Document:

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

                                                                 EXHIBIT 10.4.24

                                GEOTHERMAL LEASE

         THIS LEASE is made this 31st day of August, 1983, by and between MAGMA
ENERGY, INC., ("Lessor") a Nevada corporation, as Lessor, and HOLT GEOTHERMAL
COMPANY, ("Lessee") a California corporation, as Lessee.

                                    Recitals

         Lessor has heretofore drilled certain wells and developed certain
geothermal resources on the land and premises hereinafter described. Lessee
desires to undertake to develop additional geothermal resources on said land and
to construct thereon facilities to utilize geothermal resources for the
generation of electric power, utilizing the Magmamax power process, a
proprietary and patented process owned by Lessor for generating electric power
utilizing geothermal resources, the U.S. patent number thereon being 3,757,516,
Lessee desires, in addition to a non-exclusive license to utilize on and limited
to the leased land the Magmamax power process, to use a portion of said land for
electric power generating facilities and to obtain, on a continuing basis and
subject to License Agreement, the benefit of Lessor's continuing knowledge and
experience with respect to the Magmamax process and to have the non-exclusive
right to utilize any new developments or improvements of the Magmamax process on
and limited to the leased land.

         1. WITNESSETH: that in consideration of the agreements contained
herein, the parties hereby enter into a lease of the hereinafter described land
(the "leased land") by Lessor to Lessee and concurrently herewith, and as part
of one integrated transaction, the parties shall enter into a License Agreement
with respect to the leased land and with respect to the use by Lessee of the
Magmamax power process. In consideration of the agreements contained herein, the
Lessor does grant, lease, let and demise unto the Lessee, its successors and
assigns, the leased land with the sole and exclusive right to the Lessee to
enter upon and to use and occupy the leased land to explore for, drill for,
develop, mine, produce and use the natural heat of the earth, the energy, in
whatever form, below the surface of the earth present in, resulting from, or
created by, or which may be extracted from, such natural heat, and all minerals
in solution or other products obtained from naturally heated fluids, brines,
associated gases, and steam, in whatever form, found below the surface of the
earth ("geothermal resources") and to take, store, remove, dispose of and use
same and for uses and purposes incidental thereto, together with the right to
use the leased land and to construct and maintain any and all facilities thereon
and therein as may be necessary for Lessee's operations on the leased land or
other lands in the vicinity of the leased land, and for use of the geothermal
resources including but not limited to well sites, pipelines, power plants,
power transmission lines, power stations, tanks, ponds, wells for injection or
reinjection of waste water, gases and other residual products, roads, and other
structures and installations. Lessor retains all rights to use and occupy the
surface and subsurface of the leased land for all purposes, provided that such
use or occupancy shall not unreasonably interfere with the rights of Lessee
under this Lease.

         2. Description. The leased land is described in Exhibit "A" attached
hereto and made a part hereof. In addition to the above-described leased land,
this Lease also covers

                                      -2-

accretions and any small strips or parcels of land now or here after owned by
Lessor which are contiguous or adjacent to the above-described leased land.
Lessor agrees to execute at Lessee's request any additional or supplemental
instruments for a more complete or accurate description of the land so covered.

         3. Term. TO HAVE AND TO HOLD the leased land for a period of thirty
(30) years from the date hereof ("primary term") and so long thereafter as any
geothermal resources are produced therefrom, or are capable of being produced
therefrom, or drilling or producing operations are conducted thereon, or excused
under the terms hereof.

         4. Commencement of Operations. Within eighteen (18) months after the
effective date of this Lease, Lessee shall Commence and diligently continue the
drilling of one or more wells for production of geothermal resources from the
leased land until Lessee shall have satisfied itself that sufficient geothermal
resources are obtainable to supply the needs of a Power plant or power plants of
a gross capacity of ten (10) or more megawatts. If, within six (6) months after
commencement of drilling the first well on the leased land, Lessee determines in
its sole judgment that it is not able to develop on the leased land a sufficient
quantity of geothermal resources to warrant installation of one or more power
plants for generating electricity therefrom, Lessee may, upon notice given to
Lessor within thirty (30) days after expiration of such six (6) month period,
terminate and be freed of all obligations under this Lease. If Lessee elects not
to so terminate this Lease, Lessee shall proceed with the drilling of such well
or wells as it deems appropriate to supply the requisite quantity of geothermal
resources for operation of a power plant or power plants and shall proceed
diligently and in good faith with construction of a power plant or power plants
on the leased land for generation of electricity utilizing the geothermal
resources.

         5. Royalty. Lessee shall pay to Lessor as royalty during the full term
of this Lease compensations as follows: (a) As to ***, Lessee shall pay to
Lessor *** received by Lessee. The said payment shall be deemed to embrace a
payment of *** and *** as payment for the said non-exclusive license, for
surface land use and for Lessee's agreement to make available to Lessor subject
to License Agreement its continuing knowledge and experience with respect to the
*** and the right to utilize new developments or improvements thereof on the
leased land; (b) ***, Lessee shall pay to Lessor *** received by Lessee. The
said payment shall be deemed to embrace a payment of *** as payment for the said
non-exclusive license, for surface land use and for Lessor's agreement to make
available to Lessee subject to License Agreement its continuing knowledge and
experience with respect to the *** and the right to utilize new developments or
improvements thereof on the leased land; (c) The payment by Lessee to Lessor of
the total compensations provided for in subparagraphs (a) and (b) hereof, when
due, for the full term of this Lease is a condition to the continuation of
Lessee's rights under this Lease and its right to use or occupy the leased land
or any part thereof. In the event Lessee Shall

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

                                      -3-

default under any covenant or condition of this Lease and fail to remedy such
default or to commence in good faith remedy such default, if such default cannot
be remedied within the notice period, Lessor shall have the right, upon
expiration of sixty (60) days written notice of default, to terminate this Lease
and all of Lessee's rights hereunder. The term ***. Lessee shall pay to Lessor
royalty on the last day of each month for accrued royalties for the preceding
calendar month. If the geothermal resources produced from the leased land are
insufficient for operation of Lessee's plant or plants at a ***, at the request
of Lessee, Lessor may supply geothermal resources from other land and the ***%
royalty rate shall apply to ***. If Lessor is unable to provide sufficient
geothermal resources, Lessee may secure geothermal resources from other lands
without paying royalty to Lessor on the geothermal resources so secured. Lessee
shall have the right to *** and to pay Lessor's royalty ***. Lessee shall not be
required to pay royalty on any ***.

         6. License Agreement. Lessor agrees to grant to Lessee, by separate
agreement entered into concurrently herewith, a non-exclusive license to utilize
on and limited to the leased land for the term of this Lease Lessor's patented
Magmamax power process and improvements thereof. Together with said license,
Lessor will agree to make available to Lessee without additional consideration,
Lessor's continuing knowledge and experience with respect to said process. In
the event Lessee shall develop any patentable improvements to the Magmamax power
process, Lessor shall be entitled to a non-exclusive royalty free license with
respect thereto.

         7. Plant Expansion. Lessee shall have the right to increase the
capacity of its plant or build additional plants on the leased land if
operations under this Lease demonstrate the availability of an adequate supply
of geothermal resources on the same terms and conditions as set forth herein.
Lessee shall have the right of first refusal for the development of electricity
available from geothermal resources on adjacent or nearby lands leased or
otherwise controlled by Lessor, in the event Lessee's operation proves the
adequacy of the geothermal resources and the commercial feasibility of producing
electricity therefrom. Lessee shall have four (4) years from the date of firm
operation of the plant to determine if an increase in plant and production
capacity is warranted by the geothermal resources underlying the leased land on
the basis of its operations. Lessee will notify Lessor of its determination on
or before the fourth anniversary of said date. If an increase in the size of the
plant or construction of additional plants is not warranted in Lessee's sole
judgment, Lessee will relinquish its rights to the surface area not actually
used for the original plant or plants, gathering and injection lines, and wells,
Lessor shall assume full responsibility for compliance with any necessary
governmental approvals of such a relinquishment by Lessee. A release of surface
rights to any part of the leased land shall not constitute a release of any part
of the geothermal resources underlying the leased land.

         8. Reinjection. Lessee shall have the right to drill such well or wells
on the leased land as Lessee may deem desirable, including wells for injection
or reinjection purposes, and shall have the right to dispose in any such wells
waste brine, water and other substances, waste

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

                                      -4-

products from a well, or wells, power plants or other facilities, located on the
leased land or from wells, power plants or other facilities, located in the
vicinity of the leased land. Lessee shall have the right to freely transfer
geothermal resources from wells located on the leased land, or other lands in
the vicinity of the leased land, to and from the leased land and to inject
geothermal resources into a well or wells located on the leased land.

         9. Inspection by Lessor. Lessor, or its agents, at Lessor's sole risk,
may during hours of operation examine the leased land and the workings,
installations and structures thereto and operations of Lessee thereon, and may
at reasonable times inspect the books and records of Lessee with respect to
production and operations and matters pertaining to the payment of royalties to
Lessor. Lessee shall make available to Lessor all of Lessee's information and
operating experience as to producing and injection wells and the installed
electric generating facilities. Lessee shall also furnish to Lessor all
drilling, engineering and geological reports, tests and logs as to all wells
drilled on said land. Lessor retains the right to utilize the leased land for
any and all purposes provided that such use shall not unreasonably interfere
with Lessee's operations thereon. Lessor, its employees, representatives and
permittees retain the right at all times to enter upon the leased land and to
view all operations and activities of Lessee thereon, provided that Lessee shall
not be liable to Lessor or to any such persons for personal injury or property
damage not resulting from any negligent act or omission of Lessee. Lessor shall
maintain all information gained by such inspection in strict confidence and
shall not disclose any of such information to third parties without advance
written permission of Lessee.

