Document:

EXHIBIT 10.1.4

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                                CREDIT AGREEMENT

                                   dated as of

                                December 31, 2002

                                      among

                                   ORMESA LLC,
                                   as Borrower

                                 UNITED CAPITAL,
                        a division of Hudson United Bank,
                  as Administrative Agent and Collateral Agent

                                       and

                       The Lenders party to this Agreement
                                from time to time

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                                TABLE OF CONTENTS

                                                                                                              Page
                                                                                                              ----

ARTICLE I DEFINITIONS AND INTERPRETIVE MATTERS...................................................................1

         1.01     Certain Defined Terms..........................................................................1
         1.02     Classes and Types of Loans.....................................................................1
         1.03     Rules of Interpretation........................................................................1
         1.04     Accounting Terms...............................................................................3

ARTICLE II COMMITMENTS...........................................................................................4

         2.01     Loans..........................................................................................4
         2.02     Borrowings.....................................................................................5
         2.03     Reduction of Commitments.......................................................................6
         2.04     Fees...........................................................................................6
         2.05     Lending Offices................................................................................7
         2.06     Several Obligations; Remedies Independent......................................................7
         2.07     Notes..........................................................................................7

ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST...................................................................9

         3.01     Repayment of Loans.............................................................................9
         3.02     Interest......................................................................................10
         3.03     Optional Prepayments..........................................................................12
         3.04     Mandatory Prepayments; Etc....................................................................12
         3.05     Prepayment Mechanics..........................................................................13

ARTICLE IV PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC......................................................14

         4.01     Payments......................................................................................14
         4.02     Pro Rata Treatment............................................................................16
         4.03     Computations..................................................................................16
         4.04     Minimum Amounts...............................................................................16
         4.05     Notices.......................................................................................17
         4.06     Non-Receipt of Funds by the Administrative Agent..............................................18
         4.07     Sharing of Payments; Etc......................................................................18

ARTICLE V YIELD PROTECTION; ETC.................................................................................20

         5.01     Additional Costs..............................................................................20
         5.02     Limitation on Eurodollar Loans................................................................22
         5.03     Illegality....................................................................................23
         5.04     Treatment of Affected Loans...................................................................23
         5.05     Compensation..................................................................................24
         5.06     Taxes.........................................................................................24

         5.07     Mitigation Obligations; Prepayments; Replacement of Lenders...................................27

ARTICLE VI CONDITIONS PRECEDENT.................................................................................29

         6.01     Initial Term Loans............................................................................29
         6.02     Additional Term Loans.........................................................................37

ARTICLE VII REPRESENTATIONS AND WARRANTIES......................................................................39

         7.01     Existence.....................................................................................39
         7.02     Financial Condition...........................................................................39
         7.03     Action........................................................................................40
         7.04     No Breach.....................................................................................41
         7.05     Government Approvals; Government Rules........................................................41
         7.06     Proceedings...................................................................................42
         7.07     Environmental Matters.........................................................................43
         7.08     Taxes.........................................................................................43
         7.09     Tax Status....................................................................................44
         7.10     ERISA.........................................................................................44
         7.11     Nature of Business............................................................................44
         7.12     Title; Security Documents.....................................................................44
         7.13     Subsidiaries..................................................................................45
         7.14     Utility Regulation............................................................................46
         7.15     Financing Documents; Project Documents; Non-Material Project Contracts; Licenses, Etc.........46
         7.16     Utility Services..............................................................................48
         7.17     Disclosure....................................................................................48
         7.18     Use of Proceeds...............................................................................48
         7.19     Fees..........................................................................................48
         7.20     Indebtedness..................................................................................49
         7.21     Investments...................................................................................49
         7.22     No Force Majeure..............................................................................49
         7.23     Assets........................................................................................49

