 7:    All - 654.56
     Section 9:    All - 640.00
     Section 17:   All - 640.00

Township 22 North, Range 26 East, M.D.M.

     Section 3:    All - 640.96 acres
     Section 15:   All - 640.00
     Section 23:   All - 640.00

                                       -2-

Township 23 North, Range 27 East, M.D.M.

     Section 1:    N/2, SW/4, W/2 SE/4
                         647.26 acres
     Section 3:    All - 699.80
     Section 5:    All - 673.96
     Section 7:    All - 606.64
     Section 9:    All - 640.00
     Section 11:   All - 640.00
     Section 13:   All - 647.40
     Section 15:   All - 640.00
     Section 17:   All - 640.00
     Section 19:   All - 608.44
     Section 21:   All - 640.00
     Section 23:   All - 640.00
     Section 25:   All - 642.48
     Section 27:   All - 640.00
     Section 29:   All - 640.00
     Section 31:   All - 605.78
     Section 33:   All - 615.44
     Section 35:   All - 597.12

Township 22 North, Range 28 East, M.D.M.

     Section 3:    All - 639.40 acres
     Section 5:    All - 635.96
     Section 7:    E/2, E/2 W/2, W/2 SW/4, SW/4 NW/4
                         605.08 acres
     Section 9:    All - 640.00
     Section 11:   All - 640.00
     Section 13:   All - 640.00
     Section 15:   All - 640.00
     Section 17:   All - 640.00
     Section 19:   All - 659.04
     Section 21:   All - 637.93
     Section 23:   All - 640.00
     Section 25:   All - 640.00
     Section 27:   All - 640.00
     Section 29:   All - 640.00
     Section 31:   All - 659.44
     Section 33:   All - 640.00
     Section 35:   All - 640.00

Township 23 North, Range 27 East, M.D.M.

     Section 25:   All - 640.00 acres
     Section 27:   All - 640.00
     Section 29:   S/2, S/2 NE/4, SE/4 NW/4, NE/4 NE/4
                         480.00 acres
     Section 33:   S/2, W/2 NW/4, E/2 NE/4, SW/4 NE/4, SE/4 NW/4
                         527.12 acres
     Section 35:   All - 580.76
                       ---------
GRAND TOTAL:           42,433.44 acres

WESTERN STATES GEOTHERMAL                                              11-May-02
ROYALTY CALCULATION                                                     02:33 PM
APRIL 1992                                                     \____\ROYALTY.___

                               SALES        ___      ROYALTY   ROYALTY    ROYALTY
                              REVENUE      SOLD     INTEREST      %       PAYMENT    ADJ    PAYMENT     BALANCE
----------------------------------------------------------------------------------------------------------------

SANTE FE ENERGY/CATELLUS
JANUARY 1992                482,972.82   7,468.32      50%       10%     12,074.32          6,534.08   12,074.32
FEBRUARY 1992               513,207.12   7,935.86      50%       10%     12,830.18         12,074.32   12,830.18
MARCH 1992                  458,791.59   7,094.40      50%       10%     11,469.79         12,830.18   11,449.79
APRIL 1992                  459,839.92   7,098.24      50%       10%     11,476.00         11,469.79   11,476.00
ADVANCE MINIMUM ROYALTY                                                                    18,854.74      621.26

                          AMENDMENT TO GEOTHERMAL LEASE
                               DESERT PEAK, NEVADA

         THIS AGREEMENT, made and entered into this 25th day of February 1998,
by and between DAVID P. FRASE, TIMOTHY D. FRASE AND JAMES W. ROBERTS,
hereinafter collectively referred to as "Lessor" or "Frase" and WESTERN STATES
GEOTHERMAL COMPANY, a Delaware corporation, hereinafter referred to as "Lessee"
or "Western".

                              W I T N E S S E T H:

         WHEREAS, Southern Pacific Land Company ("SPL"), predecessor in interest
to Frase, as Lessor, and Phillips Petroleum Company ("Phillips"), predecessor in
interest to Western, as Lessor, entered into two (2) geothermal leases (the
"Leases"), the first lease dated February 14, 1974, a Memorandum of which first
lease was recorded on August 15, 1974, as Document No. 138533, in Book 72, Pages
575, et seq. and the second lease dated August 1, 1976, a Memorandum of which
second lease was recorded on September 27, 1976 as Document No. 148247 in Book
102, Pages 467, et seq., both in the Official Records of the County of
Churchill, State of Nevada, covering and affecting 42,433.44 acres, more or
less, situated in said County and State, whereby SPL leased to Phillips and
Phillips became Lessee of SPL for certain geothermal resources described in the
Leases; and

         WHEREAS, by Assignment dated June 28, 1985 and recorded on December 16,
1985 as Document No. 217089 in the Official Records of the County of Churchill,
State of Nevada, Phillips assigned the Leases to Western, then a wholly owned
subsidiary of Phillips; and

         WHEREAS, by Amendment and Termination agreement dated May 1, 1986, SPL
and Western consolidated the lands leased under the February 14, 1974 lease and
the August 1, 1976 lease under the provisions of the August 1, 1976 lease
(hereinafter referred to as "Said Lease"),

and terminated the February 14, 1974 lease, a copy of which Amendment and
Termination agreement was recorded on April 23, 1987 as document No. 227434 in
the Official Records of the County of Churchill, State of Nevada; and

         WHEREAS, Phillips and Chevron U.S.A. Inc. ("Chevron") entered into an
agreement dated as of February 7, 1986, whereby Phillips agreed to sell to
Chevron, and Chevron agreed to purchase from Phillips, as a single transaction,
all of the stock of Western which would constitute an assignment to Chevron of
all of Phillips' interest in Said Lease and the Desert Peak electrical
generating facility and its associated geothermal steam production wells and
plant. SPL granted its consent to the transfer of the stock of Western, and all
assets of Western, to Chevron on condition that an amendment to the Lease be
entered into to address the payment of royalties in situations not contemplated
by Phillips and SPL when they first entered into the Leases. Said transfer
occurred on or about February 21, 1986; and

         WHEREAS, Southern Pacific Land Company and Western States Geothermal
Company entered into that certain unrecorded Amendment to Geothermal Lease dated
and effective February 21, 1986 amending the method used to calculate, measure
and divide royalties owing under Said Lease, as amended; and

         WHEREAS, Chevron USA Inc ("CUSA") acting through its agent Chevron
Resources Company, a division of Chevron Industries Inc. sold certain assets to
California Energy Company, Inc ("CECI") effective March 28, 1991. CUSA, owner of
all of the common stock of Western States Geothermal Company, sold its entire
interest in the shares of the common stock of Western States Geothermal Company
to CECI. CECI designated its subsidiary CE Geothermal to hold the assets of
Western States Geothermal Company; and

         WHEREAS, it is the desire of the parties hereto that Said Lease, as
heretofore amended, be further amended as hereinafter set forth:

         NOW, THEREFORE, for and in consideration of $12,800 and other good and
valuable consideration accruing unto the parties hereto, the receipt and
sufficiency of all of which are hereby acknowledged, Said Lease is hereby
amended as follows, to wit:

         1. Specifically subject to Section 11 and subject to other Sections of
that certain Geothermal Lease dated August 1, 1976, the first paragraph of
Section 3 is hereby deleted in its entirety and the following paragraph is
hereby substituted therefore:

                           Lessee agrees to pay to Lessor in advance as of the
                           date of this lease the sum of $*** per acre of the
                           leased premises as rental for the first year of this
                           lease and to pay to Lessor in advance for the second
                           year of the lease on or before the first day of
                           August, 1977, and annually thereafter through July
                           31, 1998 the sum of $*** per acre of the leased
                           premises then subject to this lease. Commencing
                           August 1, 1998 and annually throughout the term of
                           this lease, on or before the same day and month of
                           each succeeding year, Lessee agrees pay to Lessor in
                           advance an annual rental payment at the rate of $***
                           per acre for each acre then covered by this lease. It
                           is acknowledged and agreed that the rental provided
                           in this paragraph shall apply only to that portion of
                           the leased premises not then committed to an approved
                           geothermal unit, as provided in said Section 11
                           hereof.