         10. Warranty of Title. Lessor hereby warrants that it has clear title
to the leased land and the geothermal resources contained therein, agrees to
defend title conveyed to Lessee under this Lease, and agrees that Lessee, at
Lessee's option, may pay and discharge any taxes, mortgages or liens existing,
levied or assessed on or against the leased land. If Lessee exercises such
option, Lessee shall be subrogated to the rights of the party to whom payment is
made to the extent of all payments costs and expenses, including attorneys'
fees, and, in addition to its other rights, may reimburse itself out of any
royalties otherwise payable to Lessor. In the event Lessee is made aware of any
claim inconsistent with Lessor's title, Lessee may suspend the payment of
royalties under this Lease, without interest, until Lessee has been furnished
satisfactory evidence that such claim has been resolved.

         11. Lesser Interest. If the Lessor or any party Lessor owns a lesser
interest in the geothermal resources under this Lease than the entire and
undivided fee estate herein, then the royalty herein provided as to geothermal
resources shall be paid to the Lessor or such party Lessor only in the
proportion which his ownership bears to the whole and undivided fee. Lessor
shall bear the entire cost of any underlying royalty interest in the fee estate
or otherwise.

         12. Removal. 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 every kind and character placed upon
the 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. Lessee agrees after termination
of this Lease to leave the leased land in a clean condition and to level sump
holes or excavations.

                                      -5-

         13. Implied Covenants. This Lease constitutes and expresses the entire
agreement between the parties and no implied covenant of any kind shall be read
into it and in particular there shall not be read into it any implied covenant
requiring Lessee to commence or to continue to conduct more drilling or other
operations on the leased land or to drill more wells thereon or fixing any
greater measure of diligence than Lessee has herein expressly agreed to.

         14. Ancillary Rights. In exploring for, developing, producing, using
and marketing geothermal resources on the leased land, Lessee shall have the
right of ingress and egress along with the right to conduct such operations on
the leased land as may be reasonably necessary for such purposes, including but
not limited to geophysical operations, the drilling of wells, and the
construction and use of roads, canals, pipelines, tanks, water wells, disposal
wells, injection wells, pits, electric and telephone lines, power stations and
plants, and other facilities deemed necessary by Lessee to discover, produces,
store, treat or transport geothermal resources and easements necessary thereto.
Lessee may use in such operations, free of cost, any water or other substances
produced on the leased land. The right of ingress and egress granted hereby
shall apply to the entire leased land described, notwithstanding any partial
release or other termination of this Lease with respect thereto.

         15. Breach or Default. In the event at any time after four (4) years
from the date hereof Lessee shall sell electrical power from said leased land in
any amount less than two (2) megawatts gross generating capacity and if such
condition continues for a period of one (1) year (the generating output would be
computed on an average for said one year), Lessor shall have the right to
consider the aforesaid event a default under this Lease, provided that Lessee
shall not be required to produce and sell electricity in excess of the reservoir
capability of the leased land. If Lessee at any time during the term of this
Lease and Agreement determines in good faith that it is uneconomic or not
feasible to continue its operations on the leased land, Lessee shall have the
right to terminate this Lease and to relinquish its rights under this lease. In
the event of termination Lessee shall execute and deliver appropriate
instruments to clear title to the leased land and shall remove surface
facilities and provide for wells as herein provided in the event of termination
due to Lessee's default. No litigation shall be initiated by Lessor with respect
to any breach or default by Lessee under this Lease, for a period of at least
ninety (90) days after Lessor has given Lessee written notice fully describing
the breach or default, and then only if Lessee fails to begin to remedy the
breach or default within such period. In the event the matter is litigated and
there is a final judicial determination that a breach has occurred, this Lease
shall not be forfeited or cancelled in whole or in part unless Lessee is given a
reasonable time after such judicial determination to remedy the breach or
default and Lessee fails to do so.

         16. Forbearance by Lessor. If any default shall occur which entitles
Lessor to terminate this Lease, Lessor shall have no right to terminate this
Lease unless, following the expiration of the period of time given to Lessee to
cure such default, Lessor shall notify any beneficiary under a deed of trust
covering all or any part of the leased land ("Mortgagee") of Lessor's intent to
so terminate at least thirty (30) days in advance of the proposed effective date
of such termination (the "Termination Notice"). Lessor shall have no right to
terminate this Lease if after delivering the Termination Notice to Mortgagee any
of the following occurs: (a) In the case of a default in the payment of
royalties, Mortgagee shall notify Lessor of Mortgagee's desire to cure such
default, and Mortgagee shall pay or cause to be paid all royalties, and any
other payments then due and in arrears as specified in the Termination Notice,
as well as such

                                      -6-

sums which may become due during such thirty day period, or extended period as
provided in subsection (c) below; (b) In the case of a default which does not
involve the payment of money but is reasonably susceptible of being cured by
Mortgagee, Mortgagee shall notify Lessor of Mortgagee's desire to cure such
default, and Mortgagee shall comply, or in good faith and with reasonable
diligence commence to comply, with all such nonmonetary requirements of this
Lease then in default and diligently pursue such cure to completion, subject to
paragraph 17; (a) In the case of a default not reasonably susceptible of being
cured by Mortgagee, including failure of production, or in the event Mortgagee
is complying with the requirements of subsections (a) or (b) above, this Lease
shall not terminate provided (i) within ninety (90) days after the giving by
Lessor of the Termination Notice, Mortgagee gives written notice to Lessor of
Mortgagee's intention to foreclose its deed of trust, and (ii) Mortgagee, within
ninety (90) days after the giving of the Termination Notice commences
foreclosure or similar proceedings under its deed of trust for the purpose of
acquiring Lessee's interest in this Lease and thereafter diligently prosecutes
the same (provided however, that if Mortgagee is restrained by a court of
competent jurisdiction from so proceeding, the time periods set forth above
shall be tolled), and (iii) either Mortgagee or any other purchaser of Lessee's
interest under this Lease, within a reasonable time after the acquisition of
such interest, commences production, or otherwise cures all defaults hereunder
susceptible of being cured by Mortgagee or such purchaser. No cancellation,
surrender or modification of this Lease shall be effective unless consented to
in writing by any Mortgagee.

         17. Force Majeure. Lessee's obligations under this Lease shall be
suspended until expiration of ninety (90) days after removal of cause for
suspension and the term of this Lease and the period for removal of Lessee's
property in the event of termination shall be extended while Lessee is prevented
from complying therewith by strikes, lockouts, riots, action of the elements,
accidents, delays in transportation, inability to secure labor or materials in
the open market, laws, rules, or regulations of any Federal, State, Municipal or
other governmental agency, authority, or representative having jurisdiction,
inability to secure or absence of a market for commercial sale of geothermal
resources from the leased land; or by other matters or conditions beyond the
reasonable control of Lessee, whether or not similar to the conditions or
matters specifically enumerated in this Paragraph.

         18. Liens, Taxes and Insurance. Lessee shall hold harmless, indemnify
and defend Lessor against all claims, demands, actions and causes of action for
injury or death to persons, damage or destruction of property unless caused by
the negligence or misconduct of Lessor, mechanic's and material man's liens
arising out of or by virtue of Lessee's rights or exercise of any rights under
this Lease, operations on the leased land or any acts or omissions by Lessee,
and Lessee undertakes and agrees to obtain and maintain insurance coverage,
naming Lessor as additional insured, in an amount not less than ten million
dollars ($10,000,000) principal amount to protect Lessor against any such
claims. Lessee shall pay all taxes levied and assessed against all structures,
improvements and personal property placed upon the leased land by Lessee. Lessor
shall pay all taxes levied and assessed against the leased land as such
including the geothermal resources and the right to production thereof and
against any rights therein not covered by this Lease and shall pay all taxes
levied and assessed against all structures and improvements placed on the leased
land by Lessor. Lessee, at its own expense, prior to commencing operations on
the leased land, shall obtain, and thereafter while this Lease is in effect
shall maintain, adequate Workers' Compensation Insurance.

                                      -7-

         19. Assignment. Except as provided in this Paragraph, the interest of
either Lessor or Lessee under this Lease may be assigned, devised or otherwise
transferred in whole or in part, by area and by depth or zone and the rights and
obligations shall extend to their respective heirs, devisees, executors,
administrators, successors and assigns. No change in Lessor's ownership shall
have the effect of reducing the rights or enlarging the obligations of Lessee
under this Lease and no change in ownership shall be binding on Lessee until
sixty (60) days after Lessee has been furnished the original or certified or
duly authenticated copies of the documents establishing such change of ownership
to the satisfaction of Lessee, Lessee shall not transfer, assign or reassign its
interest in whole or in part in this Lease without the consent of Lessor, which
consent shall not be unreasonably withheld, provided that this Lease may be
hypothecated for the benefit of any creditor of Lessee or Lessee's successor in
interest. If Lessee transfers its interest under this Lease in whole or in part,
Lessee shall be relieved of all obligations thereafter arising with respect to
the transferred interest, and failure of the transferee to satisfy such
obligations with respect to the transferred interest shall not affect the rights
of Lessee with respect to any interest not so transferred.

         20. Notice. Any notice from the Lessor to the Lessee must be given by
sending the same by registered or certified mail, postage prepaid, addressed to
its office at 1301 Chelton Way, South Pasadena, California 91030, and any notice
from the Lessee to the Lessor must be given in the same manner addressed to the
Lessor at 631 South Witmer Street, Los Angeles, California 90017. The parties
may, upon notice, change their said respective addresses for notice.

         21. Severability. If any provision of this Lease shall be found or
declared to be null, void or unenforceable for any reason whatsoever by any
Court of competent jurisdiction, then and in such event only such 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, which remaining terms and conditions shall remain binding,
valid and subsisting and in full force and effect between the parties, it being
specifically understood and agreed that the provisions of this Lease are
severable for the purposes of the provisions of this Paragraph. This Lease shall
not in any event extend beyond such term as may be legally permissible under
applicable laws, and should any such applicable law limit the term to less than
that provided in Paragraph 3, then this Lease shall not be void but shall be
deemed to be in existence for such term and no longer.

         22. Integration. This Lease constitutes the entire agreement between
the parties and supersedes all other agreements and understandings, whether oral
or written, the parties may have in connection therewith, including the March 3,
1982, Letter of Intent to enter into this Lease, and say be modified or
terminated only by a writing signed by the parties.

         23.      Binding  Effect.  This Lease shall extend to and be binding
upon the heirs,  executors, administrators, grantees, successors and assigns of
the parties.