ARTICLE VIII COVENANTS..........................................................................................49

         8.01     Financial Statements and Other Information....................................................49
         8.02     Maintenance of Existence; Etc.................................................................51
         8.03     Compliance with Government Rules; Etc.........................................................52
         8.04     Environmental Compliance......................................................................52
         8.05     Insurance; Events of Loss.....................................................................53
         8.06     Proceedings...................................................................................57
         8.07     Taxes.........................................................................................57
         8.08     Books and Records.............................................................................57
         8.09     Use of Proceeds...............................................................................57
         8.10     Maintenance of Liens..........................................................................57

         8.11     [Intentionally Omitted].......................................................................58
         8.12     Prohibition of Fundamental Changes............................................................58
         8.13     Restricted Payments...........................................................................58
         8.14     Liens.........................................................................................59
         8.15     Investments...................................................................................59
         8.16     Hedging Arrangements..........................................................................59
         8.17     Indebtedness..................................................................................60
         8.18     Transactions with Affiliates..................................................................60
         8.19     Nature of Business............................................................................60
         8.20     Maintenance of Properties.....................................................................60
         8.21     [Intentionally Omitted].......................................................................61
         8.22     Project Documents; Etc........................................................................61
         8.23     Annual Operating Plans and Budgets; Operating Statements......................................63
         8.24     Speculative Activities........................................................................66
         8.25     Status........................................................................................67
         8.26     Updated Surveys and Title Policy Following Upgrade Project....................................67
         8.27     Accounts......................................................................................68
         8.28     No Subsidiaries...............................................................................68
         8.29     SCE Consent...................................................................................68

ARTICLE IX EVENTS OF DEFAULT....................................................................................68

         9.01     Events of Default.............................................................................68
         9.02     Rights upon an Event of Default...............................................................73

ARTICLE X THE AGENTS............................................................................................73

         10.01    Appointment, Powers and Immunities............................................................73
         10.02    Reliance by Agents............................................................................75
         10.03    Defaults......................................................................................75
         10.04    Rights as a Lender............................................................................76
         10.05    Indemnification...............................................................................76
         10.06    Non-Reliance on Agents and Other Lenders......................................................76
         10.07    Failure to Act................................................................................77
         10.08    Resignation or Removal of Agents..............................................................77
         10.09    Consents......................................................................................78
         10.10    Collateral Agent..............................................................................78

ARTICLE XI MISCELLANEOUS........................................................................................79

         11.01    Waiver........................................................................................79
         11.02    Notices.......................................................................................79
         11.03    Expenses; Etc.................................................................................79
         11.04    Amendments; Etc...............................................................................82
         11.05    Successors and Assigns........................................................................83
         11.06    Assignments and Participations................................................................83

         11.07    Marshalling; Recapture........................................................................85
         11.08    Confidentiality...............................................................................85
         11.09    Non-Recourse..................................................................................86
         11.10    Survival......................................................................................87
         11.11    Counterparts; Integration; Effectiveness......................................................87
         11.12    NO THIRD PARTY BENEFICIARIES IN RELATION TO DISBURSEMENTS.....................................87
         11.13    GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC................................................88
         11.14    WAIVER OF JURY TRIAL..........................................................................88
         11.15    SPECIAL EXCULPATION...........................................................................88
         11.16    Service of Process............................................................................89
         11.17    Service of Process............................................................................89
         11.18    Severability..................................................................................89

SCHEDULES

SCHEDULE I                 Definitions
SCHEDULE II                Applicable Lending Offices
SCHEDULE III               Commitments
SCHEDULE IV                Insurance
SCHEDULE V                 Filing Jurisdictions
SCHEDULE VI                Government Approvals
SCHEDULE VII               Deferred Government Approvals
SCHEDULE VIII              Environmental Claims
SCHEDULE IX                Upgrade Acceptance Test Parameters

