Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.14

GEOTHERMAL 
LEASE AND AGREEMENT 

This Lease and Agreement is made and entered into as of this
22nd day of June, 2005, by and between: 

R. Michael Griffin and Cleo S. Griffin, husband and wife;
Harlow R. Griffin and Pauline Griffin, husband and wife; Douglas Griffin and
Margaret Griffin, husband and wife; J Terry Griffin and Sue Griffin, husband and
wife; Vincent Jorgensen and Phyllis Jorgensen, husband and wife; and Alice Mae
Griffin Shorts, a widow, Party of the first part, 

hereinafter referred to as “Lessor” 

and 

US Geothermal Inc., an Idaho corporation, 
Party of
the second part, 
hereinafter referred to as “Lessee” 

who are referred to in the plural as the “Parties”. 

Recitals 

WHEREAS Lessor is the owner of certain land and
geothermal rights situated in Cassia County, in the State of Idaho, which the
Parties believe are suited for the development of Hot Water, Steam and Thermal
Energy for use as such and/or the conversion of such geothermal energy to the
production of electric power, or for any purpose other than the generation of
electric power, and

WHEREAS It is the desire of Lessor and Lessee to enter
into an agreement which will enable the development of said Hot Water, Steam and
Thermal Energy for any of the aforesaid purposes for the mutual profit of the
Parties, 

BE IT THEREFORE HEREBY AGREED AS FOLLOWS: 

1.       Purpose. For and in
consideration of the sum of Ten Dollars ($10.00) and other valuable
consideration set forth in clauses (4.) and (5.) below, receipt of which initial
sum and sufficiency of which is hereby acknowledged, and in consideration of the
covenants and agreements hereinafter contained, Lessor has granted, leased, let
and demised to Lessee, its grantees, successors and assigns, upon and subject to
the terms and conditions contained herein, the land hereinafter described, the
sole and exclusive right to drill for, produce, extract, take, remove and sell
geothermal heat energy including , Hot Water, Steam, or Thermal Energy
therefrom, and to store, utilize, process, convert and otherwise treat such
geothermal energy upon said land, during the term hereof, with the right of
entry thereon and use and occupancy thereof at all times for said purposes and
the 

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furtherance thereof, including the right to construct, use and
maintain thereon and to remove therefrom structures, facilities and
installations, pipelines, utility and power transmission lines. 

The possession by Lessee of said land shall be sole and
exclusive for the purposes hereof and for the purposes incident or related
thereto, excepting that Lessor reserves the right to use and occupy said land,
or to lease or otherwise deal with the same, without interference with Lessee
rights, for residential, agricultural, commercial, or grazing uses, or for any
and all uses other than the uses and rights permitted to Lessee herein.

2.       Lands. The land
which is the subject of this lease is situated in the county and state above
first named, consisting of approximately one hundred sixty (160) acres and which
is described in Exhibit A attached hereto and incorporated as if more fully set
forth herein, including also in the leased land all rights of Lessor, presently
owned or hereafter acquired, in and under roads, ditches, and rights of way
traversing or adjacent to said land, (hereinafter referred to as “Lands”).

3.       Term. This Lease
shall be for a term of ten (10) years from and after the date hereof
(hereinafter referred to as the “Primary Term”) and so long thereafter as Leased
Substances, or any of them, are derived or produced in commercial quantities
from the leased land or lands pooled, unitized or combined therewith, and for so
long as Lessee is prevented from producing same, or the obligations of Lessee
hereunder are suspended, for the causes hereinafter set forth, or this Lease is
continued in force by reason of any other provision hereof. 

If at the expiration of the Primary Term, Lessee has not
completed one or more wells on the leased land or lands pooled, unitized or
combined therewith, which well or wells separately or collectively are either
producing, or capable of producing, Hot Water, Steam or Thermal Energy of
Sufficient Power Potential in Commercial quantities, but lessee is then engaged
in operations for drilling, reworking, recompleting, redrilling or enhancement
of any well on the leased land or lands pooled, unitized or combined therewith,
this Lease shall remain in force so long as drilling, reworking, recompleting,
redrilling or enhancement operations are prosecuted (whether on the same or
different wells) on the leased land or lands pooled, unitized or combined
therewith with no cessation of such operations for more than six (6) months, and
if such operations result in production or the establishment to the satisfaction
of the lessee of the existence of Sufficient Power Potential in Commercial
quantities, such well or wells will be deemed to have been completed and such
existence is established during the primary term of this Lease. 

4.       Primary Term
Consideration. It is understood and agreed that the initial consideration paid
upon the execution hereof ($1,600.00), covers both the rental in full hereunder
for a period of one (1) year from the date of this Lease and for all other
rights conferred hereunder. Thereafter, for the first five (5) years of the
lease, on or before said anniversary date, Lessee shall pay or tender to Lessor
an annual rental in the amount of FIVE DOLLARS ($5.00) per acre, which shall
constitute rental until the next anniversary date hereof. For the second five
(5) year period of the lease, Lessee shall, on or before each succeeding
anniversary date during the primary term hereunder, pay or tender to 

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Lessor an annual rental in the amount of SEVEN DOLLARS AND
FIFTY CENTS ($7.50) per acre, until such time as from the drilling of a well or
wells on the leased land, or lands pooled, unitized or combined therewith, there
has been established to the satisfaction of the Lessee the existence of
Sufficient Power Potential in Commercial quantities. Upon such establishing as
aforesaid, Lessee may nevertheless continue to pay or tender annual rental
payments on or before each anniversary date, until Lessee has commenced the
actual sale of one or more Leased Substances, and so long as such annual rental
payments to be paid or tendered, whether beyond the primary term or not, this
lease shall remain in force and effect. All payments so paid or tendered after
the expiration of said primary term shall be deemed advance royalties. So long
as such payments are paid or tendered each well or wells shall be deemed to be
actually producing one or more Leased Substances in Commercial quantities under
the terms hereof; provided, however, that if within five (5) years after the
date of expiration of the primary term hereof Lessee shall have failed to make,
or make arrangements for (by executed contract or contracts) a bona fide
Commercial sale of one or more Leased Substances (or electric energy generated
therefrom) than Lessor, at its option, may consider Lessee in default hereunder.
Additionally, should lessee fail to make any annual payment herein provided for
on or before a particular anniversary date, Lessor may, at its option, consider
lessee in default hereunder. 

5.       Geothermal Royalties.
Royalties shall be payable as follows: 

           (a)       With
respect to Hot Water, Steam or Thermal Energy produced, saved and sold by Lessee
and then used by the purchaser for the generation of electric power, Lessee
shall pay to Lessor as a royalty Ten Percent (10%) of the market value of such
Hot Water, Steam or Thermal Energy produced from the leased land at and as of
the point of origin on the leased land, which market value shall be deemed to be
the gross proceeds received by Lessee from such sale at the point of origin on
the leased land, unless the sale occurs at a location other than the point of
origin on the leased land, in which case the market value shall be deemed to be
the gross proceeds received by Lessee from such sale less all costs and expenses
of extraction, production, storage, processing, reinjection, and transportation
between the point of origin on the leased land and the point of sale. 

           (b)       With
respect to Hot Water, Steam or Thermal Energy produced (collectively to be
referred to as “Energy Produced”), saved and used for the generation of electric
power which is then sold by Lessee, Lessee shall pay to Lessor as a royalty Ten
Percent (10%) of the Net Proceeds from the sale of Energy Produced from the
leased land, at and as of the point of origin on the leased land in accordance
with the definition of Net Proceeds from the sale of Energy Produced as defined
in paragraph 21, subparagraph (g). 

         (c)       With
respect to Energy Produced, saved and sold by Lessee and which is used for any
purpose other than the generation of electric power, Lessee shall pay to Lessor
as a royalty Five Percent (5%) of the gross proceeds received by Lessee from the
sale of Energy Produced, as such, produced from the leased land at and as of the
point of origin on the leased land.

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           (d)       With
respect to Extractable Minerals, Lessee shall pay as royalty to Lessor Five
Percent (5%) of the net proceeds received by Lessee from the sale of any gases
(as herein defined) and from the sale of effluence (containing minerals and/or
minerals in solution) produced and sold from any well or wells on the leased
land, or, in the event Lessee extracts from the effluence minerals and/or
minerals in solution, Five Percent (5%) of the proceeds received by Lessee from
the sale of minerals and/or minerals in solution contained in and extracted from
the effluence produced and sold from such well or wells less costs of
transportation and extraction. 

           Lessee
shall pay to Lessor on or before the twenty-fifth day of each month the
royalties accrued and payable for the preceding calendar month, or on or before
the twenty-fifth day of the month next following that in which Lessee receives
payment therefore from the purchaser thereof, whichever method may be chosen by
Lessee from time to time, and in making such royalty payments Lessee shall
deliver to Lessor statements setting forth the basis for computation and
determination of such royalty. 

           Lessee
shall not be required to account to Lessor for or to pay any royalty on Hot
Water, Steam, Thermal Energy produced by Lessee on the leased land which is not
utilized, saved and sold, or which is used by Lessee in its operations on or
with respect to the leased land for or in connection with the developing,
recovering, producing, extracting and/or processing of Hot Water, Steam, or
Thermal Energy or in facilities for the generation of electric power, or which
are unavoidably lost. 

           Lessee
shall have the right from time to time and at any time to commingle (for
purposes of storing, transporting, utilizing, selling and processing, or any of
them) the Leased Substances, or any of them, that are produced or extracted from
the leased land or lands pooled, unitized or combined therewith, with Geothermal
Resources, or any of them, produced from other lands or units in the vicinity of
the leased land, and in the event of such commingling, Lessee shall meter,
gauge, or measure the production from the leased land, or from the unit or
units, including leased and other units or lands, as the case may be, and
compute and pay Lessor’s royalty payable under the provisions hereof on the
basis of such production so determined or allocated, as the case may be. 

From the time when Lessor shall commence Commercial production
from said Lands, Lessee shall then pay Lessor the geothermal royalty set forth
herein, or the initial term annual payments, whichever shall be the larger. This
change from annual lease payments to geothermal royalty payments shall occur at
the time when geothermal royalties exceed annual lease payments in any given
month. 

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6.       Commingled and Unit
Operations. Lessee shall have the right to commingle, or unitize said leased
land, for the purpose of utilizing, selling, processing, the Leased Substances
produced from the lease land with the steam or heat energy produced from other
lands, and to meter or gauge the production of steam or heat energy from leased
land and to compute and pay Lessor royalty on the basis of such production as so
determined. The total acreage to be embraced within any such unit shall not
exceed 1,920 acres, plus an acreage tolerance of Ten Percent (10%), except that
a larger unit may be created to conform to State or Federal regulations. Such
unit shall be deemed created either upon Lessee recording in the office of the
county recorder in the county in which the leased land is situated a written
declaration of such unit or upon Lessee giving written notice of such unit to
Lessor. 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 Lessee shall have the same rights and
obligations with respect thereto and to 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 land; provided, however, that
notwithstanding this or any other provision or provisions of this Lease to the
contrary: 

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

           
(b)       if any taxes of any kind are levied or
assessed (other than taxes on the land and on Lessor’s improvements), any
portion of which is chargeable to Lessor under paragraph 15 hereof, then the
share of such taxes to be borne by Lessor as provided in the Lease, shall be in
proportion to the share of the production from such unit allocated to the leased
land. 

Allocation of unit production whether to the leased land or to
other lands therein, shall continue after any termination of all or any part of
this or any other lease covering lands in the unit until any exploration,
drilling, remedial drilling or production operations are begun on the lands so
terminated, or until contracts regarding any such operations are entered into,
whereupon all such terminated lands shall be excluded in the production to be
allocated to the respective lands in such unit. In the event of the failure of
Lessor’s, or any other owner’s, title as to any portion of the land included in
any such unit, such portion of such land shall likewise be excluded in
allocating production from such unit, provided, however, Lessee shall not be
held to account for any production allocated to any lands excluded from any such
operating unit unless and until Lessee has actual knowledge of the circumstances
requiring such exclusion. Any exclusion shall be 

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deemed effective the first day of the month next following the
date upon which such exclusion becomes finally established. 

           Lessee
may, at its sole option, at any time when there is no Commercial production in
such unit, terminate, enlarge or diminish such unit either by Lessee recording
in the office of the county recorder in the county in which the leased land is
situated a written declaration thereof, or by Lessee giving written notice
thereof to Lessor. 

In the event that the production of Leased Substances from the
leased lands or from lands in the general area of the leased land should at any
time exceed the demand for the facility use thereof in the opinion of Lessee and
the Lessee elects to reduce the total amount of steam produced or consumed, then
in that event each well participating on a commingling basis shall be reduced in
percentage amount equal to its proportion of the whole.

7.       Use Of Lease.
Lessee shall have the right to drill such wells on leased land as Lessee may
deem desirable for the purposes hereof including the exploration and production
of Geothermal Resources for heat or electric power production purposes and any
reinjection of fluids thereof. Lessee shall have the right to construct upon
leased land such equipment and structures as Lessee may deem desirable for the
purpose of utilizing Leased Substances including geothermal power plants, access
and piping and transmission equipment related thereto. No well shall be drilled
on the leased land within 300 feet of any residence or 100 feet of any barn now
on leased land without Lessor’s consent. 

8.       Minimize Use.
Notwithstanding any provisions of this lease to the contrary, Lessee shall
utilize for such purpose only so much of the leased land as shall be reasonably
necessary for Lessee activities and operations thereon and shall interfere as
little as reasonably possible with the use and occupancy of the leased land by
the Lessor. 

Lessee agrees, upon written request of Lessor, to fence all
excavations (including sumps and setting ponds, and, upon the termination of the
Lease, Lessee shall level and fill all sump holes and excavations, shall remove
all debris and shall leave the locations or premises used by Lessee in a clean
and sanitary condition. 

Lessee agrees to replace all fences which the Lessee may have
removed for its purposes and repair all fences which Lessee may have damaged,
and if and when so required by the Lessor, will provide a proper livestock guard
at any point of entry upon lands used by Lessee. 

In the event this Lease terminates as to a portion of either
the leased land or rights granted hereunder, it shall continue in full force and
effect as to those facilities necessary to the permitted use of the remaining
leased lands or rights hereunder. 

Lessee shall have the right at any time and from time to time
to remove from the leased land any and all casing, machinery, equipment,
structures, installations and property of 

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every kind and character placed upon said leased land by or
pursuant to permission of Lessee, provided that if such removal should occur
after termination of all rights granted herein, it shall be completed within a
reasonable time thereafter. 

9.       Exclusive Rights.
Lessee shall have exclusively the rights to all Leased Substances and to all
power production from Leased Substances on and/or from leased land during the
term hereof, subject only to payment of the royalties to Lessor as is set forth
herein.

10.      Water. Lessee shall have
reasonable access to and use of water from the leased land for Lessee’s
drilling, testing and exploration operations thereon, in the vicinity thereof,
or on land or lands pooled, unitized or combined therewith. Lessee shall
purchase such water owned by Lessor at standard commercial rates for the area
and will reimburse Lessor for the use of any water which is being purchased by
Lessor. Lessor shall be allowed to enter on to the Lands during the term of the
lease for regular water monitoring activities of all wells or water sources.

Lessee agrees to and shall indemnify and hold Lessor free and
harmless from any and all damages, repairs, causes of action, costs or expense,
arising or resulting from any significant decrease or interruption of well or
water source flow, or contamination of potable water source such that the water
produced from such source has been degraded below the existing water quality
found in the well or water source, or it no longer meets Idaho Department of
Environmental Quality minimum drinking water standards (if the well or source
previously met the minimum drinking water standards), to the extent such
significant decrease, interruption or contamination is caused by Lessee’s
drilling or geothermal resource extraction operations on the Premises.

In the event any significant decrease, interruption or
contamination is documented by Lessor, Lessor must immediately notify and
provide all available documentation to Lessee, and Lessee shall be allowed to
examine, measure and/or test the well or water source. If it is determined that
Lessor’s activities have caused the injury, Lessee shall, within seven business
days after that determination, commence and direct all necessary repair,
redrilling or rehabilitation of any such affected well or water source.

In the event repair, redrilling or rehabilitation of any such
affected well or water source is not possible and a decrease, interruption or
contamination is permanent, Lessee shall compensate Lessor for the fair market
value of the permanently lost water by purchasing Lessor’s affected water
rights, and certain damages arising from the loss of such water. If crops are
planted and growing, such damages are limited to one season of crop loss equal
to the average net value of the previous 3 years of documented crop sales from
the Lands, less any current year crop sales. Such damages will be in proportion
to the Lands so affected. 

11.      Permits. Any wells
drilled by Lessee hereunder shall only be drilled after first obtaining any
relevant governmental agency permits regarding geothermal well drilling on the
leased land and in conformance with approved well design by relevant agencies.
Power plant structures shall be engineered and constructed in conformance with
and only 

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after obtaining any relevant governmental agency permits
regarding geothermal or biomass power plants. Lessor agrees to cooperate with
Lessee’s application for governmental licenses, permits, and approvals, the cost
of which shall be borne by Lessee.

12.      Partial Ownership
Interests. In the event Lessor at the time of making this Lease owns an interest
in the leased land less than One Hundred Percent (100%) of the right, title and
interest purportedly granted or leased hereby to Lessee, then any payments due
Lessor hereunder shall be paid to Lessor only in the proportion which Lessor’s
Interest bears to a One Hundred Percent (100%) interest in the leased land.
Notwithstanding the foregoing, should Lessor hereafter acquire any additional
right, title or interest in or to the leased land, 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 

13.      Assignment. There is
hereby expressly reserved to Lessor and to Lessee the right and privilege to
convey, transfer or assign, in whole or in part, or to deal with in any manner,
subject to the provisions hereof, their respective rights and interests in and
under this Lease and Agreement or in the leased land, or the Leased Substances
produced on or from the leased land but in the event Lessor shall sell or
transfer any part or parts of the leased land or any interest in the aforesaid
Leased Substances therefrom, then Lessees obligations hereunder shall not
thereby be altered, increased or enlarged, but Lessee may continue to operate
the leased land and to pay and settle rents and royalties as an entirety.

14.      Force Majeure. The
obligation of the Lessee hereunder shall be suspended and the terms of this
Lease shall be extended as the case may be, while Lessee is prevented from
complying therewith, in whole or in part, by strikes, lockouts, riots, war or
the results thereof, acts of God or the elements, fire, flood, accidents, delays
in transportation, inability to secure labor or material in the open market,
laws, orders, rules, or regulations of Federal, State, County, Municipal, or
other governmental agencies, authority, or representative, or any other matter
or condition beyond reasonable control of Lessee, whether or not similar to the
conditions or matters herein specifically enumerated, or while litigation
contesting Lessor’s title to the leased land or the rights granted Lessee
hereunder or litigation involving Lessee’s operations hereunder shall be pending
and undetermined or during any period when Lessee has no market for the products
it is then capable of producing from the leased land or the market price then
available for such products will not produce an acceptable profit. For so long
as any of the above circumstances continue to exist, Lessee, without impairment
of its rights hereunder, shall be excused from performance of all obligations
hereunder except payment of taxes and protection of the leased land. It is
expressly agreed that the prevention of settlement of any litigation or strike
or labor disturbance shall not be considered a matter subject to Lessee’s
control within the meaning of this Paragraph.

15.      Tax Payments. Lessee
shall pay all taxes on Lessee structures and improvements placed upon the leased
land by Lessee and shall pay taxes levied and assessed against products of
Lessee operations hereunder and taxes levied and assessed against the right to

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produce steam and heat energy from leased lands. Lessor shall
pay all taxes levied and assessed against leased land not covered by this lease
and/or Lessee tax payment requirements herein. 

16.      Project Costs. All labor
to be performed and materials to be furnished in operations of Lessee hereunder
shall be at the cost and expense of Lessee, and Lessor shall not be chargeable
with, or liable for, any part thereof. Lessee shall protect the leased land
against liens arising from its operations thereon. Upon commencement of
operations upon leased land, Lessee shall protect Lessor against damages of
every kind and character which may be occasioned to any of the parties hereto or
to any other person by reason of the operations or workings of the Lessee upon
said leased land. The protection of Lessor shall include maintenance of
workman’s compensation insurance typical for geothermal drilling and power plant
construction projects and good and safe drilling, construction and power plant
operations designed by competent drilling and power plant engineering
experts.

17.      Land Compensation. In
return for actual surface use of leased land required for well site, pipeline,
transmission and plant operations hereunder, Lessee shall compensate Lessor at
the annual rate of $100.00 per acre for such lands so affected for the duration
of their use. For these purposes, any pipelines or transmission lines shall be
deemed to require a 10 foot wide ground area. All pipelines shall be insulated
as per typical project specifications and shall be colored according to industry
norms or permit requirements as may be imposed. 

18.      Default Notice. Upon
violation of any of the terms and conditions of this lease by Lessee and the
failure of Lessee to begin in good faith to remedy same within 30 days after
written notice from Lessor to do so, specifying in said notice the nature of
such default, then at the option of Lessor this lease shall forthwith cease and
terminate and all rights of Lessee in and to said leased land shall be at an
end, except that in the event of such termination Lessee shall have the right to
remove from the leased land all surface facilities and improvements of
whatsoever kind and character placed upon leased land by Lessee. Upon default,
if any, Lessee shall remove from leased land any and all machinery and
structures placed upon leased land within one hundred twenty (120) days
thereof.

19.      Title. Lessor hereby
warrants and agrees to defend title to the leased land and agrees that Lessee,
at its option, may pay and discharge any taxes, mortgages, trust deeds or other
liens or encumbrances existing, levied or assessed on or against leased land,
and in the event Lessee exercises such option, Lessee shall be subrogated to the
rights of any holder or holders thereof, and shall have the right to reimburse
itself by applying to the discharge of any such mortgage, tax or other lien or
encumbrance any royalties or rentals accruing to Lessor hereunder.

20.      Notice. Any notice or
other communication hereunder from Lessor to Lessee shall be given in writing by
delivering same personally to Lessee or by sending same by registered or
certified mail postage prepaid or Federal Express to Lessee at 1509 Tyrell Lane,
Suite B, Boise, Idaho 83706. Any notice or other communication hereunder from
Lessee to Lessor shall be given in writing by delivering same personally to
Lessor or by 

9

sending same by registered or certified mail postage prepaid or
Federal Express to Lessor at the Lessor address set forth on the signature page
of this lease. Any notice so sent shall be deemed to have been given and
received within 96 hours of deposit thereof in the United States mail or within
48 hours of deposit thereof with Federal Express, providing that Lessor has
provided and street address and telephone number. The parties may upon written
notice to the other party, at any time and from time to time change their
respective addresses for the purposes hereof.

21.      Definitions. For the
purposes of this Lease the following definitions shall apply:

                  (a)       The
terms “Hot Water”, “Steam” and “Thermal Energy”, collectively referred to as
Energy Produced, each shall mean natural geothermal water and/or steam, and
shall also mean the natural heat of the earth and the energy present in,
resulting from or created by, or which may be extracted from, the natural heat
of the earth or the heat present below the surface of the earth, in whatever
form such heat or energy naturally occurs;

                  (b)       The
term “Leased Substances” shall collectively mean the matter, substances and
resources defined in subparagraph 21(a) that are subject to this Lease;

                  (c)       The
term “Geothermal Resources” shall collectively mean the matter, substances and
resources defined in subparagraph 21(a) that are not subject to this Lease but
are located on adjacent land or lands in reasonable proximity thereto;

                  (d)       The
term “Power Potential” shall mean, when used herein with respect to any well or
wells, the quantity, or units, of energy capable of being recovered from the Hot
Water, Steam or Thermal Energy produced therefrom by means of any energy
conversion or utilization facility (including, but not limited to, electrical
generating facilities) or equipment designed for use thereof;

                  (e)       The
term “Sufficient Power Potential” shall mean that Power Potential which, in the
sole judgment of Lessee shall be sufficient for the Commercial sale or
utilization thereof, or shall warrant the construction of facilities for the
Commercial sale or other utilization thereof, or shall justify additional
drilling or other operations on the leased land;

                  (f)      
The term “Commercial” shall mean those qualities of Leased Substances produced,
sold or used, the value of which, after determining Lessee’s direct operating
costs will be capable of providing a sufficient return to cause Lessee, in its
sole judgment, to continue production thereof or to elect to proceed with
further development or exploratory operations on the leased land. 

                  (g)       The
term “Net Proceeds” is defined as proceeds from the sale of generated electric
power to a third party, independent of the Lessor or Lessee, less deductions of
the sum of all direct operating costs, financing costs, interest expense on
capital, property taxes, franchise and other taxes, administration and marketing
expenses and the depreciation of production wells, reinjection wells, monitoring
wells, pipelines, 

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all production facilities, power generation facilities,
electrical distribution equipment and power lines through to the sales delivery
point. Depreciation shall be on a fifteen (15) year straight-line basis with
asset capitalization in accordance with generally accepted accounting
principles. Electric power is computed and paid for on the basis of kilowatt-
hours (“Kw-h”) and the royalty shall be calculated on a basis of cents per
Kw-h.

                  (h)       The
term “Extractable Minerals” shall mean any minerals in solution in the well
effluence and all minerals and gases produced from or by means of any well or
wells on the leased land or by means of condensing steam or processing water
produced from the effluence from any such well or wells. Said terms shall also
include any water so produced or obtained from condensation or steam; provided,
however, that the term “gases” shall not include hydrocarbon gases that can be
produced separately from the well effluents;

22.      Termination.
Notwithstanding any other provisions of this Lease, and in consideration of the
payment made by the Lessee to the Lessor for the execution of this Lease, Lessee
shall have the right at any time prior to or after default hereunder, to
quitclaim and surrender to Lessor all right, title and interest of Lessee in the
leased rights, and thereupon all rights and obligations of the parties hereto
one to the other shall cease and terminate, save and except as to any then
accrued royalty obligations of Lessee then payable as to which Lessee shall
remain liable to Lessor, and save and except the rights, rights of way and
easements which may be retained by Lessee by virtue of the granting clause of
this Lease.

23.      Severability. In the
event that any part or portion or provision of this instrument shall be found or
declared to be null, void, or unenforceable for any reason whatsoever by any
court of competent jurisdiction or any governmental agency having authority
thereover, then and in such event only such part, portion or provision shall be
affected thereby, and such finding, ruling or decision shall not in any way
affect the remainder of this instrument or any of the other terms or conditions
hereof, or any Lessor rights or obligations are not, or would not be so held to
be, void or unenforceable, which said remaining terms and conditions and such
Lessor rights or obligations, as aforesaid, of this instrument shall remain
binding, valid and subsisting and in full force and effect between the parties
hereto, it being specifically understood and agreed that the provisions hereof,
and the Lessor rights or obligations embraced within such provisions, are
severable for the purposes of the provisions of this clause.

24.      Governing Law. This
lease and agreement shall be interpreted, governed by and construed under the
laws of the state of Idaho, without consideration of any conflicts of law
between the location of the parties or states of domicile thereof.

25.      Execution Authority. The
signatories hereto represent that they are the proper person to execute this
Lease and Agreement on behalf of the parties hereto.

26.      Binding Effect. This
Lease and Agreement and all of the terms, covenants and conditions hereof shall
extend to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. 

11

IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed as of the date hereinabove first written. 