     IN WITNESS WHEREOF the parties hereto have executed this Lease effective
as of the date first written above.

HOLT GEOTHERMAL COMPANY                     MAGMA ENERGY, INC.

By: /s/ Indecipherable                      By: /s/ Indecipherable
    ----------------------------                ----------------------------
    President                                   Chairman

Attest: /s/ W.E. Viney                      Attest: /s/ Indecipherable
        ------------------------                    ------------------------
        Secretary                                   Secretary

STATE OF CALIFORNIA     )
                        )  ss.
COUNTY OF LOS ANGELES   )

     On 31 August 1983 before me, the undersigned, a Notary Public in and for
said County and State, personally appeared Ben Holt, known to me to be the
President, and W.E. Viney, known to me to be the Secretary of Holt Geothermal
Company, the corporation that executed the within Instrument, known to me to be
the persons who executed the within Instrument on behalf of the corporation
therein named, and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or resolution of its board of directors.

/s/ Betty J. Peterson
---------------------------
Betty J. Peterson

STATE OF CALIFORNIA     )
                        )  ss.
COUNTY OF LOS ANGELES   )

     On August 31, 1983 before me, the undersigned, a Notary Public in and for
said County and State, personally appeared B.C. McCabe, known to me to be the
Chairman, and Joseph W. Aidlin, known to me to be Secretary of Magma Energy,
Inc., the corporation that executed the within Instrument, known to me to be the
persons who executed the within Instrument on behalf of the corporation therein
named, and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or resolution of its board of directors.

WITNESSETH my hand and offical seal.

/s/ April L. Wogatzke
---------------------------
April L. Wogatzke

                                 FIRST AMENDMENT
                               TO GEOTHERMAL LEASE

         THIS FIRST AMENDMENT TO GEOTHERMAL LEASE (the "Amendment") is made and
entered into effective as of April 30, 1987 (the "Effective Date") by and
between Magma Energy, Inc., a Nevada corporation (the "Lessor") and
Mammoth-Pacific, a California general partnership (the "Lessee"), collectively
referred to herein as the "Parties".

                                    Recitals

         WHEREAS, the Parties made and entered into that certain Geothermal
Lease dated the 31st day of August, 1983, by and between Lessor and Holt
Geothermal Company, to which Lessee is the successor-in-interest as Lessee (the
"Lease"), a copy of which is attached as Exhibit "A" to this Amendment and
incorporated by reference herein; and

         WHEREAS, the Parties now desire to modify the Lease with respect to the
royalties to be paid by Lessee to Lessor in connection with the operation of one
or more electric power plants fueled by geothermal resources underlying the
leased land, the expansion of the existing electric power plant and the
construction of additional electric power plants, and any other matters referred
to herein.

         NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, Lessor and Lessee agree to amend
the Lease as follows:

         1. Paragraph 3 of the Lease is hereby deleted in its entirety and a new
Paragraph 3, reading as follows, is substituted in its place instead:

         3. Term. TO HAVE AND TO HOLD the leased land for a period of thirty
(30) years from the date hereof (the "primary term") and so long thereafter as
electricity is produced on the leased land from the geothermal resources
therein, or excused under the terms of Paragraph 17 of this Lease.

         2. Paragraph 5 of the Lease is hereby deleted in its entirety and a new
Paragraph 5, reading as follows, is substituted in its place instead:

         5. Royalty. Lessee shall pay to Lessor as royalty during the balance of
the full term of this Lease compensation as follows:

         5.1 *** Royalty. As to electricity or other energy generated by ***
Lessee shall pay to Lessor as royalties during the balance of the full term of
the Lease the following percentage of the "***", as such term is defined below,
received by Lessee from ***, together with *** as such term is defined at
Subparagraph 5.3 below:

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

         (a) From April 1, 1987, and for a period of twenty-four (24)
consecutive months thereafter, *** as such term is defined at Subparagraph 5.3
below, and applicable "***" as such term is defined at Subparagraph 5.3 below;

         (b) From the date following the conclusion of the period set out in
Subparagraph 5.1(a), above, and for a period of twelve (12) consecutive, months
thereafter, *** as such term is defined at Subparagraph 5.3 below, and
applicable "***" as such term is defined at Subparagraph 5.3 below;

         (c) From the date following the conclusion of the period set out in
Subparagraph 5.1(b), above, and for a period of twelve (12) consecutive months
thereafter, *** and applicable "***" as such term is defined at Subparagraph 5.3
below; and,

         (d) From the date following the conclusion of the period set out in
Subparagraph 5.1(c), above, and for the balance of the term of this Lease, ***
as such term is defined at Subparagraph 5.3 below.

         For all purposes herein, the term "Gross Proceeds" shall mean (i) with
respect to the Existing Plant, all accounts received by Lessee, directly or
indirectly, from the sale to others of electricity, including energy and
capacity payments, or energy in any other form, produced on the leased land from
the geothermal resources therein or, if applicable, the "Adjacent Lease", as
such term is defined at Subparagraph 5.8 below, and (ii) with respect to the
"New Plants", as such term is defined at Subparagraph 5.2 below, all accounts
received by Lessee, directly and indirectly, from the sale to others of
electricity, including energy and capacity payments, or energy in any other form
produced from any lands or geothermal resources without regard to ownership
thereof.

         5.2 *** Royalty. As to electricity or other energy generated by all
additional plants utilizing the *** Lessee shall pay to Lessor for the balance
of the full term of the Lease *** together with applicable "***" as such term is
defined at Subparagraph 5.3 below.

         5.3 *** Royalties. The *** payable by Lessee to Lessor with respect to
the Existing Plant and each new Plant pursuant to Subparagraphs 5.1 and 5.2
above, shall be augmented by additional *** attached to this Amendment and
incorporated by reference herein. Except as otherwise provided at Subparagraph
5.1(a), (b) and (c) above, the *** shall be applied to ***. The term "***" for
each such plant shall mean the forecasts of ***

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

                                      -9-

determined as set forth in *** to this Amendment. For all *** from the *** and
each of the ***, respectively in excess of the *** (the "***") for such plants,
the Bonus Royalties shall be applied to calculate the total amount of royalty
payable to Lessor.

         5.4 Inflation Adjustment. The applicable Baseline Revenue for each of
the plants shall not be subject to adjustment during the fixed price period of
any power purchase agreement associated with such plant. The Baseline Revenue
for each of the plants shall be adjusted annually for all years after expiration
of the period of firm prices provided in the power purchase agreement associated
with such plant to account for the difference between an assumed inflation rate
of five percent (5%) per annum and the actual inflation experienced (the
"Inflation Adjustment"). For the purpose of the Inflation Adjustment, the
"Actual Inflation" shall be determined from comparison of the value of the
Producer Price Index for Finished Goods Excluding Food (the "Inflation Index")
on December 31st of the then current year to the value of the Inflation Index on
December 31, 1986. The Actual Inflation shall be equal to the ratio of the value
of the Inflation Index on December 31, of the then current year to the value of
the Inflation Index on December 31, 1986. The "Assumed Inflation" shall be equal
to one and five hundredths ("1.05") raised to a power equal to the number of
years between 1986 and the then current year. The "Inflation Adjustment Factor"
shall be equal to the Actual Inflation divided by the Assumed Inflation. The
"Adjusted Baseline Revenue" for each year shall be determined by multiplying the
Baseline Revenue for each year by the Inflation Adjustment Factor.

         In determining the foregoing Inflation Adjustment, the percentage of
increase or decrease in the Inflation Index shall be calculated to the nearest
one hundredth of one percent (1/100th of 1%). Percentage changes in the
Inflation Index shall be calculated based on the original released United States
Department of Labor, Bureau of Labor Statistics published data with the base
"1967-100" until a new base period is established. Calculations shall be made
based on data on the new base period from that time forward. If, for any reason,
the statistics complied by the United States Department of Labor, Bureau of
Labor Statistics and referred to above, are not available for use for the
foregoing adjustment, an adjustment shall be made by mutual agreement of Lessor
and Lessee. If the United States Department of Labor, Bureau of Labor Statistics
designates an index with a new title and/or code number as being continuous with
the Inflation Index then such new index shall be used for the foregoing
adjustment.

         5.5 Consequences of Default by Lessee. The payment when due by Lessee
to Lessor of the total compensation provided for in this Paragraph 5, for the
balance of the full term of the Lease, is a condition to the continuation of
Lessee's rights under the Lease and its right to use or occupy the leased land
or any part thereof. In the event that Lessee shall default under any covenant
or condition of the Lease and shall fail to remedy such default or to commence
in good faith to remedy such default, if such default cannot be remedied within
the notice period, Lessor shall have the right, upon expiration of sixty (60)
days written notice of default, to terminate the Lease and all of Lessee's
rights hereunder.

         5.6 Payment of Royalties. Lessee shall pay to Lessor the Base
Royalties, and any applicable Bonus Royalties, on the last day of each month for
accrued royalties for the preceding calendar month. Lessee shall calculate the
amount of actual Bonus Royalties due under the Lease at the end of each calendar
year during the term of the Lease, and shall make payment of

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

                                      -10-

any underpayment to Lessor or Lessor shall make payment of any overpayment to
Lessee, as the case may be, for any amount due (the "Additional Royalties") and
payable no later than forty-five (45) days after the end of each calendar year
during the term of the Lease. When applicable under Subparagraph 5.4 above,
Inflation Adjustments to the Baseline Revenue resulting from application of the
Inflation Index shall be made on a dollar basis by each January 31st during the
term of the Lease before calculating the actual Bonus Royalties. The Baseline
Revenue for the first year of operation for any New Plant shall be prorated from
the date of first delivery to the end of the calendar year to adjust for
differences in actual and forecasted revenue set forth in the schedules of
Baseline Revenue established for such plant.

