Document:

EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

                          DATED AS OF FEBRUARY 13, 2004

                                  BY AND AMONG

                               ORMAT FUNDING CORP.
                              BRADY POWER PARTNERS
                            STEAMBOAT GEOTHERMAL LLC
                           STEAMBOAT DEVELOPMENT CORP.
                                 ORMAMMOTH INC.
                                   ORNI 1 LLC
                                   ORNI 2 LLC
                                   ORNI 7 LLC

                                       AND

                              LEHMAN BROTHERS INC.

          This Registration Rights Agreement (this "AGREEMENT") is dated as of
February 13, 2004, by and among Ormat Funding Corp., a Delaware corporation (the
"COMPANY"), the subsidiaries of the Company listed on Schedule A attached hereto
(the "GUARANTORS"), and Lehman Brothers Inc. (the "INITIAL PURCHASER"). The
Initial Purchaser has agreed to purchase the Company's 8 1/4% Senior Secured
Notes due 2020 (the "NOTES") pursuant to the Purchase Agreement (as defined
below).

          This Agreement is made pursuant to the Purchase Agreement, dated
February 6, 2004 (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchaser. In order to induce the Initial Purchaser
to purchase the Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser set
forth in Section 3 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the Indenture,
dated the Closing Date (the "INDENTURE"), among the Company, the Guarantors and
Union Bank of California, N.A., as Trustee (the "TRUSTEE"), relating to the
Notes and the Exchange Notes (as defined below).

          The parties hereby agree as follows:

SECTION 1. DEFINITIONS

          As used in this Agreement, the following capitalized terms shall have
the following meanings:

          ACT: The U.S. Securities Act of 1933, as amended.

          AFFILIATE: As defined in Rule 144 of the Act.

          BLACKOUT PERIOD: As defined in Section 5 hereof.

          BROKER-DEALER: Any broker or dealer registered under the Exchange Act.

          CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.

          CLOSING DATE: The date of this Agreement.

          COMMISSION: The United States Securities and Exchange Commission.

          CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the

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period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Notes tendered
by Holders thereof pursuant to the Exchange Offer.

          CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.

          EFFECTIVENESS DEADLINE: As defined in Section 4(a) hereof.

          EXCHANGE ACT: The United States Securities Exchange Act of 1934, as
amended.

          EXCHANGE NOTES: The Company's 8 1/4 % Senior Secured Notes due 2020,
registered under the Act, to be issued pursuant to the Indenture (a) in the
Exchange Offer or (b) as contemplated by Section 4 hereof.

          EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Notes that are tendered by such Holders in connection with such exchange and
issuance.

          EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

          EXEMPT RESALES: The transactions in which the Initial Purchaser
proposes to sell the Notes (i) to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act and (ii) pursuant to Regulation
S under the Act.

          GUARANTEES: The guarantees of the Notes and Exchange Notes of the
Guarantors under the Indenture, as amended from time to time.

          HOLDERS: As defined in Section 2 hereof.

          INTEREST PAYMENT DATE: As defined in the Notes and the Exchange Notes.

          PERSON: As defined in the Indenture.

          PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

          RECOMMENCEMENT DATE: As defined in Section 6(e) hereof.

          REGISTRATION DEFAULT: As defined in Section 5 hereof.

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          REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes and related
Guarantees pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement, in
each case (i) that is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.

          REGULATION S: Regulation S promulgated under the Act.

          RULE 144: Rule 144 promulgated under the Act.

          SHELF REGISTRATION STATEMENT: As defined in Section 4(a) hereof.

          SUSPENSION NOTICE: As defined in Section 6(e) hereof.

          TIA: The United States Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.

          TRANSFER RESTRICTED SECURITIES: (a) Each Note, and the related
Guarantees, until the earliest to occur of (i) the date on which such Note has
been exchanged by a Person other than a Broker-Dealer for an Exchange Note in
the Exchange Offer and is entitled to be resold to the public by such Person
without complying with the prospectus delivery requirements of the Act, (ii) the
date on which such Note has been effectively registered under the Act and
disposed of in accordance with the Shelf Registration Statement, or (iii) the
date on which such Note is eligible to be distributed to the public pursuant to
Rule 144(k) under the Act, and (b) each Exchange Note and the related Guarantees
acquired by a Broker-Dealer in the Exchange Offer of a Note for such Exchange
Note, until the date on which such Exchange Note is sold to a purchaser who
receives from such Broker-Dealer on or prior to the date of such sale a copy of
the Prospectus contained in the Exchange Offer Registration Statement.

SECTION 2. HOLDERS

          A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

          (a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, (ii) use their commercially reasonable
efforts to cause such Exchange Offer Registration Statement to become

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effective as soon as practicable after filing, (iii) in connection with the
foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings, if any, in connection with the registration and
qualification of the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (I) registration of the Exchange Notes to be offered
in exchange for the Notes that are Transfer Restricted Securities and (II)
resales of Exchange Notes by Broker-Dealers that tendered into the Exchange
Offer Notes that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Notes acquired
directly from the Company or any of its Affiliates) as contemplated by Section
3(c) below.

          (b) The Company and the Guarantors shall use their commercially
reasonable efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Notes and
related Guarantees shall be included in the Exchange Offer Registration
Statement. The Company and the Guarantors shall use their commercially
reasonable efforts to cause the Exchange Offer to be Consummated on or prior to
the date that is 330 days after the Closing Date (the "CONSUMMATION DEADLINE").

          (c) The Company and the Guarantors shall include a "Plan of
Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Notes acquired directly from the Company or any Affiliate
of the Company), may exchange such Transfer Restricted Securities pursuant to
the Exchange Offer. Such "Plan of Distribution" section shall also contain all
other information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.

          Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such

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prospectus delivery requirement. To the extent necessary to ensure that the
prospectus contained in the Exchange Offer Registration Statement is available
for sales of Exchange Notes by Broker-Dealers, the Company and the Guarantors
agree to use their commercially reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer Registration
Statement is declared effective or such shorter period as will terminate when
all Transfer Restricted Securities covered by such Registration Statement have
been sold pursuant thereto or are no longer outstanding. The Company shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request at any time during such one-year period in
order to facilitate resales.

SECTION 4. SHELF REGISTRATION

          (a) Shelf Registration. If (i) the Company and the Guarantors are not
(A) required to file the Exchange Offer Registration Statement or (B) the
Exchange Offer is not permitted by applicable law or Commission policy (after
the Company and the Guarantors have complied with the procedures set forth in
Section 6(a)(i) hereof) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company prior to the 20th day following the Consummation of the
Exchange Offer that (x) such Holder was prohibited by applicable law or
Commission policy from participating in the Exchange Offer or (y) such Holder
may not resell the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (z) such Holder is a Broker-Dealer and holds Notes
acquired directly from the Company or any of its Affiliates, then the Company
and the Guarantors shall:

          (I) use their commercially reasonable efforts to cause to be filed on
or prior to 45 days after the earlier of (x) the date on which the Company
determines that the Exchange Offer Registration Statement cannot be filed as a
result of clause (a)(i) of this Section and (y) the date on which the Company
receives the notice specified in clause (a)(ii) of this Section (such earlier
date, the "FILING DEADLINE"), a shelf registration statement pursuant to Rule
415 under the Act (which may be an amendment to the Exchange Offer Registration
Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer
Restricted Securities; and

          (II) use their commercially reasonable efforts to cause such Shelf
Registration Statement to become effective as soon as practicable after filing,
but in no event later than on or prior to the later of (A) 330 days after the
Closing Date or (B) 90 days after the Filing Deadline for the Shelf Registration
Statement (such later date, the "EFFECTIVENESS DEADLINE").

          If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely

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because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) of this Section), then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements of clause (I)
above; provided that, in such event, the Company and the Guarantors shall remain
obligated to meet the Effectiveness Deadline set forth in clause (II) above.

          To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their commercially reasonable
efforts to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i) hereof) following the
Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto or are no longer outstanding.

          (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information as the Company may reasonably request in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein,
including, but not limited to, the information specified in Item 507 or 508 of
Regulation S-K, as applicable, of the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein.
No Holder of Transfer Restricted Securities shall be entitled to liquidated
damages pursuant to Section 5 hereof unless and until such Holder shall have
provided all such information. By its acceptance of Transfer Restricted
Securities, each Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.

SECTION 5. LIQUIDATED DAMAGES

          If (a) the Shelf Registration Statement, to the extent required
hereby, has not been declared effective by the Commission on or prior to the
Effectiveness Deadline, (b) the Exchange Offer has not been Consummated on or
prior to the Consummation Deadline or (c) any Registration Statement required by
this Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
within two business days by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective within
five business days of filing such post-effective amendment to such Registration
Statement, except in the case of this clause (c) under the circumstances set
forth in the following paragraph (each such event referred

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to in clauses (a) through (c), a "REGISTRATION DEFAULT"); then the Company and
the Guarantors hereby jointly and severally agree to pay to each Holder of Notes
affected thereby, liquidated damages with respect to the first 90-day period
immediately following the occurrence of the first Registration Default in an
amount equal to $.05 per week per $1,000 principal amount of Notes. The amount
of the Liquidated Damages will increase by an additional $.05 per week per
$1,000 principal amount of Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages for all Registration Defaults of $.50 per week per $1,000
principal amount of Notes provided that the Company and the Guarantors shall in
no event be required to pay Liquidated Damages for more than one Registration
Default at any given time. Notwithstanding anything to the contrary set forth
herein, (i) upon the effectiveness of the Shelf Registration Statement, in the
case of (a) above, (ii) upon Consummation of the Exchange Offer, in the case of
(b) above, or (iii) upon the filing of a post-effective amendment to the
Registration Statement or an additional Registration Statement that causes the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) to again be declared effective or made usable, in the
case of (c) above, the liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (a), (b) or (c), as applicable,
shall cease to accrue, but all accrued and unpaid liquidated damages shall
continue to be payable.