U. S. Geothermal Inc. 

	By: Douglas J.
      Glaspey, COO – Lessee 	 	R.
      Michael Griffin – Lessor 
	  	 	P. O. Box 145, 
	  	 	Newton, UT 84327 
	  	 	  
	  	 	  
	  	 	  
	Cleo S. Griffin - Lessor 	 	  
	P. O. Box 145 	 	  
	Newton, UT 84327 	 	  
	  	 	  
	  	 	  
	  	 	  
	Harlow R. Griffin – Lessor 	 	Pauline Griffin - Lessor 
	P. O. Box 125 	 	P. O. Box 125 
	Newton, UT 84327 	 	Newton, UT 84327 
	  	 	  
	  	 	  
	  	 	  
	Douglas Griffin - Lessor 	 	Margaret Griffin - Lessor 
	P. O. Box 126 	 	P. O. Box 126 
	Newton, UT 84327 	 	Newton, UT 84327 
	  	 	  
	  	 	  
	  	 	  
	J. Terry Griffin - Lessor 	 	Sue Griffin - Lessor 
	P.O. Box 22 	 	P.O. Box 22 
	Newton, UT 84327 	 	Newton, UT 84327 
	  	 	  
	  	 	  
	  	 	  
	Phyllis Griffin Jorgensen – Lessor 	 	Vincent Jorgensen – Lessor 
	12007 Reenes Lane 	 	12007 Reenes Lane 
	Riverton, UT 84065 	 	Riverton, UT 84065 
	  	 	  
	  	 	  
	  	 	  
	Alice Mae Griffin Shorts – Lessor 	 	  
	P. O. Box 354 	 	  
	Wellington, UT 84542 	 	  

12

 

	State of __________
	)	On this ____________ day of _______________________ 2005, before
      me, 
	  	)	
	County of ________	)	
	 	 	 
	      	     	the undersigned Notary Public, personally
      appeared R. Michael Griffin and Cleo S. Griffin, husband and wife

	  	 	(    ) personally known to me 
	  	 	(    ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name(s) subscribed to
      the within instrument, and acknowledged that they executed it. 
	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	 
	  	 	Notary’s Signature 
	  	 	  
	  	 	  
	  	 	  
	State of __________
	)	On this ____________ day of _______________________ 2005, before
      me, 
	  	)	
	County of ________	)	
	    	   	the undersigned Notary Public, personally
      appeared Harlow R. Griffin and Pauline Griffin, husband and wife

	  	 	(   ) personally known to me 
	        	       	(   ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name Douglas J. Glaspey
      subscribed to the within Instrument, and acknowledged that he executed it.
    

	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	  
	  	 	Notary’s Signature 

 13

 

	State of __________
	)	On this ____________ day of _______________________ 2005, before
      me, 
	  	)	
	County of ________	)	
	 	 	 
	      	     	the undersigned Notary Public, personally
      appeared Douglas Griffin and Margaret Griffin, husband and wife

	  	 	(    ) personally known to me 
	  	 	(    ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name(s) subscribed to
      the within instrument, and acknowledged that they executed it. 
	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	 
	  	 	Notary’s Signature 
	  	 	  
	  	 	  
	  	 	  
	State of __________
	)	On this ____________ day of _______________________ 2005, before
      me, 
	  	)	
	County of ________	)	
	    	   	the undersigned Notary Public, personally
      appeared J. Terry Griffin and Sue Griffin, husband and wife

	  	 	(   ) personally known to me 
	        	       	(   ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name Douglas J. Glaspey
      subscribed to the within Instrument, and acknowledged that he executed it.
    

	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	  
	  	 	Notary’s Signature 

 14

 

	State of Idaho 	)	On this ____________ day of _______________________ 2005, before
      me, 
	  	)	 
	County of Ada 	)	 
	 	 	 
	      	     	the undersigned Notary Public, personally
      appeared Phyllis Griffin Jorgensen and Vincent Jorgensen, husband and wife

	  	 	(    ) personally known to me 
	  	 	(    ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name(s) subscribed to
      the within instrument, and acknowledged that they executed it. 
	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	 
	  	 	Notary’s Signature 
	  	 	  
	  	 	  
	  	 	  
	State of __________
	)	On this ____________ day of _______________________
      2005, before me, 
	  	)	
	County of ________	)	
	    	   	the undersigned Notary Public, personally
      appeared Alice Mai Griffin, a widow

	  	 	(   ) personally known to me 
	        	       	(   ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name Douglas J. Glaspey
      subscribed to the within Instrument, and acknowledged that he executed it.
    

	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	  
	  	 	Notary’s Signature 

 15

 

	State of ____________	)	On this ____________ day of _______________________
      2006, before me, 
	  	)	
	County of __________	)	
	    	   	the undersigned Notary Public, personally
      appeared Douglas J. Glaspey 

	  	 	(   ) personally known to me 
	        	       	(   ) proved to me on the basis
      of satisfactory evidence to be the person(s) whole name Douglas J. Glaspey
      subscribed to the within Instrument, and acknowledged that he executed it.
    

	  	 	  
	  	 	WITNESS my hand and official seal. 
	  	 	  
	  	 	  
	  	 	  
	  	 	Notary’s Signature 

 16

Exhibit A 

Attached to and made a part of Geothermal Lease and Agreement
dated June 22, 2005, between R. Michael Griffin and Cleo S. Griffin, husband
and wife; Harlow R. Griffin and Pauline Griffin, husband and wife; Douglas
Griffin and Margaret Griffin, husband and wife; J Terry Griffin and Sue Griffin,
husband and wife; Vincent Jorgensen and Phyllis Jorgensen, husband and wife; and
Alice Mae Griffin Shorts, a widow, Lessor, and US Geothermal Inc., an
Idaho corporation, Lessee. 

The following lands containing 160.00 acres, more or less,
located in Cassia County, Idaho. 

Township 15 South, Range 26 East
  

  Section 33:         NW 1/4 

Containing 160 acres more or less. 

           Interest
to the lands covered in this GEOTHERMAL LEASE AND AGREEMENT was reserved in
Warranty Deed dated 10/31/73 from Roland A. Griffin and wife, Alice A. Griffin;
R. Michael Griffin and wife, Cleo S. Griffin, Grantor, to L. J. Cummings, et ux,
Grantee, recorded with the Cassia County Recorder’s Office on 8/22/77 in
Instrument No. 101087, covering the NW1⁄4 of said Section 33, and reserving to
Grantor all steam rights. 

17Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.28

EXECUTION COPY 

 

 

 

ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT 

Between 

US Geothermal, Inc. 

And 

Ormat Nevada, Inc. 

 

 

Dated as of December 5, 2005 

 

 

CONFIDENTIAL 

EXECUTION COPY 

CONTENTS 

	ARTICLE 1. 	DEFINITIONS, INTERPRETATION AND CONTRACT
      DOCUMENTS 	1 
	 	 	 	 
	 	1.1 	Definitions 	1 
	 	 	 	 
	 	1.2 	Interpretation 	9 
	 	 	 	 
	 	1.3 	Documents Included 	9 
	 	 	 
	ARTICLE 2. 	CONTRACTOR RESPONSIBILITIES 	11 
	 	 	 	 
	 	2.1 	General Responsibilities 	11 
	 	 	 	 
	 	2.2 	Specific Responsibilities 	11 
	 	 	 	 
	 	2.3 	Contractor’s Personnel and Labor Relations
      	12 
	 	 	 	 
	 	2.4 	Representations and Warranties of Contractor
      	13 
	 	 	 	 
	 	2.5 	Use of Spare Parts 	14 
	 	 	 
	ARTICLE 3. 	COMPANY RESPONSIBILITIES 	14 
	 	 	 	 
	 	3.1 	General Responsibilities 	14 
	 	 	 	 
	 	3.2 	Company’s Representative 	15 
	 	 	 	 
	 	3.3 	Representations and Warranties of Company
      	15 
	 	 	 	 
	 	3.4 	Sale of Project 	16 
	 	 	 	 
	 	3.5 	Future Projects 	16 
	 	 	 
	ARTICLE 4. 	COMMENCEMENT OF WORK 	17 
	 	 	 	 
	 	4.1 	Notice to Proceed 	17 
	 	 	 	 
	 	4.2 	Commencement 	17 
	 	 	 	 
	 	4.3 	Substantial Completion 	17 
	 	 	 	 
	 	4.4 	Substantial Completion Certificate 	18 
	 	 	 	 
	 	4.5 	Deemed Substantial Completion 	18 
	 	 	 	 
	 	4.6 	Delay Liquidated Damages and Bonus 	18 
	 	 	 	 
	 	4.7 	Final Completion 	19 
	 	 	 	 
	 	4.8 	Final Completion Certificate 	19 
	 	 	 	 
	 	4.9 	Punchlist 	20 
	 	 	 	 
	 	4.10 	Failure to Achieve Final Completion by the
      Guaranteed Final Completion Date 	20

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	ARTICLE 5. 	COMPENSATION AND PAYMENT 	21 
	 	 	 	 
	 	5.1 	Contract Price 	21 
	 	 	 	 
	 	5.2 	Payment Milestones 	22 
	 	 	 	 
	 	5.3 	Payment 	22 
	 	 	 	 
	 	5.4 	Final Completion Payment for the Facility
      	23 
	 	 	 	 
	 	5.5 	Payments Not Acceptance of Work 	23 
	 	 	 	 
	 	5.6 	Payment of Subcontractor 	23 
	 	 	 	 
	 	5.7 	Waiver of Liens 	23 
	 	 	 	 
	 	5.8 	Interest 	24 
	 	 	 	 
	 	5.9 	Security Interest 	24 
	 	 	 
	ARTICLE 6. 	TESTING 	24 
	 	 	 	 
	 	6.1 	General 	24 
	 	 	 	 
	 	6.2 	Test Procedures 	24 
	 	 	 	 
	 	6.3 	Notice of Testing 	24 
	 	 	 	 
	 	6.4 	Delayed Tests; Deemed Completion 	25 
	 	 	 	 
	 	6.5 	Facilities 	26 
	 	 	 	 
	 	6.6 	Repeat Performance Tests 	26 
	 	 	 	 
	 	6.7 	Certification or Disagreement as to Test
      Results 	26 
	 	 	 
	ARTICLE 7. 	INTENTIONALLY OMITTED 	26 
	 	 	  
	ARTICLE 8. 	CONSTRUCTION SUSPENSION AND ACCELERATION;
      CHANGE ORDER 	26 
	 	 	 	 
	 	8.1 	Construction Suspension and Acceleration
      	26 
	 	 	 	 
	 	8.2 	Change Orders 	27 
	 	 	 	 
	 	8.3 	Procedure for Change Orders 	27 
	 	 	 	 
	 	8.4 	Change Orders Due to Contractor Error 	28 
	 	 	 	 
	 	8.5 	Change Orders Due to Changes in Law 	28 
	 	 	 	 
	 	8.6 	Effect of Force Majeure; Excused Performance
      	28 
	 	 	 	 
	 	8.7 	Company-Caused Changes 	30 
	 	 	 	 
	 	8.8 	Price Change 	30 
	 	 	 	 
	 	8.9 	Effectiveness; Continued Performance Pending
      Resolution of Disputes 	31 
	 	  	 	 
	 	8.10 	Documentation 	31 

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EXECUTION COPY 

	 	8.11 	Continue Work 	32 
	 	 	 	 
	 	8.12 	Critical Path Schedule Updates 	32 
	 	 	 	 
	 	8.13 	Change Order Constitutes Complete Relief
      	32 
	 	 	 	 
	 	8.14 	Effect of Changes on Warranties and Safety
      	32 
	 	 	 	 
	ARTICLE 9. 	DESIGN AND DOCUMENTATION 	33 
	 	 	 	 
	 	9.1 	Ownership of and Responsibility for Design
      	33 
	 	 	 	 
	 	9.2 	Inspection of Work 	33 
	 	 	 	 
	 	9.3 	As-Built Drawings 	33 
	 	 	 	 
	 	9.4 	License to Use 	33 
	 	 	 	 
	 	9.5 	Use of Documents After Termination 	34 
	 	 	 	 
	 	9.6 	O&M Manual 	34 
	 	 	 	 
	ARTICLE 10. 	WARRANTIES 	34 
	 	 	 	 
	 	10.1 	Warranty 	34 
	 	 	 	 
	 	10.2 	Warranty Period 	35 
	 	 	 	 
	 	10.3 	Defect Remedy Work 	35 
	 	 	 	 
	 	10.4 	Implementation of Warranty 	36 
	 	 	 	 
	 	10.5 	Disclaimer and Release 	36 
	 	 	 	 
	ARTICLE 11. 	PERFORMANCE AND PERFORMANCE RELATED REMEDIES;
      EXCLUSIVITY; LIMITATION OF LIABILITY 	37 
	 	  	 	 
	 	11.1 	Performance Liquidated Damages and Performance
      Bonus 	37 
	 	 	 	 
	 	11.2 	Exclusivity 	37 
	 	 	 	 
	 	11.3 	General Limitation of Liability 	37 
	 	 	 	 
	 	11.4 	Other Provisions 	38 
	 	 	 	 
	ARTICLE 12. 	TITLE; CARE OF THE WORK 	38 
	 	 	 	 
	 	12.1 	Passage of Title 	38 
	 	 	 	 
	 	12.2 	Risk of Loss 	39 
	 	 	 	 
	 	12.3 	Care, Custody and Control 	39 
	 	 	 	 
	ARTICLE 13. 	INSURANCE 	39 
	 	 	 	 
	 	13.1 	Contractor Provided Insurance 	39 
	 	 	 	 
	 	13.2 	Company Provided Insurance 	40 
	 	 	 	 
	 	13.3 	Policies 	41 

iii 

EXECUTION COPY 

	 	13.4 	Payment of Deductibles 	42 
	 	 	 	 
	 	13.5 	Evidence of Insurance 	42 
	 	 	 	 
	ARTICLE 14. 	DISPUTE RESOLUTION 	43 
	 	 	 	 
	 	14.1 	Settlement by Mutual Agreement 	43 
	 	 	 	 
	 	14.2 	Mediation 	43 
	 	 	 	 
	 	14.3 	Pending Disputes 	43 
	 	 	 	 
	ARTICLE 15. 	INDEMNIFICATION 	44 
	 	 	 	 
	 	15.1 	General 	44 
	 	 	 	 
	 	15.2 	Indemnification for Bodily Injury or Property
      Damage 	44 
	 	 	 	 
	 	15.3 	Indemnity from Liens 	44 
	 	 	 	 
	 	15.4 	Contractor’s Infringement Indemnity
      	44 
	 	 	 	 
	 	15.5 	Company’s Indemnity 	45 
	 	 	 	 
	 	15.6 	Notice and Settlement of Claims 	45 
	 	 	 	 
	ARTICLE 16. 	ASSIGNMENT 	46 
	 	 	 	 
	 	16.1 	Assignment by Company 	46 
	 	 	 	 
	 	16.2 	Assignment by Contractor 	46 
	 	 	 	 
	 	16.3 	Succession 	46 
	 	 	 	 
	ARTICLE 17. 	SUBCONTRACTORS 	46 
	 	 	 	 
	 	17.1 	Subcontracts 	46 
	 	 	 	 
	 	17.2 	Subcontract Provisions 	47 
	 	 	 	 
	 	17.3 	Approved Vendors 	47 
	 	 	 	 
	 	17.4 	Exclusion 	47 
	 	 	 	 
	ARTICLE 18. 	SUSPENSION 	48 
	 	 	 	 
	 	18.1 	Right of Company to Suspend Work 	48 
	 	 	 	 
	 	18.2 	Initial Payments to Contractor 	48 
	 	 	 	 
	 	18.3 	Extended Suspension 	48 
	 	 	 	 
	 	18.4 	Right of Contractor to Suspend 	48 
	 	 	 	 
	 	18.5 	Additional Changes Resulting From Suspensions
      	48 
	 	 	 	 
	 	18.6 	Resumption of Work 	49 
	 	 	 	 
	ARTICLE 19. 	TERMINATION 	49 

iv 

EXECUTION COPY 

	 	19.1 	Termination by Company 	49 
	 	 	 	 
	 	19.2 	Termination by Contractor 	50 
	 	 	 	 
	 	19.3 	Due to Force Majeure 	51 
	 	 	 	 
	 	19.4 	Due to Company’s Convenience 	51 
	 	 	 	 
	 	19.5 	Exclusive Remedy 	51 
	 	 	 	 
	 	19.6 	Actions Required Following Termination 	51 
	 	 	 	 
	 	19.7 	Termination and Transfer of Subcontracts
      and Other Rights 	52 
	 	 	 	 
	 	19.8 	Surviving Obligations 	52 
	 	 	 	 
	ARTICLE 20. 	INTENTIONALLY OMITTED 	53 
	 	 	 	 
	ARTICLE 21. 	CONFIDENTIALITY 	53 
	 	 	 	 
	 	21.1 	Both Parties to Keep Information Confidential
      	53 
	 	 	 	 
	 	21.2 	Use of Information 	53 
	 	 	 	 
	 	21.3 	Exclusions 	53 
	 	 	 	 
	 	21.4 	Company Not to Remove Logos 	53 
	 	 	 	 
	ARTICLE 22. 	NOTICES 	53 
	 	 	 	 
	ARTICLE 23. 	MISCELLANEOUS 	55 
	 	 	 	 
	 	23.1 	Governing Law 	55 
	 	 	 	 
	 	23.2 	Construction 	55 
	 	 	 	 
	 	23.3 	Nature of Agreement 	55 
	 	 	 	 
	 	23.4 	Severability 	55 
	 	 	 	 
	 	23.5 	Amendments and Waivers 	56 
	 	 	 	 
	 	23.6 	Survival 	56 
	 	 	 	 
	 	23.7 	Counterparts 	56 
	 	 	 	 
	 	23.8 	Entire Contract 	56 
	 	 	 	 
	 	23.9 	Waivers 	56 
	 	 	 	 
	 	23.10 	Counterparts; Transmitted Copies 	56 
	 	 	 	 
	 	23.11 	Further Assurances 	57 

v 

EXECUTION COPY 

LIST OF EXHIBITS

	Exhibit A 	Scope of Work Allocation and Interface Points
      
	 	 
	Exhibit B 	Contract Price, Milestone Payment Schedule
      and Work Milestone Schedule 
	 	 
	Exhibit C 	Power Plant Design Criteria, Drawings and
      Specifications per itemized list of Section 1.3. 
	 	 
	Exhibit D 	Performance Tests and Correction Curves
      
	 	 
	Exhibit E 	Warranty Claim Procedures 
	 	 
	Exhibit F 	Approved Vendors List 
	 	 
	Exhibit G 	Permits 
	 	 
	Exhibit H 	Certificate of Substantial Completion 
	 	 
	Exhibit I 	Certificate of Final Completion 
	 	 
	Exhibit J 	Form of Final Lien Waiver 
	 	 
	Exhibit K 	Liquidated Damages and Bonuses 
	 	 
	Exhibit L 	Change Order Form 
	 	 
	Exhibit M 	Change Order Request Form 

vi 

EXECUTION COPY 

ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT 

          THIS
ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT (“Contract”) dated as
of December 5, 2005, is made by and between: 

	(1) 	
      US GEOTHERMAL, INC., an Idaho corporation, with
      its principal place of business at 1509 Tyrell Lane, Suite B, Boise, Idaho
      83706 (“Company”); and 

	 	
       

	(2) 	
      ORMAT NEVADA, INC., a Delaware corporation, with
      its principal place of business at 980 Greg Street, Sparks, NV 89431-6039
      (“Contractor”). 

RECITALS 

          A.      Company
is developing a thirteen (13) MW geothermal power plant in the Raft River Known
Geothermal Resource Area in the State of Idaho and desires to retain Contractor
to provide certain construction related services and to supply equipment in
relation to such power plant. 

          B.     
Contractor desires to be retained by Company to provide construction related
services and supply equipment in relation to Company’s power plant.

AGREEMENT 

     THEREFORE, Company and Contractor
(each individually, a “Party” and together, the “Parties”) agree
as follows: 

ARTICLE
1.      DEFINITIONS,
INTERPRETATION AND CONTRACT DOCUMENTS 

          1.1      Definitions

          In
addition to the terms defined elsewhere in this Contract, the definitions of
certain terms used in this Contract with initial letters capitalized are as set
forth herein. 

          “Affiliate”
means, with respect to any person or entity, any other person or entity
(including any officer, director, shareholder, partner, employee, agent or
representative of such person or entity) that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such first person or entity. For purposes of this definition,
“control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person or
entity, whether through the ownership of voting securities, partnership or other
ownership interests, by contract, by Law or otherwise. 

          “Approved
Vendors” means the vendors set forth in Exhibit F, as amended from
time-to-time pursuant to Section 17.3. 

1 

EXECUTION COPY 

          “As-Built
Drawings” has the meaning given to it in Section 9.3. 

          “Capacity
Test” has the meaning given to it in Exhibit D. 

          “Certificate
of Final Completion” means the certificate issued by Contractor to Company
under this Contract, pursuant to Section 4.4. 

          “Certificate
of Substantial Completion” means the certificate issued by Contractor to
Company under this Contract, pursuant to Section 4.3. 

          “Change
in the Work” means a change to the Work as provided in Article 8. 

          “Change
of Law” means any Law, official interpretation thereof or manner of
interpretation thereof, that is amended or modified, is enacted, adopted,
promulgated or otherwise becomes effective or is repealed, revoked, suspended or
not renewed after the Effective Date and which increases Contractor’s cost of
performing the Work, delays Contractor’s performance of the Work or otherwise
adversely affects Contractor’s performance of its obligations under this
Contract.

          “Change
Order” means a written change order based on the form set forth in Exhibit L
describing the Change in the Work and its effect, if any, on the Contract Price,
the Milestone Payment Schedule, the Schedule and any other provision of this
Contract that is affected. 

          “Commencement
Date” has the meaning given to it in Section 4.2. 

          “Company”
has the meaning set forth in the introductory paragraph to this
Contract. 

          “Company
Default” means the failure or delay of Company or its representatives,
agents, subcontractors or suppliers (other than Contractor and its
Subcontractors and their agents and employees) to meet Company’s material
obligations under this Contract, including the obligations identified in Section
3.1. 

          “Company
Indemnified Party” has the meaning set forth in Section 15.1. 

          “Company
Permits” means the Permits to be obtained by Company as described in
Exhibit G and, other than the Contractor Permits, any Permits otherwise
necessary for the construction, operation and maintenance of the Project. 

          “Company’s
Representative” has the meaning given to it in Section 3.2. 

          “Contract”
means this Engineering, Procurement and Construction Contract together with the
Exhibits attached hereto, as the same may be amended or otherwise modified from
time-to-time as permitted herein. 

          “Contract
Price” means the total aggregate price payable to Contractor by Company as
set forth in Exhibit B, and as adjusted pursuant to the provisions of this
Contract. 

          “Contractor”
has the meaning given to it in the Preamble. 

2 

EXECUTION COPY 

          “Contractor
Hazardous Materials” has the meaning given to it in Section 2.2(h) .

          “Contractor
Permits” means the Permits to be obtained by Contractor as described
in of Exhibit G. 

          “Contractor’s
Representative” has the meaning given to it in Section 2.3.2. 

          “Correction
Curves” has the meaning(s) given to it in Exhibit D and shall be used to
adjust Facility performance from variations from the Design Conditions and/or
other specified factors (e.g., degradation) as provided therein.

          “Day”
means a twenty-four (24) hour period beginning and ending at 12:00
midnight. 

          “Defect”
or “Defective” means any Work, including any part or component
thereof, that: (i) contains improper or inferior workmanship; (ii) fails to
conform in any material respect with the relevant Drawings or Specifications,
including any Change in the Work; (iii) is not manufactured in any material
respect with the applicable Drawings and the Specifications; and (iv) is not
free from defects in material and workmanship. 

          “Defect
Remedy Work” means Contractor’s repair or replacement of any Defect or Work
that is Defective. 

          “Delay
Liquidated Damages” has the meaning given to it in Section 4.6.1. 

          “Delayed
Payment Rate” means a per annum rate of interest equal to the lesser of (i)
twelve percent (12%) and (ii) the maximum rate permitted by applicable Law. 

          “Design
Conditions” means the design operating conditions for the Facility as set
forth in Exhibit C. 

          “Documents”
means any design, drawing (including the Drawings), certificate, specification
(including the Specifications), report, studies, model, program, record,
pattern, sample, written information and data and other document of whatever
nature (including a record thereof in software form). 

          “Dollars”
or “$” means the lawful currency of the United States of
America. 

          “Drawings”
means the Facility drawings set forth in Exhibit C or otherwise provided by
Contractor to Company pursuant to Article 9 or other terms of this Contract,
including the As-Built Drawings. 

          “Effective
  Date” means the date of this Contract.

          “Facility”
means the unit number one geothermal power plant and related infrastructure to
be located the Raft River Known Geothermal Resource Area in Cassia County in the
State of Idaho to be constructed as part of the development of the Project on
the Site, all as more particularly described in Exhibits A and C, but for
avoidance of doubt excludes the 

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interconnection facilities, geothermal production, re-injection
and cooling tower make-up water wells, the gathering system and other portions
of the Project outside of the power plant island. 

          “Final
Completion” means the satisfaction or deemed satisfaction of each of the
following: (a) Substantial Completion has occurred; (b) Contractor has delivered
final lien waivers and releases from Contractor and Contractor’s Subcontractors
to Company; (c) all Documents which are to be delivered to Company, by
Contractor on or before the Final Completion Date pursuant to this Contract have
in-fact been delivered to Company; (d) all of Contractor’s supplies, personnel,
rubbish and Contractor Hazardous Materials have been removed from the Site; and
(e) all Work other than Punch List Items have been completed in accordance with
this Agreement. 

          “Final
Completion Date” means the earlier of (a) the date upon which the
Certificate of Final Completion was issued by Contractor to Company pursuant to
Section 4.7 (provided that such Certificate of Final Completion has been
subsequently countersigned by Company pursuant to Section 4.8) or (b) the date
upon which Final Completion is deemed to have occurred under this Contract
pursuant to Section 4.8 or Section 6.4.3. 

          “Financing
Parties” means (a) any and all lenders providing senior or subordinated
construction, interim or long-term debt financing or refinancing; and (b) any
and all equity investors providing leveraged lease-financing or refinancing, and
in each case any trustee or agent acting on their behalf, for the Facility.
Company shall provide written notice to Contractor of the names of all of the
Financing Parties.

          “Force
Majeure” means any war, declared or not, invasion, armed conflict or act of
public enemy, blockage, embargo, revolution, insurrection, riot, civil
commotion, act of terrorism, or sabotage provided that any such event occurs
within or directly involving the United States or any individual state, or any
other country from which machinery, equipment or material for the Facility are
procured or transported through, an act of God, including, but not limited to,
lightning, fire, earthquakes, volcanic activity, floods, storms or unusual
weather conditions, cyclones, typhoons, or tornadoes, labor disputes including
strikes, or slowdowns, or lockouts that extend beyond the Facility or are
widespread or nationwide, or any other event or circumstances or combination of
event(s) or circumstances beyond the reasonable control of a Party, that have a
real, quantifiable and adverse impact on cost or performance of the Work. 

          “Gross
Invoice Amount” has the meaning given to it in Section 5.3.1. 

          “Governmental
Authority” means any local, state, regional, central or national
government administrative, judicial or executive organs, but excluding any
similar foreign or multinational entity, that has or purports to have or asserts
or attempts to assert, jurisdiction to legislate, decree, adjudicate or enforce
any decision related to, or bearing on, the Facility or the Work. 

          “Guaranteed
  Final Completion Date” means the Guaranteed Final Completion Date identified
  in the Schedule, as the same may be amended from time-to-time in accordance
  with this Contract.

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          “Guaranteed
  Substantial Completion Date” means the Guaranteed Substantial Completion
  Date identified in the Schedule, as the same may be amended from time-to-time
  in accordance with this Contract.