         5.7 Insufficiency of Geothermal Resources. (a) With respect to both the
Existing Plant and any New Plants or any "Additional Plants," as such term is
defined at Subparagraph 5.9 below, built on the leased land or the "Adjacent
Lease", as such term is defined at Subparagraph 5.8 below, Lessee shall utilize
geothermal resources produced from the leased land and/or the "Adjacent Lease".
If the geothermal resources obtainable from the leased land and the Adjacent
Lease are insufficient for operation of the Existing Plant, any New Plant, or
any Additional Plant at their respective average capacity during the preceding
three (3) calendar years, Lessor may, but shall not be obligated to, make
available geothermal resources from other lands at the applicable royalty rates
provided in Subparagraphs 5.1, 5.2 and 5.3 above. In such cast, Lessor shall pay
all underlying, overriding, or other form of royalty or production payment, net
revenue interest, or other form of compensation payable to the United States of
America or any other third party on geothermal resources supplied from such
other land. If Lessor is unwilling or unable, as provided above, to make
available sufficient geothermal resources for the Existing Plant or for any such
New Plant or any such Additional Plant, Lessee may secure geothermal resources
from other lands ("Other Lands") for any such plant without paying royalty to
Lessor on the geothermal resources so secured. In such a case, Lessee shall have
the right to commingle the geothermal resources provided with geothermal
resources provided from such Other Lands and to pay Lessor's royalty on the
basis of production allocable to the leased land and the Adjacent Lease, and the
Other Lands made available by Lessee, as determined by metering or gauging same.

         (b) With respect to any New Plant built on land other than the leased
land or the Adjacent Lease, Lessee shall pay Lessor the full royalty due under
Subparagraphs 5.2 and 5.3 above regardless of the source of the geothermal
resources, in accordance with definition of Gross Proceeds in Subparagraph 5.1
above and the last sentence of Subparagraph 7.1 below, and the provisions of
Subparagraph 5.7 (a) above shall have no application.

         5.8 Unitization of Geothermal Resources. Lessor may not voluntarily
commit federal Geothermal Lease Number CA-11667-A (the "Adjacent Lease") to any
unit or cooperative agreement without the prior written consent of Lessee and
shall cooperate fully with Lessee, at no cost to Lessor, in accepting or
opposing, as determined by Lessee any attempt to compel unitization or other
form of joinder, of the Adjacent Lease pursuant to applicable laws and
regulations including, but not limited to, the Geothermal Steam Act of 1970, and
implementing regulations published at Title 43 Code of Federal Regulations, Part
3200, et seq., with all reasonable expenses thereof to be borne by Lessee. In
the event that the Adjacent Lease becomes unitized or otherwise joined with any
other land leased or otherwise controlled by Lessee, Lessor may not propose, or
make any election with respect to, any "Participating Area",

                                      -11-

as such term is defined in applicable laws and regulations without the prior
written consent of Lessee.

         5.9 Additional Plants. As to electricity or other energy generated by
all additional plants built on the leased land or, if applicable, the Adjacent
Lease from geothermal resources therein, other than the Existing Plant or the
New Plants (the "Additional Plants"), Lessee shall pay to Lessor during the
remainder of the full term of the Lease, royalties as provided at Subparagraphs
5.2, 5.3, 5.4, 5.6 and 5.7 above.

         5.10 Minimum Royalty. Notwithstanding Subparagraph 5.7 hereof, Lessee
shall pay to Lessor during the remainder of the full term of the Lease, a
minimum royalty of 3% of gross proceeds from the sale to others of electricity,
including energy and capacity payments, or energy in any other form generated by
plants built on the leased land or when applicable, the Adjacent Lease.

         5.11 No Guaranteed Internal Rate of Return. Lessor shall not be deemed
to have guaranteed Lessee a minimum internal rate of return with respect to the
Existing Plant, any New Plant, or any Additional Plant.

         3. Paragraph 7 of the Lease is hereby deleted in its entirety and a new
Paragraph 7, reading as follows, is substituted in its place instead.

         7. Plant Expansion. Lessee shall have the right to expand its
operations on the leased land, the Adjacent Lease, or any other lands without
regard to ownership thereof beyond the capacity of the Existing Plant as
follows:

         7.1 Plant Expansion. Subject to the provisions of Subparagraph 7.2
below, Lessee shall have the right to increase the capacity of the Existing
Plant or build the New Plants on the leased land, if operations under the Lease
demonstrate the availability of an adequate supply of geothermal resources, on
the terms and conditions set forth herein. Subject to the provisions of
Subparagraph 7.2 below and the first and second provisos to this sentence,
Lessee shall have the right of first refusal for the development of electricity
available from utilization of geothermal resources underlying the Adjacent
Lease; provided that Lessee's operation proves the adequacy of the geothermal
resources and the commercial feasibility of producing electricity therefrom; and
provided further, that Lessee shall have committed to construction of or more of
the New Plants associated with the Standard Offer Number Four Power Purchase
Contracts between Lessee and Southern California Edison Company bearing Document
Numbers 2433H and 2435H (the "Standard Offer Number Four Contracts") or expanded
the Existing Plant in an amount of no less than ten (10) megawatts nameplate
rating prior to the expiration of the Standard Offer Number Four Contracts.

         Lessee hereby agrees to exercise good faith efforts to obtain all
necessary governmental permits, authorizations, and approvals to build and
operate two (2) New Plants on the leased land or on adjacent land leased or
otherwise controlled by Lessor and, if it obtains governmental permits,
authorizations, and approvals which, in its sole discretion, are such that make
construction of the two New Plants economically viable, agrees to seek all
necessary internal corporate and partnership authorizations, and sufficient
financing for the construction of such

                                      -12-

two New Plants. In the event that Lessee is unable, in the exercise of good
faith efforts, to obtain all necessary external and internal permits,
authorizations, approval and financing to build and operate any New Plants or
determine not to build any New Plants for any reason or no reason, Lessee shall
proceed in accordance with the terms of Subparagraph 7.2, below. Regardless of
ownership of the land or geothermal resource dedicated to any New Plant, Lessee
shall pay Lessor royalties on the Gross Proceeds of such New Plants as provided
in Subparagraphs 5.2 and 5.3, above.

         7.2 Consequences of Failure to Expand. If Lessee shall fail to complete
prior to the expiration of the Standard Offer Number Four Contracts an increase
in the capacity of the Existing Plant of no less than ten (10) megawatts
nameplate rating or the construction of at least one (1) New Plant, Lessee shall
relinquish to Lessor its rights under the Lease to the surface and subsurface
area not actually used for the Existing Plant, gathering and injection lines,
and wells and shall further relinquish its right to use the geothermal resource
underlying the leased land or the Adjacent Lease for any purpose other than
operating the Existing Plant as provided herein. If Lessee so relinquishes its
rights to the surface and subsurface area and the geothermal resource, with
respect to the surface and subsurface actually used for the Existing Plant,
gathering and injection lines and wells, Lessee and Lessor shall jointly hold
such rights on a non-interference basis. If Lessee so relinquishes the foregoing
rights, Lessor shall have the right to utilize (i) the surface and subsurface
not actually used for the Existing Plant, gathering and injection lines, and
wells and the geothermal resources underlying the leased land, and (ii) the
Adjacent Lease, for any purpose; provided, however, Lessor may not exercise any
of the foregoing reserved rights which, in the reasonable opinion of Lessee,
might interfere with the operation of the Existing Plant.

         4.  A new Paragraph number 24 is hereby added to the Lease as follows:

         24. Upon request, Lessee shall provide Lessor with full access to
review, and, with respect to Lessor operations on the leased land or Adjacent
Lease, to use without charge all geotechnical data, geotechnical reports, and
documents containing geotechnical information of any kind related to Lessee's
operations on the leased land.

         5. A new Paragraph number 25 is hereby added to the Lease as follows:

         25. Lessee hereby waives, discharges and releases Lessor from any and
all claims of Lessee against Lesser, its directors, officers, employees or
agents which have accrued prior to April 1, 1987 and which arose out of, in
connection with, or relate to the negotiations of Lessees entering into, or
Lessor's performance or nonperformance of the Lease.

         6. As modified or added to by the terms of this Amendment, all terms
and conditions of the Lease shall remain in full force and effect. All
capitalized terms contained herein, unless otherwise defined, shall have the
meaning ascribed to such terms in the Lease.

         IN WITNESS WHEREOF, this Amendment has been executed on the first date
written above by the duly authorized representatives of the parties.

                                      -13-

         MAGMA ENERGY, INC., Lessor MAMMOTH-PACIFIC, Lessee

                                          By: PACIFIC GEOTHERMAL COMPANY,
                                              general partner of MAMMOTH-PACIFIC

         By: /s/ Indecipherable           By: /s/ Indecipherable
            --------------------------       --------------------------------

         Title: President & CEO           Title: President
               -----------------------          -----------------------------

                                      -14-

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

RALPH B. KOSTANT, ESQ.
WEISSBURG and ARONSON, INC.
2049 Century Park East, 32nd Floor
Los Angeles, California 90067-3271

                      SECOND AMENDMENT TO GEOTHERMAL LEASE

     THIS AMENDMENT TO GEOTHERMAL LEASE ("Amendment") is made and entered into
effective as of January 1, 1990, by and among MAGMA POWER COMPANY, a Nevada
corporation ("Lessor") and MAMMOTH-PACIFIC, L.P., a California limited
partnership ("Lessee"), with reference to the following facts:

     A. Magma Energy, Inc., a Nevada corporation, and Holt Geothermal Company, a
California corporation, entered into that certain Geothermal Lease dated August
31, 1983, and recorded in memorandum form on September 6, 1983, in Book 389,
Page 37 of Official Records of Mono County, California (the "Lease").

     B. Magma Energy, Inc. has merged with and into Lessor, and Lessor is the
successor-in-interest to Magma Energy, Inc., by operation of law, as fee owner
of the real property covered by the Lease.

     C. By an Assignment of Lease dated August 31, 1983, and recorded in
memorandum form on September 20, 1983, in Book 390, Page 90 of Official Records
of Mono County, California, Holt Geothermal Company assigned all of it right,
title and interest in the Lease to Mammoth-Pacific, a California general
partnership.

     D. The Lease was previously amended by the First Amendment to Geothermal
Lease dated April 30, 1987 between Magma Energy, Inc. and Mammoth-Pacific, a
California general partnership.