         Lessor hereby agrees that Said Lease, as amended herein, is a valid and
subsisting Geothermal Lease and is in full force and effect.

         Lessor does hereby ratify, affirm and acknowledge that Said Lease, as
amended herein, is and shall remain in full force and effect as to all its
terms, conditions and provisions.

         It is further agreed by and between Lessor and Lessee, that except for
the amendments as hereinabove set forth, Said Lease, as amended, shall in all
other respects remain in full force as originally executed.

*** Confidential material redacted and filed separately with the Commission.

         In the event any inconsistency exists between this Amendment and Said
Lease, the terms of this Amendment shall prevail, and any such inconsistent
terms contained herein shall be construed as superseding and amending the terms
of Said Lease. Except as expressly modified by this Amendment, Said Lease shall
be unchanged and shall remain in full force and effect.

         This Amendment may be executed in any number of counterparts or on
counterpart signature pages, and all such counterparts shall together be deemed
to constitute a single Amendment. The execution of one counterpart by either
Party or any Person comprising such Party shall have the same force and effect
as if such Party or Person had signed all the other counterparts.

         IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first hereinabove written.

                                  LESSOR:

                                  /s/ David P. Frase
                                  ----------------------------------------------
                                  David P. Frase

                                  /s/ Timothy D. Frase
                                  ----------------------------------------------
                                  Timothy D. Frase

                                  ----------------------------------------------
                                  James W. Roberts

                                  LESSEE:

                                  WESTERN STATES GEOTHERMAL COMPANY

                                  By:  /s/ Thomas R. Mason
                                       -----------------------------------------
                                       Thomas R. Mason

                                  Title: President, CalEnergy Operating Company

                                 COUNTERPART "A"

                                BOOK 102 PAGE 467

                                                                       SPL-655-A
                                                               BOOK 102 PAGE 467

                         MEMORANDUM OF GEOTHERMAL LEASE

     THIS MEMORANDUM made this 1st day of August, 1976, by and between the
SOUTHERN PACIFIC LAND COMPANY, as Lessor, and PHILLIPS PETROLEUM COMPANY, a
Delaware corporation, as Lessee,

     WITNESSETH:

     That Lessor for a valuable consideration and in consideration of the
covenants of the Lessee set forth in that certain Geothermal Lease No. SPL-655
made and entered into this day by and between the parties hereto covering the
land hereinafter described does hereby grant, lease and let exclusively unto
Lessee, its successors and assigns, for the purpose of exploring, prospecting,
drilling, mining and operating for and producing, treating, converting,
extracting, processing and utilizing (by any method or methods) geothermal
steam, geothermal fluids, geothermal energy and heat, hot water, and extractable
minerals and byproducts and gases associated therewith and storing, taking,
removing, transporting and disposing of same, an undivided 50 percent interest
in lands described on EXHIBIT A attached hereto, situated in the County of
Churchill, State of Nevada, deemed to contain for the purposes hereof 42,433,44
acres, whether there be more or less.

     The term of said Geothermal Lease is for 10 years from the date thereof and
so long thereafter as (a) Leased Substances or any of them are being produced
from the above-described land (or land with which the same may be combined or
pooled as in said Geothermal Lease provided), and/or (b) drilling, re-drilling,
deepening or remedial operations are being prosecuted on a continuous basis on
such premises, and/or (c) there is located on such premises one or more wolls
which in Lessee's opinion may be commercially produced.

     Reference is hereby made to executed copy of said Geothermal Lease No.
SPL-655 in possession of each of the parties for all of the provisions thereof,
and by this reference same are incorporated herein and made a part hereof in all
respects as though fully set forth herein.

148247

OFFICIAL RECORD                            SEAL
CHURCHILL COUNTY, Nevada
RECORDED                                   SOUTHERN PACIFIC LAND COMPANY, Lessor
Phillips Petroleum Co.
'76 SEP 27 AM 10:42
                                           By: Illegible
/s/                                            ---------------------------------
----------------------                         ASSITANT ________________________
COUNTY RECORDER
FEE___   DEP____
                                           Attest Illegible
BOOK 102                                          ------------------------------
PAGE 407-470                                      Assistant Secretary
INDEXED
                                           PHILLIPS PETROLEUM COMPANY, Lessee

                                           By: Illegible
                                               ---------------------------------
                                               Attorney-in-Fact

                                BOOK 102 PAGE 468

                                                               BOOK 102 PAGE 468

STATE OF CALIFORNIA )
COUNTY OF San Diego )

On this 17th day of August, in the year One Thousand Nine Hundred and Seventy
six before me, Carlene A. Timm, a Notary Public in and for the County of San
Diego, State of California, personally appeared C. W. Berge known to me to be
Attorney-in-Fact of the corporation described in and that executed the within
instrument, and also known to me to be the person who executed it on behalf of
the corporation therein named and he acknowledged to me that such corporation
executed the same.

----------------------------------
            OFFICIAL SEAL              IN WITNESS WHEREOF, I have hereunto set
           CARLENE A. TIMM             my hand and affixed my official seal at
[SEAL] NOTARY PUBLIC CALIFORNIA        my office in the County of San Diego, the
         PRINCIPAL OFFICE IN           day and year in this certificate first
           SAN DIEGO COUNTY            above written.
My Commission Expires June 7, 1960
----------------------------------     WITNESS my hand and official seal.

My commission expires June 7, 1980.                    Illegible
                                       -----------------------------------------

STATE OF CALIFORNIA              ) ss.
City and County of San Francisco )

     On this __th day of September, in the year One Thousand Nine Hundred and
Seventy Six before me, BARBARA E. BURROWES, a Notary Public in and for the City
and County of San Francisco, State of California, personally appeared
(One Market _________)

                                  ________ Costick
-------------------------------   ________ O'Donnell
         BARBARA E. BURROWES      known to me to be the Assistant General Mgr.,
       NOTARY PUBLIC CALIFORNIA   Nat. Resoures Assistant Secretary of the
       ________________________   corporation _______  described in and that
[SEAL] ________________________   executed the within instrument, and also
       ________________________   known to me to  be the person(s) who executed
       ________________________   it on behalf of the corporation ____ therein
-------------------------------   named and  (t)he(y) acknowledged to me that
                                  such corporation ________________ executed
                                  the same.