          A Registration Default referred to in clause (c) above shall be deemed
not to have occurred and be continuing in respect of a Registration Statement or
the related Prospectus if (A) such period of time during which any Registration
Statement is not effective or any such Registration Statement or the related
Prospectus is not useable ( the "BLACKOUT PERIOD") occurred solely as a result
of (x) the filing of a post-effective amendment to such Registration Statement
to incorporate annual audited financial information with respect to the Company
and the Guarantors where such post-effective amendment is not yet effective and
needs to be declared effective to permit Holders to use the related Prospectus
or (y) the occurrence of other material events with respect to the Company and
the Guarantors that would need to be described in such Registration Statement or
the related Prospectus and (B) in the case of clause (y), the Company and the
Guarantors are proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into the Registration Statement) such Registration
Statement and the related Prospectus to describe such events; provided, however,
that in the event a Blackout Period occurs for a continuous period in excess of
30 days, a Registration Default shall be deemed to have occurred on the 31st day
of such Blackout Period and liquidated damages shall be payable in accordance
with the above paragraph from the day such Registration Default occurs until
such Registration Default is cured or until the Company and the Guarantors are
no longer required pursuant to this Agreement to keep such Registration
Statement effective or such Registration Statement or the related Prospectus
usable; provided, further, that in no event shall the total of all Blackout
Periods exceed 60 days in the aggregate for any 12-month period.

          All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture, the Notes
and the Exchange Notes. Notwithstanding the

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fact that any securities for which liquidated damages are due cease to be
Transfer Restricted Securities, all obligations of the Company and the
Guarantors to pay liquidated damages with respect to securities shall survive
until (i) an Exchange Offer has been consummated or (ii) a Shelf Registration
Statement has become effective and Holders are permitted to sell Notes
thereunder in such manner and for such periods as are set forth in Section 4
hereof.

SECTION 6. REGISTRATION PROCEDURES

          (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (i) comply with all
applicable provisions of Section 6(c) below, (ii) use their commercially
reasonable efforts to effect such exchange and to permit the resale of Exchange
Notes by any Broker-Dealer that tendered Notes in the Exchange Offer that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its Affiliates) being sold in accordance with the intended
method or methods of distribution thereof, and (iii) comply with all of the
following provisions:

          (A) If, following the date hereof there has been announced a change in
     Commission policy with respect to exchange offers such as the Exchange
     Offer, that in the reasonable opinion of counsel to the Company raises a
     question as to whether the Exchange Offer is permitted by applicable
     federal law, the Company and the Guarantors hereby agree to seek a
     no-action letter or other favorable decision from the Commission allowing
     the Company and the Guarantors to Consummate an Exchange Offer for such
     Transfer Restricted Securities. The Company and the Guarantors hereby agree
     to pursue the issuance of such a decision to the Commission staff level,
     but shall not be required to take commercially unreasonable action to
     effect a change of Commission policy. Notwithstanding the foregoing, the
     Company and the Guarantors hereby agree to take all such other actions as
     may be requested by the Commission or otherwise required in connection with
     the issuance of such decision, including without limitation (I)
     participating in telephonic conferences with the Commission staff, (II)
     delivering to the Commission staff an analysis prepared by counsel to the
     Company setting forth the legal bases, if any, upon which such counsel has
     concluded that such an Exchange Offer should be permitted and (III)
     diligently pursuing a resolution (which need not be favorable) by the
     Commission staff.

          (B) As a condition to its participation in the Exchange Offer, each
     Holder of Transfer Restricted Securities (including, without limitation,
     any Holder who is a Broker-Dealer) shall furnish, upon the request of the
     Company, prior to the Consummation of the Exchange Offer, a written
     representation to the Company and the Guarantors (which may be contained in
     the letter of transmittal contemplated by the Exchange Offer Registration
     Statement) to the effect that (I) it is not an Affiliate of the Company,
     (II) it is not engaged in, and does not intend to engage in, and has no
     arrangement or understanding with any person to participate in, a
     distribution of the Exchange Notes to be issued in the Exchange Offer,
     (III) it is acquiring the Exchange Notes in its ordinary course of business
     and

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     (IV) if such Holder is a Broker-Dealer, that it will receive Exchange Notes
     for its own account in exchange for Notes that were acquired as a result of
     market-making activities or other trading activities and that it will
     deliver a Prospectus in connection with any resale of such Exchange Notes.
     Each Holder shall be required to make such other representations as may be
     reasonably necessary under applicable Commission rules, regulations or
     interpretations to render the use of Form S-4 or another appropriate form
     under the Act available and will be required to agree to comply with their
     agreements and covenants set forth in this Agreement. Each Holder using the
     Exchange Offer to participate in a distribution of the Exchange Notes will
     be required to acknowledge and agree that, if the resales are of Exchange
     Notes obtained by such Holder in exchange for Notes acquired directly from
     the Company or an Affiliate thereof, it (1) could not, under Commission
     policy as in effect on the date of this Agreement, rely on the position of
     the Commission enunciated in Morgan Stanley and Co., Inc. (available June
     5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988),
     as interpreted in the Commission's letter to Shearman & Sterling dated July
     2, 1993, and similar no-action letters (including, if applicable, any
     no-action letter obtained pursuant to clause (A) above), and (2) must
     comply with the registration and prospectus delivery requirements of the
     Act in connection with a secondary resale transaction and that such a
     secondary resale transaction must be covered by an effective Registration
     Statement containing the selling security holder information required by
     Item 507 or 508, as applicable, of Regulation S-K.

          (C) Prior to effectiveness of the Exchange Offer Registration
     Statement, the Company and the Guarantors shall provide a supplemental
     letter to the Commission (I) stating that the Company and the Guarantors
     are registering the Exchange Offer in reliance on the position of the
     Commission enunciated in Exxon Capital Holdings Corporation (available May
     13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
     interpreted in the Commission's letter to Shearman & Sterling dated July 2,
     1993, and, if applicable, any no-action letter obtained pursuant to clause
     (A) above, (II) including a representation that neither the Company nor any
     Guarantor has entered into any arrangement or understanding with any Person
     to distribute the Exchange Notes to be received in the Exchange Offer and
     that, to the best of the Company's and each Guarantor's information and
     belief, each Holder participating in the Exchange Offer is acquiring the
     Exchange Notes in its ordinary course of business and has no arrangement or
     understanding with any Person to participate in the distribution of the
     Exchange Notes received in the Exchange Offer and (III) any other
     undertaking or representation required by the Commission as set forth in
     any no-action letter obtained pursuant to clause (A) above, if applicable.

          (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

               (i) comply with all the provisions of Section 6(c) and (d) below
and use their commercially reasonable efforts to effect such registration to
permit the sale of the

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Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof; and

               (ii) issue, upon the request of any Holder or purchaser of Notes
covered by any Shelf Registration Statement contemplated by this Agreement,
Exchange Notes having an aggregate principal amount equal to the aggregate
principal amount of Notes sold pursuant to the Shelf Registration Statement and
surrendered to the Company for cancellation; the Company and the Guarantors
shall register Exchange Notes and the related Guarantees on the Shelf
Registration Statement for this purpose and issue the Exchange Notes to the
purchaser(s) of securities subject to the Shelf Registration Statement in the
names as such purchaser(s) shall designate.

          (c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

               (i) use their commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 hereof, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain an
untrue statement of material fact or omit to state any material fact necessary
to make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement curing such defect, and, if
Commission review is required, use their commercially reasonable efforts to
cause such amendment to be declared effective as soon as practicable. If at any
time the Commission shall issue any stop order suspending the effectiveness of
any Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Guarantors shall use their
commercially reasonable efforts to obtain the withdrawal or lifting of such
order as soon as practicable;

               (ii) use their commercially reasonable efforts to prepare and
file with the Commission such amendments and post-effective amendments to the
applicable Registration Statement as may be necessary to keep such Registration
Statement effective for the applicable period set forth in Section 3 or 4
hereof, as the case may be; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner, and comply with the provisions of
the Act with

                                       10

respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;

               (iii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be registered in such denominations and such
names as the selling Holders may request at least two business days prior to
such sale of Transfer Restricted Securities;

               (iv) use their commercially reasonable efforts to cause the
disposition of the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities; provided,
however, that neither the Company nor any Guarantor shall be required to
register or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;

               (v) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Trustee under the Indenture with
certificates for the Transfer Restricted Securities which are in a form eligible
for deposit with The Depository Trust Company;

               (vi) otherwise use their commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under the Act);
and

               (vii) use their commercially reasonable efforts to cause the
Indenture to be qualified under the TIA not later than the effective date of the
first Registration Statement required by this Agreement and, in connection
therewith, cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use their commercially
reasonable efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified in a
timely manner.

                                       11

          (d) Additional Provisions Applicable to Shelf Registration Statements
and Certain Exchange Offer Prospectuses. In connection with (i) each Shelf
Registration Statement, and (2) each Exchange Offer Registration Statement if
and to the extent that the Initial Purchaser has notified the Company that it is
a holder of Exchange Notes that are Transfer Restricted Securities (for so long
as such Exchange Notes are Transfer Restricted Securities or for the period
provided in Section 3 hereof, whichever is shorter); the Company and the
Guarantors shall:

               (i) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any proceeding
for any of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement in order to
make the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

               (ii) if any fact or event contemplated by Section 6(d)(i)(D)
above shall exist or have occurred, use their commercially reasonable efforts to
prepare a supplement or post-effective amendment to the Registration Statement
or related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of Transfer Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

               (iii) furnish to each Holder in connection with such exchange or
sale, if any (or, in connection with any Exchange Offer Registration Statement,
furnish to counsel for the Initial Purchaser), before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein (except the Prospectus included in the Exchange Offer Registration
Statement at the time it was declared effective) or any amendments or
supplements to any such Registration Statement or Prospectus (but excluding any
documents incorporated by reference as a result of the Company's or the
Guarantors' periodic reporting requirements under the Exchange Act), which
documents will be subject to the review and comment of such Holders (and
counsel, as the case may be) in connection with such sale, if any, for a period
of at least four business days, and the Company will not file any such
Registration Statement or Prospectus or

                                       12

any amendment or supplement to any such Registration Statement or Prospectus
(excluding all such documents incorporated by reference as a result of the
Company's or the Guarantors' periodic reporting requirements under the Exchange
Act) to which such Holders (or counsel, as the case may be) shall reasonably
object within five business days after the receipt thereof. A Holder shall be
deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein not misleading or fails
to comply with the applicable requirements of the Act;

               (iv) prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to each Holder (or, in connection with any Exchange
Offer Registration Statement, furnish to counsel for the Initial Purchaser) in
connection with such exchange or sale, if any, make the Company's and the
Guarantors' representatives available for discussion of such document and other
customary due diligence matters, and include such information in such document
prior to the filing thereof as such Holders (and counsel, as the case may be)
may reasonably request;