          “Hazardous
Materials” means any hazardous or toxic substances, materials and wastes
which are regulated or are classified as hazardous or toxic by any Governmental
Authority having jurisdiction over the Site, including, but not limited to,
those substances included in the definitions of “Hazardous Substances,”
“Hazardous Materials,” “Toxic Substances,” “Hazardous Waste,” “Solid Waste,”
“Pollutant,” or “Contaminant"” in any federal, state, local or
other Law pertaining to public or worker health, welfare or safety or the
environment, including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et
seq., as amended by the Superfund Amendments and Reauthorization Act of
1986; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
§ 6901 et seq.; the Federal Clean Air Act, 42 U.S.C. § 7401-7626; the
Federal Water Pollution Control Act and Federal Clean Water Act of 1977, as
amended, 33 U.S.C. § 1251 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. § 135 et seq.; the Federal Environmental
Pesticide Control Act, the Federal Toxic Substances Control Act, 15 U.S.C. §
2601 et seq.; the Federal Safe Drinking Water Act, 42 U.S.C. § 300(f)
et seq.; the Emergency Planning and Community Right-To-Know Act of 1986,
42 U.S.C. § 11001 et seq.; and the Occupational Safety and Health Act of
1970, 29 U.S.C. § 651 et seq. and in the regulations promulgated pursuant
to those laws. 

          “Information”
means any Drawings, Specifications or other information furnished directly or
indirectly by the other Party hereto in connection with the Contract and the
Facility and the Project whether such Information has been furnished prior to,
during or following termination of the Contract in connection with the
performance of this Contract. 

          “Insolvency
Event” means the bankruptcy, insolvency, liquidation, administration or
other receivership or dissolution of a Party and any equivalent or analogous
Proceedings by whatever name known and in whatever jurisdiction and any step
taken (including the presentation of a petition or the passing of a resolution)
for or with a view to any of the foregoing. 

          “Law”
means any federal, state, commonwealth, local or other constitution, charter,
act statute, law, ordinance, treaty, resolution, directive (to the extent having
the force of law), code, rule, regulation, order, specified standards or
objective criteria contained in any applicable permit or approval, which
standards or criteria must be met in order for the Facility to be constructed
and operated lawfully, and other legislative or administrative action of any
Governmental Authority, or a final decree, judgment or order of a court, or any
applicable engineering, construction, safety or electrical generation code.

          “Letter
of Credit” means a stand-by letter of credit procured: (i) by Company, or
(ii) through one or more of the Financing Parties for the benefit of Company and
in favor of Contractor, and which shall be sufficient to pay Contractor any
balance of sums owed to Contractor by Company pursuant to this Contract (as such
Letter of Credit may be updated from 

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time-to-time), but in particular with respect to the payment
terms set forth in Section 5.3.1 and the Schedule.

          “Liability”
or “Liabilities” means any fine, penalty, damage, loss, cost, claim or
expense or other liability (including any related fees, expenses and
disbursements of a Party’s counsel). 

          “Liquidated
Damages” means Delay Liquidated Damages, Performance Liquidated Damages,
Shortfall Generation Liquidated Damages and Net Performance Liquidated Damages.

          “Major
Vendor” means any vendor engaged directly by Contractor to provide equipment
for incorporation into the Work at the Site, whose Work is valued in excess of
One Million Dollars ($1,000,000). 

          “Materials”
means all equipment, supplies, apparatus, instruments, machinery (including the
OEC), parts, tools, components, appliances, spare parts and appurtenances
thereto to be supplied under this Contract by Contractor as described in or
required by the Scope of Work. 

          “Milestone
Payment Schedule” means the payment schedule for payment of the Contract
Price as set forth in Exhibit B. 

          “Minimum
Payment” has the meaning given to it in Section 5.3.1. 

          “Month”
means a period beginning at 12:00 midnight on the last Day of the preceding
calendar month and ending at 12:00 midnight on the last Day of the calendar
month. 

          “MW”
means megawatts. 

          “Net
  Deliverable Capacity” has the meaning given to it in Exhibit D.

          “Net
Performance Liquidated Damages” means the Performance Liquidated Damages
less the amount of Shortfall Generation Liquidated Damages paid or payable by
Contractor to Company pursuant to Section 4.10. 

          “Notice
to Proceed” means the notice issued by Company to Contractor authorizing
Contractor to commence the Work under this Contract. 

          “O&M
Manual” means the operation and maintenance manual to be provided by
Contractor to Company pursuant to Section 9.6. 

          “OEC”
means the Ormat Energy Converter. 

          “Party”
and “Parties” have the meanings given to them in the Preamble. 

          “Performance
Bonus” has the meaning given to it in Section 11.1.3. 

          “Performance
Guarantee” means the guaranteed minimum level of Net Deliverable Capacity to
be attained as specified in Exhibit D. 

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          “Performance
Liquidated Damages” has the meaning given to it in Section 11.1.1. 

          “Performance
Tests” means the Synchronization Test, the Trip Test, the Capacity Test, the
Reliability Test, and the Turbine Run Back Test (all as are defined in Exhibit
D) to be carried out to determine whether the Facility satisfies the performance
requirements set forth in this Contract. 

          “Permits”
means the permits, approvals and licenses required from Governmental Authorities
necessary for the construction, operation and maintenance of the Facility and
the performance of the Work.

          “PPA”
means the Firm Energy Sales Agreement in effect between Idaho Power Company and
US Geothermal Inc. under which the output from the Facility would be delivered
and bought. 

          “Proceeding”
means any claim, suit, demand, allegation, arbitration, dispute or other action
process, or proceeding whether actual or threatened. 

          “Project”
means the geothermal power generation project unit number one to be constructed
in the Raft River Known Geothermal Resource Area in Cassia County in the State
of Idaho, including the Facility and the related substation, geothermal
production and re-injection wells and the gathering system, all as more
particularly described in the Power Plant Design Criteria document included in
Exhibit C. 

          “Prudent
Industry Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time-to-time, as are commonly used in operations of privately-owned
geothermal electric power generation facilities similar to the Facility, which
in the exercise of reasonable judgment and in light of the facts known at the
time the decision was made, are considered good, safe and prudent practice in
connection with the operation and maintenance of geothermal electric power
generation facilities similar to the Facility. Prudent Industry Practices are
not intended to be limited to the optimal practices, methods, equipment,
specifications and standards, but rather to be the practices, methods,
equipment, specifications and standards generally accepted in the
privately-owned geothermal electric power industry. 

          “Punchlist
Items” means unfinished items of Work (such as Spare Parts, painting,
fine-finish grading or clean-up, updating of Drawings, manuals or other
Documents) the lack of which or the failure of which to complete (considered
individually or in the aggregate of all Punchlist Items) does not or will not
adversely affect the, safety or integrity of the Facility and does not impact
the performance of the Facility. 

          “Safety
Plans” has the meaning given to it in Section 2.3.4. 

          “Safety
Report” has the meaning given to it in Section 2.3.4. 

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          “Schedule”
means Exhibit B, as it may be amended from time-to-time as set forth in this
Contract, which sets forth the Work performance and payment milestone schedule
for the Facility. 

          “Schedule
Bonus” has the meaning given to it in Section 4.6.2. 

          “Scope
of Work” means the specific delineation of items of Work to be performed by
Contractor as set forth in Exhibit A, which may be modified pursuant to a Change
Order pursuant to Article 8, and which shall conform to the Drawings and the
Specifications. 

          “Shortfall
  Generation Liquidated Damages” has the meaning given to it in Section
  4.10.3.

          “Site”
means the site more specifically described in Exhibit C, together with spaces,
surface water, ground water, diversion weirs, roads, easements, privileges,
access rights, rights-of-way and other rights and interests in land and water
acquired or to be acquired by Company to develop, engineer, build, own, operate
or maintain the Facility and appurtenant facilities, including any associated
working and laydown areas for Contractor. 

          “Spare
Parts” means the spare parts for the Facility to be provided by Company as
described in Exhibit C. 

          “Specifications”
means the system descriptions, technical specifications and performance
specifications and standards for the Facility and the performance of the Work as
set forth in Exhibit C. 

          “Synchronization
Test” means a test whereby the Facility OEC is synchronized to the power
grid, as described in Exhibit D. 

          “Subcontract”
means an agreement between Contractor and a Subcontractor for the performance of
any portion of the Work. 

          “Subcontractor”
means any person or entity, other than Contractor’s employees, engaged by
Contractor to perform services relating to the Work. 

          “Substantial
Completion” means the performance of the Work requirements specified in
Section 4.3. 

          “Substantial
Completion Date” means the earlier of (a) the date upon which the
Certificate of Substantial Completion was issued by Contractor to Company
pursuant to Section 4.3 (provided that such Certificate of Substantial
Completion is subsequently countersigned by Company pursuant to Section 4.4) or
(b) the date upon which Substantial Completion is deemed to have occurred under
this Contract pursuant to Section 4.5. 

          “Tax”
means any present or future tax, charge, levy, impost or duty of any kind
whatsoever, or any amount payable on account of or as security for any of the
foregoing, 

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imposed by any Governmental Authority together with any
penalties, additions, liens, surcharges and interest relating thereto. 

          “Trip
Test” has the meaning given to it in Exhibit D. 

          “Warranty
Period” has the meaning given to it in Section 10.2. 

          “Work”
means all of the work, services and other duties, obligations and
responsibilities that are to be carried out by or under the direction of
Contractor pursuant to this Contract, including that work specifically described
as Contractor liabilities in the Scope of Work. 

          1.2     
Interpretation 

                 
    1.2.1      Where the context
requires, words importing the singular shall include the plural and vice versa,
and words importing persons shall include entities. 

                 
    1.2.2      A reference in
this Contract to any Article, Section, Exhibit, Clause or Paragraph is, except
where it is expressly stated to the contrary, a reference to such article,
section, exhibit, clause or paragraph in this Contract. 

                       1.2.3      Headings
are for convenience of reference only. 

                       1.2.4      Each
reference to this Contract shall include a reference to each agreed variation of
or supplement to this Contract as may be amended, varied or supplemented from
time-to-time. 

                       1.2.5      Where
the context requires, any reference to a person, entity or Party shall include
such person’s, entity’s or Party’s successors and permitted assigns. 

                     
1.2.6      References to the word “include” or
“including” are to be construed without limitation. 

          1.3      Documents
Included 

          This
Contract shall consist of this document and the following Exhibits, which are
specifically incorporated herein and made a part hereof by this reference. 

	 	Exhibit A 	Scope of Work Allocation and Interface Points 
	 	 	 
	 	Exhibit B 	Contract Price, Milestone Payment Schedule and
      Work Milestone Schedule
	 	  	
	 	Exhibit C 	Power Plant Design Criteria, Drawings and Specifications
    
	 	 	 

	 	a) 	Power Plant Design Criteria, dated December 5, 2005; 

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	 	b) 	
      Design Point Heat and Mass Balance Diagrams (Guaranteed,
      Design, Winter Average, Summer Average), drawing numbers 0.002.95.873.0,
      sheets 1 through 4, Rev 0. 

	 	 	
       

	 	c) 	
      The Process Flow Diagram number 7.011.00.981.0, rev P5;
      

	 	 	
       

	 	d) 	
      P&ID drawing numbers (not a complete list of all
      drawings required for the Facility): 

	Drawing Number 	Rev. 
	7.011.00.969.0 	P5 
	7.011.00.973.0 	P3 
	7.011.00.974.0 	P5 
	7.011.00.977.0 	P2 
	7.011.00.978.0 	P2 
	7.011.00.979.0 	P4 
	7.011.00.982.0 	P1 
	7.011.00.983.0 	P1 
	7.011.00.984.0 	P1 
	7.011.00.985.0 	P1 
	7.011.00.986.0 	P2 
	7.011.00.987.0 	P2 
	7.011.00.988.0 	P1 
	7.011.00.989.0 	P1 

	 	e) 	Electrical 1-line and other control, and protection drawings numbers.
    

	Drawing Number 	Rev. 
	7.002.25.853.0 	P1 
	7.002.25.887.0 	B 
	7.002.25.888.0 	_ (0) 

	 	f) 	Site Plan drawing number 7.011.00.970.0, rev P5.

	 	Exhibit D 	Performance Tests and Correction Curves 
	 	 	 
	 	Exhibit E 	Warranty Claim Procedures 
	 	 	 
	 	Exhibit F 	Approved Vendors List 
	 	 	 
	 	Exhibit G 	Permits 
	 	 	 
	 	Exhibit H 	Certificate of Substantial Completion 

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	 	Exhibit I 	Certificate of Final Completion 
	 	 	 
	 	Exhibit J 	Form of Final Lien Waiver 
	 	 	 
	 	Exhibit K 	Liquidated Damages and Bonuses 
	 	 	 
	 	Exhibit L 	Change Order Form 
	 	 	 
	 	Exhibit M 	Change Order Request Form 

ARTICLE
2.      CONTRACTOR
RESPONSIBILITIES 

          2.1      General
Responsibilities 

                     
2.1.1      Except as otherwise expressly set forth
in this Contract, Contractor, in consideration of the Contract Price, shall
provide, furnish and perform, or cause to be provided, furnished or performed,
engineering and design services, Materials, consumables and utilities, and
supervision, labor and services required for the development, design,
engineering, procurement, manufacturing, transport to Site, quality assurance,
inspection, erection, construction, commissioning and performance testing of the
Facility as specified in the Scope of Work and in accordance with the provisions
of this Contract. 

                     
2.1.2      Contractor shall diligently prosecute
the Work in a good and workmanlike manner in accordance with the Schedule and in
accordance with the provisions of this Contract. 

          2.2      Specific
  Responsibilities

          Without
limiting the generality of Section 2.1.1 and subject to the terms and conditions
set forth in this Contract, Contractor shall at its own expense furnish,
undertake, provide or cause to be furnished, undertaken or provided the
following: 

                    (a)      preparation
  of the conceptual design and integrated detail design and engineering for the
  Facility such that the Facility conforms to the Scope of Work and meets the
  performance and other requirements described in this Contract;

                    (b)      obtain
the Contractor Permits from the applicable Governmental Authorities; 

                   (c)      coordinate
  its activities pursuant to this Contract with those activities of Company’s
  other contractors as requested by Company; provided, however, that such coordination
  does not delay or otherwise unreasonably interfere with Contractor’s performance
  of the Work in accordance with the Schedule; 

                    (d)      clearing,
  excavation, backfilling, compaction, consolidation and removal or importation
  of related materials required with respect to preparation of the Site in accordance
  with the Scope of Work;

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                    (e)     
procurement, supply and transportation to the Site of all Materials necessary to
complete the Facility; 

                    (f)      supervision
  and direction of construction and other Work activities on the Site, including
  construction by Subcontractors, and the coordination of the Work under this
  Contract; 

                    (g)      keep
the Site from waste materials or rubbish caused by Contractor’s activities and
in a reasonably presentable condition given the nature of the Work. Contractor
may store all rubbish and construction debris in an authorized disposal area
furnished by Company as provided in Section 3.1(i) . Contractor shall be
responsible for the containment of any such material within such area. All
rubbish and construction debris caused by Contractor’s activities shall be
disposed through a licensed waste hauler, or in a licensed waste disposal site.

                    (h)      remediate
  and dispose of in accordance with applicable Law any Hazardous Materials generated,
  transported or released by Contractor or any Subcontractor on or about the Site
  (“Contractor Hazardous Materials”);

                    (i)      training,
in the operation and maintenance of the Facility, of a reasonable number of
operating and maintenance personnel furnished by Company pursuant to Section
3.1(f) . Such training shall be carried out in conjunction with the normal
commissioning, start-up operations and testing activities of Contractor; 

                    (j)      provide
  periodic reports to Company, not less frequently than monthly, regarding the
  progress of the Work, including a Gantt Chart in MS Project format in sufficient
  detail to allow a reasonably experienced engineer to evaluate the progress of
  the Work;

                    (k)     
commission and test the Facility as detailed in Exhibit D; and 

                    (l)     
clearance of the Site of temporary structures, surplus Materials and tools that
were delivered or created by Contractor through the course of the Work, upon
completion of field work; provided that Contractor shall offer to sell to
Company at cost any such temporary structures, surplus Materials and tools that
Contractor does not want to retain. 

          2.3      Contractor’s
Personnel and Labor Relations 

                 
    2.3.1      Contractor
shall ensure that there are at all times at the Site while the Work is being
performed at the Site there are sufficient suitably qualified and experienced
personnel to supervise and perform such Work. 

                
     2.3.2      Contractor
shall designate, by written notice to Company, a representative who shall act as
a single point of contact with Company in all matters relating to the Work
(“Contractor’s Representative”). Contractor’s Representative shall have
full authority to act on behalf of Contractor for all purposes in connection
with this Contract. 

                
     2.3.3      Company
shall be entitled by written notice to Contractor to object to any
representative or person employed by Contractor (including Contractor’s
Representative) or any 

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Subcontractor in the execution of the Work who, in the
reasonable opinion of Company, is incompetent or negligent, or engaged in
misconduct, and Contractor shall promptly remove such person from the Work and
appoint a suitable replacement, or ensure that the relevant Subcontractor does
so. 

                
     2.3.4      Contractor
shall develop, present to Company and implement a safety plan for its own
construction activities on the Site and for emergency situations prior to the
commencement of Work at the Site (“Safety Plans”). During performance of
the Work, Contractor shall publish work safety rules for the Site in compliance
with the Safety Plan, which safety rules shall apply to any and all visitors to
the Site, including representatives of Company. Each week (or other interval
mutually agreeable to Company and Contractor), Contractor shall prepare and
provide to Company a written report (“Safety Report”) listing (i) any
breaches or violations of the Safety Plan, (ii) a description of any incidents
resulting therefrom, (iii) incidents related to safety issues at the Site, (iv)
the cause of any such incident, (v) the nature of such incident, (vi) the
severity of such incident, and (vii) the remedial actions planned to remedy such
incident and prevent such incident from occurring in the future. 

                 
    2.3.5      Contractor shall be
responsible for the security and protection (i) of its equipment, supplies and
tools used in connection with the Work through the Final Completion Date, and
(ii) for all of the other property owned or leased by Contractor or any of its
Subcontractors located at the Site at areas thereon provided by Company or
stored or warehoused off the Site through the Final Completion Date. Contractor
shall use due care to protect any of Company’s property at any time in its
possession or under its control while performing the Work which shall not be
less than the care exercised by Contractor with its own property and Contractor
shall be responsible for any damage to such property resulting from its failure
to use such care. 

                
     2.3.6      Contractor
shall conduct all of its activities within the boundaries of the Site.
Contractor, its Subcontractors, agents and employees shall observe all pertinent
and reasonable regulations and rules issued by Company to Contractor which are
in effect at the Site, as the case may be, regarding passes, badges and proper
conduct on such Site. Company may issue reasonable modifications to such
regulations and rules from time-to-time. 

                 
    2.3.7      Company and its
agents, employees and other contractors shall observe all pertinent and
reasonable regulations and rules issued by Contractor, including the Safety
Plan, which are in effect at the Site, as the case may be, regarding passes,
badges and proper conduct on such Site. Contractor may issue reasonable
modifications to such regulations and rules from time-to-time. 

          2.4      Representations
and Warranties of Contractor 

          Contractor
represents and warrants to Company that: 

                    (a)     
  Contractor is a corporation duly organized, validly existing and in good standing
  under the Laws of the state of Delaware and has the requisite legal power and
  authority to execute, deliver and perform this Contract; 

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                    (b)      the
  execution, delivery and performance by Contractor of this Contract has been
  duly authorized by all requisite action of Contractor, and there is no provision
  in its charter documents requiring further consent for such action by any other
  person or entity; and

                    (c)      this
Contract constitutes the legal, valid and binding obligation of Contractor,
enforceable against Contractor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

          2.5     
Use of Spare Parts 

          Spare
parts may be withdrawn by Contractor from the Spare Parts for the purposes of
the Work. Contractor shall be responsible, at its cost, for replacing any such
withdrawn Spare Parts as soon as reasonably practicable and in any event no
later than the expiration of the Warranty Period. 

ARTICLE
3.      COMPANY RESPONSIBILITIES

          3.1      General
Responsibilities 

          Company
  shall, at Company’s expense, furnish, undertake, provide or cause to be
  furnished, undertaken or provided the following: 

                    (a)     
  make available to Contractor and its Subcontractors by the time specified in
  the Schedule, and continuing until the end of the Warranty Period, the Site,
  including space for all construction facilities, laydown and storage areas,
  and roads and other means of access to and from the Site in a timely manner
  and in accordance with Contractor’s reasonable requirements regarding amount,
  weight and dimensions of equipment to be transported and the size and layout
  of the laydown and storage areas;

                    (b)     
obtain and maintain in effect all Company Permits from the Governmental
Authorities in a timely manner as required to permit Contractor and its
Subcontractors to proceed with the Work in accordance with the Schedule;

                    (c)     
  prepare and/or obtain all environmental impact assessments, studies and statements
  and geotechnical reports required in connection with the ownership, financing,
  construction, operation and maintenance of the Facility and the performance
  of this Contract; 

                    (d)     
  furnish to Contractor copies of any environmental impact assessment, studies
  and statements and geotechnical reports prepared or obtained as provided in
  Section 3.1(c) and any information, a power of attorney (if required) and any
  other items reasonably necessary for Contractor to obtain the Contractor Permits
  or perform the Work in a timely manner as required to permit Contractor and
  its Subcontractors to proceed with the Work in accordance with the Schedule;

                    (e)      arrange
for electricity, water and other utilities to be available to Contractor at then
current market terms for the same for use in the construction, start-up, testing

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and commissioning of the Facility, in a timely manner as required
  to permit Contractor and its Subcontractors to proceed with the Work in accordance
  with the Schedule; 

                    (f)     
  provide a reasonably sufficient number of operating personnel, including their
  supervisors, for training by Contractor as provided in Section 2.2(i), and for
  participating in the start-up, testing, commissioning, maintenance and upkeep
  of the Facility through to Final Completion. Each person designated for training
  by Company shall be a qualified technician and said trainees shall not be deemed
  employees or Subcontractors of Contractor;

                    (g)      provide
  the geothermal heat resource in the quantity and quality detailed in the Design
  Conditions, and in the time frame as required to permit Contractor and its Subcontractors
  to proceed with the Work in accordance with the Schedule; 

                    (h)     
  provide or make arrangements for the tie-in point to the electricity grid (or
  any other defined electricity consumer) to be ready in a timely manner in accordance
  with the Schedule; 

                    (i)     
provide to Contractor a rubbish and construction debris (but not for Contractor
Hazardous Materials) storage area on or adjacent to the Site. Disposal of such
Contractor materials stored therein shall be the responsibility of the
Contractor, pursuant to Section 2.2 (g). 

                    (j)      any
removal or disposal of the existing transite pipe on the Site exposed during the
Work; and 

                    (k)     
  remediate and dispose of in accordance with applicable Law any Hazardous Materials
  that are found or are uncovered on or about the Site other than Contractor Hazardous
  Materials that are the responsibility of Contractor as provided in Section 2.2(h)
  .

          3.2      Company’s
Representative 

          Company
shall designate by written notice to Contractor a representative who shall act
as a single point of contact with Contractor in all matters relating to the Work
(“Company’s Representative”). Company’s Representative shall have full
authority to act on behalf of Company for all purposes in connection with this
Contract. 

          3.3     
Representations and Warranties of Company

          Company
represents and warrants that: 

                    (a)      Company
  is a corporation duly organized and validly existing under the Laws of the State
  of Idaho and has all requisite legal power and authority to execute, deliver
  and perform this Contract;

                    (b)      the
execution, delivery and performance by Company of this Contract have been duly
authorized by all requisite corporate action of Company and there is no
provision 

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in its charter documents requiring further consent for such action
  by any other person or entity; and

                    (c)     
this Contract constitutes the legal, valid and binding obligation of Company,
enforceable against Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

          3.4      Sale
of Project 

          If
prior to the expiry of the Warranty Period (or any extension thereof) Company
elects to convey or otherwise transfer its right, title and interest in and to
the Project or in and to the owner of the Project, Company shall provide written
notice of such intent to Contractor. Transfer to any third party shall not
relieve Company of any obligation hereunder, whether such obligation arises
prior to or after the transfer. 

          3.5      Future
Projects 

          In
the event that Company or its Affiliates elect to pursue up to two (2)
additional geothermal power plants in its expansion of the Project, Company or
its Affiliates shall have the option to acquire from Contractor, and Contractor
shall have the option to provide to Company or its Affiliates, the services and
equipment of the type provided by Contractor under this Contract for a lump-sum
payment for each power plant equal to the Contract Price subject to adjustment
as follows. The Contract Price, for purposes of this Section 3.5, may be
adjusted to reflect changes in applicable materials and labor prices as
determined from relevant published cost indices from the Effective Date of this
Contract, to the effective date of the subsequent contract(s). The services and
equipment provided by Contractor with respect to the power plants described
above shall be provided and subject to an EPC agreement with terms and
conditions substantially the same as set forth in this Contract.

          In
the event that Company elects to pursue the installation of the two such
additional power plant in its expansion of the Project at the same time, Company
or its Affiliates shall have the option to acquire from Contractor and
Contractor shall have the option to provide to Company or its Affiliates the
services and equipment of the type provided by Contractor under this Contract
with respect to such power plant for a lump-sum payment equal to (a) two (2)
times the Contract Price subject to adjustment as provided above minus, (b) a
reasonable discount, determined by Contractor in its sole discretion, that
reflects the economies of scale in performing EPC contract services and
equipment for the simultaneous supply of the two geothermal power plants. The
option provided to each of Company (and its Affiliates) and Contractor if such
parties have not entered into a definitive EPC agreement or EPC agreements
reflecting such terms and conditions on or before December 31, 2007. 

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ARTICLE
4.      COMMENCEMENT OF WORK

          4.1     
Notice to Proceed 

          Company
  shall issue a Notice to Proceed to Contractor only at such time as Company has
  arranged financing reasonably satisfactory to Contractor as being sufficient
  for Company to be able to meet its obligations under this Contract and to develop
  the Project and pays to Contractor simultaneously with the issuance of such
  Notice to Proceed the amount specified for the first payment milestone set forth
  in the Schedule. The Notice to Proceed shall not be issued by Company prior
  to February 1, 2006 and Contractor shall have the right to terminate this Contract
  if the Notice to Proceed has not been provided by June 1, 2006. 

          4.2      Commencement

          Subject
to Section 4.1, Contractor shall commence performance of the Work promptly upon
receipt of a Notice to Proceed from Company (“Commencement Date”).
Contractor shall thereafter proceed diligently to perform the Work and
furnishing sufficient forces, construction plant and equipment to perform the
Work in accordance with the Schedule. 

          4.3      Substantial
Completion 

          Contractor
shall achieve Substantial Completion of the Facility on or before the Guaranteed
Substantial Completion Date. When all of the following conditions have been met
with respect to the Facility, Contractor shall issue to Company a Certificate of
Substantial Completion in substantially the same form as that set forth in
Exhibit H: 

                    (a)      all
  of the Work, except for completion of insulation, painting, final grading, the
  As-Built Drawings, training and any other portion of the Work not affecting
  the operability, safety, mechanical and/or electrical integrity of the Facility,
  have been properly constructed, installed, correctly adjusted and tested, are
  mechanically, electrically and structurally sound and comply with the Drawings
  and the Specifications, and can be used safely;

                    (b)      all
Documents which are to be delivered to Company by Contractor on or before the
Substantial Completion Date pursuant to this Contract have, in fact, been
delivered to Company (including, but not limited to, a waiver and release of
Contractor’s and all of its Subcontractor’s mechanics’ liens through such date
(which may be conditioned upon payment by Company)); 

                    (c)      Contractor
has made training available to Company’s personnel (or other nominees of
Company) and written operating procedures sufficient to safely start-up and
continuously operate the Facility; and 

                    (d)     
  the Synchronization Test has been satisfactorily completed.