     IN WITNESS WHEREOF, I have hereunto set my hand  and affixed my official
seal at my office in the City and County of San Francisco, the day and year in
the certificate first above written.

Corporation                  /s/ Barbara E. Burrowes
                ----------------------------------------------------------------
                  Notary Public in and for the City and County of San Francisco,
                                  State of California.

My Commission Expires October 29, 1978CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

                                                                  Exhibit 10.4.6

                           GEOTHERMAL RESOURCES LEASE

         THIS LEASE is entered into this 18th day of November, 1983, by and
between s SIERRA PACIIC POWER COMPANY, a Nevada corporation ("Lessor"), and
GEOTHERMAL DEVELOPMENT ASSOCIATES, a Nevada corporation ("Lessee").

         1. INTEREST GRANTED:

               In consideration of the covenants and agreements contained
herein, Lessor hereby grants and leases to Lessee the exclusive right and
privilege to drill for, extract, produce, remove, utilize, sell, and dispose of
geothermal steam and associated geothermal resources as defined in NRS 322.005,
(hereinafter called "geothermal resources"), in or under that certain parcel of
property located in Washoe County, Nevada, and consisting of approximately
thirty (30) acres, as more particularly described in Exhibit "A," which is
attached hereto and incorporated herein by reference, together with:

               (a) The non-exclusive right to conduct within the leased area
               geological and geophysical exploration;

               (b) The right to construct or erect and to use, operate, and
               maintain within the leased area, together with ingress and egress
               thereupon, all wells, pumps, pipes, pipe lines, buildings,
               plants, sumps, brine pits, reservoirs, tanks, waterworks, pumping
               stations, roads, electric power generating plants, transmission
               lines, industrial facilities, electric telegraph or telephone
               lines, and such other works and structures and to use so much of
               the surface of the land as may be necessary or reasonably
               convenient for the production, utilization, and processing of
               geothermal resources or for the full enjoyment of the rights
               granted by this Lease, subject to applicable laws and
               regulations. Although the use of the leased area for an electric
               generating plant and/or transmission facilities is authorized
               hereunder, the location of such facilities and the terms of
               occupancy therefor shall be set forth in a separate agreement
               between the parties.

               (c) The non-exclusive right to drill potable water wells in
               accordance with Nevada statutory water laws within the leased
               area and to use the water produced therefrom for operation of the
               leased lands, free of costs, provided

               that such drilling and development are conducted in such a way
               that they do not interfere with Lessor's activities on the leased
               land.

               (d) The right, without the payment of royalties hereunder, to
               reinject into the leased lands geothermal resources and
               condensates to the extent that such resources and condensates are
               not utilized, but their reinjection is necessary for operation
               under this Lease in the recovery or processing of geothermal
               resources. If the Lessee, pursuant to a plan approved by the
               Nevada Division of Environmental Protection, disposes of the
               useable brine and waste products into underlying formations, it
               may do so without the payment of royalties.

               All of the activities described above shall be conducted for the
primary purpose of the generation of electrical power through the use of
geothermal resources. Nothing in this Lease shall be construed as prohibiting
the use, for other purposes, of spent geothermal resources produced on the
leased property.

         2. TERM:

               The term of this Lease shall commence upon the date of its
execution and subject to the conditions set forth below shall continue for a
term of twenty (20) years and for so long thereafter as geothermal resources are
produced or utilized in commercial quantities on the leased property, or lands
pooled or unitized therewith.

         3. RENTALS AND ROYALTIES:

               (a) Annual Rental. For each lease year prior to the commencement
               of production of geothermal resources in commercial quantities on
               the leased lands, the Lessee shall pay the Lessor on or before
               the anniversary date of the lease a rental of *** Dollars ($***)
               per acre or a fraction thereof. If no production of electrical
               energy has been achieved on the leased property by the end of the
               third year of the lease term, and the parties have not entered
               into a written agreement to extend the lease term, this Lease
               shall automatically terminate as to both parties.

               (b) After Lessee has commenced the production of electrical
               energy, Lessee may, at its option, suspend or defer such
               production. If Lessee does not then resume production within one
               year, Lessee shall pay rent for the year, in arrears, as
               described in Paragraph 3(a) hereinabove. If production is
               suspended

*** Confidential material redacted and filed separately with the Commission.

                                      -2-

               for more than eighteen (18) months at any one time, this
               agreement shall terminate automatically as to both parties.

               (c) Royalty. On or before the last day of the calendar month
               after the month of commencement of production in commercial
               quantities of geothermal resources and thereafter on a monthly
               basis, the Lessee shall pay to the Lessor:

                    (i) A royalty of *** percent (*** %) of the gross sales of
               electricity from a power plant built upon or utilizing geothermal
               resources from the leased lands, or land pooled or utilized
               therewith.

                    (ii) A royalty of *** percent (*** %) on the gross sales
               price of geothermal resources, or associated energy, produced and
               sold, or utilized for non-electric commercial purposes from this
               Lease.

                    (iii) A royalty of *** percent (***%) of the value of any
               geothermal resources produced on the leased land, or land pooled
               or utilized therewith, and utilized by Seller for the
               production of a product other than electricity. The value of said
               resource shall be considered equal to the Lessor's
               then-applicable sales price for the amount of natural gas
               necessary to produce an equivalent number of British Thermal
               Units (BTU's).

                    (iv) A royalty of *** percent (*** %) of the gross sales
               price of any by-product derived from production under this Lease
               and sold. In the event Lessee elects to process by-products
               before sale, Lessor's royalty share shall bear its proportionate
               share of such processing costs. For the purpose of this Lease,
               the value of any such by-product shall be the sales price or, if
               there is no sales price, the sales prices of any end product, the
               production of which involves the utilization of such a
               by-product.

         4. TAXES AND ASSESSMENTS:

               Lessee shall pay all taxes levied against its improvements on the
leased land. Lessor shall pay its royalty share, and Lessee shall pay the
remaining portion of any and all taxes assessed on geothermal resources from the
leased land in the following manner:

               (a) Commencing with the effective date of this Lease and prior to
               the actual production of geothermal resources, Lessor shall pay
               and bear its royalty share,

*** Confidential material redacted and filed separately with the Commission.

                                      -3-

               and Lessee shall pay and bear the remaining portion of any and
               all taxes attributable to an assessment of geothermal resources
               on said leased land.

               (b) After the commencement of production of geothermal resources
               from the leased land, Lessor shall pay its royalty share, and
               Lessee shall pay the remaining portion of any and all taxes
               assessed upon geothermal resources and also of all severance,
               production, license, and other taxes and assessments levied or
               assessed on account of the production of geothermal resources
               from the leased land.