               (v) make available, at reasonable times, for inspection by a
representative of the Holders of Transfer Restricted Securities who is
reasonably acceptable to the Company in connection with any Shelf Registration
Statement and any attorney or accountant retained by such Holders in connection
with any Shelf Registration Statement or Exchange Offer Registration Statement,
all relevant financial and other records, pertinent corporate documents of the
Company and the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees to supply all information reasonably requested by any
such Holder, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness; provided, however, that the foregoing
inspection and information gathering (A) shall be coordinated on behalf of the
selling Holders, underwriters or any representative thereof by one counsel, who
shall be Milbank, Tweed, Hadley & McCloy LLP or such other counsel as may be
chosen by the Holders of a majority in principal amount of Transfer Restricted
Securities, and (B) shall not be available to any such Holder who does not agree
to hold such information in confidence;

               (vi) if requested by any Holders (or, in connection with any
Exchange Offer Registration Statement, the Initial Purchaser and its counsel) in
connection with such exchange or sale, use their commercially reasonable efforts
to include promptly in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
Holders may reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be included in such Prospectus supplement or
post-effective amendment;

                                       13

               (vii) furnish to each Holder (or, in connection with any Exchange
Offer Registration Statement, counsel for the Initial Purchaser) in connection
with such exchange or sale without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment thereto,
and upon request all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);

               (viii) deliver to each Holder (or, in connection with any
Exchange Offer Registration Statement, the Initial Purchaser and their counsel)
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Holder (or, in
connection with any Exchange Offer Registration Statement, the Initial Purchaser
and their counsel) reasonably may request; the Company and the Guarantors hereby
consent to the use (in accordance with law) of the Prospectus and any amendment
or supplement thereto by each selling Holder in connection with the offering and
the sale of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto; provided that such use of the Prospectus and
any amendment or supplement thereto and such offering and sale conforms to the
Plan of Distribution set forth in the Prospectus and complies with the terms of
this Agreement and all applicable laws and regulations thereunder;

               (ix) upon the request of any Holder in connection with any Shelf
Registration Statement, enter into such customary agreements (including an
underwriting agreement) and make such customary representations and warranties
and take all such other customary actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any applicable Registration Statement contemplated by this Agreement
as may be reasonably requested by any Holder in connection with any sale or
resale pursuant to any applicable Registration Statement. In such connection,
the Company and the Guarantors shall have no obligation to enter into an
underwriting agreement or permit an underwritten offering unless a request
therefore shall have been received from Holders of not less than 33% of the
aggregate principal amount of Transfer Restricted Securities then outstanding;
and whether or not an underwriting agreement is entered into and whether or not
the registration is an underwritten registration, the Company and the Guarantors
shall:

          (A) upon request of any Holder in connection with any Shelf
     Registration Statement, furnish (or in the case of paragraphs (2) and (3),
     use their commercially reasonable efforts to cause to be furnished) to each
     Holder, upon the effectiveness of the Shelf Registration Statement:

          (1) a certificate, dated such date, signed on behalf of the Company
     and each Guarantor by (x) two senior officers and (y) a principal financial
     or accounting officer of the Company and such Guarantor, confirming, as of
     the date thereof, the matters set forth in Section 8(b) of the Purchase
     Agreement and such other similar matters as such Holders may reasonably
     request;

          (2) an opinion, dated the date of Consummation of the Exchange Offer
     or the date of effectiveness of the Shelf Registration Statement, as the
     case may be, of counsel for the Company and the Guarantors covering such
     matters as are covered by the opinion

                                       14

     set forth in Section 8(a)(i) of the Purchase Agreement and such other
     matters as such Holder may reasonably request, and in any event including a
     representation to the effect that such counsel has participated in
     conferences with officers and other representatives of the Company and the
     Guarantors, representatives of the independent public accountants for the
     Company and the Guarantors and has considered the matters required to be
     stated therein and the statements contained therein, although such counsel
     has not independently verified the accuracy, completeness or fairness of
     such statements; and that such counsel advises that, on the basis of the
     foregoing, no facts came to such counsel's attention that caused such
     counsel to believe that the applicable Registration Statement, at the time
     such Registration Statement or any post-effective amendment thereto became
     effective and, in the case of the Exchange Offer Registration Statement, as
     of the date of Consummation of the Exchange Offer, contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein not
     misleading, or that the Prospectus contained in such Registration Statement
     as of its date and, in the case of the opinion dated the date of
     Consummation of the Exchange Offer, as of the date of Consummation,
     contained an untrue statement of a material fact or omitted to state a
     material fact necessary in order to make the statements therein, in the
     light of the circumstances under which they were made, not misleading.
     Without limiting the foregoing, such counsel may state further that such
     counsel assumes no responsibility for, and has not independently verified,
     the accuracy, completeness or fairness of the financial statements, notes
     and schedules and other financial data included in any Registration
     Statement contemplated by this Agreement or the related Prospectus; and

          (3) customary comfort letters, dated as of the date of effectiveness
     of the Shelf Registration Statement, from the Company's independent
     accountants and any other independent accountants that have rendered
     opinions with respect to financial statements included in, or incorporated
     by reference in, such Shelf Registration Statement, in each case, in the
     customary form and covering matters of the type customarily covered in
     comfort letters to underwriters in connection with underwritten offerings,
     and affirming the matters set forth in the comfort letters delivered
     pursuant to Section 8(d) of the Purchase Agreement; and

          (B) deliver such other documents and certificates as may be reasonably
     requested by the selling Holders to evidence compliance with the matters
     covered in clause (A) above and with any customary conditions contained in
     any agreement entered into by the Company and the Guarantors pursuant to
     this clause (ix);

               (x) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in connection
with the registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things reasonably necessary
or advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that neither the

                                       15

Company nor any Guarantor shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject; and

               (xi) provide promptly to each Holder, upon written request, each
document filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.

          (e) Restrictions on Holders. Each Holder's acquisition of a Transfer
Restricted Security constitutes such Holder's agreement that, upon receipt of
the notice referred to in Section 6(d)(i)(C) or any notice from the Company of
the existence of any fact of the kind described in Section 6(d)(i)(D) hereof (in
each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until (i) such Holder has received copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(ii) hereof, or
(ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice
shall be required to either (I) destroy any Prospectuses, other than permanent
file copies, then in such Holder's possession that have been replaced by the
Company with a more recently dated Prospectus or (II) deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the Prospectuses covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.

SECTION 7. REGISTRATION EXPENSES

          (a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all reasonable fees and
disbursements of counsel for the Company, the Guarantors and one counsel for the
Holders of Transfer Restricted Securities (which shall be Milbank, Tweed, Hadley
& McCloy LLP or such other counsel as may be selected by a majority of such
Holders); (v) all application and filing fees in connection with listing the
Exchange Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the

                                       16

Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).

          The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

          (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities who are tendering Notes in the Exchange Offer and/or selling or
reselling Notes or Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel (who shall be Milbank, Tweed, Hadley & McCloy LLP unless
another firm shall be chosen by the Holders of a majority in principal amount of
the Transfer Restricted Securities for whose benefit such Registration Statement
is being prepared).

SECTION 8. INDEMNIFICATION

          (a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), to the fullest extent lawful from
and against any and all losses, claims, damages, liabilities or judgments
(including without limitation, any reasonable legal or other expenses incurred
in connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Company to
any Holder or any prospective purchaser of Exchange Notes or registered Notes,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to any of the
Holders furnished in writing to the Company by any of the Holders; provided,
that with respect to any such untrue statement or omission or alleged untrue
statement or omission in or from any preliminary Prospectus, the indemnity
agreement contained in this paragraph shall not inure to the benefit of any
Holder from whom the Person asserting any such loss, claim, damage, liability or
judgment received Notes or Exchange Notes to the extent that any such loss,
claim damage, liability or judgment of or with respect to such Holder results
from the fact that both (i) a copy of the final Prospectus was not sent or given
to such Person at or prior to the written confirmation of the sale of such Notes
or Exchange Notes to such Person and (ii) the untrue statement or omission or
alleged untrue statement or omission in or from such preliminary Prospectus was
corrected in the

                                       17

final Prospectus unless, in either case, such failure to deliver the final
Prospectus was a result of the non-compliance by the Company or the Guarantors
with the provision of Section 6 hereof.

          (b) By its acquisition of Transfer Restricted Securities, each Holder
of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantors, and their respective
directors and officers, and each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company
or the Guarantors to the same extent as the foregoing indemnity from the Company
and the Guarantors set forth in Section 8(a) hereof, but only with reference to
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use in any Registration Statement or in any amendment or
supplement thereto. In no event shall any Holder, its directors, officers or any
Person who controls such Holder be liable or responsible for any amount in
excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.

          (c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 8(a) or (b) hereof
(the "INDEMNIFIED PARTY") the indemnified party shall promptly notify the Person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and (b) hereof, a Holder shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as

                                       18

they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified, pursuant to Section 8(a)
hereof, and by the Company and the Guarantors, in the case of parties
indemnified, pursuant to Section 8(b) hereof. The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (A) effected with its written consent or (B) effected without its
written consent if the settlement is entered into more than 20 business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (I) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (II) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

          (d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors on the one hand, and the Holders, on the other hand, from their
initial sale of Transfer Restricted Securities (or in the case of Exchange Notes
that are Transfer Restricted Securities, the sale of the Notes for which such
Exchange Notes were exchanged) or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in such clause
8(d)(i) but also the relative fault of the Company and the Guarantors, on the
one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

                                       19

          The Company, the Guarantors and, by its acquisition of Transfer
Restricted Securities, each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any matter, including any action
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.

SECTION 9. RULE 144A AND RULE 144

          The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (a) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof and
any prospective purchaser of such Transfer Restricted Securities designated by
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (b) is subject to Section 13 or 15(d) of the Exchange
Act, to use its commercially reasonable efforts to make all filings required
thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

SECTION 10. FUTURE GUARANTEES

          If, prior to the Consummation of the Exchange Offer or prior to the
effectiveness of the Shelf Registration Statement, as the case may be, any
subsidiary of the Company executes a Guarantee in accordance with the terms and
provisions of the Indenture, the Company shall cause such subsidiary to execute
and deliver to the parties hereto a counterpart signature page to this Agreement
and such subsidiary shall be bound by all the provisions of this Agreement as a
"Guarantor."