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          4.4      Substantial
Completion Certificate 

          Within
ten (10) Days following the receipt of the Certificate of Substantial
Completion, Company shall inspect the Facility and review all Work and services
performed by Contractor with respect thereto, and shall either (i) deliver to
Contractor the Certificate of Substantial Completion countersigned and
certifying that the requirements of this Contract applicable to Substantial
Completion have been fully satisfied for the Facility and Substantial Completion
of the Facility has accordingly been achieved or (ii) if reasonable cause exists
for doing so, notify Contractor in writing that Substantial Completion of the
Facility has not been achieved, stating in detail the reasons therefore. In the
event that Company determines that Substantial Completion has not been achieved
and Contractor has not disputed Company’s determination, Contractor shall
promptly take such corrective action or perform such additional Work or other
services as shall achieve Substantial Completion of the Facility and shall issue
to Company another Certificate of Substantial Completion. Such procedure shall
be repeated until Substantial Completion of the Facility has been achieved;
provided, however, that Company shall respond to any such subsequent Certificate
of Subsequent Completion within five (5) Days following the receipt thereof.

          4.5      Deemed
Substantial Completion 

          Deemed
completion may occur under one (1) or both of two (2) circumstances, when: (a)
Company fails to provide the countersigned Certificate of Substantial Completion
as contemplated in Section 4.4 within the period referenced therein; or (b)
Contractor’s conduct or completion of the Synchronization Test is delayed from
the date on which such test would otherwise have commenced, been conducted or
completed due to a Company Default and Contractor has completed all of the other
requirements set forth in Section 4.3. In the event of (b), Contractor shall
notify Company of having achieved deemed Substantial Completion pursuant to
Section 4.4. 

          4.6      Delay
Liquidated Damages and Bonus 

                     
4.6.1      The Parties agree that it would be
extremely difficult and impracticable under the presently known and anticipated
facts and circumstances to ascertain and fix the actual damages that Company
would incur should Contractor fail to achieve Substantial Completion by the
Guaranteed Substantial Completion Date, and accordingly, the Parties hereby
agree that if Contractor fails to so achieve Substantial Completion by the
Guaranteed Substantial Completion Date, then Company shall be entitled to
recover from Contractor as liquidated damages for such delay, and not as a
penalty, the amounts set forth in Section 1 of Exhibit K (“Delay Liquidated
Damages”). The Delay Liquidated Damages are, subject to Section 4.10 and
Article 19, Company’s sole and exclusive remedy in the event Contractor fails to
achieve any of the milestones for the Facility, including Substantial
Completion, by the dates set forth in the Schedule. Company and Contractor
further agree that the Delay Liquidated Damages are a good faith estimate of the
damages Company would suffer. 

                    
 4.6.2      If the Substantial Completion Date
occurs prior to the Guaranteed Substantial Completion Date, Company shall pay to
Contractor a bonus, for each Day which 

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shall elapse between the Substantial Completion Date and the
  Guaranteed Substantial Completion Date, the amounts set forth in Section 2 of
  Exhibit K (“Schedule Bonus”).

          4.7     
Final Completion 

          When
all of the following conditions have been met with respect to the Facility,
Contractor shall issue to Company a Certificate of Final Completion in
substantially the same form as that set forth in Exhibit I: 

                    (a)     
  except for the Punchlist Items and As-Built Drawings, the Facility and Work
  has been completed and complies with the Scope of Work, the Drawings, the Specifications
  and applicable Laws, and Contractor has made training available to Company’s
  personnel (or other nominees of Company);

                    (b)     
the Facility has satisfied or, pursuant to Sections 6.4.2, 6.4.3 or 6.7 is
deemed to have satisfied, the checks and tests under Exhibit D, including the
Performance Guarantee or, if the Performance Guarantee was not met, the
Performance Liquidated Damages have either been paid or agreed and shall be
deducted from the final payment of the Contract Price; 

                    (c)      any
amount finally determined due for Delay Liquidated Damages has either been paid
or agreed and shall be deducted from the final payment of the Contract Price;

                    (d)     
the list of Punchlist Items (if any) for the Facility have been identified by
Contractor and provided to Company as provided in Section 4.9; 

                    (e)      all
other deliverables identified in this Contract with respect to the Facility
(except for the As-Built Drawings or deliverables appearing in the Punchlist
Items provided by Contractor), including the O&M Manual and other documents
and materials described in Article 9, have been completed in accordance with the
provisions hereof and have been provided to Company.; and 

                    (f)      all
  rubbish accumulated by Contractor in the Company-designated disposal area has
  been removed and disposed in accordance with Section 2.2(g) .

          4.8      Final
Completion Certificate 

          Within
fifteen (15) Days following the receipt of the Certificate of Final Completion,
Company shall inspect the Facility and review all Work and services performed by
Contractor with respect thereto, and shall either (i) deliver to Contractor the
Certificate of Final Completion countersigned and certifying that the Work
requirements of this Contract (other than the Punchlist Items identified by
Contractor and the As-Built Drawings) have been fully satisfied for the Facility
and Final Completion of the Facility has accordingly been achieved, or (ii) if
reasonable cause exists for doing so, notify Contractor in writing that Final
Completion of the Facility has not been achieved, stating in detail the reasons
therefore. In the event that Company determines that Final Completion has not
been achieved and Contractor has not disputed Company’s determination,
Contractor shall promptly take such corrective action or perform such 

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additional Work or other services as shall achieve Final
Completion of the Facility and shall issue to Company another Certificate of
Final Completion. Such procedure shall be repeated until Final Completion of the
Facility has been achieved; provided, however, that Company shall respond to any
such subsequent Certificate of Final Completion within five (5) Days following
the receipt thereof. If Company fails to provide the Certificate of Final
Completion or as contemplated in (ii) above within the aforementioned period,
Final Completion of the Facility shall be deemed to have been achieved. 

          4.9      Punchlist
  

          Contractor
shall provide to Company a list of all Punchlist Items and the estimated cost
thereof prior to the issuance of the Certificate of Final Completion. Within
fifteen (15) Days following the receipt of this list of Punchlist Items, Company
shall notify Contractor in writing whether Company has any objections to that
list or the estimates thereof. If Company has any objections, including
additions, the Parties shall use good faith efforts to resolve such objections.
If no agreement can be reached, the provisions of Article 14 shall be invoked to
resolve the dispute. Two hundred percent (200%) of the estimated value of such
Work, as reasonably decided by Company, shall be retained or deducted from the
Contract Price by Company or, at Contractor’s option, paid to Company by
Contractor pending satisfactory rectification and/or completion. Contractor
shall rectify or complete to the reasonable satisfaction of Company within the
time stated in the Certificate of Final Completion any such Punchlist Items
listed. In the event Contractor fails to rectify or complete any Punchlist Items
listed, Company may arrange for the outstanding work to be done and the cost
thereof shall be certified by Company and deducted from the Contract Price or,
at Contractor’s option, paid to Company by Contractor. Upon satisfactory
rectification and/or completion of such Work, the money retained, deducted or
paid under this Section 4.9 in relation thereto shall be reimbursed to
Contractor by Company. During the period after Final Completion, Contractor and
Company shall cooperate to ensure that the performance of the Work does not
unreasonably interfere with the commercial operation of the Facility and at the
same time allowing the remaining Work to be performed in a prompt and efficient
manner. As soon as practicable after the completion of all Punchlist Items,
Contractor shall remove all of its equipment and Materials and complete the
removal of all Work-related waste material and rubbish from and around the Site.

          4.10     Failure
to Achieve Final Completion by the Guaranteed Final Completion Date

                     
4.10.1      If the Final Completion Date has not
occurred on or before the Guaranteed Final Completion Date and if the Net
Deliverable Capacity is less than the Performance Guarantee, and Contractor
elects to make corrections to the Facility and continue repeating Performance
Tests pursuant to Exhibit D, then Contractor shall be liable for liquidated
damages to the Company for the shortfall in generation in the amount calculated
as described below until such time that Contractor has performed the final
Capacity Test pursuant to Exhibit D so that there can be a determination as to
whether Performance Liquidated Damages or a Performance Bonus is payable as
provided in this Contract. 

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                      4.10.2     
  The shortfall in generation for purposes of Section 4.10.1 shall be calculated
  as the lesser of: (a) the Net Deliverable Capacity Deficiency, as defined in
  Schedule A of Exhibit D; and (b) the difference between what the Facility would
  have been able to generate and sell to Idaho Power Company had the Facility
  met the Performance Guarantee, and that which it was actually able to sell as
  a result of the Facility not meeting the Performance Guarantee. The shortfall
  in generation shall be calculated between the Guaranteed Final Completion Date
  and the actual Final Completion Date. Any shortfall generation attributable
  to the Company, whether because the Facility was unable to operate or to only
  operate at a reduce power output, shall not be included in the shortfall generation
  for which the Contractor is liable.

                    
 4.10.3      The Shortfall in Generation
liquidated damages that the Company shall be entitled to recover from
Contractor, and Contractor shall pay to Company, shall be calculated as the
shortfall in generation calculated as provided in Section 4.10.2 multiplied by
the PPA rate for the power (“Shortfall Generation Liquidated
Damages”). 

ARTICLE
5.      COMPENSATION AND PAYMENT

          5.1     
Contract Price 

                     
5.1.1      As compensation for the performance of
the Work, Company shall pay Contractor, in the manner and at the times
hereinafter specified, the Contract Price, which amount may be subject to
adjustment in accordance with the terms of this Contract. 

                     
5.1.2      The Contract Price includes any and all
Taxes imposed directly or indirectly by any Governmental Authority including
export taxes, importation duties and income Taxes imposed on Contractor, but
excludes State of Idaho and local sales and use taxes.

                   
  5.1.3      Contractor shall be
responsible for paying all State of Idaho sales and use taxes due as a result of
the Work in the construction of the Facility to the State of Idaho on behalf of
the Company. Company shall reimburse Contractor for any such taxes so paid. The
State of Idaho sales and use taxes paid by Contractor since the previous invoice
shall be stated separately and shown on all invoices as a separate line item and
shall be paid by Company to Contractor.

                     
5.1.4      Upon request of Company, Contractor
shall:

                    (a)      promptly
provide to Company evidence of its remittance to the applicable Governmental
Authority of all state and local sales and use taxes that Contractor collects
from Company under this Contract; and 

                    (b)      provide
Company with sufficient level of detail such that Company is able to claim any
State of Idaho sales and use tax refund for geothermal energy projects for which
it may be eligible under State of Idaho law. 

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          5.2      Payment
Milestones 

          Exhibit
B sets forth the payment installments payable by Company in respect of Work
performed by Contractor. The Schedule shall be used as the basis for preparation
of invoices and for payments. Any cumulative acceleration of the Milestone
Payment Schedule of more than fourteen (14) Days must reflect a reciprocal
acceleration in the Guaranteed Substantial Completion Date and the Guaranteed
Final Completion Date. 

          5.3      Payment

                     
5.3.1      Upon the completion of any of the
payment milestones described in the Schedule, Contractor shall present to
Company the invoice and any other Documents described for payment of such
milestone in the Schedule. Except as provided below in this Section 5.3,
invoices that are presented for payment shall be paid within thirty (30) Days of
Company’s receipt of such invoice. All invoices presented for payment by
Contractor to Company shall set forth the following information, the: (i)
aggregate Contract Price related committed costs for the period represented by
such invoice as provided in the Milestone Payment Schedule (“Gross Invoice
Amount”); (ii) minimum cash payment required to be paid by Company pursuant
to such invoice as provided in the Milestone Payment Schedule (“Minimum
Payment”); and (iii) aggregate payments made by Company to Contractor as of
the invoice date. Contractor agrees to forebear the requirement for payment of
the Gross Invoice Amount and shall accept payment of the Minimum Payment with
respect to such invoice; provided, that Company shall provide to Contractor a
Letter of Credit in a form, and issued by a financial institution, acceptable to
Contractor, for the: (a) aggregate of the Gross Invoice Amount less the Minimum
Payment, and (b) any outstanding balances owed to Contractor by Company in
relation to prior invoices where Company paid Contractor a Minimum Payment.

                  
   5.3.2      Within ten (10) Days
of its receipt of an invoice and such Documents, Company’s Representative shall
give written notice to Contractor of any objections that Company’s
Representative has with regard to the accomplishment of such milestone. If
Company’s Representative fails to provide such notice within such ten (10) Day
period, the milestone shall be deemed accomplished and Contractor shall be
entitled to payment. If Company’s Representative provides written notice of
objection to the accomplishment of such milestone and said Documentation within
the period described above, and the contents of Company’s Representative’s
notice is not in dispute, Contractor shall resubmit the corrected invoice and/or
Documentation, and the above-described approval process shall reapply except
that the response time shall be five (5) Days rather than ten (10) Days.

                      
5.3.3      If pursuant to Section 5.3.2, Company’s
Representative disputes any amounts invoiced by Contractor within the specified
time period, Company shall promptly pay to Contractor the undisputed amount of
such invoice in the manner provided in Section 5.3.1, and any disputed amount
that is ultimately determined to have been payable shall be paid with interest
from the date the item was payable to and including the date of payment, in
accordance with the provisions of Section 5.8. The Parties shall resolve their
differences regarding the disputed amount in accordance with the dispute
resolution procedures set forth in Article 14. 

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                    5.3.4      The
Letter of Credit will provide that Contractor is entitled to draw under the
Letter of Credit the amount of the applicable Minimum Payment upon presentation
of a certificate signed by Contractor stating that Company has failed to pay to
Contractor a Minimum Payment when due and that such payment is not subject to a
bona fide dispute subject to the dispute resolution procedures set forth in this
Contract. The Letter of Credit will also provide that Contractor is entitled to
draw the full amount of the Letter of Credit upon presentation of a certificate
signed by Contractor stating that one of the events described in Section 19.2.1
of this Contract has occurred and Company has failed to cure such default within
the time periods specified in Section 19.2.1. 

          5.4      Final
Completion Payment for the Facility 

          No
  later than thirty (30) Days after the Final Completion Date, Contractor shall
  submit to Company a statement summarizing and reconciling all previous invoices,
  payments and Changes in the Work, with respect to the Work, and a waiver of
  liens as provided in Section 5.7 from Contractor for the Facility and such other
  data as Company may reasonably request establishing payment of or surety for
  payment of such unpaid Contractor obligations. Within thirty (30) Days
  of the receipt of such statements and lien waiver, Company shall pay Contractor
  the remaining portion of the Contract Price (except with respect to amounts
  remaining to be paid by Company under the Contract for Punchlist Items and less
  any unpaid Liquidated Damages owing by Contractor). Any disputes regarding a
  final payment shall be handled in accordance with the procedure set forth in
  Article 14. 

          5.5      Payments
Not Acceptance of Work 

          No
payment made by Company to Contractor shall be considered or deemed to represent
that Company has inspected the Work or checked the quality or quantity of the
Work and shall not be deemed or construed as an approval or acceptance of any
Work or as a waiver of any claim or right Company may have hereunder. 

          5.6      Payment
of Subcontractor 

          Contractor
shall promptly pay, in accordance with the terms and conditions set forth in the
respective Subcontract, each Subcontractor the amount to which said
Subcontractor is entitled. Contractor shall, by an appropriate agreement with
each Subcontractor, require each Subcontractor to make timely payments to its
laborers, suppliers and subcontractors in a similar manner. 

          5.7      Waiver
of Liens 

          As
a condition precedent to the making of the final Milestone Payment Schedule
payment by Company hereunder, Contractor shall be required, upon request by
Company, to supply Company with a waiver and release of liens and security
interests to the extent of such payment in the form attached as Exhibit J, duly
executed by Contractor. 

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          5.8     
Interest 

          Amounts
not paid by either Party to the other when due under any provision of this
Contract, including the provisions of this Article 5, shall bear interest, from
the date payment was due to and including the date of payment, at the Delayed
Payment Rate. For the purposes of this Agreement, interest shall not accrue on
sums owed to Contractor by Company that are secured by a Letter of Credit
pursuant to Section 5.3.1. 

          5.9      Security
Interest 

          Notwithstanding
anything to the contrary herein, Contractor hereby reserves and Company hereby
grants Contractor, a purchase money security interest in the Work as security
for the due and punctual performance of all of Company’s obligations hereunder.
The security interest referred to above shall be satisfied by payment in full of
the Contract Price and any other amounts payable to Contractor hereunder.
Company hereby agrees to execute such documents to evidence and perfect such
security interest as Contractor may reasonably request from time-to-time.
Company hereby appoints each of Contractor’s officers as Company’s duly
authorized agent for the purpose of taking any and all such action, including
execution of financing statements on Form UCC-1 and other documents deemed
reasonably necessary by Contractor for the perfection and enforcement of the
security interest granted hereby. 

ARTICLE
6.      TESTING 

          6.1      General

          Development
and implementation of tests procedures shall be the responsibility of
Contractor. Contractor shall be responsible for providing all supplies required
for carrying out such tests, except to the extent heat resource, testing power
and water is required to be supplied by Company in accordance with this
Contract. Company may, at its expense, require independent calibration of any
and all instruments used by Contractor and/or supply Company’s own instruments
to be used in addition to those of Contractor. 

          6.2      Test
Procedures 

          The
Performance Tests shall be performed under normal operating conditions as
described in Exhibit D hereto and in accordance with all applicable Laws in
effect on the date thereof, and the test results shall be adjusted pursuant to
the Correction Curves for deviations from the Design Conditions and shall be
adjusted for other deviations as set forth in Exhibit D. Contractor may conduct
the Performance Tests after the Substantial Completion Date. 

          6.3     
  Notice of Testing

          Contractor
shall notify Company at least fourteen (14) Days in advance of the actual date
that Contractor shall start conducting the initial Performance Test. Company’s
Representative shall be entitled to attend at the time and place appointed and
Company shall instruct its operating personnel to follow the directions of
Contractor in connection with the performance of the Performance Tests. If
Company’s Representative fails to attend at the time and place 

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appointed for the Performance Tests, Contractor shall be
entitled to proceed with the Performance Tests in their absence. The Performance
Tests shall then be deemed to have been made in the presence of Company’s
Representative. 

          6.4      Delayed
  Tests; Deemed Completion

                   
  6.4.1      In the event that
Contractor’s conduct or completion of the Performance Tests is delayed for less
than sixty (60) Days from the date on which such test would otherwise have
commenced, been conducted or completed due to the failure of Company to fulfill
any of its obligations under this Contract, then Company shall issue a Change
Order extending the Schedule Day-for-Day for each Day of delay for those
Schedule items that are affected by the Company’s failure to fulfill its
obligations and compensating Contractor for its additional costs incurred as a
result of such delay. 

                 
    6.4.2      In the event that
Contractor’s conduct or completion of the Performance Test is delayed for thirty
(30) Days from the Substantial Completion Date due to a Company Default, then
Company shall pay to Contractor fifty percent (50%) of the payment milestone set
forth in the Milestone Payment Schedule for the Final Completion payment
milestone.

                  
   6.4.3      In the event that
Contractor’s conduct or completion of the Performance Test is delayed for sixty
(60) Days from the Substantial Completion Date due to a Company Default, then
the Facility shall then be deemed to be completed for all purposes under this
Contract, Company shall pay to Contractor the remainder of the Contract Price
less only the amounts withheld for Punchlist Items pursuant to Section 4.10 and
Final Completion shall be deemed to have occurred.

                
     6.4.4      Subject to
Section 6.4.5, prior to the commencement of the Performance Tests or, if the
Performances Tests have been delayed as provided in this Section 6.4, if and
when the events that prevented the commencement of the Performance Tests cease,
the Parties shall inspect the Facility and: 

	 	(a) 	
      if geothermal fluid and or cooling water have been run
      through any part of the Facility or the Facility has otherwise been
      operated by Company, for a cumulative period of more than two (2) weeks,
      or based on shortfall in the test results, Contractor may require that the
      parties jointly open and inspect the Facility prior to the Performance
      Tests being carried out or prior to repeating of the test as the case may
      be; and 

	 	 	
       

	 	(b) 	
      if the Facility is in good, clean and as-installed
      condition, Contractor will proceed within a reasonable period of time to
      conduct the Performance Tests not previously completed; or 

	 	 	
       

	 	(c) 	
      if the Facility is not in good, clean and as-installed
      condition, prior to the conduct of the Performance Tests, Company will
      within a reasonable period of time clean and repair the Facility (as
      Contractor reasonably deems appropriate) at Company’s expense and then
      Contractor will conduct such Performance Tests; or

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	 	(d) 	
      if the Facility can not be cleaned and/or repaired to a
      standard to enable the Performance Tests to be carried out, the testing
      protocols and requirements shall be revised accordingly to adjust for the
      constraints which prevent such tests from being performed as originally
      defined and within a reasonable period of time Contractor shall conduct
      such revised Performance Tests. 

Subject to the foregoing, such Performance Test(s) shall be
conducted in accordance with the terms of this Contract and the results of the
final Capacity Test conducted during such period, if any, shall be subject to
the payment of Net Performance Liquidated Damages or Performance Bonus in
accordance with the terms set forth in Article 11. Contractor shall be paid all
additional costs and expenses, if any, from those costs and expenses anticipated
in the Contract Price that arise directly from such prevention and delay,
including without limitation those costs and expenses reasonably incurred for
demobilization and remobilization and increased costs and expenses incurred for
rescheduling of the testing. 

                     
  6.4.5      Subject to extension as provided elsewhere
  in this Agreement, Contractor’s obligations under this Section 6.4 shall
  cease one hundred eighty (180) Days from the Substantial Completion Date if
  Contractor has not been able to commence the Performance Tests before the end
  of that period.

          6.5      Facilities

          Except
as expressly set forth in Section 3.1, Section 6.3 and the Scope of Work,
Contractor shall be responsible for the provision of all necessary labor,
supervision, consumables, materials and equipment necessary to carry out
properly the Performance Tests. 

          6.6      Repeat
Performance Tests 

          The
terms governing the repetition of the Performance Tests are provided in Exhibit
D, Section 4. 

          6.7      Certification
or Disagreement as to Test Results 

          The
terms governing the certification of the Performance Tests and resolution of
disputes thereof pursuant to Article 14 of the Contract are provided in Exhibit
D, Section 6. 

ARTICLE
7.      INTENTIONALLY OMITTED

ARTICLE
8.      CONSTRUCTION SUSPENSION
AND ACCELERATION; CHANGE ORDER 

          8.1      Construction
Suspension and Acceleration 

                  
   8.1.1      Company may order
Contractor to suspend the Work, or any part thereof, for such a time and in such
a manner as Company may consider necessary or desirable. Contractor, during
such a suspension, shall properly protect and secure the Work, or such part 

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thereof, so far as is necessary in the opinion of Company. In
the event of such order to suspend the Work, or any part thereof, and such
suspension is not the result of a Contractor default, Contractor shall be
entitled to a Change Order for adjustments pursuant to this Article 8 in the
Contract Price and the Schedule (including the Guaranteed Substantial Completion
Date and the Guaranteed Final Completion Date) as may be affected by such
suspension. 

                
       8.1.2      Company
  may order Contractor to accelerate the progress of the Work, or any part thereof,
  for such a time and in such a manner as Company may consider necessary or desirable
  provided that such acceleration is reasonably practicable. In the event of such
  order to accelerate the Work, or any part thereof, and such acceleration is
  not the result of Contractor’s default, Contractor shall be entitled to
  a Change Order for adjustments pursuant to this Article 8 in the Contract Price
  as may be affected by such acceleration.

          8.2      Change
Orders 

          Company,
without invalidating this Contract, may order Change in the Work that are
reasonably related to and do not materially reduce or increase the Scope of
Work, in which event one or more of the Contract Price, the Schedule (including
the Guaranteed Substantial Completion Date and the Guaranteed Final Completion
Date) and other such parts of the Contract as may be affected by such Change in
the Work shall be adjusted as necessary. If Company decides not to issue a
Change Order after having requested a Change in the Work, unless such Change
Order request is issued in response to a Contractor Change Order notice as set
forth in Section 8.3.2, Contractor shall be entitled to reasonable compensation
for providing engineering services necessary to respond to Company’s Change
Order request. Such reasonable compensation is defined to mean Contractor’s
actual direct cost of providing such engineering services plus a fifteen percent
(15%) mark-up for overhead and profit. All Changes in the Work shall be
authorized by a Change Order and only Company or Company’s Representative may
issue Change Orders. 

          8.3      Procedure
for Change Orders. 

                     
8.3.1      As soon as reasonably possible, but in
no event later than fourteen (14) Days after Contractor becomes aware, through
the exercise of reasonable diligence, of any circumstances which Contractor has
reason to believe may constitute a Change in the Work, Contractor shall issue to
Company a Change Order notice using the Change Order Request form set forth in
Exhibit M. All Change Order notices shall include preliminary documentation
sufficient to enable Company to determine (i) the factors necessitating the
possibility of a Change Order; (ii) the impact which the Change Order is likely
to have on the Contract Price; and (iii) the impact which the Change Order is
likely to have on the Schedule (including the Guaranteed Substantial Completion
Date and the Guaranteed Final Completion Date). Failure to give such proper and
timely Change Order notice shall, to the extent Company is prejudiced by such
failure, constitute a waiver of Contractors right to an adjustment.

                    
 8.3.2      If Company desires to make a Change
Order in response to a Change Order notice, it shall submit a Change Order
request to Contractor using the Change Order Request form set forth in Exhibit
M. Contractor shall promptly review the Change Order request and notify Company
promptly in writing of the options for implementing the proposed Change 

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Order (including, if possible, any option that does not involve
an extension of time) and the effect, if any, each such option would have on the
Contract Price, the Schedule (including the Guaranteed Substantial Completion
Date and the Guaranteed Final Completion Date), or any other such part of the
Contract as may be affected. The preparation and provision of information to
Company in response to a Change Order request shall be at Contractor’s expense
if such Change Order request is issued in response to a Change Order notice
issued by Contractor pursuant to this Section 8.3.2 and otherwise Contractor
shall be reimbursed for such expense as provided in Section 8.2. 

                  
   8.3.3      If Company agrees that a
Change Order is in order and accepts Contractor’s statement of the effect of
such Change Order on any one or more of the Contract Price, the Schedule
(including the Guaranteed Substantial Completion Date and the Guaranteed Final
Completion Date), or any other such part of the Contract as may be affected,
Company shall issue a Change Order. In the event Company disagrees with
Contractor’s statement of the effect of such Change Order on any one or more of
the Contract Price, the Schedule (including the Guaranteed Substantial
Completion Date and the Guaranteed Final Completion Date), or any other such
part of the Contract as may be affected, Company may proceed to issue the Change
Order in accordance with Section 8.8.

          8.4      Change
Orders Due to Contractor Error 

          Except
as provided in Sections 8.5, 8.6 or 8.7, no Change Order shall be issued and no
adjustment of any one or more of the Contract Price or the Schedule (including
the Guaranteed Substantial Completion Date and the Guaranteed Final Completion
Date) shall be made to the extent resulting from any delay, failure of
performance, correction of errors, and flaws or errors in design, omissions,
deficiencies or improper or defective Work, machinery, equipment, materials,
systems, supplies or other items on the part of Contractor or any Subcontractor
in the performance of the Work or provisions of, or delay in provisions of
Materials or other items of the Work where such delay was within the reasonable
control of Contractor or any Subcontractor, or any failure of Contractor or any
Subcontractor to comply with the Contract. To the extent any delay or failure of
performance was concurrently caused by Company and Contractor, Contractor shall
be entitled to an adjustment of the Schedule (including the Guaranteed
Substantial Completion Date and the Guaranteed Final Completion Date) for that
portion of the delay or failure of performance that was concurrently caused, but
Contractor shall not be entitled to any adjustment of Contract Price for such
concurrent delay. 