               In the event Lessor's royalty share of such taxes exceeds
one-half of the amount of Lessor's rental shut-in royalty and/or royalty
payments hereunder for the year in which such taxes are payable, Lessee shall
advance such excess on Lessor's behalf and recoup such advance out of one-half
of Lessor's royalty income once commercial production has commenced on the
leased lands. Lessor shall pay before delinquency all other taxes and
assessments on the leased land and improvements. However, Lessee is hereby
authorized to pay any taxes and assessments on behalf of Lessor and may, if it
so desires, deduct the amounts so paid from royalties or monies due Lessor
hereunder.

         5. WELLS:

               (a) Lessee shall not drill or operate water wells or take water
               in such a way as to injure water wells, ponds or reservoirs of
               Lessor or interfere with or restrict the supply of water to
               Lessor or its tenants for domestic, livestock or agricultural
               use. If Lessee elects to permanently abandon any well drilled by
               Lessee or the leased land, Lessor shall have the option of
               requiring in writing that Lessee turn over such well to Lessor,
               and at that time Lessor shall pay Lessee for the salvage value of
               the material and equipment in and on said well. If Lessor so
               elects, Lessee agrees to plug such well at the bottom of the
               surface casing according to the requirements of the State
               Engineer in order to prevent contamination of freshwater bearing
               formations as a result of Lessee's drilling operations.

               (b) Subject to the terms of this Paragraph 5, within six (6)
               months after abandonment of any well, including those
               abandonments resulting from termination of this Lease, Lessee
               shall remove all machinery, material and

                                      -4-

               structures used in connection with said well and not used in its
               other operations, if any, on the leased land, and shall fill in
               and level off all excavations, pits, or other alterations to the
               surface of the leased land caused in connection with said well,
               and, insofar as practical, shall restore the leased land and the
               means of ingress and egress to as good a condition as existed
               when Lessee commenced operations under this Lease, except
               reasonable wear and tear, acts of nature and conditions beyond
               the control of Lessee.

         6. COMINGLING, POOLING AND UNITIZATION:

               (a) Lessee shall have the right to comingle (for purposes of
               storing, transporting, handling, utilizing, selling or
               processing) geothermal resources produced or extracted from the
               leased land and lands pooled, unitized or combined therewith,
               with similar substances produced or extracted from other lands or
               units. In the event of such comingling, Lessee shall meter, gauge
               or measure, according to prevalent industry standards, the
               production from the leased land, or from the unit or units
               including the leased land or other units or lands, as applicable,
               and compute and pay Lessor's royalty attributable to Lessor's
               land on the basis of such production as so determined or
               allocated.

               (b) Lessee may, as a recurring right for drilling, development or
               operating purposes, pool, unitize, or combine all or part of the
               leased land into a unit with any other land or lands (whether
               held by Lessee or others), whether or not adjacent or contiguous,
               which Lessee desires to develop or operate as a unit. Such a unit
               shall be officially created upon Lessee's filing in the official
               records of Washoe County a notice of such unitization, describing
               said unit. Any well (whether or not Lessee's well) commenced,
               drilled, drilling and/or producing or being capable of producing
               in any part of such unit shall for all purposes of this Lease be
               deemed a well commenced, drilled, drilling and/or producing on
               the leased land, and the Lessee shall have the same rights and
               obligations with respect thereto and the drilling and producing
               operations upon the lands from time to time included within any
               such unit as Lessee would have if such lands constituted the
               leased lands; provided, however, that

                                      -5-

               notwithstanding this or any other provision or provisions of this
               Lease to the contrary:

                    (i) Production as to which royalty is payable from any such
               well or wells drilled upon any such unit, whether located on the
               leased land or other lands, shall be allocated to the leased land
               in the proportion that the acreage of the leased land in such
               unit bears to the total acreage of such unit. Such allocated
               portion thereof shall for all purposes be considered as having
               been produced from the leased land, and the royalty payable under
               this Lease with respect to the leased land in such unit shall be
               payable only upon that proportion of production so allocated, and

                    (ii) If taxes of any kind are levied or assessed (other than
               taxes on the surface and on Lessor's improvements), any portion
               of which is chargeable to Lessor under the provisions of this
               Lease, then this share of such taxes to be borne by Lessor shall
               be in proportion to the share of the production from such unit
               allocated to the leased land.

         7. RESERVATIONS TO LESSOR:

               All rights in the leased area not granted to Lessee by this Lease
are hereby reserved to Lessor. Without limiting the generality of the foregoing,
such reserved rights include:

               (a) Disposal - the right to sell or otherwise dispose of the
               surface of the leased lands or any resource in the leased lands
               under existing laws, or laws hereinafter enacted, subject to the
               rights of the Lessee under this Lease.

               (b) Rights of Way - the right to authorize geological and
               geophysical explorations on the leased land which do not
               interfere with or endanger actual operations under this Lease and
               the right to grant such easements or rights of way for joint or
               several use upon, through, or in the leased area for steam lines
               and other public or private purposes which do not interfere with
               or endanger planned or actual operations or facilities
               constructed under this Lease.

               (c) Mineral Rights - the ownership of the right to extract
               minerals, oil, hydrocarbon gas, and helium from the leased lands.

                                      -6-

               (d) Casing - the right to acquire the well and casing at the fair
               market value of the casing where the Lessee finds only potable
               water, and such water is not required in lease operations.

               (e) Measurements - the right to measure geothermal resources and
               to sample any production thereof.

         8. DEFAULT AND TERMINATION:

               Whenever the Lessee fails to comply with any of the terms and
provisions of this Lease, and does not commence to remedy such failure within
ninety (90) days after receipt of written notice from Lessor, the Lessor may (a)
suspend operations until the requested action is taken to correct the
non-compliance, or (b) cancel this Lease by delivering written notice of its
intent to do so to Lessee. Such cancellation shall be effective immediately upon
delivery of said notice. The following property shall be excepted from any Lease
termination hereunder as a result of default: (a) each and any well then capable
of producing in commercial quantities the substances covered by this Lease, and
in respect to which Lessee is not in default; and (b) rights of way and
easements across lands subject to such Lease termination, which rights of way
and easements are necessary for conducting Lessee's operations on or in the
vicinity of the lands retained, including sites for electric generating units.

               Lessee may terminate this Lease at any time upon six (6) months
written notice to Lessor. During the six-month period, Lessee shall remove all
generation equipment and plant, treat all wells in accordance with the
appropriate provisions of Paragraph 5 above, and return the leased land to a
condition as near as possible to its state prior to Lessee's entry thereon.

         9. INDEMNIFICATION:

               The Lessee shall indemnity and hold harmless Lessor, its
officers, agents and employees from any and all claims for liability of any kind
arising from or connected with Lessee's activities and operations under this
Lease. Lessee shall pay to the person beneficially interested in the damaged
object all damages caused by Lessee's operations on the surface of the leased
land, including but not limited to damages to growing crops, pasture and
improvements on the leased land, or to animals or livestock. Lessee agrees to
take reasonable steps to prevent its operations from:

               (a) Causing or contributing to soil erosion, or to the injury to
               soil conserving structures on the leased land;

                                      -7-

               (b) Polluting the waters of reservoirs, springs, streams or water
               wells on the leased land;

               (c) Damaging crops or pasture, consistent with the purposes of
               this Lease; or

               (d) Harming or injuring in any way the animals or livestock owned
               by Lessor or his tenants, or kept or pastured on the leased land,
               including the erection and maintenance of fences, gates and
               cattle guards where necessary for such purposes.