                                       20

SECTION 11. MISCELLANEOUS

          (a) Remedies. The Company and the Guarantors acknowledge and agree
that monetary damages (including the liquidated damages contemplated by Section
5 hereof) would not be adequate compensation for any loss incurred by reason of
a breach by the Company or the Guarantors of the provisions of this Agreement
and the Company and the Guarantors hereby agree to waive the defense in any
action for specific performance that a remedy at law would be adequate; provided
that the liquidated damages contemplated by Section 5 hereof shall be the
exclusive remedy for any such breach of Section 3 or 4 of this Agreement.

          (b) No Inconsistent Agreements. The Company and the Guarantors will
not, on or after the date of this Agreement, enter into any agreement with
respect to their respective securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The Company and the Guarantors have not previously entered
into any agreement granting any registration rights with respect to their
respective securities to any Person that would require such securities to be
included in any Registration Statement filed hereunder. The rights granted to
the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's and the Guarantors'
securities under any agreement in effect on the date hereof.

          (c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 11 (c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver of or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.

          (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one band, and the Initial Purchaser, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

                                       21

          (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:

               (i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and

               (ii) if to the Company or any of the Guarantors:
                    Ormat Funding Corp.
                    980 Greg Street
                    Sparks, Nevada 89431
                    Attention: President
                    Facsimile: (775) 356-9039

          All such notices and communications shall be deemed to have been duly
given at the time delivered by hand; when receipt is acknowledged, if
telecopied; and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.

          Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

          (f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

          (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                                       22

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

          (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       23

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                        Ormat Funding Corp.

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                        Brady Power Partners,

                                        By: ORNI 1 LLC,
                                            a Delaware limited liability company
                                            Its: General Partner

                                            By: ORMAT FUNDING CORP.,
                                                a Delaware corporation
                                                Its: Sole Member and Manager

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                        Steamboat Geothermal LLC,

                                        By: ORNI 7 LLC,
                                            a Delaware limited liability company
                                            Its: General Partner

                                            By: ORMAT FUNDING CORP.,
                                                a Delaware corporation
                                                Its: Sole Member and Manager

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                       24

                                        Steamboat Development Corp.

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                        OrMammoth Inc.

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                        ORNI 1 LLC

                                        By: ORMAT FUNDING CORP.,
                                            a Delaware corporation
                                            Its: Sole Member and Manager

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                        ORNI 2 LLC

                                        By: ORMAT FUNDING CORP.,
                                            a Delaware corporation
                                            Its: Sole Member and Manager

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                       25

                                        ORNI 7 LLC

                                        By: ORMAT FUNDING CORP.,
                                            a Delaware corporation
                                            Its: Sole Member and Manager

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name: Yehudit Bronicki
                                            Title: President and Secretary

                                       26

LEHMAN BROTHERS INC.

By: /s/ John Veech
    ---------------------------------
Name: John Veech
Title: Managing Director

                                       27

                                   SCHEDULE A

Guarantors

Brady Power Partners
Steamboat Geothermal LLC
Steamboat Development Corp.
OrMammoth, Inc.
ORNI 1 LLC
ORNI 2 LLC
ORNI 7 LLC

                                       28EXECUTION COPY

================================================================================

                          PLEDGE AND SECURITY AGREEMENT

                          Dated as of February 13, 2004

                                 by and between

                               ORMAT NEVADA INC.,
                             a Delaware corporation

                                       and

                         UNION BANK OF CALIFORNIA, N.A.,
                       in its capacity as Collateral Agent

================================================================================

                          PLEDGE AND SECURITY AGREEMENT

          This PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of
February 13, 2004, is made by and between ORMAT NEVADA INC., a Delaware
corporation (together with its permitted successors and assigns, the "Obligor"),
and UNION BANK OF CALIFORNIA, N.A., in its capacity as the Collateral Agent for
the Noteholders described below (in such capacity, the "Collateral Agent").

                                    RECITALS:

          A. Ormat Funding Corp., a Delaware corporation (the "Note Issuer"),
Union Bank of California, N.A., in its capacity as the Trustee, ORNI 1 LLC, a
Delaware limited liability company, ORNI 2 LLC, a Delaware limited liability
company, ORNI 7 LLC, a Delaware limited liability company, OrMammoth, Inc., a
Delaware corporation, Brady Power Partners, a Nevada general partnership,
Steamboat Development Corp., a Utah corporation, and Steamboat Geothermal LLC, a
Delaware limited liability company (the "Subsidiary Guarantors"), and Ormesa
LLC, a Delaware limited liability company, have entered into the Indenture dated
as of even date herewith (the "Indenture"), pursuant to which the Note Issuer is
issuing the 8.25% Senior Secured Notes (collectively, the "Notes"), and Union
Bank of California, N.A. has been appointed the Trustee on behalf of the holders
of the Notes (collectively, the "Noteholders").

          B. It is a condition precedent to the issuance of the Notes by the
Note Issuer, that Obligor shall have executed and delivered this Agreement.

          C. Obligor will derive substantial direct and indirect benefit from
the issuance of the Notes.

          NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Obligor hereby agrees with Collateral Agent as follows:

                                    ARTICLE I
                                   DEFINITIONS

          Section 1.01. Certain Defined Terms.

               (a) Each capitalized term used and not otherwise defined herein
     shall have the meaning assigned to such term (whether directly or by
     reference to another agreement or document) in Article I the Indenture. The
     Rules of Construction set forth in Section 1.04 of the Indenture are hereby
     incorporated by reference as if fully set forth herein.

               (b) In addition to the terms defined in the Indenture, the
     preamble and the recitals, the following terms shall have the following
     respective meanings:

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

          "Capital Stock" of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interest in (however designated) the common or preferred
equity or equity or preference share capital of such Person, including, without
limitation, partnership interests and limited liability company membership
interests.

          "Certificated Security" has the meaning assigned to the term
"certificated security" in the Uniform Commercial Code.

          "Collateral" has the meaning assigned to that term in Section 2.01.

          "Discharge Date" shall mean the date when the outstanding principal of
the Notes and other amounts payable to the Noteholders under the Indenture have
been paid in full.

          "Ownership Collateral" has the meaning assigned to that term in
Section 2.01(a)(iii).

          "Pledged Ownership Interests" has the meaning assigned to that term in
Section 2.01(a)(i).

          "Proceeds" has the meaning assigned to the term "proceeds" in the
Uniform Commercial Code.

          "Secured Obligations" shall mean any and all indebtedness,
liabilities, and other obligations of the Note Issuer, Obligor and the
Subsidiary Guarantors (including, but not limited to, all such obligations in
respect of principal, interest (including post-petition interest), fees,
indemnities, costs and other expenses, whether due after acceleration or
otherwise and whether incurred before or after a bankruptcy of Obligor), of
whatever nature and however evidenced, owed to the Secured Parties under or
pursuant to the Indenture and each other Transaction Document, in each case,
direct or indirect, primary or secondary, fixed or contingent, now or hereafter
arising out of or relating to any such document.

          "Security" has the meaning assigned to the term "security" in the
Uniform Commercial Code.

          "Uniform Commercial Code" shall mean the Uniform Commercial Code as
the same may, from time to time, be in effect in the State of New York;
provided, however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of the security interest in
any Collateral (as hereinafter defined) is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, the term
"UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       2

                                   ARTICLE II
                                 THE COLLATERAL

          Section 2.01. Grant. As collateral security for the prompt payment in
full when due (whether at stated maturity, upon acceleration, on any optional or
mandatory prepayment date or otherwise) and performance of the Secured
Obligations, Obligor hereby pledges and grants to the Collateral Agent, for the
benefit of the Secured Parties, and subject to the rules and regulations of the
Bureau of Land Management, as applicable with respect to certain Geothermal
Resource Leases to which Obligor is a party, a security interest in all of
Obligor's right, title and interest in and to (subject to any Permitted Liens)
the following property, whether now owned or in the future acquired by Obligor
and whether now existing or in the future coming into existence (all of the
property, assets and revenues described in this Section 2.01 being collectively,
the "Collateral"):

               (a)  (i) all of the Capital Stock in any Subsidiary identified in
          Annex 2 now or hereafter owned by Obligor, in each case together with
          all certificates (if any) evidencing the same (collectively, the
          "Pledged Ownership Interests");

                    (ii) all shares, partnership interests, membership
          interests, Securities, moneys or property representing a dividend on
          any of the Pledged Ownership Interests, or representing a distribution
          or return of capital upon or in respect of the Pledged Ownership
          Interests, or resulting from a split-up, revision, reclassification or
          other like change of the Pledged Ownership Interests or otherwise
          received in exchange therefore, and any subscription warrants, rights
          or options issued to the holders of, or otherwise in respect of, the
          Pledged Ownership Interests;

                    (iii) without affecting the obligations of Obligor under any
          provision prohibiting that action under any Transaction Document, in
          the event of any consolidation or merger in which any Subsidiary
          Guarantor is not the surviving Person, all ownership interests of any
          class or character in the successor Person (unless that successor
          Person is Obligor itself) formed by or resulting from that
          consolidation or merger (collectively, and together with the property
          described in clauses (i) and (ii) above, the "Ownership
          Collateral");and

               (b) all Proceeds and products in whatever form of all or any part
     of the other Collateral, including all rents, profits, income and benefits,
     substitutions and replacements of and to any of the Collateral and all
     proceeds of insurance and all condemnation awards and all other
     compensation for any event of loss with respect to all or any part of the
     other Collateral (together with all rights to recover and proceed with
     respect to the same), and all accessions to, substitutions for and
     replacements of all or any part of the other Collateral.

IT BEING UNDERSTOOD, HOWEVER, that (A) in the case of any of the foregoing that
consists of general or limited partnership interests in a general or limited
partnership, the security

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       3

interest hereunder shall be deemed to be created only to the maximum extent
permitted under the applicable organizational instrument pursuant to which such
partnership is formed and (B) in no event shall the security interest granted
under this Section 2.01 attach to any lease, license, contract, property rights
or agreement to which any Obligor is a party or any other part of the Collateral
(or to any of its rights or interests thereunder) if the grant of such security
interest would constitute or result in either (i) the abandonment, voiding,
invalidation or unenforceability of any right, title or interest of any Obligor
therein or (ii) in a breach or termination pursuant to the terms of, or a
default under, any such lease, license, contract, property rights or agreement
(other than, to the extent that any such term would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial
Code).