          8.5      Change
Orders Due to Changes in Law 

          Any
Change in the Work necessitated by any Change of Law enacted after the Effective
Date (excluding therefrom any change in applicable Law relating to taxation of
Contractor’s income) shall be treated as a Change Order under Section 8.3. 

          8.6      Effect
of Force Majeure; Excused Performance 

          If
Contractor’s performance hereunder is wholly or partially prevented due to the
occurrence of a Force Majeure affecting Contractor and such Force Majeure has
caused an extension of the Guaranteed Substantial Completion Date or any other
date under the Schedule, 

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Contractor shall provide to Company a written description of
Contractor’s plan to make-up Days lost under the Schedule due to the occurrence
of such Force Majeure, including an estimate of the costs of such plan. In the
event of the occurrence of a Force Majeure, Contractor shall be entitled to a
Change Order for adjustments pursuant to this Article 8 in the Schedule
(including the Guaranteed Substantial Completion Date and the Guaranteed Final
Completion Date) and other such parts of the Contract as may be affected by such
Force Majeure; provided, however, that there shall be no adjustment in the
Contract Price for the first two (2) events of Force Majeure declared by a Party
or any event of Force Majeure that arises from a failure of Contractor’s vendor,
Ormat Systems Ltd., to timely perform its obligations that are being performed
outside of the United States of America under its OEC supply agreement with
Contractor. To the extent that Company desires to pay for the costs of
acceleration of the Work or change to the Schedule (including the Guaranteed
Substantial Completion Date and the Guaranteed Final Completion Date) set forth
in Contractor’s proposal in order to compensate for delays in the work caused by
such Force Majeure, Company shall authorize a Change Order increasing the
Contract Price and adjusting the Schedule (in addition to any automatic
adjustments of the Guaranteed Substantial Completion Date). To the extent
Contractor (a) is compensated for the effect of a Force Majeure by insurance
maintained pursuant to this Contract, or (b) would have been so compensated, but
for Contractor’s failure to provide such insurance as required under this
Contract, Contractor shall not be entitled to a Change Order to the Contract
Price in connection with such Change Order issued for such Force Majeure. Except
for the obligations of either Party to make any required payment then due and
owing under this Contract, if either Party is rendered wholly or partially
unable to perform its obligations under this Contract because of a Force
Majeure, then such Party’s obligations that are so affected shall be excused and
suspended to the extent and during the continuance of the Force Majeure. If the
Force Majeure continues for six (6) consecutive months or more, this Contract
may be terminated by either Party pursuant to Section 19.3. This Section 8.6 is
subject to and conditioned upon the following:

                    (a)      the
non-performing Party, by exercise of due foresight, could not reasonably have
been expected to avoid, or that by the exercise of reasonable due diligence
could not have been able to overcome, such Force Majeure; 

                    (b)      the
non-performing Party gives the other Party notice describing the particulars of
the occurrence, with notice given promptly after the occurrence of the Force
Majeure, and in no event more than fifteen (15) Days after the affected Party
becomes aware of such occurrence; within thirty (30) Days after such occurrence,
the non-performing Party shall give the other Party written notice estimating
the expected duration and probable impact on the performance of such Party’s
obligations hereunder, and continues to furnish timely regular reports with
respect thereto during the continuation of the Force Majeure; 

                    (c)      the
non-performing Party shall forecast the duration of its non-performance,
provided that it shall be no more than is reasonably required by the Force
Majeure; 

                    (d)      the
non-performing Party shall exercise all reasonable efforts to mitigate or limit
damages to the other Party; 

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                    (e)      the
non-performing Party shall exercise all reasonable efforts to continue to
perform its obligations hereunder and to correct or cure the event or condition
excusing performance; and 

                    (f)      when
the non-performing Party is able to resume performance of its obligations under
this Contract, that Party shall give the other Party written notice to that
effect and shall promptly resume performance hereunder. 

          8.7      Company-Caused
Changes 

          In
the event and to the extent (a) a failure of Company to perform, or cause
performance of, its obligations in accordance with the Contract; or (b) damage
to or destruction of any Work caused by Company cause a delay in Contractor’s
performance of the Work which impairs Contractor’s ability to meet the Schedule,
or impacts Contractor’s cost of performance of the Work, an equitable adjustment
in the Schedule (including the Guaranteed Substantial Completion Date and the
Guaranteed Final Completion Date) or the Contract Price or any other such part
of this Contract as may be affected shall be made pursuant to this Article 8. To
the extent Contractor cannot reasonably redeploy labor or equipment, reasonable
standby and mobilization/remobilization costs incurred by Contractor resulting
from any such delay shall be reimbursed to Contractor monthly as such costs are
incurred. 

          8.8      Price
Change 

                  
   8.8.1      An increase or
decrease in Contract Price, if any, required pursuant to this Article 8 as a
result of a Change Order shall be determined by the mutual agreement of the
Parties, and shall be paid (or reimbursed) in one or more payments in accordance
with the following: 

                    
(a)      as a fixed price lump-sum, in an amount
proposed by Contractor (properly itemized and supported by sufficient
substantiating data to permit evaluation) and accepted by Company; or 

                    
  (b)      if the method set forth in Section 8.1(a)
  is not agreed upon by the Parties, Contractor shall perform the Work on a time
  and material basis.

                
8.8.2      Change Order Pricing – Time and
Material Prices. 

                    (a)      Whenever
Company authorizes Contractor to perform Work contemplated under a Change Order
on a time and material basis, Company’s authorization shall clearly state: 

                              (i).      scope
of Work to be performed; and 

                              (ii).     type
of reimbursement including pre-agreed rates, if any, for material quantities or
labor. 

                    (b)      Contractor
shall: 

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                              (i).      cooperate
with Company and assist in monitoring the Work being performed. As requested by
Company, identify workers assigned to the Work and areas in which they are
working; 

                              (ii).     identify
on daily time sheets all labor, equipment and materials furnished in accordance
with this authorization. Submit copies of daily time sheets within two (2) Days
for Company’s review; 

                              (iii).    leave
access as appropriate for quantity measurement; 

                              (iv).  
efficiently perform all Work in accordance with this Section 8.8.2; 

                              (v).   
not be required to perform time and material work past the established not to
exceed limit(s) without Company’s prior written approval. 

                              (vi).  
Submit costs in accordance with Section 8.8.1, plus profit and overhead of
fifteen percent (15%) on the sum of such costs and additional verification
supported by: 

                                        (1)      labor
priced at Contractor’s then current burdened direct labor rates, detailed on
daily time sheets; 

                                        (2)      invoices
for equipment and material; and 

                                        (3)      invoices
for construction equipment rental costs. 

          8.9      Effectiveness;
Continued Performance Pending Resolution of Disputes 

          If
a Change in the Work is initiated under this Article 8, then the Change Order
and the modifications made pursuant to such Change Order shall be effective upon
Company’s issuance of a Change Order with respect thereto. Notwithstanding a
dispute regarding any proposed or requested Change Order, or any adjustment of
one or more of the Contract Price, the Schedule (including the Guaranteed
Substantial Completion Date and the Guaranteed Final Completion Date), or any
other such part of this Contract as may be affected with respect to a Change
Order, Contractor shall proceed with the performance of such Change Order
promptly following Company’s execution of the corresponding Change Order. 

          8.10      Documentation

          All
claims by Contractor for adjustments pursuant to a Change Order to one or more
of the Contract Price, the Schedule (including the Guaranteed Substantial
Completion Date and the Guaranteed Final Completion Date), or any other such
part of this Contract as may be affected as a result of Change Orders under this
Article 8 shall be supported by such documentation as is reasonably sufficient
for Company to determine the accuracy thereof. Within thirty (30) Days of
Contractor’s knowledge of Contractor’s need to provide additional supporting
data for the 

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Change Order notice, unless Company agrees in writing to allow
  an additional period of time to ascertain more accurate data, Contractor shall
  supplement the Change Order notice with additional supporting data. Such additional
  data shall include, to the extent known, or through the exercise of reasonable
  diligence should be known at the time, at a minimum (a) the amount of compensation
  or delay claimed, itemized in accordance with procedures set forth herein; (b)
  specific facts, circumstances; (c) analysis that confirms not only that Contractor
  suffered the damages or delay claimed, but that the damages or delay claimed
  were actually a result of the act, event, or condition complained of, and that
  the Contract provides entitlement to an equitable adjustment in Contract Price
  or Schedule (including the Guaranteed Substantial Completion Date and the Guaranteed
  Final Completion Date) for such act, event or condition; and (d) supporting
  documentation sufficiently detailed to permit an informed analysis of the request
  by Company. Failure to provide such additional information and documentation,
  to the extent such information and documentation was reasonably available to
  Contractor, within the time allowed or within the format required shall, to
  the extent Company’s interests are prejudiced, constitute a waiver of Contractor’s
  right to an adjustment.

          8.11      Continue
Work 

          Pending
final resolution of any request in accordance with this Article 8, unless
otherwise agreed in writing, Contractor shall proceed diligently with
performance of the Work. 

          8.12      Critical
Path Schedule Updates 

          If
there is any change in the Schedule covered by a Change Order, or based on a
Change Order notice, Contractor shall provide Company with an updated version of
Contractor’s critical path schedule reflecting the change attributable to the
Change Order or event(s) giving rise to the request for adjustment. 

          8.13      Change
Order Constitutes Complete Relief 

          Except
for aggregate impacts which are either unknown, or despite the exercise of
reasonable diligence would not be known at the time of execution of a Change
Order, any Change Order signed by Company and Contractor shall constitute full
compensation to Contractor for all claims for cost for direct, indirect, labor,
temporary construction failures, job site, or home office overhead, stacking of
trades, inefficiencies, impacts or any other cost of any kind or nature; and in
the event the Change Order adjusts the Schedule, the Change Order signed by
Company and Contractor constitutes complete relief to Contractor for schedule
impacts for all events giving rise to the Change Order. 

          8.14      Effect
of Changes on Warranties and Safety 

          8.14.1
If Contractor reasonably believes that a proposed Change in the Work may
negatively affect any warranty or performance commitments with regard to any
Work, Contractor shall serve Company notice within fourteen (14) Days of
Contractor’s receipt of such proposal of its belief and the believed effect. If
Company insists, despite Contractor’s notice, upon requiring the execution of
such proposal and Contractor acquiesces to Company’s request and executes the
proposal, the affected warranties or performance commitments shall be adjusted

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to the extent agreed between the Parties or as already determined
  in accordance with the provisions of Article 14, but only to the extent related
  to or derived from Company’s proposal.

                 
    8.14.2      If Contractor
reasonably believes that a proposed Change in the Work may negatively affect
safety of the Work or persons in its vicinity or would violate any applicable
Laws, Contractor shall serve Company notice within fourteen (14) Days of
Contractor’s receipt of such proposal of Contractor’s belief and the believed
effect, and Contractor shall not be required to perform such proposal.

ARTICLE
9.      DESIGN AND DOCUMENTATION

          9.1      Ownership
of and Responsibility for Design 

                
     9.1.1      Contractor
retains legal title to and ownership of the design and engineering of the
Facility and Contractor remains entitled to freely use, modify, license or
otherwise dispose of the same at its discretion without any obligation to
account to Company. 

                 
      9.1.2      Contractor
  shall be responsible for the development of the technical data (other than the
  technical interface data which is being developed and provided by Company),
  design and other documentation required for the performance of the Work.
  

          9.2      Inspection
of Work 

          At
Company’s sole expense, Company and Company’s Representative shall have
the right to inspect any item of the Work to be provided hereunder. Company and
Company’s Representative shall have access to those portions of the Site then
under Contractor’s control, at reasonable times and upon reasonable notice.
While at the Site, Company and the Company’s Representative shall comply with
all of Contractor’s safety rules and other job site rules and regulations. 

          9.3      As-Built
Drawings 

          Within
three (3) months following the Final Completion Date, Contractor shall furnish
to Company two (2) reproducible sets of full sized construction drawings of the
Facility on which are marked any and all material deviations from those Drawings
that were issued for construction (“As-Built Drawings”). In addition,
Contractor shall provide a complete set of the “As-Built” Drawings in electronic
media compatible with AutoCAD – Release 2002 or newer, or substitute as approved
by Company. 

          9.4      License
to Use 

          Subject
to Section 9.1.1, Company shall have a non-exclusive, transferable
license and right to use and reproduce all Drawings, Specifications, Facility
manuals and any other Documents provided or to be provided by Contractor
hereunder, including the O&M Manual for the Facility and the reproducible
Drawings furnished by Contractor pursuant to Section 9.3, solely for the purpose
of operating, maintaining and repairing the Facility. Company shall not use any
such Documents for any other purpose. 

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          9.5      Use
of Documents After Termination 

          If
this Contract is terminated by Company pursuant to Section 19.1 prior to
completion of the Facility, Company may, in its sole discretion, use any
Drawings, Specifications, Facility manuals or other Documents prepared hereunder
solely for the purpose of completing the Facility. If this Contract is
terminated by Contractor and full payment of the Contract Price is not received,
Company shall not be entitled to use or continue using the documents thereafter.

          9.6      O&M
Manual 

          At
least sixty (60) Days prior to the start-up of the Facility or any portion
thereof, Contractor shall deliver to Company four (4) copies of the preliminary
draft of the O&M Manual for the Facility as provided in the Scope of Work.
The O&M Manual shall include the information for that manual described in
the Scope of Work. Such preliminary draft shall be as reasonably complete as
available information shall allow and at a minimum with sufficient information
to permit the training of Company’s operation and maintenance personnel and the
normal operation and maintenance of the Facility by persons generally familiar
with facilities and plants similar to the Facility. Contractor thereafter shall
provide to Company four (4) copies of the final and complete O&M Manual for
the Facility prior to Final Completion. 

ARTICLE
10.      WARRANTIES 

          10.1      Warranty

          Contractor
warrants to Company that: 

                    (a)      the
Work shall conform in all material respects to the Drawings, the Specifications
and the other requirements set forth in this Contract; 

                    (b)      the
Work shall be of good quality, free from any Defect and shall be performed in a
workmanlike and skilful manner; 

                    (c)      the
equipment and all Materials and other items incorporated in the Work shall: 

                              (i)      be
new and shall be of a suitable grade of its respective kind for its intended
use;

                              (ii)    
be free from any Defect; 

                              (iii)   
meet the requirements of this Contract; 

                              (iv)   
be free from any charge, encumbrance, lien or other security interest; and 

                              (v)     comply
with current applicable Laws. 

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                    (d)      title
  and ownership to the Work shall pass to and vest in Company, as described in
  Section 12.1, free and clear of any and all liens, claims, charges, security
  interests, encumbrances and rights of other persons arising as a result of any
  actions or failure to act of Contractor, its Subcontractors, or their employees
  or representatives; and

                    (e)      the
Work has been and shall be designed and engineered with all the skill, care and
diligence to be expected of appropriately qualified and experienced professional
designers and engineers with experience in carrying out works of a similar,
type, nature and complexity to the Work. 

          10.2      Warranty
Period

          The
warranties set forth in Section 10.1 shall extend for a period of twelve (12)
Months from the Final Completion Date; provided, however, that such period with
respect to any item of the Work that is repaired, replaced, modified, or
otherwise altered by Contractor pursuant to Section 10.3 shall be extended for
twelve (12) Months from the date of completion of such repair, replacement,
modification or alteration, but in no event shall such period exceed twenty-four
(24) Months from the Final Completion Date for the subject item of the Work (for
such item, the “Warranty Period”). Upon the expiration of the Warranty
Period, Contractor will assign to Company, to the extent assignable, the
warranties relating to the Work from any Subcontractors or vendors that extend
beyond the Warranty Period, if any. 

          10.3      Defect
Remedy Work 

                      
10.3.1      Company shall notify Contractor
promptly (but not longer than forty-eight (48) hours) upon discovery of any
Defect. A written “failure report,” which includes available technical and
logistic information to assist Contractor to assess the damage to the equipment
and to evaluate appropriate corrective action, shall be provided to Contractor
as soon as reasonably practicable upon discovery of the Defect. If Contractor
requests, Company shall supply all relevant information relating to past
maintenance, repair and operational data relating to the failed Work.

                 
     10.3.2      Contractor’s
responsibility for any such warranty claim shall be limited to Contractor’s
performance of Defect Remedy Work on the Defect and Contractor shall perform
such Defect Remedy Work as soon as reasonably possible following Contractor’s
receipt of notice and the relevant failure report from Company
applicable to such Work. Only direct costs and expenses of Defect Remedy Work
shall be borne by Contractor. Contractor shall have the obligation in connection
with the performance of any Defect Remedy Work to provide any special rigging,
cranes or heavy equipment or any labor required in connection with operating
such equipment, except where such items or labor are readily available at the
Site, in which case such items or labor shall be provided by Company or
Company’s operator, at Contractor’s request, and Contractor shall pay reasonable
compensation therefore. 

                   
   10.3.3      All costs associated
with the performance of any repair and maintenance work which is not Defect
Remedy Work, including the costs of the replacement of any parts or other
portions of the Work which are not defective but which are replaced in
conjunction with Defect Remedy Work at the request of Company, shall be the
responsibility of Company.

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Company shall provide Contractor with access to the Facility
  and to utilities, tools and equipment available at the Site for Contractor’s
  performance of any Defect Remedy Work. If Contractor elects not to carry out
  such Defect Remedy Work and requests Company to perform the same under this
  Article 10 instead of Contractor, Company may cause the Defect Remedy Work to
  be effected and Contractor shall reimburse Company the costs Company has reasonably
  incurred as a result. 

                 
       10.3.4      The
  warranty and the liabilities and obligations of Contractor under this Contract
  shall not extend to replacement of normal consumables or apply to any failure
  to comply with the warranty that has been caused by (i) any erosion or derosion
  or normal wear and tear in operation of the subject Work; (ii) any failure of
  Company or a third party, other than Contractor or Subcontractor, to properly
  store, install, operate and/or maintain the subject Work in accordance with
  good industry practices and the O&M Manual; (iii) any modifications made
  to the subject Work by any person other than personnel of Contractor or Subcontractor
  without Contractor’s express written consent prior to such modifications;
  (iv) any neglect, abuse, malicious mischief, vandalism or event of Force Majeure
  (other than a warranty failure) affecting the subject Work; (v) any other negligent
  act of Company or Company’s operator; (vi) operation of the Facilities
  under conditions (including composition of the geothermal fluid) outside of
  the range specified in the Design Conditions; or (vii) operation of the Facility,
  other than by personnel of Contractor or Subcontractor, without Contractor’s
  prior express written consent, outside the Facility’s defined operation
  range. 

          10.4      Implementation
of Warranty 

          The
warranty claims and related Work shall be implemented in accordance with the
Warranty Claim Procedures in Exhibit E.

          10.5      Disclaimer
and Release 

          THE
WARRANTIES, CONDITIONS, OBLIGATION AND LIABILITIES OF CONTRACTOR AND RIGHTS AND
REMEDIES OF COMPANY SET FORTH IN THIS CONTRACT ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND COMPANY HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER PRESENT AND
FUTURE WARRANTIES, CONDITIONS, OBLIGATIONS, REPRESENTATIONS AND LIABILITIES OF
CONTRACTOR, TOGETHER WITH ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF COMPANY
AGAINST CONTRACTOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO, (A) ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE; (B) ANY IMPLIED WARRANTY OR CONDITION
ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (C) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING
FROM THE NEGLIGENCE OF CONTRACTOR OR ITS SUBCONTRACTORS, ACTUAL, PASSIVE OR
IMPUTED; OR (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR
DAMAGE TO THE FACILITY, WORK OR ANY 

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PORTION THEREOF OR FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES. 

ARTICLE
11.      PERFORMANCE AND
PERFORMANCE RELATED REMEDIES; EXCLUSIVITY; LIMITATION OF LIABILITY

          11.1      Performance
Liquidated Damages and Performance Bonus

                      
11.1.1      In the event that, upon completion of
the Capacity Test, the Net Deliverable Capacity result is less than the
Performance Guarantee, Contractor shall have the option for the period specified
in Exhibit D to undertake any necessary actions to increase the Net Deliverable
Capacity of the Facility to satisfy the Performance Guarantee at its own cost.
If, upon the expiration of such period, the Net Deliverable Capacity of the
Facility as determined by the last Capacity Test is below such Performance
Guarantee, then Contractor shall, within thirty (30) Days, pay to Company as
liquidated damages, and not as penalty, the amounts set forth in Section 3 of
Exhibit K (“Performance Liquidated Damages”); provided, however, that if
Contractor has made any payments of Shortfall Generation Liquidated Damages to
Company pursuant to Section 4.10, Contractor shall be obligated to only pay Net
Performance Liquidated Damages to Company. 

                  
    11.1.2      Notwithstanding
anything to the contrary herein, Performance Liquidated Damages as provided in
this Section 11.1 or the payments described in Section 4.10 shall not be payable
if failure to achieve the Performance Guarantee is due to Force Majeure, Company
Default or any other reason not attributable to Contractor. 

                 
       11.1.3      If the Facility,
  as determined by the last Capacity Test, exceeds the Performance Guarantee in
  respect of Net Deliverable Capacity, Company shall pay Contractor within
  thirty (30) Days of Contractor’s invoice, as a bonus and in addition to
  the Contract Price, the amounts set forth in Section 4 of Exhibit K (“Performance
  Bonus”).

          11.2
Exclusivity 

          The
Liquidated Damages payable under this Contract shall, without duplication, be
the sole and exclusive remedy and measure of damages with respect to any delay
in completion of the Facility or any failure to meet the Performance Guarantee.
Once payment of Liquidated Damages and other amounts has been made, or the
limits set forth in Section 11.5 have been met, and Contractor has performed all
other Work required hereunder with respect to the Facility, Contractor shall be
relieved of any further Liability with respect to such failures. 

          11.3      General
Limitation of Liability 

                      
11.3.1      Notwithstanding any other provision to
this Contract, Contractor’s maximum aggregate Liability under this Contract
(including for Liquidated Damages) from any and all causes shall in no case
exceed the sum of: the lower of one hundred percent (100%) of the Contract Price
(as the same may be adjusted in accordance with this Contract) or one hundred
percent (100%) of the amount of the actual payments for the Work received by
Contractor hereunder. 

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       11.3.2      Except
  to the extent of the Liquidated Damages, Performance Bonus, Schedule Bonus or
  the termination payments described in Article 19, in no event shall either Party
  be liable to the other for any indirect, special, incidental, consequential
  or exemplary damages (which includes loss of profit, revenues or savings), or
  for costs of procurement of substitute goods whether arising in contract, equity,
  tort, or other basis for Liability, even if it has been advised of the possibility
  of such damages.

                      
11.3.3      The foregoing limitations on Liability
in this Section 11.3 shall: 

                    (a)      not
limit Company’s right to receive proceeds of Contractor’s insurance required to
be maintained pursuant to Article 13 of this Contract; 

                    (b)      not
apply to limit, nor shall they include, the costs of Contractor’s or Company’s
indemnification obligations under Article 15; or 

                    (c)      exclude
any Liability of Contractor or Company stemming from the fraud or willful
misconduct of Contractor, any Subcontractor, or their respective employees or
Company or its employees, respectively. 

          11.4     
Other Provisions 

          The
Parties acknowledge and agree that because of the unique nature of the Facility
and the unavailability of substitute facilities, it is difficult or impossible
to determine with precision the amount of damages that would or might be
incurred by Company as a result of Contractor’s failure to complete the Work so
that Substantial Completion is accomplished by the Guaranteed Final Completion
Date and the Facility is completed by the Guaranteed Final Completion Date or so
that the Facility meets the Performance Guarantee. It is understood and agreed
by the Parties that Company shall be damaged by the failure of Contractor to
meet such obligations and that (i) it would be impracticable or extremely
difficult to fix the actual damages resulting therefrom; (ii) any Liquidated
Damages that are payable under this Contract are in the nature of liquidated
damages, and not a penalty, and are fair and reasonable; and (iii) such payments
represent a reasonable estimate of fair compensation to Company for the losses
that may reasonably be anticipated from such failure. The Parties hereby
acknowledge that Section 4.6, Section 4.10 and this Article 11 represent a
reasonable allocation of risk. 

ARTICLE
12.      TITLE; CARE OF THE WORK

          12.1      Passage
of Title 

          Subject
to the provisions of Sections 9.1.1 and 9.4, legal title to and ownership of all
Work and Materials provided hereunder shall pass to and vest in Company the
later of (i) delivery to the Site; or (ii) upon payment of the respective
milestone payment pursuant to the Milestone Payment Schedule. 

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          12.2     
Risk of Loss 

          Contractor
shall be responsible to assure safe delivery of all Materials to the Site.
Except to the extent caused by the negligence or willful misconduct of Company,
Contractor shall bear the risk of physical loss or destruction of or damage to
the Materials and the Work, whether or not incorporated in the Facility at the
Site or located on or off the Site, until the Substantial Completion Date.
Notwithstanding the passage of title as provided in Section 12.1, Contractor
assumes the risk of loss with respect to, and shall be obligated to replace,
repair or reconstruct, any portion or all of the Materials or the Work that is
lost, damaged or destroyed prior to turning over care, custody and control of
such Material or Work to Company as provided in this Contract, irrespective of
how such loss, damage or destruction shall have occurred. In the event of a
termination of this Contract in accordance with the provisions hereof prior to
such turnover, the risk of loss with respect to such Materials and Work shall
pass to Company upon the effective date of termination, whether by Company or by
Contractor. 

          12.3      Care,
Custody and Control 

          Upon
the Substantial Completion Date, Contractor shall turn over to Company the care,
custody and control of the Facility. Company, at its expense, shall properly
operate and maintain such portions of the Facility turned over to it by
Contractor in accordance with applicable Laws, Prudent Industry Practices, the
O&M Manual and the instructions and specific recommendations provided by
Contractor to Company. Contractor may conduct periodic inspections of the
turned-over equipment to ensure that Company is complying with such obligations.
It is further acknowledged and agreed that Company shall provide Contractor, at
all times, free and clear access to the Facility in order to allow Contractor to
perform its obligations under the Contract (including completion and/or
repetition of testing, Punchlist Items and warranties). 

ARTICLE
13.      INSURANCE 

          13.1      Contractor
Provided Insurance 

          Contractor
shall: 

                    (a)      obtain
  and maintain in full force and effect from the Commencement Date through Final
  Completion, at its own cost, the following policies of insurance: 

  
               (i)      Builders
      All Risk insurance in an amount equal to cover the replacement cost of the
      Facility, including transit coverage for purchased plant and equipment;
    

               (ii)      Public
      Liability insurance with bodily injury and property damage combined single
      limits of at least One Million Dollars ($1,000,000) per occurrence and Two
      Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
      liability for bodily injury to third parties or damage to property to third
      parties arising in connection with the performance of the Work; 

  

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               (iii)      Excess
      Liability insurance with a single limit of at least Five Million Dollars
      ($5,000,000) per occurrence in excess of the limits of the insurance provided
      in paragraph (ii) above;

              (iv)     
      Workers Compensation insurance providing statutory limits of liability,
      and Employers Liability limits of One Million Dollars ($1,000,000) per disease/accident/
      employee, covering Contractor; and

              (v)     
      Marine transit insurance for Materials and/or Equipment procured and to
      be delivered pursuant to this Contract and to provide that Company is named
      as the additional named insured; and 

  

                    (b)      procure
  and maintain such further coverages as Contractor is required to have by any
  applicable Law.