               In no event shall Lessor be indemnified for liability or loss
resulting from its sole negligence.

         10. CONDEMNATION:

               Eminent domain proceedings resulting in the condemnation of a
part of the premises leased herein, but leaving the remaining premises
reasonably useable by Lessee for the purposes of the activities described in
Paragraph 1 above, will not terminate this Lease unless Lessor and Lessee
mutually agree to such termination. The effect of any such partial condemnation
will be to terminate the Lease as to the portion of the premises condemned, and
the Lease of the remainder of the premises shall remain intact. Lessee hereby
assigns and transfers to Lessor any claim it may have to compensation for
damages or award as a result of any condemnation, that does not materially
impair its ability to carry out the activities described in Paragraph 1.

         11. PERMITTING:

               Lessee shall obtain and maintain any and all permits, licenses,
and governmental approvals necessary for the conduct of Lessee's activities on
the leased land. All labor to be performed and material to be furnished in the
operations hereunder shall be at the sole cost and expense of Lessee, and Lessee
shall hold Lessor free and harmless from liability thereunder. Lessee shall keep
the leased premises fully protected against any and all liens of every character
arising from or connected with Lessee's operations hereunder.

         12. ASSIGNMENTS AND SUBLEASES:

               (a) Neither party shall voluntarily assign this Lease without the
               prior written consent of the other party, unless the assignment
               is to a partnership in which one of the parties to this Lease is
               a general partner.

                                      -8-

               (b) In the event that either party to this Lease wishes to assign
               this Lease to a corporation or other entity, which does not fall
               into subsection (a) above, said party shall provide the other
               party with written notice of such intent. Said written notice
               shall describe the financial structure and assets of the
               potential assignee in sufficient detail to permit the noticed
               party to evaluate the effect of the assignment on its interest in
               this Lease and the even-dated Agreement For the Purchase and Sale
               of Electricity executed by the parties hereto. The noticed party
               shall have thirty (30) days from its receipt of the notice to
               consent or refuse to consent to the assignment. Failure to give
               written consent or refusal within said thirty-day period shall be
               deemed consent by the noticed party. In no event shall consent to
               any assignment be unreasonably withheld.

               (c) In the event Lessee is contemplating an assignment such as
               described in subsection (b) above, Lessor shall have a prior
               right to regain Lessee's rights under the Lease, together with
               any and all related improvements, at the price and on the terms
               of the intended assignment. Lessor may exercise this right by
               notifying Lessee of its intent to do so by the end of the
               thirty-day period described in subsection (b) above. Such notice
               shall also be deemed a refusal of consent to the assignment of
               Lessee's rights to a third party.

               Subject to the provisions of this Paragraph, all obligations
hereunder shall be binding upon, and every benefit hereof shall inure to, the
heirs, executors, administrators, successors and assigns of the respective
parties hereto.

         13. NOTICES:

               Lessor may give any notice or deliver any document hereunder to
Lessee by mailing the same by registered mail addressed to Lessee at:

                           Geothermal Development Associates
                           251 Ralston Street
                           Reno, Nevada 89503

or by delivering the same in person to the above-referenced address Lessee.
Lessee may give any notice or deliver any document hereunder to Lessor by
mailing the same by registered mail addressed to Lessor at:

                           Sierra Pacific Power Company
                           Attention: Max Jones

                                      -9-

                           P.O. Box 10100
                           Reno, Nevada 89520

or by delivering the same to Lessor in person. For purposes of this Paragraph,
either party may change its address by written notice to the other. In case of
any notice or document delivered by registered mail, the same shall be deemed
delivered when deposited in any U.S. Post Office, properly addressed as herein
provided, with postage fully prepaid. Lessee may make any payment due Lessor to
Lessor personally or by mail at the address of Lessor given above.

         14. CONDITION:

               The obligations of both parties under this Lease are conditioned
upon the Public Service Commission of Nevada's approval of the pricing
provisions in the parties' even-dated Agreement for the Purchase and Sale of
Electricity as a portion of Lessor's purchased power costs. If such approval is
not received, this Lease shall be considered null and void.

///
///
///
///
///
///
///

               IN WITNESS WHEREOF, the parties hereto have executed this Lease
as of the day and year first above written.

                                             LESSOR:

                                             SIERRA PACIFIC POWER COMPANY

                                             By  /s/ Indecipherable
                                               ---------------------------------
                                             Title:  Sr. Vice President
                                                   -----------------------------

                                             LESSEE:

                                             GEOTHERMAL DEVELOPMENT
                                              ASSOCIATES

                                      -10-

                                             By  /s/ G. Martin Booths
                                               ---------------------------------
                                             Title: President
                                                    ----------------------------

                                      -11-

                               SECOND AMENDMENT TO
                           GEOTHERMAL RESOURCES LEASE

     THIS AGREEMENT is entered into as of the date of its execution by and
between SIERRA PACIFIC POWER COMPANY, A Nevada Corporation ("Lessor") and FAR
WEST HYDROELECTRIC FUND, LTD., a Utah Limited Partnership ("Lessee").

1. RECITALS. This Amendment is based on the following facts:

     a. On November 18, 1983, Lessor and Geothermal Development Associates
     entered into an Agreement for the Purchase and Sale of Electricity ("the
     Original Power Purchase Agreement") and a Geothermal Resources Lease ("the
     Lease") for a geothermal generation project to be located near Steamboat
     Springs, Nevada. The parties amended the Lease on January 7, 1985, and the
     Original Power Purchase Agreement on March 6, 1987. Both the Original Power
     Purchase Agreement, as amended, and the Lease, as amended, are currently in
     effect.

     b. Through a series of assignments, to which Lessor consented, Far West
     Hydroelectric Fund, Ltd. is the current Lessee under the Lease, as well as
     the Seller under the Original Power Purchase Agreement.

     c. Far West Capital, Inc. wishes to construct a geothermal generating
     facility which consists of a 2.0 MW gross (1.8 MW net) expansion at the
     Steamboat Project ("Plant") on the land subject to the Lease, the output of
     which will be sold to Lessor pursuant to a new Long-Term Agreement for the
     Purchase and Sale of Electricity of even date herewith ("the New Power
     Purchase Agreement"). Lessor and Lessee wish to amend the Lease to
     accommodate the Plant on the leased property and delineate a method of
     calculating royalty payments to be made by Lessee on the output of the
     Plant.

     d. Lessee intends to sublease a portion of the leased property to Far West
     Capital, Inc.

In consideration of these facts, the parties agree as follows:

2. AMENDED PROVISION. Section 3(c) (i) of the Lease is hereby amended to read as
follows:

                                       1

     3.(c) ROYALTY - At the end of the Billing Period during which the initial
     production of geothermal resources in commercial quantities from the Plant
     ("the Initial Operation") occurs and at the end of each monthly Billing
     Period thereafter, the Lessee shall pay Lessor royalties calculated as
     follows:

          (i) A royalty of *** percent (***%) on the gross sales of electricity
     from the 7.5 MW gross (5 MW net), plant which is the subject of the
     Original Power Purchase Agreement.