Notwithstanding the foregoing, Collateral shall not include all Capital Stock of
any Subsidiary of Obligor other than the Pledged Ownership Interests. To the
extent that Obligor is permitted under (a) Section 3.2 of the Depositary
Agreement to receive disbursements from the Operating Account in respect of
Operating and Maintenance Expenses, (b) Section 3.4(b), 3.5(c) or 3.7(b) of the
Depositary Agreement to receive disbursements from the Debt Service Reserve
Account, the Galena Re-powering Account or the Ormesa Loan Repayment Account, as
applicable or (c) Section 3.8 of the Depositary Agreement to receive Restricted
Payments, upon receipt by Obligor of such disbursements made pursuant to Section
3.2, 3.4(b), 3.5(c), 3.7(b) or 3.8 of the Depositary Agreement, as applicable,
such cash or other property distributed to Obligor shall automatically be
released, without any further action by the Collateral Agent, from any security
interest that may have been created in such cash or other property pursuant to
the foregoing grant clause.

          Section 2.02. Obligations Unconditional. The obligations of Obligor in
this Agreement shall be continuing, irrevocable, primary, absolute and
unconditional irrespective of the value, genuineness, validity, regularity or
enforceability of any Financing Document or any other agreement or instrument
referred to therein, or any substitution, release or exchange of any guarantee
of or security for any of the Secured Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 2.02 that the
obligations of Obligor hereunder shall be absolute and unconditional under any
and all circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of Obligor hereunder, which shall remain absolute and
unconditional as described above without regard to and not be released,
discharged or in any way affected (whether in full or in part) by:

               (a) at any time or from time to time, without notice to Obligor,
     the time for any performance of or compliance with any of the Secured
     Obligations shall be extended, or such performance or compliance shall be
     waived;

               (b) any Financing Document shall be amended or modified or there
     shall be a departure from, or waiver of, any of the terms of any Financing
     Document;

               (c) the maturity of any of the Secured Obligations shall be
     accelerated, or any of the Secured Obligations shall be modified,
     supplemented or amended in any

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       4

     respect, or any right under any Financing Document or any other agreement
     or instrument referred to therein shall be waived or any guarantee of any
     of the Secured Obligations or any security therefore shall be released or
     exchanged in whole or in part or otherwise dealt with;

               (d) any lien granted to, or in favor of, the Collateral Agent as
     security for any of the Secured Obligations shall fail to be perfected; or

               (e) any proceeding, voluntary or involuntary, involving the
     bankruptcy, insolvency, receivership, reorganization, liquidation or
     arrangement of Obligor or the Note Issuer or by any defense which Obligor
     or the Note Issuer may have by reason of the order, decree or decision of
     any court or administrative body resulting from any such proceeding.
     Obligor acknowledges and agrees that the Secured Obligations include
     interest on the Secured Obligations at the applicable rate therefor under
     the Financing Documents which accrues after the commencement of any such
     proceeding (or, if interest on any portion of the Secured Obligations
     ceases to accrue by operation of law by reason of the commencement of said
     proceeding, such Secured Obligations includes the interest which would have
     accrued on such portion of the Secured Obligations if said proceedings had
     not been commenced), since it is the intention of the parties that the
     amount of the Secured Obligations secured pursuant to this Agreement should
     be determined without regard to any rule of law or order which may relieve
     Obligor or the Note Issuer of any portion of the Secured Obligations.
     Obligor will permit any trustee in bankruptcy, receiver, debtor in
     possession, assignee for the benefit of creditors or similar person to pay
     the Collateral Agent, or allow the claim of the Collateral Agent in respect
     of, interest which would have accrued after the date on which such
     proceeding is commenced. Notwithstanding the above, so long as any Secured
     Obligation shall remain outstanding, Obligor shall not, without the prior
     written consent of the Collateral Agent, commence or join with any other
     person in commencing any bankruptcy, reorganization or insolvency
     proceedings of or against the Note Issuer.

          Section 2.03. Waiver.

               (a) Obligor hereby expressly waives promptness, diligence,
     presentment, demand for payment or performance and protest; filing of
     claims with any court; any proceeding to enforce any provision of the
     Financing Documents; notice of acceptance of and reliance on this Agreement
     by the Secured Parties, notice of the creation of any Secured Obligations
     of the Note Issuer, and (except with respect to any notice required by the
     Transaction Documents) any other notice whatsoever; any requirement that
     the Collateral Agent exhausts any right, power or remedy or proceed or take
     any other action against Obligor or the Note Issuer under any Financing
     Document to which it is a party or any lien or encumbrance on, or any claim
     of payment against, any property of Obligor or the Note Issuer or any other
     agreement or instrument referred to therein, or any other Person under any
     guarantee of, or lien securing, or claim for payment of, any of the Secured
     Obligations; any right to require a proceeding by the Collateral Agent
     first against the Note Issuer whether to marshal any assets or to exhaust
     any right or take any action against the Note Issuer or any other Person or
     any collateral

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       5

     or otherwise, any diligence in collection or protection for realization
     upon any Secured Obligation; any obligation hereunder or any collateral
     security for any of the foregoing; any right of protest, presentment,
     notice or demand whatsoever, and any claims of waiver, release, surrender,
     alteration or compromise and all defenses, set-offs counterclaims,
     recoupments, reductions, limitations, impairments or terminations, whether
     arising hereunder or otherwise. Obligor further waives (i) any requirement
     that any other Person be joined as a party to any proceeding for the
     enforcement by the Collateral Agent of any Secured Obligation and (ii) the
     filing of claims by the Collateral Agent in the event of the receivership
     or bankruptcy of the Note Issuer. The Collateral Agent shall have the right
     to bring suit directly against Obligor with respect to the obligations owed
     to the Collateral Agent hereunder either prior to or concurrently with any
     lawsuit against, or without bringing any suit against Obligor, the Note
     Issuer or any other Person.

               (b) The enforceability and effectiveness of this Agreement and
     the liability of Obligor, and the rights, remedies, powers and privileges
     of the Collateral Agent, under this Agreement shall not be affected,
     limited, reduced, discharged or terminated, and Obligor hereby expressly
     waives to the fullest extent permitted by law any defense now or in the
     future arising, by reason of:

                    (i) the illegality, invalidity or unenforceability of all or
          any part of the Secured Obligations, any Financing Document or any
          agreement, security document, guarantee or other instrument relating
          to all or any part of the Secured Obligations;

                    (ii) any disability or other defense with respect to all of
          any part of the Secured Obligations of Obligor, including the effect
          of any statute of limitations that may bar the enforcement of all or
          any part of the Secured Obligations;

                    (iii) the illegality, invalidity or unenforceability of any
          security or guarantee for all or any part of the Secured Obligations
          or the lack of perfection or continuing perfection or failure of the
          priority of any lien or encumbrance on any collateral for all or any
          part of the Secured Obligations;

                    (iv) the cessation, for any cause whatsoever, of the
          liability of any Person that is a guarantor of all or any part of the
          Secured Obligations (other than, subject to Section 2.05, by reason of
          the full payment and performance of all Secured Obligations);

                    (v) except as required by Section 5.01 hereof, any failure
          of the Collateral Agent to give notice of sale or other disposition of
          any collateral (including any notice of any judicial or nonjudicial
          foreclosure or sale of any interest in real property serving as
          collateral for all or any part of the Secured Obligations) for all or
          any part of the Secured Obligations to the Note Issuer, Obligor or any
          other Person or any defect in, or any failure by the Note Issuer,

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                        6

          Obligor or any other Person to receive, any notice that may be given
          in connection with any sale or disposition of any collateral;

                    (vi) any failure of the Collateral Agent to comply with
          applicable laws in connection with the sale or other disposition of
          any collateral for all or any part of the Secured Obligations;

                    (vii) any judicial or nonjudicial foreclosure or sale of, or
          other election of remedies with respect to, any interest in real
          property or other Collateral serving as security for all or any part
          of the Secured Obligations, even though such foreclosure, sale or
          election of remedies may impair the subrogation rights of either the
          Note Issuer or Obligor or may preclude the Note Issuer or Obligor from
          obtaining reimbursement, contribution, indemnification or other
          recovery from the other Subsidiary Guarantors, the Note Issuer or any
          other Person and even though the Note Issuer or Obligor may not, as a
          result of such foreclosure, sale or election of remedies, be liable
          for any deficiency;

                    (viii) any act or omission of the Collateral Agent or any
          other Person (other than payment of the Secured Obligations) that
          directly or indirectly results in or aids the discharge or release of
          Obligor or any part of the Secured Obligations or any security or
          guarantee (including any letter of credit) for all or any part of the
          Secured Obligations by operation of law or otherwise;

                    (ix) any law which provides that the obligation of a surety
          or Obligor must neither be larger in amount nor in other respects more
          burdensome than that of the principal or which reduces a surety's or
          Obligor's obligation in proportion to the principal obligation;

                    (x) any counterclaim, set-off or other claim which Obligor
          has or alleges to have with respect to all or any part of the Secured
          Obligations;

                    (xi) any failure of the Collateral Agent to file or enforce
          a claim in any bankruptcy or other proceeding with respect to any
          Person;

                    (xii) the election by the Collateral Agent, in any
          bankruptcy proceeding of any Person, of the application or
          non-application of Section 1111(b)(2) of the United States Bankruptcy
          Code;

                    (xiii) any extension of credit or the grant of any lien or
          encumbrance under Section 364 of the United States Bankruptcy Code;

                    (xiv) any use of cash collateral under Section 363 of the
          United States Bankruptcy Code;

                    (xv) any agreement or stipulation with respect to the
          provision of adequate protection in any bankruptcy proceeding of any
          Person;

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                        7

                    (xvi) the avoidance of any lien or encumbrance in favor of
          the Collateral Agent for any reason;

                    (xvii) any bankruptcy, insolvency, reorganization,
          arrangement, readjustment of debt, liquidation or dissolution
          proceeding commenced by or against any Person, including any discharge
          of, or bar or stay against collecting, all or any part of the Secured
          Obligations (or any interest on all or any part of the Secured
          Obligations) in or as a result of any such proceeding; or

                    (xviii) any action taken by the Collateral Agent that is
          authorized by this Section 2.03(b) or otherwise in this Agreement or
          by any other provision of any Financing Document or any omission to
          take any such action.