                                      -15-

     E. Pacific Geothermal Company, a California corporation and a general
partner of Lessee, subsequently succeeded to all of Mammoth-Pacific, a
California general partnership's right, title and interest in the Lease. By an
assignment dated January 29, 1990 and recorded in memorandum form on January 29,
1990 as Instrument No. 665, Official Records of Mono County, California, Pacific
Geothermal Company assigned an undivided 50% of all of its right, title and
interest in the Lease to Lessee, and the remaining undivided fifty percent (50%)
of all of its right, title and interest in the Lease in equal shares to CD
Mammoth Lakes I, Inc., a Maryland corporation and _______ Mammoth Lakes II,
Inc., a Maryland corporation (collectively, the CD Companies); and the CD
Companies in the same assignment subsequently assigned all of such right, title
and interest in the Lease to Lessee.

     F. Exhibit "A" to the Lease contains the following exception in the
description of Parcel B of the leased premises EXCEPTING THEREFROM the surface
of the Southwesterly three (3) acres, more or less, occupied by a lumberyard as
of the date of this Lease.

     The area covered by this exception is referred to in this Amendment as the
"Excepted Acreage."

     G. Lessor and Lessee desire to amend the Lease to include the Excepted
Acreage in the leased premises, without, however, any warranty of title by
Lessor.

     NOW, THEREFORE, in consideration of the above-referenced facts, the
agreements of Lessor and Lessee contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessor and Lessee agree as follows:

     1. The following language is deleted from Exhibit "A" to the Lease:

                                      -16-

     EXCEPTING THEREFROM the surface of the Southwesterly three (3) acres, more
or less, occupied by a lumberyard as of the date of this Lease.

     2. From and after the date of this Amendment, the Excepted Acreage shall be
part of the leased premises covered by the Lease, subject to all of the terms
and conditions of the Lease, as amended, except as provided in paragraph 3
below.

     3. Notwithstanding anything set forth in the Lease, Lessor is leasing the
Excepted Acreage to Lessee without any warranties or representations of title
whatsoever, including, without limitation, any warranty or representation that
the Excepted Acreage is free and clear of leases and tenancies by others.

     EVIDENCING their agreement, Lessor and Lessee have executed this Amendment
as of the date first written above.

     LESSOR:

     MAGMA POWER COMPANY, a Nevada
     corporation

     By: /s/ Jon R. Peele
     Name: (print): Jon R. Peele
     Title: Senior Vice President

     By: /s/ Wallace C. Dieckmann
     Name: (print) Wallace C. Dieckmann
     Title: Assistant Secretary

     LESSEE:

     MAMMOTH-PACIFIC, L.P., a California limited partnership

     By Pacific Geothermal Company, a California corporation, its Managing
     General Partner

     By: /s/ Claude Harvey
     Name: (print) Claude Harvey
     Title: Sr. Vice President

                                      -17-

                       THIRD AMENDMENT TO GEOTHERMAL LEASE

     THIS THIRD AMENDMENT TO GEOTHERMAL LEASE (the "Third Amendment") is made
and entered into as of April 12, 1991, by and between MAGMA POWER COMPANY, a
Nevada corporation ("Lessor") and MAMMOTH-PACIFIC, L.P., a California limited
partnership ("Lessee") with reference to the foregoing facts:

     A. Magma Energy, Inc., a Nevada corporation, and Holt Geothermal Company, a
California corporation, entered into that certain Geothermal Lease dated August
31, 1983, and recorded in memorandum form on September 6, 1983, in Book 389,
Page 37 of Official Records of Mono County, California (the "Original Lease").

     B. Magma Energy, Inc. has merged with and into Lessor, and Lessor is the
successor-in-interest to Magma Energy, Inc., by operation of law, as fee owner
of the real property covered by the Original Lease.

     C. By an Assignment of Lease dated August 31, 1983, and recorded in
memorandum form on September 20, 1983, in Book 390, Page 90 of the Official
Records of Mono County, California, Holt Energy Company assigned all of its
right, title and interest in the Original Lease to Mammoth-Pacific, a California
general partnership ("MPGP").

     D. The Original Lease was previously amended by the First Amendment to
Geothermal Lease dated as of April 30, 1987 between Magma Energy, Inc and MPGP
(the "First Amendment") and by the Second Amendment to Geothermal Lease dated as
of January 1, 1990 between Lessor and MPGP (the "Second Amendment") (the
Original Lease, the First Amendment and the Second Amendment are referred to
collectively herein as the "Lease").

     E. MPGP has dissolved and, as a result of such dissolution, Pacific
Geothermal Company, a California corporation ("PGC"), succeeded to 100% of
MPGP's interest in the Lease.

     F. PGC is a general partner of Lessee, holding not less than 50% interests
in both partnership capital and profits.

     G. By an Assignment and Assumption Agreement dated as of January , 1990
(the "Assignment Agreement"), PGC assigned an undivided 50% interest in the
Lease to Lessee and an undivided 50% in the Lease to the CD Companies (as
defined in the Assignment Agreement) (the "CD Companies"). Said Assignment
Agreement was recorded in memorandum form on January 29, 1990 in Book 548, Page
592 of the Official Records of Mono County, California.

     H. Concurrently with the Assignment to the CD Companies described in
Recital G, the CD Companies assigned their entire interest in the Lease to
Lessee.

     I. Lessor and Lessee now desire to modify the Lease for purpose of, among
other things, modifying and/or clarifying certain rights and obligations of
Lessor and Lessee under the Lease.

                                      -18-

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Lessor and Lessee agree to amend
the Lease as follows:

     1. Definitions. All capitalized terms contained herein, unless otherwise
defined, shall have the meanings ascribed to such terms in the Lease.

     2. Modification of Exhibit "A-1". Lessor and Lessee agree to amend Exhibit
"A-1" to the First Amendment promptly upon the occurrence of "firm operation" of
each New Plant, which amendment(s) shall be prepared on the basis of the same
assumptions used for purposes of initially preparing said Exhibit "A-1", but
which amendment(s) shall accurately reflect the appropriate commencement date
for the effectiveness thereof.

     3. Modification of Exhibit "A-2". Exhibit "A-2" to the First Amendment is
hereby deleted in its entirety and Exhibit "A-2" hereto is substituted in its
place.

     4. Property Taxes. Paragraph 18 of the Lease is hereby amended by adding
the following before the last sentence of Paragraph 18:

     In this regard, all property taxes assessed by the Assessor on the
respective property interests of the parties hereunder in respect of the leased
land shall be shared by Lessee and Lessor in proportion to which the Assessor
allocates the assessment of value among structures, improvements and personal
property made or placed upon the leased land by Lessee, on the one hand, and the
leased land as such (including the geothermal resources and the right to
production thereof), on the other hand; provided, however, that any increase in
tax assessments which arise after the date hereof by reason change in control of
or ownership interests in Lessee shall be paid by "Lessee", and/"Lessee" shall
indemnify and hold Lessor harmless therefor, including, without limitation,
changes in control or of ownership interests in Lessee arising by reason of
redemptions or transfers of interest. In addition, from and after January 1,
1990, Lessor and Lessee shall cooperate in good faith to pursue a joint strategy
of settling on an agreed-upon methodology with the Assessor for valuation and
allocation of property taxes, both historically and prospectively during the
term of this Lease. Lessor and Lessee agree that each party shall represent its
own interests as they shall appear and shall bear its own fees and costs, but
shall seek, in good faith and to the extent reasonably practicable, to present a
common position to the Assessor in a good faith effort to achieve the lowest
overall property tax assessment applicable to both parties.

     5. Indemnification. Paragraph 18 of the Lease is hereby further amended by
adding the following after the first sentence of Paragraph 18:

     Without limiting the generality of the foregoing or any other provision of
this Lease (including, without limitation, Paragraphs 12 and 15 hereof) and in
furtherance thereof, Lessee acknowledges that Lessor has not itself utilized or
monitored Lessee's activities on the leased land and Lessee (i) acknowledges and
agrees that Lessee is relying solely on its own investigation of the leased land
with respect to the effect of (a) the presence, if any, of any underground tanks
on the leased land or of any "hazardous substances", "hazardous materials" or
"hazardous wastes" (as defined under federal or California Law) (collectively,
the "Hazardous Materials"), (ii) assumes the risk of all liabilities, claims,
demands, actions and causes of action arising out of any such storage tanks or
Hazardous Materials on, at, in, under or about the leased

                                      -19-

land whether placed there now or at any point in the future while this Lease is
in affect and, (iii) agrees to hold harmless, indemnify and defend Lessor
against all claims with respect to the foregoing.

     6. Assignment of BLM Lease. Concurrently with the execution and delivery
hereof, Lessor is assigning to Lessee all of Lessor's right, title and interest
in and to that certain Geothermal Resource Lease (Mono-Long Valley Parcel #12)
dated March 1, 1982, between the United States and Magma Energy, as assigned to
Lessor (the "BLM Lease"). In consideration for such Assignment, Lessee shall pay
to Lessor, on the date hereof, the amount of $89,468.06 by wire transfer of
immediately available funds.

     7. BLM Approval. Lessee shall, within 180 days following the date hereof,
obtain from the Department of Interior, Bureau of Land Management ("BLM") such
approvals to the Assignment of the BLM Lease described in Paragraph 6 of this
Third Amendment as may be required in accordance with 43 C.F.R. 3241.2, and
either (a) Lessee shall post a bond satisfactory to BLM if required thereby or
(b) if Lessor has heretofore posted a bond with BLM, then Lessee shall replace
such bond and cause such bond to be released to Lessor. In the event Lessee
fails to perform its obligations under this Paragraph 7, Lessee shall, upon
request of Lessor, assign the BLM Lease to Lessor.

     8. Cross Default. Lessee shall be deemed to be in material breach of the
Lease, as amended hereby, in the event Lessee fails for any reason whatsoever to
pay within five (5) days when due all royalties payable by Lessee for Lessor
under the Lease, as amended hereby, in respect of the BLM Lease, including
without limitation in the event the payment of all or any part of said royalties
are determined to constitute impermissible overriding royalties. If Lessee or
any lender or other party holding a beneficial interest in the BLM Lease fails
to pay any royalty due under the ELM Lease within sixty (60) days after such
royalty comes due, Lessor shall have the right to terminate the Lease upon
written notice to Lessee.