          (ii) A royalty, calculated as set forth in Exhibit B, on the gross
     sales of electricity from the Plant for the previous Billing Period which
     is the subject of the New Power Purchase Agreement.

          (iii) A royalty of *** percent (***%) on the gross sales of
     electricity from any other power plant built upon or utilizing geothermal
     resources from the leased lands, or land pooled or unitized therewith.

      A "Billing Period" shall mean the time period between established meter
reading dates.

3. STATUS OF AMENDMENT. It is expressly understood and agreed by the parties
hereto that this Amendment is supplemental to the Lease. It is further
understood and agreed that all the terms, conditions and provisions of the
Lease, unless specifically modified herein, are to apply to this Amendment and
are made a part of this Amendment as though they were expressly written,
incorporated and included herein.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
29th day of October 1988.

                                        LESSOR:

                                        SIERRA PACIFIC POWER COMPANY

                                        By  /s/ Gerarld Canning
                                          --------------------------------------

*** Confidential material redacted and filed separately with the Commission.

                                       2

                                        Title: Vice President Electric Resources
                                               ---------------------------------

                                        LESSEE:

                                        FAR WEST HYDROELECTRIC FUND LTD.

                                        By  /s/ Indecipherable
                                          --------------------------------------
                                        Title:  Gen. Partner
                                              ----------------------------------
                                        Date: 10/27/88
                                              ----------------------------------

                                       3

                               THIRD AMENDMENT TO
                           GEOTHERMAL RESOURCES LEASE

THIS THIRD AMENDMENT to Geothermal Resources Lease is entered into as of the
date of its execution, by and between Sierra Pacific Power Company, a Nevada
corporation ("Lessor") and Far West Electric Energy Fund, L.P., a Delaware
limited partnership (formerly Far West Hydroelectric Fund, Ltd. a Utah limited
partnership before its change of name and change of domicile) ("Lessee").

                                    RECITALS.

     a. On November 13, 1983, Lessor and Geothermal Development Associates
entered into an Agreement for the Purchase and Sale of Electricity (the
"Original Power Purchase Agreement"). As the result of a series of assignments
consented to by Lessor, Lessee has become the seller under the Original Power
Purchase Agreement, which Agreement was amended on March 6, 1987.

     b. An unrecorded Geothermal Resources Lease dated November 18, 1983, was
executed by Sierra Pacific Power Company as Lessor, and Geothermal Development
Associates, as Lessee, as disclosed by a Memorandum of Lease by and between
Sierra Pacific Power Company and Geothermal Development Associates dated January
7, 1985, and recorded in Book 2115, page 321, as Document No. 971913 of said
Official Records (the "Lease"). Said Lease was amended by an unrecorded Letter
Amendment by and between Sierra Pacific Power Company and Geothermal Development
Associates dated January 7, 1985, as disclosed by the above Memorandum of Lease
and by an Amended Memorandum of Lease by and between the same parties dated
January 7, 1985, and recorded in Book 2116, page 812, as Document No. 972684 of
said Official Records. Said Lease was assigned by Geothermal Development
Associates to Ormat Systems Inc. by an Assignment of Lease dated September 26,
1985, and recorded in Book 2272, page 643 as Document 1043163 of said Official
Records, further assigned by Ormat Systems Inc. to Bonneville Pacific
Corporation by an Assignment of Lease dated September 26, 1985, and recorded in
Book 2272, page 647 as Document No. 1043164 of said Official Records, further
assigned by Bonneville Pacific Corporation to Far West Capital, Inc. ("FWC") by
an Assignment of Lease dated December 12, 1985, and recorded in Book 2272, page
750 as Document No. 1043167 of said Official Records, and further assigned by
FWC to Far West

                                       1

Hydroelectric Fund, Ltd. by Assignment of lease dated December 12, 1985, and
recorded in Book 2272, page 756, as Document No. 1043168 of said Official
Records, all of said assignments being disclosed by that certain Memorandum of
Lease, Assignments of Lease and Purchase Agreement by and among Geothermal
Development Associates, Ormat Systems Inc., Bonneville Pacific Corporation, FWC,
Far West Hydroelectric Fund, Ltd. and Sierra Pacific Power Company dated
December 31, 1985, and recorded in Book 2317, page 368 as Document 1062824 of
said Official Records. Said Lease was further amended by a Second Amendment to
Geothermal Resources Lease by and between Sierra Pacific Power Company and Far
West Hydroelectric Fund, Ltd. dated October 29, 1988.

     c. Lessee constructed and is operating a five megawatt geothermal power
plant ("Original Power Plant") on the leased property which is delivering power
to the Lessor under the Original Power Purchase Agreement.

     d. Lessor entered into a Long Term Agreement for the Purchase and Sale of
Electricity with FWC (the "1-A Power Purchase Agreement") dated October 29,
1988, and a Special Facilities Agreement ("Special Facilities Agreement") dated
October 29, 1988. The 1-A Power Purchase Agreement, and the Special Facilities
Agreement both relate to the 1.8 MW expansion of the Original Power Plant (the
"1-A Expansion"). The 1-A Expansion is located on the leased property which is
subleased to FWC. FWC has now assigned its rights and interests in the 1-A Power
Purchase Agreement and the Special Facilities Agreement to 1-A Enterprises, a
Nevada General Partnership ("1-A") and Lessor consented to said assignments on
August 18, l989.

     e. Lessee and 1-A have requested and Lessor has agreed that certain
portions of the Lease be modified or clarified.

     NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:

1. Section 3(c) of the Lease is hereby amended to add the following:

     (v) Any such payments made under this section shall be made by Lessee
within thirty (30) days of receipt of an invoice from Lessor requesting said
payment. Should Lessee fail to pay the amount of such invoice, Lessor may offset
future payments to Lessee under the applicable Original Power Purchase Agreement
or the 1-A Power Purchase Agreement by such amount. Such rights shall apply only
to amounts that become due and payable pursuant to this Lease, as amended.

                                       2

2. Section 12 of the Lease is hereby amended to read as follows:

12. ASSIGNMENTS AND SUBLEASES:

     a. Neither party shall voluntarily assign this Lease without the prior
written consent of the other party, unless the assignment is to a partnership in
which one of the parties to this Lease is a general partner.

     b. In the event that either party to this Lease wishes to assign this Lease
to a corporation or other entity, which does not fall into subsection (a) above,
said party shall provide the other party with written notice of such intent.
Such written notice shall describe the financial structure and assets of the
potential assignee in sufficient detail to permit the noticed party to evaluate
the effect of the assignment on its interest in this Lease and the even-dated
Agreement For The Purchase and Sale of Electricity executed by the parties
hereto. The noticed party shall have thirty (30) days from its receipt of the
notice to consent or refuse to consent to the assignment. Failure to give
written consent or refusal within said thirty-day period shall be deemed consent
by the noticed party. In no event shall consent to any assignment be
unreasonably withheld.

     c. In the event Lessee is contemplating an assignment such as described in
subsection (b) above, Lessor shall have a prior right to regain Lessee's rights
under the Lease, together with any and all related improvements, at the price
and on the terms of the intended assignment. Lessor may exercise this right by
notifying Lessee of its intent to do so by the end of the thirty-day period
described in subsection (b) above. Such notice shall also be deemed a refusal of
consent to the assignment of Lessee's rights to a third party. Subject to the
provisions of this paragraph, all obligations under this Lease as amended shall
be binding upon, and every benefit hereof shall inure to, the heirs, executors,
administrators, successors, and assigns of the respective parties thereto.

     d. Subject to subsections (a), (b), and (c) above, which refer to a
complete assignment of interest, from time to time and with prior written notice
to Lessor and without Lessor's consent, Lessee's leasehold estate in the leased
land and Lessee's right, title and interest as tenant in the Lease as amended
may be assigned for security purposes and be encumbered by one or more deeds of
trust, mortgages, security agreements, sale-and-leaseback arrangements,
leveraged leases or other security instruments or devices to secure a debt or
debts or other similar obligation or obligations.