          Section 2.04. Reinstatement. The obligations of Obligor under this
Article II and the security interest in, and the lien on, the Collateral shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of Obligor in respect of the Secured Obligations is rescinded or
must be otherwise restored by any holder of any of the Secured Obligations or if
and to the extent that for any reason any payment by or on behalf of the Note
Issuer in respect of its obligations under the Indenture and the Senior Secured
Notes is rescinded or must be otherwise restored by any Noteholder, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise. Obligor
agrees that it will indemnify the Collateral Agent on demand for all reasonable
and reasonably documented costs and expenses (including reasonable and
reasonably documented fees of counsel) incurred by the Collateral Agent in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

          Section 2.05. Subrogation. Obligor shall be subrogated to all rights
of the Collateral Agent and the Secured Parties in respect of any amounts paid
by Obligor pursuant to the terms of this Agreement; provided, however, that
Obligor hereby waives all rights of subrogation or contribution, whether arising
by contract or operation of law (including, without limitation, any such right
arising under any bankruptcy, insolvency or other similar law) or otherwise by
reason of any payment by it pursuant to the provisions of this Article II. If
any amount shall be paid to Obligor on account of such subrogation rights at any
time prior to the payment, discharge or performance in full of the Secured
Obligations, such amount shall be held in trust for the benefit of the
Collateral Agent (if applicable) and shall forthwith be paid to the Collateral
Agent to be credited and applied upon and against the Secured Obligations, to
the extent then matured, in accordance with the terms of the relevant Financing
Documents or, to the extent not then matured or existing, be held by the
Collateral Agent as collateral security for such Secured Obligations.

          Section 2.06. Remedies. Obligor agrees that, as between Obligor and
the Collateral Agent, any obligations of the Note Issuer to the Secured Parties
under any of the Financing Documents to which it is a party may be declared to
be forthwith due and payable notwithstanding any stay, injunction or other
prohibition (except any applicable prohibitions set forth in the Transaction
Documents) preventing such declaration (or such obligations from

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       8

becoming automatically due and payable) as against the Note Issuer and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations shall forthwith be deemed to
have become due and payable for purposes of this Agreement. For the avoidance of
doubt, it is understood and agreed that any amount paid pursuant to the
immediately preceding sentence is intended to be applied to the payment or
prepayment (as the case may be) of the related obligations of the Note Issuer.
Each of the obligations of Obligor under this Agreement is separate and
independent of each other obligation of Obligor hereunder and separate and
independent of the Secured Obligations, and Obligor agrees that a separate
action or actions may be brought and prosecuted by the Collateral Agent against
Obligor to enforce this Agreement, irrespective of whether any action is brought
by the Collateral Agent against the Note Issuer under any relevant Financing
Document or whether the Note Issuer is joined in any such action or actions.

          Section 2.07. Continuing Obligation. The obligation provided in this
Article II is a continuing obligation and shall apply to all Secured Obligations
whenever arising.

          Section 2.08. [Intentionally Omitted.]

          Section 2.09. [Intentionally Omitted.]

          Section 2.10. Perfection. Obligor authorizes the Collateral Agent to
file such financing statements and continuation statements in such offices as
are or shall be necessary or as the Collateral Agent may determine to be
appropriate to create, perfect and establish the priority of the liens granted
by this Agreement in any and all of the Collateral, to preserve the validity,
perfection or priority of the liens granted by this Agreement in any and all of
the Collateral or to enable the Collateral Agent to exercise its remedies,
rights, powers and privileges under this Agreement. Concurrently with the
execution and delivery of this Agreement, Obligor shall (i) deliver to the
Collateral Agent any and all certificates for all Certificated Securities,
including those identified in Annex 2, duly endorsed in blank; (ii) with respect
to any part of the Ownership Collateral that constitutes an uncertificated
security Obligor shall cause any issuer thereof to register the Collateral Agent
as the registered owner of such security; and (iii) take all such other actions,
and authenticate or sign and file or record such other records or instruments,
as are necessary or as the Collateral Agent may reasonably request to perfect
and establish the priority of the liens granted by this Agreement in any and all
of the Collateral or to enable the Collateral Agent to exercise its remedies,
rights, powers and privileges under this Agreement, including, without
limitation, causing any or all of the Collateral to be transferred of record
into the name of the Collateral Agent as such (and the Collateral Agent agrees
that if any Collateral is transferred into its name, the Collateral Agent will
thereafter promptly give to Obligor copies of any notices and communications
received by it with respect to the Collateral pledged by Obligor hereunder).

          Section 2.11. Preservation and Protection of Security Interests.
Obligor shall:

               (a) upon the acquisition after the date of this Agreement by
     Obligor of any Certificated Securities covered by a certificate of title or
     ownership promptly (x) take such action with respect to that Collateral as
     is specified for that type of Collateral in

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                                       9

     Section 2.10 and (y) take all such other actions, and authenticate or sign
     and file or record such other records or instruments, as are necessary or
     as the Collateral Agent may reasonably request to create, perfect and
     establish the priority of the liens granted by this Agreement in any and
     all the Collateral, to preserve the validity, perfection or priority of the
     liens granted by this Agreement in any and all of the Collateral or to
     enable the Collateral Agent to exercise its remedies, rights, powers and
     privileges under this Agreement;

               (b) whether with respect to Collateral as of the date of this
     Agreement or Collateral in which Obligor acquires rights in the future,
     authorize, give, authenticate, execute, deliver, file or record any and all
     financing statements, notices, contracts, agreements or other records or
     instruments, obtain any and all Governmental Approvals, and take all such
     other actions, as are necessary or as the Collateral Agent may reasonably
     request to create, perfect and establish the priority of the liens granted
     by this Agreement in any and all the Collateral, to preserve the validity,
     perfection or priority of the liens granted by this Agreement in any and
     all of the Collateral or to enable the Collateral Agent to exercise and
     enforce its remedies, rights, powers and privileges under this Agreement,
     including causing any or all of the Ownership Collateral to be transferred
     of record into the name of the Collateral Agent or its nominee (and the
     Collateral Agent agrees that if any Security is transferred into its name
     or the name of its nominee, the Collateral Agent shall thereafter promptly
     give to Obligor copies of any notices and communications received by it
     with respect to that Security); and

               (c) furnish to the Collateral Agent from time to time and no
     later than 90 days prior to the date that continuation statements are
     required to be filed to preserve the validity, perfection or priority of
     the liens granted by this Agreement, statements and schedules further
     identifying and describing the Collateral pledged by hereunder and such
     other reports in connection with the Collateral pledged by Obligor
     hereunder as the Collateral Agent may reasonably request, all in reasonable
     detail.

          Section 2.12. Attorney-in-Fact.

               (a) Subject to Obligor's rights under Sections 2.13 through 2.16,
     Obligor hereby irrevocably constitutes and appoints the Collateral Agent
     and any officer or agent thereof, with full power of substitution, as its
     true and lawful attorney-in-fact with full irrevocable power and authority
     in the place and stead of Obligor and in the name of Obligor or in its own
     name, for the purpose of carrying out the provisions of this Agreement upon
     the occurrence and during the continuation of an Event of Default, to (x)
     take any appropriate action and to execute any document or instrument that
     may be necessary or desirable to accomplish the purposes of this Agreement,
     (y) preserve the validity, perfection and priority of the liens granted by
     this Agreement and, (z) exercise its rights, remedies, powers and
     privileges under this Agreement. This appointment as attorney-in-fact is
     irrevocable and coupled with an interest. Without limiting the generality
     of the foregoing, Obligor hereby gives the Collateral Agent the power and
     right, on behalf of Obligor, without notice to or assent by Obligor, upon
     the occurrence and during the continuation of any Event of Default (i) to
     ask, demand, collect, sue for,

                                                   PLEDGE AND SECURITY AGREEMENT
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                                       10

     recover, receive and give receipt and discharge for amounts due and to
     become due under and in respect of all or any part of the Collateral, (ii)
     to file any claims or take any action or proceeding that the Collateral
     Agent may deem necessary or advisable for the collection of all or any part
     of the Collateral, (iii) to execute, in connection with any sale or
     disposition of the Collateral under Article V, any endorsements,
     assignments, bills of sale or other instruments of conveyance or transfer
     with respect to all or any part of the Collateral, (iv) pay or discharge
     taxes and Liens levied or placed on or threatened against the Collateral
     (other than Permitted Liens), effect any repair or pay or discharge any
     insurance called for by the terms of this Agreement (including all or any
     part of the premiums therefor and the costs thereof), (v) execute, in
     connection with any sale provided for in Article V, any endorsement,
     assignment or other instrument of conveyance or transfer with respect to
     the collateral; and (vi) (A) direct any party liable for any payment under
     any Collateral to make payment of any moneys due or to become due
     thereunder directly to the Collateral Agent or as the Collateral Agent
     shall direct, (B) ask or demand for, collect, and receive payment of and
     receipt for, any moneys, claims and other amounts due or to become due at
     any time in respect of or arising out of any Collateral, (C) sign and
     indorse any invoice, freight or express bill, bill of lading, storage or
     warehouse receipt, draft against debtors, assignment, verification, notice
     and other document in connection with any Collateral, (D) commence and
     prosecute any suit, action or proceeding at law or in equity in any court
     of competent jurisdiction to collect any Collateral and to enforce any
     other right in respect of any Collateral, (E) defend any suit, action or
     proceeding brought against Obligor with respect to any Collateral, (F)
     settle, compromise or adjust any such suit, action or proceeding and, in
     connection therewith, give such discharges or releases as the Collateral
     Agent may deem appropriate and (G) generally, sell, transfer, pledge and
     make any agreement with respect to or otherwise deal with any Collateral as
     fully and completely as though the Collateral Agent were the absolute owner
     thereof for all purposes, and do, at the Collateral Agent's option and
     Obligor's expense, at any time, or from time to time, all acts and things
     that the Collateral Agent reasonably deems necessary to protect, preserve
     or realize upon the Collateral and the Collateral Agent's and the other
     Secured Parties' security interests therein and to effect the intent of
     this Agreement, all as fully and effectively as Obligor might do.

               (b) Without limiting the rights and powers of the Collateral
     Agent under Section 2.12(a), Obligor hereby appoints the Collateral Agent
     as its attorney-in-fact, effective the date of this Agreement and
     terminating upon the Discharge Date, for the purpose of, upon the
     occurrence and during the continuation of an Event of Default, executing
     such other documents and instruments on behalf of, and taking such other
     action in the name of, Obligor as the Collateral Agent may deem necessary
     or advisable to accomplish the purposes of this Agreement (including the
     purpose of exercising the rights, remedies, powers and privileges of the
     Collateral Agent under Section 5.01). This appointment as attorney-in-fact
     is irrevocable and coupled with an interest.