     9. BLM Lease Property Taxes. From and after the date hereof, Lessee shall
pay all property taxes payable in respect of the BLM Lease property and all
rental and royalties payable under the BLM Lease, as though Lessee were the
direct and original lessee thereunder, and lessee shall indemnify and hold
harmless Lessor for all losses, liabilities, costs and expenses (including
without limitation reasonable attorneys' fees) in respect thereof.

     10. Matters Concerning the BLM Leases. To the best of Lessor's knowledge,
without any review of title reports but based solely on Lessor's not having
received any notice, certificate or document to the contrary, Lessor has no
reason to believe there are any defects in Lessor's title to the BLM Lease. In
addition, Lessor represents that all rental Payments and taxes attributable to
the BLM Lease which have become due and payable have been paid in full.

     11. Effectiveness of Third Amendment. This Third Amendment shall be
effective and become of full force and effect only upon receipt by Lessor of
insurance binders or certificates in a form reasonably satisfactory to Lessor
evidencing the maintenance by Lessee of all policies of insurance required to be
maintained pursuant to Paragraph 18 of the Lease.

     12. Continued Effectiveness. Except as specifically provided in this Third
Amendment, the Lease shall remain in full force and effect in accordance with
its original terms

                                      -20-

and conditions, except that the term "Lease" as used in the Lease shall
hereafter mean the Lease as amended hereby.

     13. Counterparts. This Third Amendment may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute a single original instrument.

     14. Entire Agreement-Amendments. This Third Amendment, together with the
Lease and those certain letter agreements date of even date herewith, between
Lessor and Lessee, constitute the entire agreement of the parties with respect
to the matters set forth herein, and the provisions hereof, together with the
other documents enumerated in this Paragraph 14, shall supersede any and all
prior agreements or understandings relating to the same subject matter. The
Lease, as amended hereby, may be further amended only by a writing signed by a
duly authorized representative of both parties.

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be signed by their duly authorized officers as of the day and year first above
written.

                                           LESSOR:

                                           MAGMA POWER COMPANY, a Nevada
                                           corporation

                                           By: /s/ Jon R. Peele
                                              --------------------------------
                                           Name:  Jon R. Peele
                                           Its:  Senior Vice President

                                           By: /s/ Wallace C. Dieckmann
                                              --------------------------------
                                           Name:  Wallace C. Dieckmann
                                           Its:  Assistant Secretary

                                           LESSEE:

                                           MAMMOTH-PACIFIC, L.P., a California
                                           limited partnership

                                           By:  Pacific Geothermal Company,
                                           a California corporation,
                                           General Partner

                                           By: /s/ Claude Harvey
                                              --------------------------------
                                           Name: Claude Harvey
                                                ------------------------------
                                           Title: Sr. Vice President
                                                 -----------------------------

                                           Recording Requested By and
                                           When Recorded Return To:

                                           WILLILAM E. VINEY, ESQ.
                                           530 West 6th Street, Suite 623
                                           Los Angeles, California 90014

                                           By: CD Mammoth Lakes I Inc.,
                                              --------------------------------
                                               a Maryland Corporation
                                              --------------------------------
                                               General Partner

                                           By: /s/ Terry L. Ogletree
                                              --------------------------------
                                           Name: Terry L. Ogletree
                                                ------------------------------
                                           Its: President
                                               -------------------------------

                                      -21-Exhibit 10.4.25

                           UNPROTECTED LEASE AGREEMENT

             Made in Yavne, Israel as of this 15th day of July, 2004
                                 BY AND BETWEEN:

Ormat Industries Ltd.
Public Company No. 52-003671-6
Of the Industrial Area of Yavne
(hereinafter:  "OIL")
                                                              OF THE FIRST PART;

                                      AND:

Ormat Systems Ltd.
Private Company No. 51-159723-9
Of the Industrial Area of Yavne
(hereinafter: "OSL")
                                                             OF THE SECOND PART;

WHEREAS       OIL leases from the Israeli Land Administration (hereinafter:
              "ILA") a 65,655 sqm of land in the Industrial Area of Yavneh,
              known as Block no. 5403 Plots 8 & 9 (in part), Block 4921 Plots D
              & 10 (in part) and Block no. 5170 Plot 107 (hereinafter: "THE REAL
              ESTATE"), under lease contracts expiring between 2018 through 2047
              (hereinafter: "THE LEASE CONTRACTS") and on which OIL's production
              and manufacturing facilities, headquarters, the technical school
              and other permanent constructions and fixtures used by OIL are
              located as well as the plot on which the Guest House is located at
              7 Brosh St., Yavne (hereinafter, together: "THE PLANT"); and

WHEREAS       OIL and OSL have agreed on the sale of certain assets and
              liabilities of OIL to OSL, including the activities of the Plant
              but excluding the Real Estate and the Plant, and for that purpose
              are entering, simultaneously with their entering into this
              Agreement, into a Purchase Agreement (hereinafter: "THE PURCHASE
              AGREEMENT"); and

WHEREAS       OSL wishes to lease the Real Estate and the Plant for the Term (as
              hereinafter defined), and OIL wishes to lease the Real Estate and
              the Plant to OSL for said period, provided, however that the terms
              of the Law for the Protection of Tenants [Consolidated Version],
              1972 and/or any other law which will replace it or add to it, will
              not apply to this Agreement and that OSL will not be protected by
              such laws;

                                      -2-

       THEREFORE, IN CONSIDERATION OF THE FOREGOING, THE PARTIES, INTENDING
       TO BE LEGALLY BOUND, AGREE AS FOLLOWS:

  1.   DEFINITIONS

       In this Agreement, except where the context otherwise requires, the
       following terms shall have the meaning ascribed to them hereunder:

1.1            "THE LEASED PROPERTY" - the Real Estate and the Plant, depicted
       in blue and red respectively in the drawing attached as EXHIBIT A to this
       Agreement. For the removal of doubt, the Leased Property will include any
       permanent constructions and fixtures located in the Real Property, which
       may not under Israeli law be sold apart from the Real Estate, while it is
       the intention of the Parties that all detachable, removable and/or
       temporary fixtures and constructions will be sold to OSL under the
       Purchase Agreement.

1.2            "QUARTER" - any three-months-period beginning on January 1st,
       April 1st, July 1st or October 1st.

1.3            "BUSINESS DAY" - a day in which most of the five largest banks in
       Israel are open to transact business with the public.

1.4            "THE REPRESENTATIVE RATE OF EXCHANGE" - the representative rate
       of exchange of the USD published by the Bank of Israel, and if such rate
       will not be published, then any rate which will replace it and in the
       absence of such rate - the average of the two largest banks in Israel buy
       and sale rates for transfers of USD.

1.5            "ASSIGNMENT" - whether by way of assignment, conveyance,
       transfer, sale, sublet, lease, pledge, lien, or license, whether with or
       with no consideration.

1.6            "PERMITTED TRANSFEREE" - an entity Controlling, under the Control
       of, or under common Control with, the transferor.

1.7            "CONTROL" - the ability to direct the operations and activities
       of a corporation, except an ability stemming only from the fulfillment of
       a position of a director or another office in the corporation, and it is
       presumed that a person controls a corporation if the person holds half or
       more of the voting rights in the corporation, or half or more of the
       rights to nominate the directors of the corporation.

                                      -3-

  2.   LEASE AND TERM

2.1            Subject to the conditions specified herein, OIL hereby leases to
       OSL and OSL hereby leases from OIL, the Leased Property, for a period of
       4 years and 11 months, commencing on July 1st, 2004 (hereinafter: the
       "TERM"). If necessary, OIL will apply to the ILA for its consent to
       extend the Term to a period of up to a total of 25 years (less one day)
       and, should such approval be granted or if such an approval is not
       required, the Term will be extended accordingly. For the purpose of this
       Agreement, the Term shall include any extension thereof.

2.2            If required, the Parties will exert their best efforts to
       register the Lease with the Land Registry Office and will do so with
       respect to any other registry where such registration is deemed necessary
       or beneficial by the Parties.

2.3            Possession of the Leased Property will be granted to OSL
       effective as of July 1st, 2004 (hereinafter: the "EFFECTIVE DATE").

2.4            Should OIL's Lease Contracts, or part thereof, be terminated
       and/or not be renewed, then the Term with respect to the relevant plot,
       will terminate, and the provisions of section 12.3 hereunder will apply,
       accordingly. The parties agree that other than for gross negligence,
       willful misconduct, or a breach by OIL of its Lease Contracts, OIL shall
       not be liable to OSL for damage and/or loss which results from the
       termination of the Lease by the ILA or the denial of any extension by the
       ILA.

  3.   USE OF THE LEASED PROPERTY

3.1            OIL hereby leases the Leased Property to OSL for the purpose of
       operating the Plant and/or any other type of legal activity.

3.2            OSL declares that it is familiar with, and has seen and
       inspected, the Leased Property, its surroundings and the regulatory
       framework applicable to the Leased Property (including the plans ("taba")
       and the designation of the Leased Property thereunder) and has found the
       Leased Property and its surroundings to be in good and proper condition,
       and the Leased Property and the regulatory framework suitable for its
       purposes and needs. Subject to OIL's complying with its obligations
       hereunder, OSL hereby waives any claim of defect or unsuitability
       regarding the Leased Property, and any other claim of any kind regarding
       the Leased Property or this Agreement.

                                      -4-

3.3            The Plant and/or any other business will be operated by OSL in
       the Leased Property at its sole cost. Beginning on the Effective Date,
       OSL will be solely responsible for obtaining any licenses, permits and
       authorizations necessary for the use and operation of its business in the
       Leased Property. Notwithstanding the above, if required, OIL will assist
       OSL in obtaining any such authorizations, provided OSL will reimburse OIL
       for any expenses incurred by it in connection therewith. For the removal
       of doubt, failure to obtain the necessary authorizations or their
       termination, shall not grant OSL the right to terminate this Agreement or
       the lease hereunder, prior to the termination of the Lease Period.