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

13.2 Company Provided Insurance 

Company shall: 

                    (a)      obtain
  and maintain in full force and effect, at its own cost, the following policies
  of insurance:

  
              (i)      All
      risks property insurance with a limit in an amount not less than the replacement
      cost of the Facility plant and equipment the care, custody and control of
      which has been turned over to Company by Contractor pursuant to this Contract;
    

              (ii)      Public
      Liability insurance with bodily injury and property damage combined single
      limits of at least One Million Dollars ($1,000,000) per occurrence and Two
      Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
      liability for bodily injury to third parties or damage to property to third
      parties arising in connection with the Site or the Facility; and 

              (iii)      Excess
      Liability insurance with a single limit of at least Ten Million Dollars
      ($10,000,000) per occurrence in excess of the limits of the insurance provided
      in paragraph (ii) above; and

  

                    (b)      procure
  and maintain such further coverages as Company is required to have by any applicable
  Law.

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

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          13.3      Policies

                      
13.3.1      Contractor’s insurance shall:

                    (a)      name
Company and its directors, officers, representatives, employees and agents and
any identified Financing Parties as additional insureds;

                    (b)      include
the following cross-liability clause: 

“Where more than one party comprises
  the “Insured,” each of the parties shall, for the purpose of such
  insurance, be considered as a separate and distinct unit/entity, and the words
  “the Insured” shall be considered as applying to each party in the
  same manner as if a separate policy has been issued to each of the said parties.
  The insurer shall provide indemnity to each in the same manner and to the same
  extent as if a separate policy has been issued to each, provided that the total
  amount payable in respect of compensation shall not exceed the limits of indemnity”;

                    (c)      provide
that such Contractor’s insurance may not be cancelled, non-renewed or materially
changed by the insurer without giving thirty (30) Days’ prior written notice to
Company; 

                    (d)      waive
any and all rights of subrogation against Company and its respective directors,
officers, representatives, agents and employees, and waive any other right of
the insurers to any offset or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any Liability of Company or its
directors, officers, representatives, agents and employees; and 

                    (e)      provide
  that any other insurance maintained by Company and its respective directors,
  officers, representatives, agents and employees is in excess of such Contractor’s
  insurance and not contributory with it.

                           
13.3.2      Company’s insurance shall: 

                    (a)      name
Contractor, Subcontractors and their respective directors, officers,
representatives, employees and agents and any identified Financing Parties as
additional insureds; 

                    (b)     
  include the following cross-liability clause:

“Where more than one party comprises
the “Insured,” each of the parties shall, for the purpose of such insurance, be
considered as a separate and distinct unit/entity, and the words “the Insured”
shall be considered as applying to each party in the same manner as if a
separate policy has been issued to each of the said parties. The insurer shall
provide indemnity to each in the same manner and to the same extent as if a
separate policy has 

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been issued to each, provided that the
  total amount payable in respect of compensation shall not exceed the limits
  of indemnity”; 

                    (c)      provide
  that such Company’s insurance may not be cancelled, non-renewed or materially
  changed by the insurer without giving sixty (60) Days’ prior written notice
  to the Contractor; 

                    (d)     
  waive any and all rights of subrogation against Contractor, Subcontractors and
  their respective directors, officers, representatives, agents and employees,
  and waive any other right of the insurers to any offset or counterclaim or any
  other deduction, whether by attachment or otherwise, in respect of any Liability
  of Contractor, Subcontractors or their respective directors, officers, representatives,
  agents and employees; and

                    (e)      provide
that any other insurance maintained by Contractor, any Subcontractors and their
respective directors, officers, representatives, agents and employees is in
excess of such Company’s insurance and not contributory with it. 

          13.4      Payment
of Deductibles 

          If
any of the insurance described above shall have any deductibles, the Party
obligated to procure such insurance shall be solely responsible for payment of
all such deductible amounts associated with such insurance. 

          13.5      Evidence
of Insurance 

          Within
thirty (30) Days of the Commencement Date (or with regard to the Builders All
Risk coverage described in Section 13.1(a)(i), prior to the commencement of Work
at the Site), each Party shall cause its insurers or agents to provide to the
other Party for the other Party’s review and approval certificates of insurance
evidencing the policies and terms specified in this Article 13. Notwithstanding
the foregoing, Contractor shall be entitled to cause its insurers or agents to
provide to Company the certificates of insurance evidencing its builders all
risk policy only when the relevant risk arises. Failure by a Party to obtain the
insurance coverage or certificates of insurance required by this Article 13
shall not in any way relieve or limit such Party’s obligations and liabilities
under this Contract, nor shall the failure of any insurance company for any
reason to pay claims accruing with respect to such Party’s insurance, affect,
negate or release such Party from any of the provisions of this Contract,
including such Party’s indemnity obligations. The insurance coverage to be
provided by each Party pursuant to this Article 13 are not intended to, and
shall not in any manner, limit or modify such Party’s obligations under this
Contract, except to the extent any proceeds of such insurance are applied in
satisfaction of such Party’s obligations. If a Party shall fail to procure or
maintain its insurances, then the other Party shall have the right (but shall
not be obligated) to provide and maintain such insurance at the defaulting
Party’s expense and to deduct the cost thereof from any amount or amounts due to
the other Party or in the event there are no such amounts due and payable, the
defaulting Party shall reimburse the other Party for such costs on demand.

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ARTICLE
14.      DISPUTE RESOLUTION

          14.1      Settlement
by Mutual Agreement 

          Company
and Contractor desire that this Contract operate between them fairly and
reasonably. If during the term of this Contract a dispute arises between Company
and Contractor, or one Party perceives the other as acting unfairly or
unreasonably, or a question of interpretation arises hereunder, then the Parties
shall cause the Company’s Representative and Contractor’s Representative to
promptly confer and exert their good faith efforts to reach a reasonable and
equitable resolution of the issue. If Company’s Representative and Contractor’s
Representative are unable to resolve the issue within fourteen (14) Days (within
five (5) Days if a payment dispute), the matter shall be referred within two (2)
Days of the lapse of such period to the Parties’ responsible officers for
resolution. Neither Party shall seek resolution by mediation or arbitration of
any dispute arising in connection with this Contract until both Parties’
responsible officers, who shall be identified by each Party from time-to-time,
have had at least fourteen (14) Days (seven (7) Days if a payment dispute) to
resolve the dispute following referral of the dispute to such responsible
officers. If the Parties fail to settle such dispute within such period
(including a failure to identify their respective responsible officers and
make necessary referrals within such period), the provisions of Section 14.2
shall apply unless the Parties agree that the dispute is to be resolved
according to the provisions of Section 14.3. 

          14.2     
Mediation 

          If
a dispute under this Contract is not resolved by the Parties pursuant to Section
14.1, upon the request of either Party the Parties shall try in good faith to
settle the dispute by nonbinding mediation administered by the American
Arbitration Association under its Commercial Mediation Rules before resorting to
arbitration. Unless otherwise agreed upon by the Parties, the mediation shall be
held in King County, Washington. Each Party shall bear the cost and expense of
preparing and presenting its own case (including, but not limited to, its own
attorneys’ fees and costs of witnesses). Payment of the mediator and other costs
and expenses of the mediation shall be divided equally among the Parties.

          14.3      Pending
Disputes 

          Notwithstanding
any provision of this Article 14 to the contrary, either Party may commence
litigation within thirty (30) Days prior to the date after which the
commencement of litigation could be barred by any applicable statute of
limitations or other law, rule, regulation, or order of similar import or in
order to request injunctive or other equitable relief in connection with any
bankruptcy or insolvency proceeding or otherwise necessary to prevent
irreparable harm. In such event, the Parties shall (except as may be prohibited
by judicial order) nevertheless continue to follow the procedures set forth
herein. While any disputes under this Contract are pending, including the
commencement and pendency of any of the dispute resolution procedures set forth
in this Article 14, the Parties shall abide by all their obligations under this
Contract without prejudice to a final determination in accordance with the
foregoing provisions of this Article 14. 

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ARTICLE
15.      INDEMNIFICATION

          15.1      General

          Contractor
shall defend, indemnify and hold harmless Company, the Financing Parties, each
of their parent company and affiliates, and the directors, officers, members,
agents, employees, successors and assigns of each of them (each, a “Company
Indemnified Party”), from and against any and all claims, demands, and
causes of action asserted by any Governmental Authority or other third party
against any Company Indemnified Party (other than as a result of a breach of
this Contract by such person) and any Liabilities, including reasonable
attorneys’ fees, incurred by such Company Indemnified Party in connection
therewith to the extent and as a result of Contractor’s performance (or that of
its Subcontractors, agents, employees or consultants) under this Contract,
including, but not limited to (a) on account of any violation of any Law or
Permit to be complied with by Contractor hereunder; and (b) in respect of any
Taxes imposed on or attributable to performance of Contractor (other than sales
or use taxes in the State of Idaho except to the extent that Company has not
made payment to Contractor when due hereunder Taxes in the State of Idaho; in
each case other than to the extent caused by or arising from the negligence or
willful misconduct of such Company Indemnified Party not attributable to
Contractor or any affiliate or Subcontractor of Contractor. 

          15.2      Indemnification
for Bodily Injury or Property Damage 

          Company,
as one Party, and Contractor, as the other Party, shall defend, indemnify and
hold each other, and each other’s lenders, Financing Parties, parent company,
affiliates, officers, directors, members, agents and employees, owners of the
real property comprising the Site, harmless from and against any loss, damage or
liability (including, but not limited to, reasonable attorneys’ fees and other
costs but excluding consequential damages) on account of any claim by a third
party for bodily injury or property damage against the indemnified party caused
by the negligent act or omission of the indemnifying party or the indemnifying
party’s employees, contractors, subcontractors or agents, in connection with the
performance of their respective undertakings under this Contract. 

          15.3      Indemnity
from Liens 

          Contractor
shall defend, indemnify and hold each of the Company Indemnified Parties
harmless from and against (i) all liens arising from the performance of the Work
by Contractor or otherwise caused by any Subcontractor or any employee, agent or
Affiliate of Contractor or any of its Subcontractors or anyone else entitled to
file a lien under Law; and (ii) any loss, damage or liability (including, but
not limited to, reasonable attorneys’ fees and other costs) in connection with
any and all mechanics’ liens filed in connection with Contractor’s Work
hereunder. This Section 15.3 shall not apply to Liens of Contractor which result
from non-payment by Company. 

          15.4      Contractor’s
Infringement Indemnity 

          Contractor
shall indemnify and keep indemnified and hold harmless Company Indemnified
Party(ies) from and against any and all third-party suits, actions claims of any
type 

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of character, type or description, based upon any claim of
infringement of any patent or other license or intellectual property right
(whether by way of trademark or otherwise) resulting directly or indirectly from
furnishing of the Work pursuant to this Contract asserted by any third party
against any Company Indemnified Party and any Liabilities, including reasonable
attorneys’ fees, incurred by such Company Indemnified Party in connection
therewith. Each Party agrees to notify the other as soon as reasonably possible
of any material matters with respect to which the foregoing indemnity is likely
to apply and of which the notifying Party has actual knowledge. If notified in
writing of any action or claim for which the Contractor may be liable to provide
indemnity, the Contractor shall, without limitation, defend (subject to
reasonable consultation with Company) such action or claim at their expense and
pay the cost and damages and attorneys’ fees awarded against Company in such
action or claim; provided, however, that the Contractor shall have the right to
control the defense and settlement of all such actions or claims, which
settlement shall be subject to the consent of Company, if applicable, not to be
unreasonably withheld. This Section 15.4 shall not be applicable to any suit,
claim or proceeding based on infringement or violation of a patent or copyright
(i) relating solely to a particular process or product of a particular
manufacturer specified by Company and not offered or recommended by Contractor;
or (ii) arising from modifications to the Work by Company after Final Completion
of the Facility. If a suit, claim or proceeding is based upon the events set
forth in the preceding sentence, Company shall defend, indemnify and hold
harmless Contractor to the same extent as Contractor is obligated to indemnify
Company. 

          15.5      Company’s
Indemnity 

          Company
shall defend, indemnify and hold harmless Contractor and its Subcontractors and
their respective joint venture partners, directors, officers, agents, employees,
shareholders and affiliates from any and all Liability or Proceedings arising
out of: 

                    (a)      any
  actual or alleged injury or death of persons or damage to property arising out
  of the negligence, willful misconduct or default of Company (except only to
  the extent that the same have been caused by the negligence or default of Contractor
  or its Subcontractors); 

                    (b)      any
and all environmental related liability or cost arising from or related to the
Site, including any actual or alleged injury to persons or property related
thereto or any remedial activity (except to the extent the same was caused by
the negligence or default of Contractor or its Subcontractors in connection with
their performance of the Work); or 

                    (c)      on
  account of any violation of any Law or Permit to be complied with by Company
  hereunder.

          15.6     
Notice and Settlement of Claims 

          A
Party seeking the benefit of an indemnity under this Article 15 shall give the
other Party written notice of any claim giving rise to the indemnity promptly
after such Party learns of the same. The indemnifying Party may, at its own
cost, conduct negotiations for the settlement of such claim and any litigation
that may arise therefrom. The Party claiming the benefit of the indemnity shall
not make any admission that might be prejudicial to the indemnifying Party 

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unless the indemnifying Party fails to take over the conduct of
the negotiations or litigation within a reasonable time after having been so
requested. The indemnifying Party shall not settle any indemnified claim without
the indemnified Party’s prior written approval (not to be unreasonably withheld
or delayed). The Party claiming the benefit of the indemnity shall, at the
request of the other Party, provide reasonable assistance for the purpose of
contesting any such claim or action, and shall be paid all reasonable costs
incurred in doing so and shall have the right to have its own counsel, at its
expense, participate in the defense and negotiation of the claim or action.

ARTICLE
16.      ASSIGNMENT 

          16.1      Assignment
by Company 

          Company
  may not assign any or all of its obligations, rights, title and/or interest
  in and to or arising out of or in connection with the Contract without the prior
  written approval of Contractor, which approval shall not be arbitrarily or unreasonably
  withheld or delayed. Notwithstanding the foregoing, Company may assign its obligations,
  rights, title and/or interest in and to or arising out of or in connection with
  the Contract to an Affiliate who is a special purpose entity wholly owned by
  Company whose sole assets relate to the Facility, without Contractor’s
  consent. No assignment of Company’s obligations, rights, title and/or interest
  in and to or arising out of or in connection with the Contract shall relieve
  Company of any obligation hereunder. 

          16.2      Assignment
by Contractor 

          Contractor
may not assign any or all of its obligations, rights, title and/or interest in
and to or arising out of or in connection with the Contract without the prior
written approval of Company, which approval shall not be arbitrarily or
unreasonably withheld or delayed. Notwithstanding the foregoing, Contractor may
assign its obligations, rights, title and/or interest in and to or arising out
of or in connection with the Contract to an Affiliate, without Company’s
consent. No assignment of Contractor’s obligations, rights, title and/or
interest in and to or arising out of or in connection with the Contract shall
relieve Contractor of any obligation hereunder. 

          16.3      Succession

          This
Contract shall inure to the benefit of and be binding upon the successors and
permitted assigns (as provided for by Sections 16.1 and 16.2) of the
Parties.

ARTICLE
17.      SUBCONTRACTORS

          17.1      Subcontracts

          Subject
to Section 17.2, Contractor may enter into Subcontracts for the performance of
the Work and shall be solely responsible for the satisfactory performance of the
Work and the acts, defaults and omissions of any Subcontractor notwithstanding
any review, approval or other action taken by Company with regard to the
selection of a Subcontractor hereunder. Contractor 

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shall be responsible for the actions of the Subcontractors in
  their performance of the Work as if such actions were those of Contractor. The
  issuance of any Subcontract shall not relieve Contractor of any of its obligations
  under this Contract. All Subcontracts shall be consistent with and in no way
  contrary to or inconsistent with any of the terms or provisions of this Contract.
  No contractual relationship shall exist between Company and any Subcontractor
  with respect to the Work to be performed hereunder, and no Subcontractor is
  intended to be or shall be deemed a third-party beneficiary of this Contract.
  Except as expressly set forth in Section 17.2, nothing contained herein shall
  (a) create any contractual relationship between any Subcontractor and Company
  or (b) obligate Company to pay or arrange for the payment of any Subcontractor.

          17.2      Subcontract
Provisions 

          Contractor
shall ensure that Subcontracts made with Subcontractors having a value of Two
Million Dollars or more are made in writing. Contractor shall make reasonable
efforts to require that each such Subcontract shall provide that the rights and
obligations of Contractor under each such Subcontract are assignable to Company,
its successors and assigns upon Company’s written request accompanied by proof
of source of payment to such Subcontractor’s satisfaction, following any
termination of this Contract. 

          17.3      Approved
Vendors 

          Contractor
shall not subcontract the supply of any equipment for a price of in excess of
One Million Dollars ($1,000,000), except to Major Vendors approved by Company,
which approval shall not be arbitrarily or unreasonably withheld. The vendors
appearing on the Approved Vendors List set forth in Exhibit F have been approved
by Company. The Approved Vendors List attached as Exhibit F is preliminary and
may be amended in the following manner. In the case the need arises for
Contractor to add a Major Vendor to the Approved Vendors List, in Contractor’s
opinion, Contractor shall propose such addition to the Company’s Representative
in writing identifying the type of equipment that could be purchased from such
Major Vendor. Within five (5) Days after receipt of Contractor’s proposal, the
Company’s Representative shall have the right to advise Contractor of any such
potential Major Vendors to which it reasonably objects, together with the
reasons for objection. Contractor shall not add any potential Major Vendor to
the list to which the Company’s Representative so reasonably objects. If the
Company’s Representative fails to respond within such five (5) Day period,
Contractor shall have the right to add said potential Major Vendor to the list.

          17.4      Exclusion

          The
provisions of this Article 17 shall not apply to the suppliers of equipment for
the OEC. 

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ARTICLE
18.      SUSPENSION 

          18.1      Right
of Company to Suspend Work 

          Company
may suspend performance of the Work by Contractor hereunder as provided in
Section 8.1.1. 

          18.2      Initial
Payments to Contractor 

          Contractor
shall be entitled to payment for Work that has been completed as of the
effective date of such suspension or concerning which delivery has been
suspended if such suspension has not ceased within ten (10) Days of the
effective date of such suspension within thirty (30) Days of the issuance of an
invoice therefore by Contractor. 

          18.3      Extended
Suspension 

          In
the event that the duration of the suspensions by Company exceed ninety (90)
Days in the aggregate, then Contractor may give notice to the Company’s
Representative requesting permission to proceed. If permission is not granted
within twenty (20) Days of the delivery of such notice, Contractor may terminate
its obligations under the Contract by so notifying Company in writing, and
Contractor shall be entitled to payments as described in Section 19.2.2.

          18.4      Right
of Contractor to Suspend 

          Contractor
may suspend performance of the Work hereunder, in whole or in part, upon ten
(10) Days’ prior written notice to Company of such suspension (i) where
Company has withheld from payment any amount invoiced by Contractor unless
within fifteen (15) Days of the Company’s Representative’s receipt of any such
invoice Company has released such payment or such withheld payment has been
deposited into the joint bank account of Company and Contractor with Bank of
America or other bank acceptable to Company and Contractor or otherwise set
aside for payment to Contractor in a form acceptable to Contractor pending
resolution of the dispute in accordance with the dispute resolution procedures
set forth in Article 14; (ii) the aggregate amount of the Contract Price
payments being withheld by Company, whether or not deposited in the
above-referenced account, equals Two Hundred Thousand Dollars ($200,000); or
(iii) Company breaches or is in default under any financing obligations with any
Financing Parties. Such suspension shall continue for the period specified in
the suspension notice. 

          18.5      Additional
Changes Resulting From Suspensions 

          Provided
that suspension is not necessary by reason of a default on the part of
Contractor that has not been corrected, in the event of suspension pursuant to
this Article 18 the Contract Price shall be increased by the amount equal to the
additional costs reasonably incurred by Contractor as a result of the suspension
(including costs for the purpose of safeguarding, storage, personnel,
Subcontractors or rented equipment costs, demobilization and re-mobilization
costs and increased costs or charges incurred for rescheduling) and the
scheduled dates specified in this Contract, the Schedule, and all other dates
and milestones herein by which Contractor’s 

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responsibilities are measured shall be adjusted to reflect any
  delays resulting from such suspension (including a period equal to the suspension
  period, a period for demobilization and re-mobilization plus any additional
  period required). If Contractor shall, solely in consequence of such suspension,
  be required to perform any obligations under its warranty at a time which exceeds
  the original schedule for warranty obligations that would have been applied
  if there were no suspension, the additional cost of complying with the warranty
  obligations shall be added to the Contract Price.

          18.6      Resumption
of Work 

          Upon
receipt of notice to resume the Work in accordance with this Contract,
Contractor shall examine the Facility and the Work affected by the suspension.
Contractor shall make good any deterioration or defect in or loss of such
Facility or Work that may have occurred during suspension, and costs incurred in
making such examinations and making good and resuming Work shall be added to the
Contract Price, all of which Work shall be at Company’s expense unless such
suspension occurred by reason of a default on the part of Contractor that was
not corrected within the time period specified in Section 19.1. 

ARTICLE
19.      TERMINATION

          19.1      Termination
by Company 

                      
  19.1.1      Company may terminate the Work and
  this Contract after the occurrence of one or more of the following events of
  default and if, following a written notice from Company to cure such event of
  default, said event of default continues to exist for ten (10) Days in the circumstances
  described in (a) below, and thirty (30) Days in the circumstances described
  in (b) below:

  
              (a)      the
      occurrence of an Insolvency Event involving Contractor; or

               (b)      Contractor
      defaults in its performance under a material provision of this Contract;
      provided, however, that Company may not terminate this Contract if, after
      notice of such default and prior to expiration of the thirty (30) Day period
      set forth above, Contractor has commenced and is diligently pursuing efforts
      to cure such breach. 

  

                      
  19.1.2      In the event of termination as provided
  in Section 19.1.1, Company shall compensate Contractor for all payment milestones
  achieved plus a pro rata portion of the payment milestone amounts for payment
  milestones partially achieved as of termination, but Company shall not compensate
  Contractor for any other costs associated with the termination of the Work.
  Upon termination and such payment, Contractor shall deliver to Company possession
  of the Work in its then condition, including Drawings and Specifications and
  contracts with Subcontractors, and construction supplies dedicated solely to
  construction of the Facility.

                   
   19.1.3      In the event of
termination as provided in Section 19.1.1: (a) Company shall have the right, at
its sole option, to assume and become liable for any reasonable written
obligations and commitments that Contractor may have in good faith undertaken
with third parties in connection with the Work, which obligations and
commitments are by Law or by their 

49 

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terms assumable by Company and are not covered by the payments
  made to Contractor under Section 19.1.2; and (b) Contractor shall be entitled
  to draw the full amount of the Letter of Credit as of the date of such event
  of termination. If Company elects to assume any obligation of Contractor as
  described in this Section 19.1.3, then as a condition precedent to Company’s
  compliance with any subsection of this Article 19, Contractor shall execute
  all papers and take all other reasonable steps requested by Company that may
  be required to vest in Company all rights, set-offs, benefits and titles necessary
  to such assumption by Company of such obligations. Company agrees to indemnify
  and hold Contractor harmless against any Liability under any obligations assumed
  by Company pursuant hereto.

          19.2      Termination
by Contractor 

                    
    19.2.1      Contractor may terminate
  the Work and this Contract after the occurrence of one or more of the following
  events of default and if, following a written notice from Contractor to Company
  to cure such event of default, said event of default continues to exist for
  ten (10) Days in the event of a payment default, and thirty (30) Days in the
  event of any of the other defaults described below:

  
              (a)      the
      occurrence of an Insolvency Event involving Company;

              (b)      Company
      defaults in its performance under a material provision of this Contract,
      including the obligation to make any payment hereunder; provided, however,
      that Contractor may not terminate this Contract if, for all cases except
      for the obligation to make or complete any payment, after notice of such
      default and prior to expiration of the thirty (30) Day period set forth
      above, Company has commenced and is diligently pursuing efforts to cure
      such breach; or

              (c)      Company
      breaches or is in default under any financing obligations with any Financing
      Parties and fails to cure such breach or default within the cure or other
      period provided in the applicable agreement or instrument. 

  

                 
       19.2.2      In the
  event of termination as provided in Section 19.2.1, Company shall pay to Contractor
  the greater of (a) that portion of the Contract Price associated with all payment
  milestones achieved, including any amount in the Letter of Credit which amount
  Contractor may draw down, plus a pro rata portion of the payment milestone amounts
  for payment milestones partially achieved up to the date of Contractor’s
  receipt of notice of termination plus any costs attributable to and incurred
  in terminating the Work, including cancellation charges owed to third parties
  and additional compensation in the amount of twenty percent (20%) for the portion
  of the remaining unpaid Contract Price, but in no event shall the total amount
  exceed the Contract Price, or (b) the termination
  amount payable by Company to Contractor as specified in Section 19.4. If all
  such payments are not received within thirty (30) Days of termination, without
  derogation from other remedies available to Contractor, the license granted
  to Company under Section 9.4 shall automatically terminate and be of no further
  effect.

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          19.3      Due
to Force Majeure 

          If
(a) Company wholly suspends the Work on the Facility for six (6) consecutive
months due to the occurrence of a Force Majeure suffered by Company; or (b)
Contractor is prevented from performing the Work for a period of six (6)
consecutive months as a result of the occurrence of a Force Majeure suffered by
Contractor, then the affected Party may terminate this Contract at no cost or
penalty, other than the payment of all accrued payment obligations due and
payable pursuant to this Contract (excluding loss of anticipated profits for the
Work not yet performed by Contractor) upon not less than fifteen (15) Days prior
written notice to the other Party; provided, however, that nothing in this
Section 19.3 shall relieve or excuse either Party from its obligations under
Sections 19.5 and 19.6.

          19.4      Due
to Company’s Convenience 

          If
Company determines it is in its best interest to terminate this Contract for its
convenience, then Company may terminate this Contract at no cost or penalty if
such notice is given prior to Company issuing Contractor a Notice to Proceed
pursuant to Section 4.1. Company may also terminate this Contract for
convenience after issuing Contractor a Notice to Proceed at no cost or penalty,
other than the payment by Company to Contractor of the sum of (a) the greater of
(i) Five Million Dollars ($5,000,000) less payments previously made by Company
to Contractor under this Contract prior to termination or (ii) all accrued
payment obligations due and payable pursuant to this Contract plus a pro rata
portion of the payment milestone amounts for payment milestones partially
achieved up to the date of Contractor’s receipt of notice of termination
(excluding loss of anticipated profits for the Work not yet performed by
Contractor), (b) any costs attributable to and incurred in terminating the Work,
including cancellation charges owed to third parties, and (c) One Million
Dollars ($1,000,000) for miscellaneous expenses and/or loss of anticipated
profit for the Work not yet performed by Contractor. Such payment shall be made
by Company to Contractor not less than fifteen (15) Days after Contractor has
provided Company written notice of the amounts due. Nothing in this Section 19.4
shall relieve or excuse either Party from its obligations under Sections 19.6
and 19.7. It is understood and agreed by the Parties that Contractor shall be
damaged by Company’s termination of this Contract for convenience and that (i)
it would be impracticable or extremely difficult to fix the actual damages
resulting therefrom; (ii) the termination fee described in clause (c) above is
in the nature of liquidated damages, and not a penalty, and is fair and
reasonable; and (iii) such payments represent a reasonable estimate of fair
compensation to Contractor for the losses that may reasonably be anticipated
from such termination. 