               (c) [Intentionally Omitted.]

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                                       11

               (d) The expenses of the Collateral Agent incurred in connection
     with actions undertaken as provided in this Section 2.12, together with
     interest thereon at a rate per annum equal to the rate per annum at which
     interest would then be payable on past due Notes under the Indenture, from
     the date of payment by the Collateral Agent to the date reimbursed by
     Obligor, shall be payable by Obligor to the Collateral Agent on demand and
     shall constitute Secured Obligations and be secured by the Liens of the
     Collateral Documents.

               (e) Obligor hereby ratifies all that said attorneys shall
     lawfully do or cause to be done by virtue hereof. All powers,
     authorizations and agencies contained in this Agreement are coupled with an
     interest and are irrevocable until this Agreement is terminated and the
     security interests created hereby are released.

          Section 2.13. Special Provisions Relating to Securities.

               (a) So long as no Event of Default has occurred and is
     continuing, Obligor shall have the right to exercise all voting, consensual
     and other powers of ownership pertaining to all Ownership Collateral for
     all purposes not inconsistent with the terms of any Transaction Document,
     provided that Obligor shall not vote the Ownership Collateral in any manner
     that is inconsistent with the terms of any Transaction Document; and the
     Collateral Agent shall, at Obligor's expense, execute and deliver to
     Obligor or cause to be executed and delivered to Obligor all such proxies,
     powers of attorney, dividend and other orders and other instruments,
     without recourse, as Obligor may reasonably request for the purpose of
     enabling Obligor to exercise the rights and powers that it is entitled to
     exercise pursuant to this Section 2.13(a).

               (b) So long as no Event of Default has occurred and is
     continuing, Obligor shall be entitled to receive and retain any dividends
     on all Ownership Collateral paid in cash.

               (c) If any Event of Default has occurred and is continuing, and
     whether or not the Collateral Agent exercises any available right to
     declare any Secured Obligation due and payable or seeks or pursues any
     other right, remedy, power or privilege available to it under applicable
     law, this Agreement or any other Transaction Document, all dividends and
     other distributions on all Ownership Collateral shall be paid directly to
     an account designated by the Collateral Agent and retained by it in such
     account as part of the Collateral, subject to the terms of the Transaction
     Documents, and, if the Collateral Agent so requests, Obligor shall execute
     and deliver to the Collateral Agent appropriate additional dividend,
     distribution and other orders and instruments to that end, provided that if
     the applicable Event of Default is cured, any such dividend or distribution
     paid to the Collateral Agent prior to that cure shall, upon request of
     Obligor (except to the extent applied to the Secured Obligations), be
     returned by the Collateral Agent to Obligor.

          Section 2.14. [Intentionally Omitted.]

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                                       12

          Section 2.15. Use of Collateral. So long as no Event of Default has
occurred and is continuing, Obligor shall be entitled to use and possess the
Collateral, subject to the rights, remedies, powers and privileges of the
Collateral Agent under Articles II and V.

          Section 2.16. Rights and Obligations.

               (a) No reference in this Agreement to proceeds or to the sale or
     other disposition of Collateral shall authorize Obligor to pledge, sell or
     otherwise dispose of any Collateral except to the extent otherwise
     expressly permitted by the terms of any Transaction Document. The
     Collateral Agent shall not be required to take steps necessary to preserve
     any rights against prior parties to any part of the Collateral.

               (b) Obligor shall remain liable to perform its duties and
     obligations under the contracts and agreements included in the Collateral
     in accordance with their respective terms to the same extent as if this
     Agreement had not been executed and delivered. The exercise by the
     Collateral Agent of any right, remedy, power or privilege in respect of
     this Agreement shall not release Obligor from any of its duties and
     obligations under those contracts and agreements. The Collateral Agent
     shall not have any duty, obligation or liability under those contracts and
     agreements or in respect to any Governmental Approval included in the
     Collateral by reason of this Agreement or any other Transaction Document,
     nor shall the Collateral Agent be obligated to perform any of the duties or
     obligations of Obligor under any such contract or agreement or any such
     Governmental Approval or to take any action to collect or enforce any claim
     (for payment) under any such contract or agreement or Governmental
     Approval.

               (c) No lien granted by this Agreement in Obligor's right, title
     and interest in any contract, agreement or Governmental Approval shall be
     deemed to be a consent by the Collateral Agent to any such contract,
     agreement or Governmental Approval.

          Section 2.17. Release of Collateral. Upon the Discharge Date, or the
date of any sale or conveyance of a motor vehicle or any other portion of the
Collateral for which Obligor is entitled, pursuant to the terms and conditions
of the Indenture, to sell or otherwise convey free and clear of the Liens of the
Transaction Documents, and upon the request of, and at the expense of, Obligor,
the Collateral Agent will execute and deliver to Obligor such instruments as
Obligor reasonably requests to remove the notation of the Collateral Agent as
lienholder on any financing statement with respect to such applicable portion of
the Collateral; provided that in connection with such sale or conveyance, any
such instruments shall be delivered, and the release shall be effective, only
upon receipt by the Collateral Agent of a certificate from Obligor stating that
such portion of the Collateral the lien on which is to be released is to be sold
or conveyed in accordance with the terms and conditions of the Indenture.

          Section 2.18. [Intentionally Omitted.]

          Section 2.19. Termination. Upon the occurrence of the Discharge Date,
all liens granted hereunder shall be deemed terminated, and the Collateral Agent
shall forthwith cause to

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                                       13

be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect of the Collateral, to or on the order of Obligor. The
Collateral Agent shall also execute and deliver to Obligor, at Obligor's
expense, upon the occurrence of the Discharge Date such Uniform Commercial Code
termination statements and other documentation as shall be reasonably requested
by Obligor to effect the termination and release of the liens created under this
Agreement. The security interest created hereby and the other liens created by
the Transaction Documents shall also be released with respect to any portion of
the Collateral that is sold, transferred or otherwise disposed of in compliance
with the terms and conditions of the Transaction Documents.

                                  ARTICLE III
                                 REPRESENTATIONS

          Section 3.01. Organization; Power; Authorization; Validity.

               (a) Without limiting the generality of Section 3.01, Obligor
     represents and warrants (i) it is duly organized, validly existing and in
     good standing under the laws of the jurisdiction of its organization, has
     all requisite power and authority to carry on its business as now conducted
     and is qualified to do business in and is in good standing in Delaware,
     (ii) the execution, delivery and performance by Obligor of its obligations
     under this Agreement and the other Transaction Documents to which it is a
     party are within Obligor's powers as a corporation and have been duly
     authorized by all corporate action, and (iii) this Agreement has been duly
     executed and delivered by Obligor and constitutes a legal, valid and
     binding obligation of Obligor, enforceable in accordance with its terms,
     subject to applicable bankruptcy, insolvency, reorganization, moratorium or
     other laws affecting creditors' rights generally and subject to general
     principles of equity, regardless of whether considered in a proceeding in
     equity or at law.

               (b) Annex 1 correctly sets forth Obligor's full and correct legal
     name, type of organization, jurisdiction of organization, organizational
     identification number (if applicable), chief executive office and mailing
     address as of the date of this Agreement.

               (c) Obligor has not (i) changed its location (as defined in
     Section 9307 of the Uniform Commercial Code), (ii) previously changed its
     name except as set forth on Annex 1 and (iii) previously become a "new
     debtor" (as defined in the Uniform Commercial Code) with respect to a
     currently effective security agreement entered into by another Person
     except as set forth on Annex 1.

          Section 3.02. Title. Obligor is the sole beneficial owner of the
Collateral in which it purports to grant a lien pursuant to this Agreement, and
the Collateral is free and clear of all liens (subject to Permitted Liens) and
the liens granted by this Agreement have attached and constitute a perfected
security interest in all of the Collateral prior to all other liens and
encumbrances.

                                                   PLEDGE AND SECURITY AGREEMENT
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                                       14

          Section 3.03. Pledged Ownership Interests.

               (a) The Pledged Ownership Interests identified in Annex 2 are
     duly authorized, validly existing, fully paid and nonassessable, and none
     of the Pledged Ownership Interests is subject to any contractual
     restriction, or any restriction under the organizational documents of the
     Note Issuer, upon the transfer of such Pledged Ownership Interests (except
     for any such restriction contained in any Transaction Document). Such
     Pledged Ownership Interests exist in a certificated form.

               (b) The Pledged Ownership Interests identified in Annex 2
     constitute all of the issued and outstanding membership interests or other
     interests of any class or character in the Note Issuer (whether or not
     registered in the name of Obligor), and Annex 2 correctly identifies the
     issuer of such Pledged Ownership Interests and the respective number (and
     registered owners) of the interests identified in Annex 2.

               (c) No Person other than Obligor is the registered owner of the
     Pledged Ownership Interests.

          Section 3.04. Intercompany Notes. The intercompany notes identified in
Annex 6 constitute all of the outstanding intercompany notes payable to Obligor.

                                   ARTICLE IV
                                    COVENANTS

          Until the Discharge Date, Obligor covenants and agrees as follows:

          Section 4.01. Preservation of Rights. Obligor shall warrant and defend
its title to the Collateral and the interest of the Collateral Agent in the
Collateral against any claim or demand of any persons which may in the
reasonable judgment of the Collateral Agent, materially affect Obligor's title
to or the Collateral Agent' right or interest in such Collateral.

          Section 4.02. Further Assurances. Obligor, from time to time upon the
written request of the Collateral Agent, shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order fully to effect the purposes of this Agreement.

          Section 4.03. Records. Obligor shall, at all times, keep accurate and
complete records of the Collateral. Obligor shall permit representatives of the
Collateral Agent at any time during normal business hours of Borrower and upon
three Business Days' notice to inspect and make abstracts from Obligor's books
and records pertaining to the Collateral. Upon the occurrence and continuance of
an Event of Default, at the Collateral Agent's request, Obligor shall promptly
deliver any and all such records to the Collateral Agent.