                                       3

     e. From time to time and with the prior written consent of the Lessor, the
Lessee or its Sublessee may enter into Subleases of the leased property. Any
Sublessee may with notice to the Lessor and the Lessee but without their consent
may encumber its subleasehold interest by one or more deeds of trust, mortgages,
security agreements, sale-and-leaseback arrangements, leveraged leases or other
security instruments or devices to secure a debt or debts or other similar
obligation or obligations.

3. Lessor hereby grants to Lessee and its successors, assigns and sublessees the
right to use the easement, 45.0 feet in width described in that certain Basement
Agreement dated October 18, 1971, and recorded November 3, 1971, as Document No.
224422 at Book 589, page 533 in the Official Records of Washoe County, Nevada,
for roadway and electric utility purposes over, upon and across the property
described therein and subject to the terms thereof, which Easement Agreement is
attached hereto as Exhibit C and made a part hereof.

4. It is expressly understood and agreed by the parties hereto that this
Amendment is supplemental to the Lease. It is further understood and agreed that
all of the terms, conditions and provisions of this Lease, as amended, unless
specifically modified herein, are to apply to this Amendment and are made a part
of this Amendment as though they were expressed, incorporated and included
herein.

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.

                                                    LESSOR:
                                                    SIERRA PACIFIC POWER COMPANY

                                                    By /s/ Indecipherable
                                                       ------------------------
                                                    Title: Sr. Vice President
                                                           --------------------

                                                    LESSEE:

                                                    GEOTHERMAL DEVELOPMENT
                                                    ASSOCIATES

                                                    By /s/ Indecipherable
                                                       ------------------------
                                                    Title: President
                                                           --------------------

                                       4

                                   EXHIBIT "A"

     All that real property situate in the County of Washoe, State of Nevada,
more particularly described as follows:

     PARCEL 1

     Beginning at the one-quarter corner between Sections 28 and 29, Township
     18, North, Range 20 East, M.D.B.&M., running thence North 583 feet to the
     south side of the county highway right of way then along said right of way
     South 69 DEG. 58' West 257 feet; thence along said right of way North 81
     DEG. 30' West 176.10 feet; thence South 520 feet; thence East 415.50 feet
     to the place of beginning; all of said described land is situated in the
     Southeast quarter of the Southeast quarter of the Northeast quarter of
     Section 29, Township 18 North, Range 20 East, M.D.B.&M.

     PARCEL 2

     The East half of the Northeast quarter of the Southeast quarter of Section
     29, Township 18 North, Range 20 East, M.D.B.&M., according to the
     official plat.

     EXCEPTING FROM SAID PARCEL 2 the following described real property, and
     subject to the condition that Lessee's use of the remainder of Parcel 2
     shall not cause subsidence or in any way damage Lessor's facilities
     presently constructed or to be constructed on the following described real
     property:

     Commencing at the one-quarter corner between Sections 28 and 29, T18N,
     R20E, MDB & M; thence South 413.40 feet along the East line of said Section
     29; thence West 188.0 feet to the True Point of Beginning; thence South
     77.0 feet; thence East 85.5 feet; thence South 410.0 feet; thence West
     460.0 feet; thence North 410.0 feet; thence East 85.5

     feet; thence North 272.0 feet; thence East 289.0 feet; thence South 195.0
     feet to the True Point of Beginning. Containing 6.13 acres, more or less.

                                                                    Continued...

Exhibit "A" continued:

     PARCEL 3

     A portion of the Southeast one-quarter (SE 1/4) of the Northeast
     one-quarter (NE 1/4), and a portion of the Southwest one-quarter (SW 1/4)
     of the Northeast one-quarter (NE 1/4), all in Section 29, Township 18
     North, Range 20 East, M.D.B.&M., Washoe County, Nevada, described as
     follows:

     Beginning at a point marked by an iron pin on the South line of the North
     one-half (N 1/2) of Section 29, Township 18 North, Range 20 East,
     M.D.B.&M., said point further described as being the Southwest corner of a
     5.0 acre tract described by Document No. 174192, recorded in Book 236 of
     Deeds,

     Records of Washoe County, Nevada from which point the East one-quarter (SE
     1/4) corner of said Section 29 bears South 89 DEG. 41' East 415.5 feet
     (being East 415.5 according to said deed).

     Thence, North 52 DEG. 07' West 673.26 feet more or less to a point on the
     Southerly right of way line of the Mount Rose Highway;

     Thence South 57 DEG. 37'30" West 759.97 feet more or less along the
     Southerly right of way line of said highway to a point on the South line
     of the North one-half (N 1/2) of said Section 29;

     Thence, South 89 DEG. 41' East 1173.24 feet more or less along the South
     line of the North one-half (N 1/2) of said Section 29, to the point of
     beginning.

                          Sierra Pacific Power Company

                                  MAX L. JONES
                              Senior Vice President
                      Planning, Engineering & Construction

                                                                 January 7, 1985

G. Martin Booth, III.
President
Geothermal Development Associates
251 Ralston Street
Reno, Nevada

Dear Mr. Booth:

     As you discussed on the telephone with Peggy Glodowski this past Friday,
Sierra Pacific would like to amend Exhibit "A" to the Geothermal Resource Lease
executed by Geothermal Development Associates (GDA) and Sierra Pacific on
November 18, 1983. The amendment would consist of the addition of the attached
page to the existing Exhibit A. The added page excepts Sierra's substation site
from the lease with regard to surface occupancy and other activities of GDA. The
existing map would remain the same, as would all terms and conditions of the
lease other than those modified or impacted by the new page.

     If you agree with the amendment and its terms, please indicate by signing
on the line provided below and returning an executed original to me. A duplicate
original is enclosed for your files.

                                             Sincerely,

                                             /s/ Max L. Jones
                                             -----------------------------------
                                                 MAX L. JONES

ACCEPTED AND APPROVED:

/s/ G. Martin Booth
-----------------------------------
G. Martin Booth, III
Geothermal Development Associates

                                                                          [LOGO]

            P.O. BOX 10100/REN0, NEVADA 89520/TELEPHONE 702/789.4500

                                                              Exhibit A P.1 of 2

                            [Graphic: Area Plat Map]

                                       16

                                                            Exhibit A, P. 2 of 2

Excepting from the property shown on Page 1 of this Exhibit "A", all rights to
surface occupancy of Parcel 2 described below, and further accepting rights to
drill or utilize geothermal steam and associated geothermal resources in such a
way as to cause subsidence or in any way damage Lessor's facilities located on
said Parcel 2.