          19.5      Exclusive
Remedy 

          Company’s
payment to Contractor pursuant to either Section 19.3 or 19.4, shall be
Contractor’s exclusive remedy against Company in the event of such termination.

          19.6      Actions
Required Following Termination 

          Upon
early termination of the Work, each Party shall be immediately released from any
and all obligations to the other Party (except for the obligation of each Party
to pay any amount then accrued or due hereunder, or otherwise due under this
Article 19), Contractor immediately 

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shall discontinue the Work and remove its personnel and construction
  equipment from the Site, and except for termination due to Company’s default
  Company shall be entitled to take exclusive possession of the Materials and
  all or any part of the Materials delivered or en route to the Site, to the extent
  that Company has paid Contractor all undisputed amounts hereunder then due and
  payable from Company to Contractor. Contractor shall immediately take such steps
  as are reasonably necessary to preserve and protect Work completed and in progress.

          19.7      Termination
and Transfer of Subcontracts and Other Rights 

          Upon
the early termination of the Work pursuant to this Article 19, including
pursuant to Section 19.4, if requested by the Company, Contractor shall make
reasonable efforts to cancel existing contracts with Subcontractors performing
Work at the Site. If early termination of the Work occurs due to the default by
Contractor, Contractor shall also, upon request by Company (a) deliver and
assign to Company, pursuant to a document produced by Contractor and reasonably
acceptable to Company, any and all Subcontracts, purchase orders, bonds and
options made by Contractor for Work to be performed at the Site (but in no event
shall Company be liable for any action or default of Contractor occurring prior
to such delivery and assignment (except to the extent such action or default was
caused by Company) and Contractor shall defend and hold harmless Company against
any such liability); and (b) deliver to Company originals of all Subcontracts
and all papers and documents relating to Contractor Permits, orders placed,
bills and invoices, lien releases related to the Work. All deliveries hereunder
shall be made free and clear of any liens, security interests or encumbrances,
except as may arise hereunder, be created by Company or may arise in favor of
Contractor due to non-payment by Company. Except as provided herein, no action
taken by Company or Contractor after the termination of the Work and/or this
Contract shall prejudice any other rights or remedies of Company or Contractor
provided by Law, this Contract or otherwise upon such termination. 

          19.8      Surviving
Obligations 

          Termination
or expiration of this Contract (a) shall not relieve either Party of its
obligations with respect to the confidentiality of the other Party’s information
as set forth in Article 21; (b) shall not relieve either Party of any
obligations hereunder which expressly or by implication survive termination
hereof; and (c) except as otherwise provided in any provision of this Contract
expressly limiting the liability of either Party, shall not relieve either
Company or Contractor of any obligations or liabilities for loss or damage to
the other Party arising out of or caused by acts or omissions of such Party
prior to the effectiveness of such termination or arising out of such
termination, and shall not relieve Contractor of its obligations as to portions
of the Work or other services already performed or of obligations assumed by
Contractor prior to the date of termination. This Section 19.8 shall survive the
termination or expiration of this Contract. 

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ARTICLE
20.      INTENTIONALLY OMITTED

ARTICLE
21.      CONFIDENTIALITY

          21.1      Both
Parties to Keep Information Confidential 

          Company
and Contractor shall keep confidential and shall not, without the written
consent of the other Party, divulge to any third party Information of the other
Party. 

          21.2      Use
of Information 

          Subject
always to Sections 9.1.1, 9.4 and 21.1, Company shall not use any Information of
Contractor for any purpose other than the operation and maintenance of the
Facility. Similarly, Contractor shall not use any Information received from
Company for any purpose other than the design, procurement of the Facility,
construction or such other Work as required for the performance of the
Contract. 

          21.3      Exclusions

          The
obligations of any Party under Sections 21.1 and 21.2 shall not apply to
Information of the other Party that: 

                    (a)      now
or hereafter enters the public domain through no fault of the receiving
Party; 

                    (b)      can
be proved to have been in the possession of the receiving Party at the time of
disclosure and which was not previously obtained, directly or indirectly, from
the other Party hereto; 

                    (c)      otherwise
lawfully becomes available to the receiving Party from a third party under no
obligation of confidentiality; or 

                    (d)      the
receiving Party is required by law or any relevant stock exchange or other
competent regulatory authority to publish or otherwise disclose but only to the
extent that it is necessary to publish or disclose the same. 

          21.4      Company
Not to Remove Logos 

          Company
shall not remove or detach from the Work or any part thereof any of Contractor’s
trademarks, designs, names, logos or markings. 

ARTICLE
22.      NOTICES 

               22.1      All
notices and other communications required or permitted by this Contract shall be
in writing and delivered by hand (including by messenger or courier) or by
airmail post or special courier or by telecopier or facsimile (receipt
confirmed), at the addresses or numbers set forth below or at such other
addresses or numbers as the Party receiving notice shall 

53 

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subsequently designate by way of replacement by giving ten (10)
  Days’ written notice to the other Party pursuant to this Section:

	 	If to Company: 	US Geothermal, Inc. 
	 	  	1509 Tyrell Lane, Suite B 
	 	  	Boise, Idaho 83706 
	 	  	Attention: Daniel Kunz 
	 	  	Fax: (208) 424-1030 
	 	  	  
	 	with a copy for 	  
	 	any notice of 	  
	 	claim or dispute 	  
	 	to: 	Stoel Rives LLP 
	 	  	600 University Street 
	 	  	Seattle, WA 98101 
	 	  	Attention: John F. Pierce 
	 	  	Fax: (206) 386-5700 
	 	  	  
	 	If to Contractor: 	Ormat Nevada, Inc. 
	 	  	980 Greg Street 
	 	  	Sparks, NV 89431-6039 
	 	  	Attention: President 
	 	  	Fax: 702-356-9039 
	 	  	  
	 	with a copy for 	  
	 	any notice of 	  
	 	claim or dispute 	  
	 	to: 	Perkins Coie LLP 
	 	  	1201 Third Avenue, 40th Floor 
	 	  	Seattle, WA 98101-3099 
	 	  	Attention: Robert E. Giles, Esq. 
	 	  	Fax: 206-583-8500 

          22.2      Any
notice sent by telecopier or facsimile transmission shall be confirmed within
two (2) Days after dispatch by notice sent by airmail or special courier.

          22.3      Any
notice or confirmation of notice sent by airmail or special courier shall be
deemed (in the absence of evidence of earlier receipt) to have been delivered
ten (10) Days after dispatch and in proving the fact of dispatch, it shall be
sufficient to show that the envelope containing such notice was properly
addressed, stamped and conveyed to the postal authorities or courier service for
transmission by airmail or special courier. 

          22.4      Any
notice delivered by hand, facsimile, telecopier or telegram shall be deemed to
have been delivered on the date of its dispatch. 

          22.5      In
this Article 22, notices shall include any approvals, consents, instructions,
orders, and certificates to be given under the Contract. 

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ARTICLE
23.      MISCELLANEOUS

          23.1      Governing
Law 

          This
Contract and the Exhibits hereto shall in all respects be governed by and
construed under the laws of the State of Idaho, without regard to the principles
of conflict of laws. The selection of Idaho law shall conclusively be presumed
to be a significant, material and reasonable relationship with the State of
Idaho and shall be enforced whether or not there are other relationships with
the State of Idaho. Any dispute arising under or related to this Agreement shall
be resolved by a court of competent jurisdiction in King County, Washington and
each party hereby irrevocably and unconditionally submits to such exclusive
jurisdiction and venue. 

          23.2      Construction

          This
Contract and any documents or instruments delivered pursuant hereto shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Contract and such other
documents and instruments shall be construed as though the parties participated
equally in the drafting of the same. Consequently, the parties acknowledge and
agree that any rule of construction that a document is to be construed against
the drafting party shall not be applicable to this Contract or such other
documents or instruments. 

          23.3      Nature
of Agreement 

          Contractor
and its Subcontractors shall be independent contractors with respect to the
Work, irrespective of whether such Subcontractors are selected or approved by
Company, and neither Contractor nor its Subcontractors, nor the employees of
either, shall be deemed to be the servants, employees, representatives or agents
of Company. This Contract does not create any agency, partnership, joint venture
or other joint relationship between Company and Contractor. Nothing contained in
this Contract shall be construed (a) to authorize either Party hereto to act as
agent for the other Party or to permit a Party hereto to undertake any contract
or other obligation for the other Party or (b) to create any agency,
partnership, joint venture or other joint relationship between the Parties.

          23.4      Severability

          In
the event that any of the provisions or portions, or applications thereof, of
this Contract become invalid, illegal or unenforceable in any respect under the
Law of any jurisdiction, Company and Contractor shall negotiate an equitable
adjustment in the provisions of this Contract with a view toward effecting the
purpose of this Contract, and the validity and enforceability of the remaining
provisions or portions, or applications thereof, shall not be affected
thereby. 

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          23.5      Amendments
and Waivers 

          This
Contract may not be changed or amended orally, and no waiver hereunder may be
oral. Any change or amendment or any waiver of any term or provision of, or
consent granted under, this Contract shall only be effective if given in writing
and signed by the waiving or consenting Party (or both Parties in the case of a
change or amendment). 

          23.6      Survival

          The
provisions of Sections 2.4, 3.3, 5, 9.1.1, 9.4, 9.5, 11.2, 11.3, 11.4, and all
of Articles 5, 14, 15, 19, 21, 22 and 23 shall survive termination or expiration
of the Contract for whatever reason. 

          23.7      Counterparts

          This
Contract may be executed in separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute but one and the same
instrument. 

          23.8      Entire
Contract 

          This
Contract and the Exhibits sets forth the full and complete understanding of the
Parties relating to the subject matter hereof as of the Effective Date and
supersedes any and all negotiations, agreements, understandings and
representations made or dated prior thereto with respect to such subject matter.
Contractor shall not be bound by, and specifically objects to, any term,
condition or other provision that is different from or in addition to the
provisions of this Contract (whether or not it would materially alter this
Contract), which is proffered by Company in any purchase order, receipt,
acceptance, confirmation, correspondence or otherwise, unless Contractor
specifically agrees to such provision in a written instrument signed by
Contractor. 

          23.9      Waivers

          Subject
to Section 23.5, no relaxation, forbearance, delay, indulgence or failure by
either Party to enforce any of the terms, covenants, conditions or other
provisions of this Contract at any time shall in any way prejudice, affect,
limit, modify or waive that Party’s right thereafter to enforce or compel strict
compliance with every term, covenant, condition or other provision hereof, any
course of dealing or custom of the trade notwithstanding. No delay or omission
on the part of a Party shall operate as a waiver thereof, nor shall any waiver
by either Party of any breach of the Contract operate as a waiver of any
subsequent or continuing breach of the Contract. 

          23.10      Counterparts;
Transmitted Copies 

          This
Contract may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument. To expedite the process of entering into this Contract, the
parties acknowledge that Transmitted Copies of this Contract shall be equivalent
to original documents until such time (if any) as original documents are
completely executed and delivered. “Transmitted Copies” mean copies 

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that are reproduced or transmitted via facsimile or another
process of complete and accurate reproduction and transmission. 

          23.11      Further
Assurances 

          Company
and Contractor shall use reasonable endeavors to implement the provisions of
this Contract, and for such purpose each, at the request and expense of the
other, shall, without further consideration, promptly execute and deliver or
cause to be executed and delivered to the other such, consents, documents or
other instruments in addition to those required by this Contract as the other
may reasonably require to implement any provision of this Contract. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

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         IN WITNESS
  WHEREOF, the Parties have caused this Contract to be executed on the date
  first above written.

	Company: 	 	Contractor: 
	 	 	 	 	 
	US Geothermal, Inc. 	 	Ormat Nevada, Inc. 
	 	 	 	 	 
	By: 	  	 	By: 	  
	 	 	 	 	 
	Name: 	Daniel
      Kunz 	 	Name: 	Hezy Ram 
	 	 	 	 	 
	Title: 	President and CEO 	 	Title: 	Executive Vice President
    

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EXHIBIT A 

SCOPE OF WORK ALLOCATION AND INTERFACE POINTS 

1.      Scope
of Work Between Contractor and Company for Facility Construction 

          The
allocation and division of the work to be performed by Company and Contractor is
defined below for the Facility and the remainder of the Project. As used in this
Exhibit A, references to “Power Plant” shall have the same meaning as Facility
and “Geothermal Fluid” shall have the meaning ascribed to that term in Exhibit
D. All technical work is as defined in Exhibit C. The list below does not
replace Exhibit C, but simply confirms and clarifies specific areas of
conformance with that document. 

  	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	  	  	  
	1   	POWER PLANT PROJECT & CONSTRUCTION
        MANAGEMENT 	    	    

	  	Free Site access and main access road 	  	Company 
	  	On-Site Overall Site Management 	Lot 	Contractor 
	  	All Trade Labor & Construction Supervision
      	Lot 	Contractor 
	  	Project and Construction Scheduling 	Lot 	Contractor 
	  	Supervision During Preparation Of the Site Area
      	Lot 	Contractor 
	    	Supervision of Initial Start-Up And
        Power Plant Commissioning 	Lot   	Contractor   

	  	Operator Training (Power Plant and Control System)
      	Lot 	Contractor 
	  	  	  	  
	2   	DESIGN, ENGINEERING & DOCUMENTATION
      	    	    

	  	  	  	  
	  	Heat source and cooling water characteristics
        and 

        utilization constraints 	  	Company 
	  	Drawing Schedule 	Lot 	Contractor 
	  	Site General Arrangement 	Lot 	Contractor 
	  	Equipment General Arrangement Drawings 	Lot 	Contractor 
	  	Foundation Plan & Details 	Lot 	Contractor 
	  	Electrical One Line Diagrams 	Lot 	Contractor 
	  	Equipment Schematic & Wiring Diagrams 	Lot 	Contractor 
	  	Lighting Plan 	Lot 	Contractor 
	  	MCC & Electrical Equipment Layout Drawings
      	Lot 	Contractor 
	  	Piping & Instrument Diagrams 	Lot 	Contractor 
	    	Control System Programming (Power Plant,
        Gathering and Injection System, and other Project facilities) 	Lot   	Contractor   

	    	Well Head Control System Equipment
        and Control Strategies 	Lot   	Company   

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  	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	Geotechnical Report 	Lot 	Company 
	  	Utility interconnection study 	  	Company 
	  	Mechanical and electrical detailed design, Power
        Plant 	  	Contractor 
	  	Mechanical and electrical detailed design, gathering
        

        system and well pad 	  	Company 
	  	Water treatment system design 	  	Company 
	      	Mechanical and electrical design for
        raw water supply and blow-down system outside the Power Plant fence line
      	      	Company     

	  	  	  	  
	3 	CIVIL WORKS 	  	  
	  	Site Final Grading, including runoff containment
      	Lot 	Contractor 
	  	Foundations and Anchor Bolts (inside Power Plant)
      	Lot 	Contractor 
	  	Cooling Tower Basin 	1 	Contractor 
	    	Containment for transformers, pentane
        storage, diesel tanks, etc. (inside Power Plant) 	Lot   	Contractor   

	      	Preparation and maintenance of Access
        road, well pads, roads to wells and any other outside of the Power Plant
        area 	      	Company     

	    	Gravel for Power Plant Site Area (Crushed
        Stone Surface) 	Lot   	Contractor   

	  	Fencing Around Power Plant Boundaries 	Lot 	Contractor 
	  	Final Grouting of Equipment, Skids, Etc. 	Lot 	Contractor 
	    	Rubbish storage area (excluding Contractor
        Hazardous Materials) 	    	Company   

	      	Removal and final disposal of Contractor
        rubbish and debris, and Contractor Hazardous Materials from the Facility.
      	      	Contractor     

	  	  	  	  
	4   	STRUCTURAL STEEL & PLATFORMS
        (Inside Plant fence line) 	    	    

	  	Structural Steel And Platforms 	Lot 	Contractor 
	  	Pipe Supports 	Lot 	Contractor 
	  	Conduit & Cable Tray Supports 	Lot 	Contractor 
	  	All Other Structural Steel 	Lot 	Contractor 
	  	  	  	  
	5 	ORMAT ENERGY CONVERTER 	  	  
	  	Turbine – Generator Set 	Lot 	Contractor 
	  	Turbine – Generator oil system 	  	  
	  	Turbine and Generator Controls and Protection
      	Lot 	Contractor 
	  	Electrical system 	  	Contractor 
	  	Vaporizer and pre-heaters. 	  	Contractor 
	  	Condenser (with 316L tubes) 	Lot 	Contractor 

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  	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	Working fluid pumps, piping, and instrumentation
      	Lot 	Contractor 
	  	Pentane Vapor Recovery system 	Lot 	Contractor 
	  	Working fluid (Pentane) initial fill up and allowance
        for purging and losses during startup. 	  	Contractor 
	6 	Injection Pumps 	  	  
	  	Foundations 	  	Contractor 
	  	4160V Electrical Supply and Equipment 	  	Contractor 
	  	Power Metering 	  	Contractor 
	  	Piping and Valves 	  	Contractor 
	  	Instrumentation and control 	  	Contractor 
	  	Injection pump specification 	  	Company 
	  	Purchase of pumps to specification 	  	Contractor 
	  	  	  	  
	7     	RAW WATER SUPPLY 

        (For fire water, construction, cooling water & sanitary use)
      	      	      

	      	Single water supply line to the Power
        Plant fence for all uses (service, pump seals, sanitation, CT makeup,
        etc.) 	Lot     	Company     

	    	Pumps and piping as required to deliver
        water from fence to uses within the Power Plant. 	    	Contractor   

	  	Fittings, Valves, And Hardware 	Lot 	Contractor 
	  	Interconnect Cabling 	Lot 	Contractor 
	  	  	  	  
	8 	COOLING WATER SYSTEM 	  	  
	  	FRP Cooling Tower 	Lot 	Contractor 
	  	Cooling Tower water basin and pump pit 	Lot 	Contractor 
	  	Cooling water supply and return piping 	Lot 	Contractor 
	  	Cooling water circulating water pumps 	Lot 	Contractor 
	  	  	  	  
	9 	PENTANE STORAGE AND FEED SYSTEM 	  	  
	    	Storage tank system comprising Pumps,
        Piping, Valves, instrumentation, and all other ancillary items 	Lot   	Contractor   

	  	Mechanical installation 	  	Contractor 
	  	  	  	  
	10 	FIRE FIGHTING SYSTEM 	  	  
	  	Diesel Firewater Pumps 	1 	Contractor 
	  	Electric Jockey Pump 	1 	Contractor 
	    	Freeze protection and/or shed for fire
        water system and fire pumps 	1   	Contractor   

	  	Underground Fire Loop, Hydrants W/ Hose Reels
      	Lot 	Contractor 
	  	Interconnect Cabling, Testing and Checkout 	Lot 	Contractor 
	  	Fire annunciation and alarm system 	Lot 	Contractor 

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  	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	Mechanical installation 	  	Contractor 
	  	Raw Water Tank with supply line to Power Plant
      	1 	Company 
	  	  	  	  
	11 	WASTE WATER SYSTEM 	  	  
	  	Blow Down Water Disposal (from condenser discharge
        to interface point) 	1 	Company 
	  	Piping, Fittings, Valves, flowmeter, and Hardware
      	Lot 	Contractor 
	  	Mechanical installation 	Lot 	Contractor 
	    	Interconnect Cabling Installation,
        Testing and Checkout 	Lot   	Contractor   

	  	Septic system for toilets and sinks 	1 	Contractor 
	  	  	  	  
	12 	WATER TREATMENT SYSTEM 	  	  
	  	Water Analysis and Treatment Design 	Lot 	Company 
	  	Water treatment system ( equipment and materials)
      	  	Company 
	  	Water treatment installation 	  	Contractor 
	    	Chemicals for initial fill up, commissioning
        and operation 	    	Company   

	  	Slab and foundations for the water treatment
      	  	Contractor 
	  	Mechanical and electrical Installation and connection
      	  	Contractor 
	  	  	  	  
	13 	COMPRESSED AIR SYSTEM 	  	  
	  	Compressor Package – Duplex Compressors
      	1 	Contractor 
	    	Compressed Air Piping, Fittings, Valves
        and Hardware 	Lot   	Contractor   

	  	Instrumentation (Pressure Transmitter And Indicator)
      	Lot 	Contractor 
	  	Mechanical installation 	Lot 	Contractor 
	  	Interconnect Cabling Installation, Testing and
      	Lot 	Contractor 
	  	Checkout 	  	  
	  	  	  	  
	14 	COMMUNICATION SYSTEMS 	  	  
	      	Supervisory Control System – Power
        Plant hardware and interconnection capability for gathering and injection
        system 	Lot     	Contractor     

	    	Programming of control system –
        Power Plant and gathering and injection system 	Lot   	Contractor   

	    	Telephone Connections from fence-line
        to PBX panel and distribution to control system and control room 	Lot   	Contractor   

	  	Telecom hardware inside PBX panel 	Lot 	Company 
	  	Construction telephone service for Contractor
      	Lot 	Contractor 
	  	  	  	  
	15 	BUILDINGS 	  	  
	  	Control Room (Operator Station) with closets
        and 	1 	Contractor 

62 

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	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	toilet facility 	  	  
	  	Off-site offices, warehouse, and maintenance
      building 	Lot 	Company 
	  	Electrical Building 	1 	Contractor 
	  	Mechanical Equipment Building 	1 	Contractor 
	  	Chemical Treatment area shed 	1 	Contractor 
	  	  	  	  
	16   	PLANT LIGHTING, LIGHTNING and
      GROUNDING 	    	    

	  	Site Lighting Distribution Panel 	1 	Contractor 
	  	Outside Lighting Fixtures & Control Sensors
    	Lot 	Contractor 
	  	Conduit And Wires 	Lot 	Contractor 
	  	Site Ground Grid, Conductors, Electrodes, Etc.
    	  	  
	  	Lightning Protection 	  	  
	  	  	  	  
	17 	ELECTRICAL SYSTEMS 	  	  
	  	12.47 / 34.5kV Main Step-Up Transformer 	1 	Contractor 
	  	12.47kV Generator Circuit Breaker 	Lot 	Contractor 
	  	12.47k V / 4160 V Aux Transformer (if required)
    	1 	Contractor 
	  	12.47kV / 480 V Service Transformer 	Lot 	Contractor 
	  	12.47 kV Power And Control Cabling Complete 	Lot 	Contractor 
	    	4160 And 480 V Power And control
      Cabling Complete within Power Plant scope 	Lot   	Contractor   

	    	Motor Control Centers And
      Distribution Panels for Power Plant scope with spares, 	Lot   	Contractor   

	  	Power, Control and Instrument Cabling Complete
    	Lot 	Contractor 
	  	Emergency Diesel Generator 	1 	Contractor 
	    	24 and 125 VDC System, Batteries,
      Cabling and Charges 	Lot   	Contractor   

	    	Conduit, Cable Trays, Terminations,
      Supports and Structures 	Lot   	Contractor   

	  	Electrical Testing and Checkout 	Lot 	Contractor 
	  	Freeze protection systems 	  	  
	  	  	  	  
	18   	34.5 KV EQUIPMENT AND
      TRANSMISSION INTERCONNECT 	    	    

	    	34.5 kV Breakers to Well Pump
      Upstream of plant output meter 	1   	Contractor   

	    	34.5 kV Breakers to Well Pump
      Downstream of plant output meter and transmission line breaker 	1   	Contractor   

	  	34.5 kV revenue metering and protection
      equipment 	Lot 	Contractor 
	  	34.5 kV Breaker to transmission system (line
      breaker) 	1 	Contractor 
	    	Dead-end poles for 34.5 kV lines to
      pumps and transmission line with disconnects 	Lot   	Company   

63 

EXECUTION COPY 

	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	    	Underground or overhead 34.5 kV cable
      from breakers to 34.5kV poles 	Lot   	Contractor   

	  	34.5 kV Disconnect Switch in Switchgear 	Lot 	Contractor 
	  	Surge Arresters 	Lot 	Contractor 
	  	Protective Relaying And Control (Inc.
      Breaker/Xfmr) 	Lot 	Contractor 
	  	Cable, Terminals, And Misc. Hardware 	Lot 	Contractor 
	  	Utility interconnection 	  	Company 
	  	Transmission line 	Lot 	Company 
	  	  	  	  
	19 	WELLS, FIELD GATHERING and WELL HEAD 	  	  
	  	SYSTEM 	  	  
	  	Production, re-injection and makeup well
      drilling 	  	Company 
	  	Well pad equipment including pump and
      auxiliaries 	  	Company 
	  	Production pipe lines and equipment 	  	Company 
	  	Injection pipe line and equipment 	  	Company 
	  	All electrical equipment in the well pads 	  	Company 
	  	Well pad controllers 	  	Company 
	    	Communication interface connection to
      well-pads in PLC/Communication hub at Power Plant fence-line 	9   	Contractor   

	    	Transmission line or cabling
      (electrical and control) to the well pads (well pumps) 	    	Company   

	  	  	  	  
	20 	MECHANICAL WORK – DETAILS 	  	  
	  	  	  	  
	  	Off Loading and Protection Of Equipment At Site
    	Lot 	Contractor 
	  	Setting And Leveling of Equipment On
      Foundations 	Lot 	Contractor 
	    	Installation And Testing of
      geothermal Piping Systems 	Lot   	Contractor   

	    	Installation And Testing of cooling
      water Piping Systems 	    	Contractor   

	  	Installation And Testing of auxiliary Piping
      Systems 	  	Contractor 
	  	  	  	  
	21 	MISCELLANEOUS 	  	  
	  	Operations & Maintenance Manuals 	Lot 	Contractor 
	    	Operators for plant start up,
      commissioning and operation 	    	Company   

	  	Transportation to the site of Contractor’s
      equipment 	  	Contractor 
	    	Replacement of Spares And Consumables
      Used in Installation And Startup 	Lot   	Contractor   

	  	Custom clearance and import duties 	  	Contractor 
	  	State and local taxes, duties and levies 	  	Company 
	  	Geothermal fluid in Design Conditions 	  	Company 

64 

EXECUTION COPY 

	ITEM 	ACTIVITY or EQUIPMENT DESCRIPTION 	QTY 	Supplied By 
	  	Raw water at Design Condition 	  	Company 
	  	Utility hook up 	  	Company 
	  	Plant Performance Test 	  	Contractor 
	  	OEC special tools 	  	Contractor 
	      	Spare Parts Initial Inventory And
      Special Maintenance Equipment (Optional Item Not Included In This
      Contract) 	Lot     	Company     

65 

EXECUTION COPY 

2.      Interface
Points Between Contractor and Company for Facility Construction 

	Description 	Interface 	Conditions 	Comment 
	Geothermal Fluid to Facility Power Plant  
        	Flange downstream of block valve into
      plant, on or adjacent to the Plant fence line. 	Per H&MB Diagram for “Guaranteed
      Design Point”   	Company to supply bypass pipeline
      from production line to injection line 

	Geothermal Fluid to Injection Wells    
            	Flange upstream of block valve out of
      Power Plant, but downstream of brine injection pumps, on or adjacent to
      the Plant fence line. 	Minimum discharge pressure = 60 psi
      above power plant inlet pressure. Maximum = 350 psig     	Pressures per the requirements of
      Paragraph 3.6.2 of the Design Criteria of Exhibit C.     