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                                   ARTICLE V
                                    REMEDIES

          Section 5.01. Events of Default, Etc. Without limiting the rights,
powers and privileges of the Collateral Agent under Article II, if any Event of
Default shall have occurred and be continuing:

               (a) The Collateral Agent in its discretion may require Obligor
     to, and Obligor shall, assemble the Collateral owned by it at such place or
     places, reasonably convenient to both the Collateral Agent and Obligor,
     designated in the Collateral Agent's request;

               (b) The Collateral Agent in its discretion may make any
     reasonable compromise or settlement it deems desirable with respect to any
     of the Collateral and may extend the time of payment, arrange for payment
     in installments, or otherwise modify the terms of, all or any part of the
     Collateral;

               (c) The Collateral Agent in its discretion may, in its name or in
     the name of Obligor or otherwise, demand, sue for, collect or receive any
     money or property at any time payable or receivable on account of or in
     exchange for all or any part of the Collateral, but shall be under no
     obligation to do so;

               (d) The Collateral Agent in its discretion may, upon ten (10)
     Business Days' prior written notice to Obligor of the time and place, with
     respect to all or any part of the Collateral which shall then be or shall
     thereafter come into the possession, custody or control of the Collateral
     Agent or any of its agents, sell, lease or otherwise dispose of all or any
     part of such Collateral, at such place or places as the Collateral Agent
     deems best, for cash, for credit or for future delivery (without thereby
     assuming any credit risk) and at public or private sale, without demand of
     performance or notice of intention to effect any such disposition or of
     time or place of any such sale (except such notice as is required above or
     by applicable statute and cannot be waived), and the Collateral Agent or
     any other Person may be the purchaser, lessee or recipient of any or all of
     the Collateral so disposed of at any public sale (or, to the extent
     permitted by law, at any private sale) and thereafter hold the same
     absolutely, free from any claim or right of whatsoever kind, including any
     right or equity of redemption (statutory or otherwise), of Obligor, any
     such demand, notice and right or equity being hereby expressly waived and
     released. The Collateral Agent may, without notice or publication, adjourn
     any public or private sale or cause the same to be adjourned from time to
     time by announcement at the time and place fixed for the sale, and such
     sale may be made at any time or place to which the sale may be so
     adjourned;

               (e) The Collateral Agent shall have, and in its discretion may
     exercise, all of the rights, remedies, powers and privileges with respect
     to the Collateral of a secured party under the Uniform Commercial Code
     (whether or not the Uniform Commercial Code is in effect in the
     jurisdiction where such rights, remedies, powers and privileges are
     asserted) and such additional rights, remedies, powers and privileges to

                                                   PLEDGE AND SECURITY AGREEMENT
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                                       16

     which a secured party is entitled under the laws in effect in any
     jurisdiction where any rights, remedies, powers and privileges in respect
     of this Agreement or the Collateral may be asserted, including the right,
     to the maximum extent permitted by law, to exercise all voting, consensual
     and other powers of ownership pertaining to the Collateral as if the
     Collateral Agent were the sole and absolute owner of the Collateral (and
     Obligor agrees to take all such action as may be appropriate to give effect
     to such right);

               (f) The Collateral Agent in its discretion may, to the full
     extent provided by law, have a court having jurisdiction appoint a
     receiver, which receiver shall take charge and possession of and protect,
     preserve, replace and repair the Collateral or any part thereof, and manage
     and operate the same, and receive and collect all rents, income, receipts,
     royalties, revenues, issues and profits therefrom. Obligor irrevocably
     consents and shall be deemed to have hereby irrevocably consented to the
     appointment thereof, and upon such appointment, Obligor shall immediately
     deliver possession of such Collateral to the receiver. Obligor also
     irrevocably consents to the entry of an order authorizing such receiver to
     invest upon interest any funds held or received by the receiver in
     connection with such receivership. The Collateral Agent shall be entitled
     to such appointment as a matter of right, if it shall so elect, without the
     giving of notice to any other party and without regard to the adequacy of
     the security of the Collateral; and

               (g) The Collateral Agent in its discretion may enforce one or
     more remedies hereunder, successively or concurrently, and such action
     shall not operate to estop or prevent the Collateral Agent from pursuing
     any other or further remedy which it may have hereunder or by law, and any
     repossession or retaking or sale of the Collateral pursuant to the terms
     hereof shall not operate to release Obligor until full and final payment of
     any deficiency has been made. Obligor shall reimburse the Collateral Agent
     upon demand for, or the Collateral Agent may apply any proceeds of
     Collateral to, the costs and expenses (including reasonable attorneys'
     fees, transfer taxes and any other charges) incurred by the Collateral
     Agent in connection with any sale, disposition, repair, replacement,
     alteration, addition, improvement or retention of any Collateral hereunder.

The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 5.01 shall be applied in accordance with
Section 5.04.

          Section 5.02. [Intentionally Omitted.]

          Section 5.03. [Intentionally Omitted.]

          Section 5.04. Application of Proceeds. The Proceeds of, or other
     realization upon, all or any part of the Collateral by virtue of the
     exercise of remedies under Section 5.01, and any other cash at the time
     held by the Collateral Agent under this Article V, shall be applied by the
     Collateral Agent in accordance with the terms and provisions of the
     Collateral Agency Agreement.

                                                   PLEDGE AND SECURITY AGREEMENT
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                                       17

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

          Section 6.01. Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (which may be
by telecopier with confirmation of receipt) delivered to the intended recipient:
if to the Collateral Agent, at the address set forth in Section 10.02 of the
Indenture and if to Obligor, at the address set forth in Annex 1; or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.s

          Section 6.02. Amendments. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be amended or modified only
by an instrument in writing signed by Obligor and the Collateral Agent and
(except for this Section 6.02) any provision of this Agreement may be waived in
writing only by the Collateral Agent.

          Section 6.03. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns of the parties to this Agreement; provided,
however, that (a) Obligor may not assign or transfer any of its respective
rights or interest in or under this Agreement or delegate any of its obligations
under this Agreement without the prior written consent of the Collateral Agent
and (b) the Collateral Agent shall transfer or assign its rights under this
Agreement in connection with a resignation or removal of such Person from its
respective capacity in accordance with the terms of this Agreement.

          Section 6.04. Survival. All agreements, statements, representations
and warranties made by Obligor herein or in any certificate or other instrument
delivered by Obligor or on its behalf under this Agreement shall be considered
to have been relied upon by the Collateral Agent and shall survive the execution
and delivery of this Agreement and the other Transaction Documents until the
earlier to occur of (i) termination thereof; and (ii) the Discharge Date, in
each case, regardless of any investigation made by or on behalf of the
Collateral Agent.

          Section 6.05. No Waiver; Remedies Cumulative. No failure or delay on
the part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between Obligor and the Collateral Agent
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.

          Section 6.06. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       18

          Section 6.07. Captions. The headings of the several articles and
sections and sub sections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.

          Section 6.08. Severability. In case any provision contained in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 6.09. Governing Law; Submission to Jurisdiction and Venue;
Waiver of Jury Trial.

               (a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.

               (b) Submission to Jurisdiction. The Obligor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The Obligor
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such court has been brought in an inconvenient forum.

               (c) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

               (d) NO CLAIM MAY BE MADE BY ANY PARTY HERETO AGAINST ANY OTHER
PARTY HERETO OR ANY OF ITS SUCCESSORS IN INTEREST OR ITS AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF ANY OF THEM FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH
OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATING TO, OR
ANY ACT, OMISSION OR EVENT

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       19

OCCURRING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS, AND EACH PARTY HERETO HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE
UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT
KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

          Section 6.10. Entire Agreement. This Agreement, together with any
other agreement executed in connection with this Agreement, is intended by the
parties as a final expression of their agreement as to the matters covered by
this Agreement and is intended as a complete and exclusive statement of the
terms and conditions of such agreement.

          Section 6.11. Independent Obligations. Obligor's obligations under
this Agreement are independent of those of any other Person. The Collateral
Agent may bring a separate action against Obligor without first proceeding
against any other Person or any other security held by the Collateral Agent and
without pursuing any other remedy.

          Section 6.12. Expenses. Obligor agrees to pay or to reimburse the
Collateral Agent for all costs and expenses (including reasonable attorney's
fees and expenses) that may be incurred by the Collateral Agent in any effort to
enforce any of the provisions of Article II or Article V, or any of the
obligations of Obligor in respect of the Collateral or in connection with (a)
the preservation of the liens on, or the rights of the Collateral Agent to the
Collateral pursuant to this Agreement or (b) any actual or attempted sale,
lease, disposition, exchange, collection, compromise, settlement or other
realization in respect of, or care of, the Collateral, including all such costs
and expenses (and reasonable attorney's fees and expenses) incurred in any
bankruptcy, reorganization, workout or other similar proceeding.

                             [SIGNATURES TO FOLLOW]

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                       20

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective authorized officers as of the
date first written above.

                                        OBLIGOR:

                                        ORMAT NEVADA INC.,
                                        a Delaware corporation

                                        By: /s/ Yehudit Bronicki
                                            ------------------------------------
                                            Name:
                                            Title:

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                        COLLATERAL AGENT:

                                        UNION BANK OF CALIFORNIA, N.A.

                                        By: /s/ Sonia N. Flores
                                            ------------------------------------
                                            Name: Sonia N. Flores
                                            Title: Vice President

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                     ANNEX 1

               Organization and Chief Executive Office of Obligor

Obligor's Legal Name, Type and Jurisdiction of Organization, and Organizational
Identification Number:

Ormat Nevada Inc., a Delaware corporation, organizational ID#: 2278574.

Obligor's Chief Executive Office and Mailing Address:

Ormat Nevada Inc.
980 Greg Street
Sparks, NV 89431
Facsimile: (775) 356-9039
Attention: President

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                     ANNEX 2

                           PLEDGED OWNERSHIP INTERESTS

Issuer: Ormat Funding Corp., a Delaware corporation ("Ormat Funding")

Chief Executive Office and Address of the Issuer:
Ormat Funding Corp.
980 Greg Street
Sparks, NV 89431
Facsimile: (775) 356-9039
Attention: President

Pledged Ownership Interests: 100% of all equity interests of Ormat Funding

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                     ANNEX 3

                              GOVERNMENT APPROVALS

                                      None.

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

                                     ANNEX 4

                               INTERCOMPANY NOTES

     The obligation, in an amount up to $55,000,000, owing to Obligor by Ormat
     Funding Corp., a Delaware corporation, evidenced under the Amended and
     Restated Credit Facility between Obligor and Ormesa LLC dated December 1,
     2003, as amended by the First Amendment to Amended and Restated Credit
     Facility, dated February 5, 2004.

                                                   PLEDGE AND SECURITY AGREEMENT
                                                                  (ORMAT NEVADA)

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