Parcel 2:

The east one-half of the Northeast one-quarter of the Southeast one-quarter (E
1/2 NE 1/4 SE 1/4) of Section 29, T18N, R20E, MDB&M.

Excepting from the above the following described parcel;

Commencing at the one-quarter corner between Sections 28 and 29; T18N, R20E,
MDB & M;

Thence South 413.40 feet along the East line of said Section 29;

Thence West 188.0 feet to the True Point of Beginning;

Thence South 77.0 feet;

Thence East 85.5 feet;

Thence South 410.0 feet;

Thence West 460.0 feet;

Thence North 410.0 feet;

Thence East 85.5 feet;

Thence North 272.0 feet;

Thence East 289.0 feet;

Thence South 195.0 feet to the True Point of Beginning.

Containing 6.13 acres, more or less.

Remaining area of Parcel 2 containing 13.98 acres, more or less.

Escrow No. 40_110-JP

                                                                     Exhibit C
                                                                     Page 1 of 3

                               EASEMENT AGREEMENT
                               -------- ---------

     THIS AGREEMENT, made and entered into this 18th day of October, 1971, by
and between NEVADA COMSTOCK ENTERPRISES, hereinafter called Grantor and SIERRA
PACIFIC POWER COMPANY, a Nevada corporation, hereinafter called Grantee,

                                  WITNESSETH:

     WHEREAS, Grantor does own that certain property hereinafter describe in
Washoe County, Nevada; and

     WHEREAS, grantor has agreed to grant an easement 45.0 feet in width for
roadway and electric utility purposes over, upon and across the parcel of land
hereinafter described; and

     WHEREAS, in consideration of such conveyance, Grantor has agreed to pay the
owner the sum of Four Thousand Four Hundred  Dollars  ($4,400.00) as and for the
easement  price of the  following  described  property;

     NOW THEREFORE, for and in consideration of the mutual promises, covenants
and conditions hereinafter contained, the Grantor hereby grants an easement 45.0
feet in width for roadway and electric utility purposes over, upon and across
the parcel of land hereinafter described, subject to the terms as hereinafter
set forth.

     (1) Grantor hereby agrees to execute and deliver to the escrow agent, Title
Insurance and Trust Company, 160 West Liberty Street, Reno, Nevada, an easement
agreement over, upon and across the following described real property situate in
the County of Washoe, State of Nevada, to-wit:

     A portion of the South one-half of the Northwest one-quarter (S 1/2 NW 1/2)
     of Section 28, T 18 N, R 20 E, M.D.B. & M.

     Beginning at a concrete monument designated as the West one-quarter corner
     of said Section 28; thence North 00(degrees)08'47" West along the westerly
     boundary line of said Section 28 as shown on Record of Survey #210116,
     Official Records of Washoe County, Nevada, 1014.22 feet to the
     southeasterly right of way line of Nevada State Route 27 (Mt. Rose
     Highway); thence along said right of way line North 57(degrees)37'30" East
     53.19 feet; thence South 00(degrees)08'47" East 1042.95 feet; thence North
     89(degrees)41'00" West 45.0 feet to the point of beginning. Containing
     1.063 acres, more or less

WHEN RECORDED MAIL TO:
Sierra Pacific Power Company
P.O. Box 10100 Reno, Nevada 89510

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

                                                                     Exhibit C
                                                                     Page 2 of 3

     (2) Grantee agrees to deposit the sum of Four Thousand Four Hundred Dollars
($4400.00) with above named escrow agent to be paid to the Grantor upon issuance
of Grantee of fully executed easement agreement including signatures, company
seal notarization of signatures.

     (3) Grantee agrees to bear all costs of the acquisition.

     (4) Granted agrees that the easement acquired through this agreement will
be utilized for a road and electric utility lines and that the Grantor will have
permission to cross over said property in location or locations mutually agreed
upon.

     (5) Grantor does hereby reserve the right to the use of said 45.0 foot
easement insofar as said use shall not interfere with the construction,
operation and maintenance of Grantee's road and utility facilities. Said use
shall especially consist of (1) the right to install, grant and improve two
dedicatable right of ways over and across said 45.0 foot easement for roadway
purposes: (2) the right to install a commercial driveway from said 45.0 foot
easement to the Mt Rose Highway: (3) the right to install landscaping and
parking on said 45.0 foot easement insofar as said landscaping and parking shall
not interfere with Grantee's use of its road and utility facilities, said
landscaping and parking rights to be cancellable upon 30 day's notice from
Grantee at such time as Grantee may need more space for it's utility facilities:
(4) the right to use said 45.0 foot easement for agricultural purposes insofar
as said use shall not interfere with Grantee's road and utility operation and
maintenance, and: (5) the right to use said 45.0 foot easement for utility
purposes insofar as said use will not interfere with Grantee's use of it's
roadway and utility facilities. It is further agreed and understood that all
construction rights reserved in this document are to be at locations acceptable
to Grantee and at no cost to said Grantee.

                                                                     Exhibit C
                                                                     Page 3 of 3

     (6) It is agreed that Grantor will save and hold harmless Grantee or its
successors from loss, damage or liability which Grantee or its agents or
employees may sustain by reason of any injury or damage to the person or
property of another caused by the above said use of said easement.

     (7) It is agreed that Grantee will save and hold harmless Grantor or its
successors from loss, damage and liability which Grantor or its agents or
employees may sustain by reason of any injury or damage to the person or
property of another caused by the construction, operation or maintenance of said
roadway and electric utility lines.

     (8) Grantor and Grantee agree that this agreement shall constitute the
major instructions to Title Insurance and Trust Company, 160 W. Liberty Street,
Reno, Nevada.

     (9) This agreement is binding upon the heirs, successors, executors and
assigns of the respective parties hereto.

     IN WITNESS WHEREOF, the parties hereto have cause these presents to be
executed the day and year first above written.

NEVADA COMSTOCK ENTERPRISES                   SIERRA PACIFIC POWER COMPANY

by: /s/ Edward I. Thayer                      by: /s/ R. S. Leighton
    -----------------------------                 ----------------------------
    Edward I. Thayer                              R. S. Leighton

                                                      [NOTARY SEAL]

STATE OF CALIFORNIA       )
                           ss.
COUNTY OF LOS ANGELES     )

On October 27, 1971 personally appeared before me
a Notary Public EDWARD I. THAYER
who acknowledged that he executed the within instrument.

                                                  /s/ Jack Steinberg
                                                  ---------------------------
                                                  Jack Steinberg

                                                      [NOTARY SEAL]

STATE OF NEVADA           )
                           ss.
COUNTY OF WASHOE          )

On October 18, 1971 personally appeared before me
a Notary Public R. S. LEIGHTON
who acknowledged that he executed the within instrument.

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