  4.   OWNERSHIP OF LEASED PROPERTY

       OIL hereby declares and warrants that it is the sole legal lessor and
       holder of the Leased Property and that it is legally entitled to lease
       the Leased Property pursuant to the terms and conditions of this
       Agreement.

  5.   RENT

5.1            In consideration for the lease of the Leased Property, OSL will
       pay OIL a monthly rent of USD52,250 (hereinafter: "THE RENT"), together
       with VAT as stated in clause 5.5 hereunder. The Rent will be paid every
       Quarter in advance, on the first Business Day of such Quarter, with the
       Rent for the period commencing on the Effective Date to be paid on the
       date of signing of this Agreement.

5.2            The Rent will be adjusted every year, beginning on January 1st,
       2005, by the same rate of increase of the Israeli Consumer Price Index
       ("CPI") during the previous calendar year. In any event, the Rent with
       respect to each year during the Term and any extension thereof shall not
       be lower than the Rent paid during the previous year.

5.3            At OSL's choice, Rent will be paid either in USD or in NIS. If
       Rent is paid in NIS, it will be paid according to the Representative Rate
       of Exchange most recently published by the Bank of Israel prior to the
       time of payment.

5.4            Payment of Rent will be effected in cash by wire transfer of
       immediately available funds to an account designated by OIL, in writing,
       or by check, or in any other manner approved by the Parties' CEOs.

                                      -5-

5.5            Value Added Tax, at the appropriate rate, shall be paid by OSL
       with respect to any Rent payment, and in the same manner and on the same
       date such payment is made, against issuance of a VAT invoice by OIL.

  6.   TAXES AND OTHER PAYMENTS IMPOSED ON OSL

6.1            OSL shall pay during the Term any tax, levy, charge or other
       compulsory payments, whether state or municipal and of any kind, imposed
       on the date hereof and/or in the future, on the lessee and/or occupant
       and/or possessor of the Leased Property, and/or applicable on the
       business or operations of OSL in the Leased Property, including municipal
       tax ("arnona"), business tax, licenses fees etc., but excluding payments
       which pursuant to this Agreement are the liability of OIL.

6.2            OSL will pay all the required payments relating to the operation
       of the Leased Property, including electricity, water, gas, telephone
       (including faxes) etc. OIL may demand OSL to register itself during the
       Term as the debtor of such payments with the appropriate entities, and
       OSL will do so. Upon the termination of the Lease Agreement, OIL (or
       whomever it may order) will be re-registered as the debtor.

6.3            OSL will timely and fully remit all taxes and other payments
       imposed on it as aforesaid. Notwithstanding the above, in any event of
       late payment, OSL will bear any interest (including arrears interest),
       linkage differences, fines and other costs imposed in connection with
       such late payment.

6.4            Within reasonable time of OIL's demand, OSL will provide it with
       all the receipts or other certifications proving its full and timely
       compliance with its payment obligations under this clause. OIL will be
       entitled, but not obligated, to pay any such payment which has been due
       for over 60 Business Day and has not been paid by OSL at the time OIL
       remits such payment, and in such event OSL will reimburse OIL for its
       expenses, immediately upon OIL's demand, together with interest (as set
       forth in clause 14.1 hereunder).

                                      -6-

  7.   TAXES AND OTHER PAYMENTS IMPOSED ON OIL

       OSL shall indemnify OIL, immediately upon OIL's demand, for any taxes,
       levies or charges imposed upon OIL, including any payments to the ILA, in
       connection with Leased Property and/or the Rent, but excluding any income
       taxes or other taxes imposed by reference to revenues of OIL or earnings
       of OIL derived from the Rent.

  8.   INAPPLICABILITY OF TENANCY PROTECTION LAWS

       OSL hereby declares, warrants and certifies that:

8.1            The Tenant Protection Law [Consolidated Version], 1972
       (hereinafter: "THE TENANT LAW") does not apply to the lease under this
       Agreement.

8.2            This Agreement, the lease hereunder, OSL, and the Leased Property
       are not and will not be protected under the provisions of the Tenant Law
       nor under any other law that may amend or add to or replace the Tenant
       Law, nor under any other law that now grants or in any time in the future
       will grant tenants or tenancies protection similar to those mentioned in
       the Tenant Law. Any such laws, or any regulation, directive or
       legislation that has been or will be passed or promulgated in the future
       under such laws, shall not apply to OSL, the Leased Property, this
       Agreement or the lease hereunder.

8.3            OSL has not paid, nor has it been required to pay or undertook to
       pay OIL any amount whatsoever, directly or indirectly, whether in money
       or its equivalent, with respect to "key monies" for the lease. OSL hereby
       warrants and declares that any repair and/or change executed in the
       Leased Property, if at all, will be executed in the course of ongoing
       maintenance of the Leased Property and shall not constitute fundamental
       changes in the Leased Property. Hence, upon surrender of the Leased
       Property, OSL shall not be entitled to claim or receive any amount or
       benefit with respect to key monies or goodwill.

  9    OSL'S UNDERTAKINGS

9.1            OSL will fully and timely comply with all laws, regulations,
       directives and other legislation, as well as any licenses, permits and
       authorizations issued by the authorities or required by them, applicable
       to the maintenance and operation of the Leased Property, its use and the
       activities taking place therein.

                                      -7-

  9.2          OSL will look after the intactness of the Leased Property, will
       operate its business only within the boundaries of the Leased Property
       and will not cause or allow its employees, managers, invitees, customers
       or any one on its behalf to cause any hazard, nuisance, trespassing,
       noise, shocks, filth, smoke or other unpleasantness to the users of the
       Leased Property and/or its surroundings, which is unreasonable
       considering the character of the Leased Property and the character of its
       surroundings.

  9.3            OSL will use the Leased Property in a reasonable and careful
       manner. Without derogating from the generality of the above, OSL:

9.3.1          Will keep the Leased Property in a good and proper shape, except
       for reasonable wear and tear.

9.3.2          Will keep the Leased Property clean.

9.3.3          Will use the Leased Property for legal activities.

9.3.4          Will not act in a manner causing harm to the Leased Property.

9.3.5          Will inform OIL of any defect, damage or loss caused to the
       Leased Property, immediately upon their occurring.

9.3.6          Will without delay repair, at its own expense, any loss or damage
       caused to the Leased Property. Should OSL fail to do so within 10
       Business Days of the occurance of such loss or damage, OIL may (but will
       not be obligated to) execute such repair works, at OSL's expense, and OSL
       will reimburse OIL for any out of pocket expenses borne by it with
       respect thereto immediately upon OIL's demand. The expenses will bear
       interest, as set forth in clause 14.1 hereunder.

  9.4          OSL shall obtain and maintain, at its own cost and
       responsibility, with financially and professionally reputable insurers,
       the insurance policies detailed in EXHIBIT B to this Agreement, which
       will cover the Leased Property and its contents at their full value. Both
       OIL and OSL shall be named as beneficiaries of such insurance policies.
       OSL will keep its insurance policies in full force and effect throughout
       the Lease period and will pay the premiums in full and in a timely
       manner. Upon OIL's demand, OSL will present it with proof of its
       compliance with this undertaking. Should OSL fail to obtain or maintain
       insurance policies as aforesaid, OIL may do so

                                      -8-

       at OSL's expense, and OSL shall indemnify OIL, upon its demand, for
       all its expenses in connection therewith. In any event of damage, OSL
       shall take reasonable measures to activate the policies and will use
       any monies received in connection with such policies only to repair,
       with no delay, the damage covered.

  10.  OSL INDEMNIFICATION UNDERTAKINGS

10.1           In addition to any liability imposed on OSL under law, OSL will
       repair, at its expense, any damage or loss which results from defective
       construction of the Plant. Such repair works will be executed by OSL
       within reasonable time of being notified by OIL of the damage or loss.
       Should OSL fail to execute any such repair works within 10 Business Days
       of being notified of the damage or loss, OIL may notify OSL of its intent
       to repair the damage or loss, and in the absence of action on the part of
       OSL within 5 Business Days, OIL may (but will not be obligated to) repair
       any such damage or loss at OSL's expense. OSL will reimburse OIL for any
       out-of-pocket expenses borne by it with respect thereto immediately upon
       OIL's demand. The expenses will bear interest as set forth in clause 14.1
       hereunder.

10.2           Notwithstanding the above, and in addition to any liability
       imposed on OSL under law as possessor and/or occupant and/or lessee of
       the Leased Property, OSL will be solely responsible for any damages of
       any type or kind caused to the Leased Property and/or OIL and/or a third
       party present in the Leased Property (including bodily injury or damages
       to property), as a result of OSL's negligent acts or omissions, including
       the negligent acts or omissions of its employees, invitees or any other
       person or entity acting on behalf of OSL. OSL hereby releases OIL from
       any liabilities under any law to indemnify and/or compensate and/or be
       liable to such damage. OSL will indemnify OIL, immediately upon its
       demand, for any loss or expenses (including legal expenses) it paid as a
       result of OSL's negligence, including loss or expenses incurred by as a
       result of any demand, motion or law suit derived, directly or indirectly,
       from OSL's said negligence.

  11.  MODIFICATIONS AND ALTERATIONS

11.1           Subject to clause 11.4 hereunder, OSL will not build or construct
       on or otherwise develop, modify, alter or effect a change in the Leased
       Property (hereinafter: "A CHANGE") without the advance written consent of
       OIL, which will not be unreasonably withheld.

                                      -9-

11.2           In case of any request or requirement for a Change by OSL, OSL
       will provide OIL in writing all the information regarding the requested
       Change, including all information reasonably required by OIL.

11.3           If OIL authorizes a Change, OSL will be permitted to execute such
       Change, provided it corresponds to the authorization and all other
       reasonable limitations or restrictions imposed by OIL.

11.4           Notwithstanding the provisions of clause 11.1 above, OSL shall be
       entitled to remodel, redecorate, refurbish and make improvements and
       replacements (hereinafter: "IMPROVEMENTS") to the interior structure of
       the Plant as OSL may deem desirable. OIL will have no objection to the
       same, provided that none of the Improvements will have any permanent
       effect whatsoever on the structure or construction of the Plant.