	Raw Water into Power Plant     	Pipe end at fence-line at depth below
      frost line   	1000 gpm at 13 psig    
        	Single supply line for cooling water
      make- up, sanitary water, and service water 

	Cooling Tower blowdown     	Pipe end at fence-line at depth below
      frost line   	Discharge from cooling water system
      downstream of Condensers 	        

	Power to Utility     	Pole-mounted disconnect inside Power
      Plant fence 	34.5 kV     	Company supplies pole and disconnect
        

	Power to wells (2 feeds)   	Pole-mounted disconnect inside Power
      Plant fence 	34.5 kV     	Company supplies pole and disconnect
        

	HMI at control room inside Facility Power Plant
      fence   	2 operator interface at Power Plant
      control room   	        	        

	HMI at nearby US Geo building    
          	Communications cable and location by
      Company HMI Computer and programming by Contractor 	         
        	         
        

	Production and Injection well controls  
          	Communication Hub Port(s) located in
      the Control Room     	Ethernet        
    	Communication protocol and equipment
      manufacturer to be same as ORMAT 

	Communication Cables to off-site 	Communication Hub in Control Room 	Company provides cables 	Contractor provides pull-box at base
      of 

66 

EXECUTION COPY 

	Description 	Interface 	Conditions 	Comment 
	control sites     	      	      	one 34.5 kV power pole interface with
      conduit to hub 

	Telephone and Internet   	Junction box inside fence   	      	Plenty of spare capacity into and out
      of junction box 

	Access and well field roads 	Fence-line   	    	    

67 

EXHIBIT B 
CONTRACT PRICE
and
PROJECT MILESTONE AND PAYMENT SCHEDULE 
Raft River EPC Contract
between US Geothermal and Ormat

	A. 	Contract Price 	 
    
	  	The Contract Price for the Facility is 	$20,200,000 
	  	  	(twenty million, two hundred thousand US
      dollars) 
	  	  	  
	B. 	Milestone Payment 	  
		Schedule 	 
    

  	# 

          	DESCRIPTION
      
(notes 1 - 5) 	Month 
(notes 7-9)
    	Documentation for Payments 

        (notes 6) 	% of EPC Contract Price
        
      

	  

          
  	  
  
  	  
  
  	  

          
  	Change in 
Committed 
Cost 	Minimum 
cash 
payment 	L/C fund 
amount 
 
  

	1 	Sign Contract 	n/a 	  	0% 	0% 	0% 
	2 	Notice to Proceed 	0.0 	• Contractor's invoice 	15% 	7% 	8% 
	3 

          
  	provide geotechnical and
      
topographical study (by Company) 
  	2.0 
  
  	  

          
  	  
  
  	  
  
  	0% 
  
  

	4 

          
  
  	issue purchase order for heat
      
exchangers materials or issue 
purchase order or subcontract for
      heat 
exchangers (subcontracted) 	2.0 
  
  
 
    	• Contractor's invoice 

        • P.O. for
      heat exchanger tubes or P.O. 
or Subcontract for heat exchanger
      
Subcontractor 	15% 
  
 
      
  	5% 
  
  
 
    	10% 
  
 
      
  

	5 	finalize oec components specification 	2.0 	  	  	  	0% 
	6 

          
  	complete conceptual design (p&id;
      
sld; layout; main equipment 
specification) 	2.0 
  
  	• Contractor's invoice 

        •
      Submittal to Company of 
conceptual design package 	2% 
  
  	2% 
  
  	0% 
  
  

	7 

          
  
 
      
  	provide access to the site and any
      
other required land, easements and 
rights of way, including access
      roads 
and lay down area for start of 
construction (by Company) 	2.5 
  
  
 
      
  	  

          
 
      
  
  	  
  
 
      
  
  	  
  
 
      
  
  	0% 
  
  
 
      
  

	8 

          	issue purchase order for step up
      
transformer 	3.0 
  	• P.O. for step up transformer 

        •
      Contractor's invoice 	4% 
  	2% 
  	2% 
  

	9 

          	issue purchase order for generator
      
  	3.0 
  	• Contractor's invoice 

        • P.O. for
      OEC Generator 	4% 
  	3% 
  	1% 
  

	10 

          	complete control configuration design
      
  	3.0 
  	  

          	1% 
  	1% 
  	0% 
  

	11 

          
  
  	Issue PO for detailed civil
      
engineering 
  
  	4.0 
  
  
 
    	• Contractor's invoice 

        •
      P.O/Engineering agreement for 
Civil Engineeringcivil engineering and
      
Designdesign 	1% 
  
  
 
    	1% 
  
  
 
    	0% 
  
  
 
    

	12 

          	issue purchase order for cooling
      
tower 	4.0 
  	• P.O. for Cooling Tower 

        •
      Contractor's invoice 	4% 
  	2% 
  	2% 
  

	13 

          
  	provide all construction-related
      
Company-obtained permits (by 
Company) 	4.0 
  
  	  

          
  	  
  
  	  
  
  	0% 
  
  

 

    68

  

  	# 

          	DESCRIPTION 

        (notes 1 - 5) 	Month
      
(notes 7-9) 	Documentation for Payments
      
(notes 6) 	% of EPC
      Contract Price   
      

	      	      	     
	      	Change in Committed
      Cost 	Minimum 
cash
      
payment 	L/C fund amount
        

	 14 

          	issue po's for cooling water circ 

        pumps 	4.0 
  	• Contractor's invoice 
• P.O. for
      cooling water pumps 	4% 
  	2% 
  	2% 
  

	 15 

          
  	issue PO for detailed electrical 

        engineering 
  	6.0 
 
      
  	• Contractor's invoice 
•
      P.O./Engineering Agreement for 
Electrical Engineeringand Design 	1% 
 
      
  	1% 
 
      
  	0% 
 
      
  

	 16 

          	commence fabrication of heat 

        exchangers 	6.0 
  	  
  	2% 
  	2% 
  	0% 
  

	 17 

         
      
   	Award Civil Contract 

          
 	6.0 
 
    
 	• Contractor's invoice 
•
      P.O./SubcontractConstruction 
 Contract for civil
      works    	1% 
 
    
 	1% 
 
    
 	0% 
 
    
 

	 18 	complete civil detailed design 	7.0 	  	2% 	1% 	1% 
	 19 	complete mechanical detailed design 	7.0 	  	1% 	1% 	0% 
	 20 

          
  	Award Mech Constr Contract 

          
  	7.0 
 
      
  	• Contractor's invoice 
•
      P.O./Subcontractconstruction 
contract. for mechanical works 	1% 
 
      
  	2% 
 
      
  	-1% 
 
      
  

	 21 

          
  	Award Electr Constr Contract 

          
  	7.0 
 
      
  	• Contractor's invoice 
•
      P.O./Construction contract for 
electrical works 	1% 
 
      
  	1% 
 
      
  	0% 
 
      
  

	 22 	civil contractor mobilization to site 	7.0 	• Contractor's invoice 	1% 	1% 	0% 
	 23 

          	construction power available (by 

        Company) 	7.0 
  	  
  	  
  	  
  	0% 
  

	 24 	commence foundation work 	8.0 	  	  	2% 	-2% 
	 25 	Vaporizer ready for shipment 	10.0 	  	2% 	2% 	0% 
	 26 

          	Cooling Tower Foundations complete 

          	10.0 
  	• Contractor's invoice 
  	2% 
  	2% 
  	0% 
  

	 27 

          	Condenser ready for shipment 

          	10.0 
  	• Contractor's invoice 
• Packing
      List 	3% 
  	3% 
  	0% 
  

	 28 	OEC generator ready for shipment 	10.0 	  	2% 	3% 	-1% 
	 29 

          	Cooling Tower Equipment Ready for 

        Shipment 	10.0 
  	• Contractor's invoice 
• Packing
      List 	3% 
  	3% 
  	0% 
  

	 30 

          	last oec components ready for 

        shipment 	11.0 
  	• Contractor's invoice 
• Packing
      List 	2% 
  	2% 
  	0% 
  

	 31 	OEC Foundations complete 	11.0 	• Contractor's invoice 	1% 	2% 	-1% 
	 32 

          	Receive majority OEC equipment on 

        site 	11.0 
  	  
  	1% 
  	3% 
  	-2% 
  

	 33 

          	Cooling tower pumps ready for 

        shipment 	11.0 
  	  
  	2% 
  	3% 
  	-1% 
  

	 34 	commence electrical work 	11.0 	• Contractor's invoice 	0% 	2% 	-2% 
	 35 	Provide operators ( By Company) 	11.0 	  	0% 	0% 	0% 
	 36 	commence erection oec unit 	12.0 	• Contractor's invoice 	0% 	3% 	-3% 
	 37 	Receive final OEC equipment on site 	12.0 	  	2% 	5% 	-3% 
	 38 

          	geothermal fluid available to Facility
        

        (by Company) 	12.0 
  	  
  	  
  	  
  	0% 
  

  69

  	# 

          	DESCRIPTION
      
(notes 1 - 5) 	Month
      
(notes 7-9) 	Documentation for Payments 

        (notes 6) 	% of EPC
      Contract Price   
      

	  

          
  	  
 
      
  	  
 
      
  	  

          
  	Change in
      
Committed 
Cost 	Minimum 
cash
      
payment 	L/C fund 
amount
      
  

	 39 

         
      
  	34.5 kV utility
      interconnection 
available for interconnect to Facility 
(by
      Company) 	12.0 
 
      
  	  

          
  	  
 
      
  	  
 
      
  	0% 
 
      
  

	 40 	Complete erection of cooling
      tower 	13.0 	  	       
         2% 	3% 	-1% 
	 41 	energize power plant 	15.0 	  	       
         1% 	3% 	-2% 
	 42 	complete erection of the oec unit
    	16.0 	  	       
         4% 	9% 	-5% 
	 43 

          	First admission of
      brine into the unit 
  	16.5 
  	  

          	  
  	  
  	  
 

	 44 

         
      
       
  
  
 
    	substantial completion
      
  
 
  
  
  	17.0 
 
      
 
  
  
  	• Contractor's invoice 

        •
      Certificate of Substantial 
  Completion Certificate
•
      Performance Tests readiness 
notice provided under Section 6.3 of the
      
Contract 	     
         8% 
  
 
  
  
  	10% 
 
      
 
  
  
  	-2% 
 
      
 
  
  
  

	 45 	Commence performance tests 	17.5 	    	  	  	  
	 46 

          
  	guaranteed final
      completion date 
  
  	19.0 
 
      
  	• Contractor's invoice 

        •
      Certificate of Final Completion 
Certificate 	     
         5% 
  
  	5% 
 
      
  	0% 
 
      
  

  70

EXECUTION COPY 

EXHIBIT C 

POWER PLANT DESIGN CRITERIA, 
DRAWINGS AND SPECIFICATIONS

 

 

This and succeeding pages of this exhibit are redacted from
this document due to the confidential nature of the data and information
contained therein. This exhibit has been provided to the Securities and Exchange
Commission under separate cover in accordance with Rule 24b-2. 

 

 

71

EXECUTION COPY 

EXHIBIT D 

PERFORMANCE TEST AND CORRECTION CURVES

 

 

This and succeeding pages of this exhibit are redacted from
this document due to the confidential nature of the data and information
contained therein. This exhibit has been provided to the Securities and Exchange
Commission under separate cover in accordance with Rule 24b-2. 

 

 

72

EXECUTION COPY 

EXHIBIT E 

WARRANTY CLAIM PROCEDURES 

          1.      Where
Company has agreed in accordance with the terms of the Contract to take
corrective action, and upon notifying Contractor as set forth in Section 10.3.1
of the Contract, Company may undertake corrective action, but Contractor
reserves the right to investigate and determine the eligibility of such warranty
claim. 

          2.      Company
shall notify Contractor in accordance with Section 10.3.1 of the Contract and
provide documents per paragraph 3 below together with a written cost estimate of
the corrective action required. As soon as reasonably possible following the
receipt of said documents and cost estimate, Contractor shall investigate the
defect and shall issue written instructions to Company on the corrective action
to be undertaken, or Contractor shall undertake corrective action by its own
employees or agents. 

          3.      The
following procedures shall be observed in all Contractor warranty claims for the
Facility in connection with which Company taken corrective action at
Contractor’s request as identified in paragraph 1 above: 

                    (a)      A
failure report, which shall contain technical and logistic information
sufficiently detailed to enable Contractor to assess the damage to the Work and
to evaluate appropriate corrective action in the form as agreed to by Company
and Contractor, shall be provided by Company as soon as reasonably practicable
after the occurrence of any event giving rise to a warranty claim. 

                    (b)      Warranty
claims shall be submitted in accordance with paragraph (d) below, and shall
include, as a required minimum, the following documents: 

          (i)      Applicable
failure report; 

          (ii)      List
of equipment and materials purchased or used in accomplishing the repair,
schedule of operations and subcontractors hours applicable to each claim, and a
copy of any internal work orders or purchase orders prepared in connection with
each such claim; 

          (iii)      Company’s
maintenance and repair records with respect to the equipment for which the claim
is being made (Company shall include with such maintenance and repair records
the manufacturer/vendor part number and serial number and the identification by
part number and serial number of the next major assembly call-out (such as, but
not limited to, turbine, generator, electrical cabinet)); and 

73

EXECUTION COPY 

          (iv)     
copies of invoices received or prepared for costs and expenses claimed. 

The documentation to be provided pursuant to paragraphs (b)(ii)
and (b)(iii) above, shall be in a form reasonably acceptable to Contractor. 

                    (c)      All
warranty claims pertaining to failure of the equipment for which Company has
independently undertaken corrective action during any calendar month shall be
submitted to Contractor on or before the last day of the following calendar
month. Claims shall be paid by Contractor on a net 30 basis. Work performed by
Company under a warranty claim shall be billed on a “time and material” basis as
defined below: 

                    (d)      “Time
and Material” in connection with a warranty claim is defined as follows: 

          (i)      With
respect to “Time”, the product of one hundred fifteen percent (115%) of the
normal hourly wage (including fringe benefits, insurance and taxes) Company pays
with respect to its particular employee (not including overhead) multiplied by
the number of hours each employee performed the particular Work. 

          (ii)      With
respect to “Material”, one hundred ten percent (110%) of the actual purchase
price paid by Company or an affiliate to a third party for the materials
incorporated or consumed in connection with the Work; and 

          (iii)      With
respect to Work performed by a subcontractor (other than an entity which
directly or indirectly controls, is controlled by, or is under common control
with, Company, Work done by any such entity being deemed Work done by Company
through its own employees for purposes of this definition), one hundred ten
percent (110%) of the actual amount paid by Company to the subcontractor for
such Work. 

                    (e)      Accounting
settlement between Company and Contractor due to warranty claims shall occur on
a quarterly basis. 

                    (f)     
Company shall maintain adequate records to support all warranty claims and allow
Contractor to audit warranty claims upon no less than ten (10) Days period
notice. 

74

EXECUTION COPY 

EXHIBIT F 

APPROVED VENDORS LIST 

  	Equipment Item 	Name of Supplier/Vendor 
	Turbine/OEC 	Ormat Systems 
	Generator   	
      Ideal Electric Co., Kato Engineering, Hundai ; Brush HMA
      

	Feed Pump and Brine 	
      Goulds Pumps, Floway Pumps, FlowServe, Johnston

	Pumps 	
      Pump Company, Ingersoll Dresser; ITT; Bunghartz

	Air Coolers *1 	
      Ormat Systems 

	Tube and shell Heat Exchangers*1 	
      Ormat Systems   

	Cooling Towers 	
      Cooling Tower Depot, Marley 

	Auxiliary Transformers 	
      Haward, Virginia Transformer Corp., ABB, Cooper , Siemens
      

	Air Compressors     	
      Atlas Copco, Cooper (Joy) Turbo Division, AC Compressors,
      Quincy, Hamworthy Belliss & Morcom (UK), Said Macchine Impianti (IT),
      Ingersol Rand 

	Switchgear     	
      Powell, Powercon Corp., S&C Electric Canada Ltd,
      Babco Electric & Engineering Ltd (CN), Blenkhorn & Sawle (CN),
      Ardan (ISR), Schneider (ISR) ; Siemens 

	Central Station Control   	
      Ormat Systems 

        HMI-Citect, Cimplicity 

        PLC-Allen Bradley, GE 

	Motor Control Center     	
      Allan Bradley, GE, Merlin Gerin; Moller Electric Inc.
      (CN), ADEX (ISR), ILS (ISR), Schneider (FR), ABB; Siemens ; Holec;
      Terasaki 

	Step-up Transformer 	
      Waukesha Electric System, Virginia Transformer
  

75

EXECUTION COPY 

  	Equipment Item 	Name of Supplier/Vendor 
	    	Corp., Elco (ISR), Fortune Electric
      Co. (TW), ABB; Fortune; 

	Pumps   	Goulds Pumps, Floway Pumps,
      FlowServe, Bungartz (GER) 

	Instruments and Control Valves
          	Neles Control Group, Jamesbury Inc.,
      Fisher Controls Int’l LLC, De Zurick, Habonim Industrial Valves LTD (ISR),
      Hamlet (ISR), Masoneilan, Vanessa Valve Corporation (IT), Tyco ;
      Flowserve; Valtek; Tyco 

	*1 	
      As being part of the OEC, which is a complete unit,
      Contractor or Ormat System may, at its discretion, assign the
      manufacturing of part or all of the OEC Heat Exchanger to an outside
      manufacturer, with the adequate certifications under Contractor or Ormat
      System design and supervision. 

76

EXECUTION COPY 

EXHIBIT G 

PERMITS 

          This
Exhibit G defines the current scope and allocation of permitting and contracting
work for the Project. Contractor is responsible for only the permits expressly
designated below as being the responsibility of Contractor; Company is
responsible for obtaining all other Project related permits. 

	PERMITS & CONTRACTS
      
  	Prepare by and
      
responsibility party 

	Conditional Use Permit 	Company 
	Production Well Permits 	Company 
	Injection Well Permits 	Company 
	Air Quality Permit to Construct 	Company 
	Water Rights Use for CT 	Company 
	Transmission Easements (through BLM) 	Company 
	Pipeline road easements (from highway
      district) 	Company 
	Private land lease & easements 	Company 
	Geothermal leases 	Company 
	County Building Permit – Power Plant 	Contractor 
	Storm Water Pollution Prevention
      Plan – Power Plant 
(containment plan during construction) 	Contractor* 
  

	Storm Water Pollution Prevention
      Plan 
(containment plan during operation) 	Company 
  

	Blowdown land application 	Company 
	Certificate of occupancy 	Company 
	Boiler permits 	Company 
	Idaho Power Certifications 	Company 

* Contractor shall not be responsible
for any delay that may occur in obtaining Governmental Authority approval of the
Storm Water Pollution Prevention Plan. 

77

EXECUTION COPY 

EXHIBIT H 

CERTIFICATE OF SUBSTANTIAL COMPLETION 

US Geothermal, Inc. 
1509 Tyrell Lane, Suite B 
Boise, ID
83706 
Attn: Daniel Kunz 

          With
reference to the ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT (the
“Contract”) dated September __, 2005 between US GEOTHERMAL, INC. (“Company”),
and ORMAT NEVADA, INC. (“Contractor”) for construction of the unit number one
Raft River Geothermal Project power plant in Cassia County, Idaho, Company
hereby confirms and certifies that the requirements of the Contract for
Substantial Completion set forth in the Contract have been achieved as of
_____________, 200_. 

          Terms
defined in the Contract shall have the same meaning when used herein. 

          Executed
this ____ day of ________________, 200__. 

Ormat Nevada, Inc. 

By:
________________________________
Name:
______________________________
Title: _______________________________

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EXHIBIT I 

CERTIFICATE OF FINAL COMPLETION 

US Geothermal, Inc. 
1509 Tyrell Lane, Suite B 
Boise, ID
83706 
Attn: Daniel Kunz 

          With
reference to the ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT (the
“Contract”) dated as of December 5, 2005 between RAFT RIVER ENERGY I LLC
(“Company”), and ORMAT NEVADA, INC. (“Contractor”) for construction of the unit
number one Raft River Geothermal Project power plant in Cassia County, Idaho,
Company hereby confirms and certifies that the requirements of the Contract for
Final Completion set forth in the Section 4.4 of the Contract have been achieved
as of _____________, 200_. Attached hereto is a list of the Punchlist Items
submitted by Contractor for approval by Company pursuant to Section 4.9 of the
Contract. 

          Terms
defined in the Contract shall have the same meaning when used herein. 

          Executed
this ____ day of ________________, 200__. 

Ormat Nevada, Inc. 

By:
________________________________
Name:
______________________________
Title: _______________________________

AGREED: 

US Geothermal, Inc. 

By: ________________________________
Name:
______________________________
Title: _______________________________

Date Signed: _________________________

 

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EXHIBIT J 

FORM OF FINAL LIEN WAIVER 

WAIVER OF LIENS/RELEASE 
AND CERTIFICATE OF FINAL PAYMENT

          With
reference to the Engineering, Procurement and Construction Contract (“Contract”)
dated as of December 5 2005 between the undersigned, ORMAT NEVADA, INC.,
(“Contractor”) and US Geothermal, Inc. (“Company”) for construction of the unit
number one Raft River Geothermal Power Project power plant in Cassia County,
Idaho, Contractor hereby certifies and represents that it has made, or will
make, when due, full payment of all costs, charges and expenses incurred by it
or on its behalf for work, labor, services, materials and equipment supplied to
the foregoing premises and/or used in connection with its work under the
Contract with respect to the Facility, other than any thereof for which payment
has been requested in the invoice of even date herewith.

          Contractor
hereby covenants that it will require each of its subcontractors and material
suppliers to make full payment of all costs, charges and expenses incurred by
them or on their behalf for work, labor, services, materials and equipment
supplied to the foregoing premises and/or used by them in connection with the
undersigned’s work under the Contract with respect to the Facility, other than
any thereof for which payment has been requested in the invoice of even date
herewith.

          In
consideration of ____________________Dollars ($__________) as final payment
under the Contract for work performed by Contractor as of _________, 200_,
Contractor, upon receipt of such final payment hereby unconditionally releases
and forever discharges Company and Company’s premises and property from all
claims, liens and obligations of every nature arising out of or in connection
with the payment of the aforesaid final payment except as set forth below: 

          (Note:
If none, write “NONE” in space above. Any claims excepted must be described and
the specific amount claimed must be set forth.) 

          As
additional consideration for the aforesaid final payment, Contractor, upon
receipt of such payment agrees to indemnify and hold harmless Company from and
against all costs, losses, claims, causes of action, judgments and expenses,
including attorney’s fees arising out of or in connection with claims against
Company, which claims arise out of the performance of the work under the
Contract with respect to the Facility and which may be asserted by Contractor or
any of its Subcontractors or any of their representatives, officers, agents or
employees except for those claims listed above. 

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          The
foregoing shall not relieve Contractor of its obligations under the provisions
of the Contract, which by their nature survive completion of the work including,
without limitation, warranties, guarantees and indemnities. 

          Executed
this __________________day of ________________________, _____. 

ORMAT NEVADA, INC. 

 

By: 
______________________________

NAME: ___________________________

TITLE: 
___________________________

 

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EXHIBIT K 

LIQUIDATED DAMAGES AND BONUSES

1.      Delay
Liquidated Damages 

          If
the Substantial Completion Date does not occur on or before the Guaranteed
Substantial Completion Date, then Contractor shall pay to Company liquidated
damages calculated as the sum of the amount set forth below for each Day that
the Substantial Completion Date is after the Guaranteed Substantial Completion
Date during the period between the Guaranteed Substantial Completion Date
and the Substantial Completion Date: 

	Number of Days that Substantial 
Completion
      Occurs After the 
Guaranteed Substantial Completion 
Date	Amount of Liquidated Damages per
      
Day 
  

	0 - 3 Days 	$0 
	4 – 7 Days 	$4,300 
	8+ Days 	$7,100 

2.      Schedule
Bonus 

          If
the Substantial Completion Date occurs (a) before the Guaranteed Substantial
Completion Date and (b) no later than fifteen (15) months after the date of
issuance of the Notice to Proceed plus the extension days, if any, of the
Guaranteed Substantial Completion Date under the terms of this Contract, then
Company shall pay to Contractor a bonus calculated as the sum of the amount set
forth below for each Day that the Substantial Completion Date is before the
Guaranteed Substantial Completion Date:

	Number of Days that Substantial 
Completion
      Occurs Before the 
Guaranteed Substantial Completion 
Date 	Amount of Bonus per Day 
 
      
  
  

	0 - 3 Days 	$0 
	4 – 7 Days 	$2,100 
	8 - 14 Days 	$3,600 

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	15 – 30 Days 	$5,400 
	31+ Days 	$5,700 

The Schedule Bonus for any period greater than thirty (30) Days
shall be subject to the approval of Company, which approval shall be given if
the Facility and the remainder of the Project will be ready for operation on
such date. 

3.      Performance
Liquidated Damages 

     If the Net Deliverable Capacity
result from the final Capacity Test is less than the Performance Guarantee, then
Contractor shall pay to Company liquidated damages calculated as the sum of the
amount per kW for each kW that such Net Deliverable Capacity is less than the
Performance Guarantee as follows and in accordance with Formula 3 in Schedule A
of Exhibit D: 

	Amount of kW that the Net 
Deliverable
      Capacity is less than the 
Performance Guarantee 	Amount of Liquidated Damages per
      
kW 
  

	0 - 150 kW 	$900 
	150+ – 250 kW 	$1,800 
	250+ - 500 kW 	$2,400 
	500+ kW 	$3,800 

4.      Performance
Bonus 

          If
the Net Deliverable Capacity result from the final Capacity Test is greater than
the Performance Guarantee, then Company shall pay to Contractor a bonus
calculated as the sum of the amount per kW for each kW that such Net Deliverable
Capacity is greater than the Performance Guarantee as follows and in accordance
with Formula 4 in Schedule A of Exhibit D: 

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	Amount of kW that the Net 
Deliverable
      Capacity is greater than 
the Performance Guarantee 	Amount of Bonus per kW 
 
      
  

	0 - 150 kW 	$0 
	150+ - 250 kW	$500 
	250+ - 500 kW	$1,000 
	500+ kW 	$1,500 

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EXHIBIT L 

CHANGE ORDER FORM 

  	Prepared By: 

         	 

         	Change Order Form 

         	Rev. # 

         	Date 

         

	         
	    Description of Change  
          
	          
	         
	         
	         
	         
	          

  

  	Change Requested By:  	Date: 	  Basis of Change: 
	    

         
	 	   

  

	Price of this Change: 	 
	Additional time required for Change: 	 

	APPROVALS
	 	Name/Title/Company
      & Signature 	Date 
	Submitted By:
      
  
  	 
 
 	  
 
      
  

	Approved and Accepted
      By: 
  
  	 
 
 	  
 
      
  

	Other: 

	 	 

Attachments to this change Proposal: 
	 
	 
	 

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EXHIBIT M 

CHANGE ORDER REQUEST FORM 

  	Prepared By: 
  	 
  	Change Order Form 
  	Rev. # 
  	Date 
  

	         
	    Description of Change  
          
	          
	         
	         
	         
	         
	          

  

  	Change Requested By:  	Date: 	  Basis of Change: 
	    

         
	 	   

  

  	Price of this Change: 	 
	Additional time required for Change: 	 

  	APPROVALS
	 	Name/Title/Company & Signature
      	Date 
	Submitted By: 

          

          	 

         

         	  

          

          

	Approved and Accepted By:
        

          

          	 

         

         	  

          

          

	Other: 

        
	 	  

Attachments to this change Proposal: 
	 
	 
	 

86

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