11.5           OSL will bear the responsibility and all costs and expenses
       involved in executing the Change or Improvement, and the maintenance
       thereof, and will not be entitled to any compensation, consideration or
       indemnification for such Change or Improvement, whether upon its
       execution or any time thereafter, including at the termination of this
       Agreement. Neither will OSL be entitled to any reduction in the Rent on
       account of such Change or Improvement. For the removal of doubt, OSL
       alone will be responsible to obtain any necessary approvals or
       authorizations for the execution of the Change or Improvement.

11.6           Any Change or Improvement made will be considered an integral
       part of the Leased Property and deemed owned by OIL for all intents and
       purposes, and will accordingly be surrendered to OIL, together with the
       Leased Property, upon termination of this Agreement (for no
       consideration). Provided however, that subject to clause 13 hereunder,
       said provision will not apply to equipment and furniture belonging to OSL
       (including phones and computer systems) which are not permanently
       attached to the Leased Property and whose detachment will not have a
       permanent effect on the construction or structure of the Plant.

               Notwithstanding the above, OIL shall be entitled at the end of
               the Term or upon the termination of this Agreement, to demand
               that OSL remove any Change or Improvement and return the Leased
               Property to its previous condition, at OSL's expense and OSL
               will do so, within a

                                      -10-

               reasonable time after being so demanded. If OSL fails to do so
               within 30 Business Days of receipt of such a demand, OIL may
               return the Leased Property to its previous condition, at OSL's
               expense, and OSL will reimburse OIL for all its expenses in
               connection therewith, together with interest as set forth in
               clause 14.1 hereunder, immediately upon OIL's demand.

  12.  CEASING OF OPERATION AND TERMINATION

12.1           OSL may cease its activities in the Leased Property at any time
       during the Term, provided however, it continues to fully comply with it
       obligations under this Agreement.

12.2           OIL will have the right to terminate this Agreement upon the
       occurrence of any one of the followings: (i) the dissolution or winding
       up of OSL (ii) an appointment of a special manager, trustee or receiver,
       over OSL or its material assets, if such appointment is not cancelled
       within 90 days (iii) a breach by OSL of any of its payment obligations to
       OIL under this Agreement which is not remedied within 30 days after being
       notified in writing of the breach by OIL, or a breach of OSL of any of
       its other undertakings under this Agreement which is not remedied within
       90 days after being notified in writing of the breach by OIL.

12.3           Upon OIL request and at OIL's sole discretion, the area of the
       Leased Property shall be reduced in order to accommodate the needs of
       OIL; provided, however, that any such reduction does not have an adverse
       affect on the operation of the business of OSL in the Leased Property. If
       OIL exercises its aforesaid right, the Rent and all OSL's liabilities
       with respect to the Leased Property shall be adjusted proportionately to
       such reduction.

13.    SURRENDER OF THE LEASED PROPERTY

13.1           OSL undertakes upon expiration or termination of the Agreement to
       restore possession of the Leased Property to OIL free of any property,
       equipment and fixtures not belonging to OIL (subject to clause 11 above).
       The Leased Property will be in as good, clean, orderly, and proper
       condition as on the date of this Agreement, except for ordinary wear and
       tear resulting from ordinary and reasonable use of the Leased Property in
       accordance with the purpose of the lease.

                                      -11-

               Should OSL fail to comply with its obligation, it will reimburse
               OIL all the expenses incurred by it in the course of restoring
               the Leased Property to such condition.

  13.2         Should OSL fail to vacate as aforesaid the Leased Property at the
         time set forth above,

13.2.1         OSL shall be obligated to pay OIL liquidated damages of USD 3,000
         for each day of delay in vacating the Leased Property. Such penalty
         will not be considered as Rent payment and will not create any
         lessor-lessee relationship between OIL and OSL.

13.2.2         Upon a 7 days prior written notice, OIL may vacate the Leased
         Property at OSL's expense, and transfer and store any equipment and
         furniture belonging to OSL, all at OSL's expense. OIL shall not be
         liable to any damage to OSL or the Leased Property or the equipment or
         furniture vacated, caused in connection with such actions on its part,
         except damage caused willfully or negligently.

               All this, without derogating from any other remedies OIL may be
               entitled to under this Agreement or under law.

  14.  ARREARS INTEREST

14.1           Any payment imposed on a Party under this Agreement for the
         benefit of the other Party, which was not remitted by it on the date
         due for payment, shall bear interest at the rate of Prime plus 5% per
         annum, for the period during which such payment remained unpaid.

14.2           The right to receive or the payment of arrears interest will not
         impair OIL's right to receive, in addition to such payment, any other
         or additional remedy OIL may be entitled to under this Agreement or
         under law for such delay in payment, and will not constitute any waiver
         by OIL of its right to such remedies.

  15.    MISCELLANEOUS

15.1           Each of the Parties hereby declares and confirms, that all
         actions and resolutions necessary in order to give effect to its
         entering into this Agreement, have

                                      -12-

         been taken, and that there is no restriction and/or limitation and/or
         hindrance on its signing this Agreement, and such signature and/or the
         execution of this Agreement by it shall not constitute a breach by it
         of any applicable contract and/or law and/or its documents of
         incorporation.

15.2           Each party will cooperate with the other party, in good faith,
         and exert its best efforts in order to assist the other party in
         achieving the purposes of this Agreement and complying with the other
         party's undertakings hereunder.

15.3           Monetary obligations owed by the Parties hereto to one another,
         which have become due, may be offset by a written notice provided by
         the offsetting Party to the other Party.

15.4           Assignment. Neither this Agreement nor any of the rights or
         obligations hereunder may be assigned by OSL without the prior written
         consent of OIL. Provided however, such assignment may be made to a
         Permitted Transferee, without OIL's consent. OIL may, at any time and
         at its full discretion, assign this Agreement or any of its rights or
         obligations hereunder, as well as sell, transfer, pledge or otherwise
         assign its rights (in whole or in part) in the Leased Property or any
         part thereof, without obtaining OSL's consent, provided however, OSL's
         rights pursuant to this Agreement will not be impaired. OIL will notify
         OSL of such act within reasonable time after its being carried out. OSL
         will then comply with all its obligations pursuant to this Agreement to
         any such transferee of OIL. Any assignment maybe subject to the prior
         consent of the ILA, which the assigning party shall be responsible to
         obtain.

               In any event, the transferee (whether of OSL or of OIL), will
               sign this Agreement with the remaining Party, or will otherwise
               affirm its assumption of the transferor's obligations and
               undertakings under this Agreement in a manner satisfactory to
               the remaining Party.

               Subject to the foregoing, this Agreement shall be binding upon
               and inure to the benefit of the parties hereto and their
               respective successors and assignees with no other person having
               any right, benefit or obligation hereunder.

15.5           Notices. Unless otherwise provided herein, any notice, request,
         instruction or other document to be given hereunder by either party to
         the other shall be in writing and delivered by telecopy or other
         facsimile (with acknowledged

                                      -13-

          receipt), delivered personally or mailed by certified or registered
          mail, postage prepaid (and by airmail if sent internationally), return
          receipt requested or by internationally recognized courier (such as
          Federal Express or DHL) (such mailed or couriered notice to be
          effective on the date such receipt is acknowledged or refused), as
          follows:

               If to OSL, addressed to:
               Ormat Systems Ltd.
               Yavne Industrial Area
               Attn.: President
               Fax: 08-9439901

               If to OIL, addressed to:
               Ormat Industries Ltd.
               Yavne Industrial Area
               Attn: CEO
               Fax: 08-9439901

               or to such other place and with such other copies as either
               party may designate as to itself by written notice to the other.

15.6           Choice of Law; Venue. This Agreement shall be construed,
         interpreted and the rights of the parties determined in accordance with
         the laws of the State of Israel. Each of the parties to this Agreement
         consents to the exclusive jurisdiction and venue of the competent
         courts of Tel-Aviv-Jaffa over all matters arising in connection with
         this Agreement.

15.7           Entire Agreement; Amendments and Waivers. This Agreement,
         together with all exhibits and schedules hereto, constitutes the entire
         agreement between the parties hereto pertaining to the subject matter
         hereof, and supersedes all prior agreements, understandings,
         negotiations and discussions, whether oral or written, between the
         parties hereto with respect to such subject matter. No supplement,
         modification or waiver of this Agreement shall be binding unless
         executed in writing by the party to be bound thereby. No waiver of any
         of the provisions of this Agreement shall be deemed or shall constitute
         a waiver of any other provision hereof (whether or not similar), nor
         shall such waiver constitute a continuing waiver unless otherwise
         expressly provided.

                                      -14-

15.8           Multiple Counterparts. This Agreement may be executed in one or
         more counterparts, each of which shall be deemed an original, but all
         of which together shall constitute one and the same instrument.

15.9           Invalidity. In the event that any one or more of the provisions
         contained in this Agreement or in any other instrument referred to
         herein shall, for any reason, be held to be invalid, illegal or
         unenforceable in any respect, then to the maximum extent permitted by
         law, such provision or provisions shall be judicially reformed
         consistent with the parties' intentions so as to be valid, legal and
         enforceable to the maximum extent possible and such invalidity,
         illegality or unenforceability shall not affect any other provision of
         this Agreement or any other such instrument.

15.10          Titles. The titles, captions or headings of the Sections herein
         are inserted for convenience of reference only and are not intended to
         be a part of or to affect the meaning or interpretation of this
         Agreement.

                            [Signature Page Follows]

                                      -15-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their respective behalf, by their respective duly authorized
officers, in multiple originals, all as of the day and year first above written.

----------------------------------------  ------------------------------------
Ormat Industries Ltd.                     Ormat System Ltd.

By: /s/ Lucien Y. Bronicki                By: /s/ Etty Rosner
    ------------------------------            ---------------------------
    Lucien Y. Bronicki                        Etty Rosner
    Chairman of the Board                     V.P. Contract Administrator

                                      -16-

                                    EXHIBIT A
                                    ---------
                                    [drawing]

                                      -17-

                                    EXHIBIT B
                                    ---------

-      Employers' Liability Insurance

-      Third Party Liability Insurance

-      Property Insurance

-      Consequential Damage Insurance

-      Business Interruption Insurance

-      Comprehensive General Liability

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