EXHIBITS

EXHIBIT A-1                Form of Initial Term Loan Note
EXHIBIT A-2                Form of Additional Term Loan Note
EXHIBIT B-1                Form of Borrower Security Agreement
EXHIBIT B-2                Form of Borrower Equity Interest Pledge
EXHIBIT C                  Form of Depositary Agreement
EXHIBIT D                  Form of Notice of Borrowing
EXHIBIT E                  Form of Conversion/Continuation Notice
EXHIBIT F                  Form of Distribution Certificate

     CREDIT AGREEMENT (this "AGREEMENT") dated as of December 31, 2002 among
ORMESA LLC, a limited liability company duly formed and validly existing under
the laws of the State of Delaware (the "BORROWER"), each of the lenders that is
a signatory hereto or which, pursuant to Section 11.06(b), shall become a
"Lender" hereunder (individually, a "LENDER" and, collectively, the "LENDERS"),
UNITED CAPITAL, a division of Hudson United Bank, a New Jersey banking
corporation ("UNITED"), not in its individual capacity, but solely as
administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT"), and UNITED, not in its individual capacity, but solely as collateral
agent for the benefit of the Secured Parties (in such capacity, the "COLLATERAL
AGENT").

     WHEREAS, the Borrower directly owns 100% of the assets comprising each
Project and has requested that the Lenders make Loans to it in an aggregate
principal amount not exceeding $27,500,000 in order to enable the Borrower to:
(a) fund the Debt Service Reserve Account as provided herein; (b) fund certain
of its working capital needs in connection with the operation of each Project;
(c) pay costs associated with the transactions contemplated by the Financing
Documents; and (d) make a distribution to the Sponsor;

     WHEREAS, the Lenders are prepared to make the Loans upon the terms and
conditions hereof;

         NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I

                      DEFINITIONS AND INTERPRETIVE MATTERS

1.01   CERTAIN DEFINED TERMS. Unless otherwise specified herein, capitalized
       terms used in this Agreement shall have the meanings assigned to such
       terms in Schedule I. Capitalized terms and other terms used in this
       Agreement shall be interpreted in accordance with Sections 1.02, 1.03 and
       1.04, as applicable.

1.02   CLASSES AND TYPES OF LOANS. Loans hereunder are distinguished by "Class"
       and by "Type". The "CLASS" of a Loan refers to whether such Loan is an
       Initial Term Loan or an Additional Term Loan, each of which constitutes a
       Class of Loans. Commitments to make Loans and Notes evidencing Loans may
       be correspondingly referred to hereunder by the Class of Loan to which
       such Commitment or Note, as applicable, relates. The "TYPE" of a Loan
       refers to whether such Loan is a Prime Rate Loan or a Eurodollar Loan,
       each of which constitutes a Type of Loan. Loans may be identified by both
       Class and Type.

1.03   RULES OF INTERPRETATION. Unless the context of this Agreement otherwise
       requires:

       (a)    words of any gender include each other gender;

                                      -2-

       (b)    words using the singular or plural form also include the plural or
              singular form, respectively;

       (c)    any reference to any Person in any capacity includes a reference
              to its successors and assigns in such capacity to the extent such
              succession or assignment is permitted or not prohibited hereunder
              and, in the case of any Government Authority, any Person
              succeeding to its functions and capacities;

       (d)    the terms "hereof", "herein", "hereby", "hereto" and similar words
              refer to this entire Agreement and not any particular Section,
              Schedule, Exhibit or other subdivision of this Agreement;

       (e)    references to "Section", "Schedule" or "Exhibit" are to such
              subdivisions contained in or annexed to this Agreement;

       (f)    the words "include" and "including" shall be deemed to be followed
              by "without limitation" or "but not limited to", whether or not
              they are followed by such phrases or words of like import;

       (g)    references to any statute or statutory provision shall be
              construed as a reference to the same as it may have been, or may
              from time to time be, amended, modified or re-enacted;

       (h)    references to any agreement or document (including this Agreement)
              shall (unless otherwise expressly provided) be construed as a
              reference to such agreement or document as amended, modified,
              novated or supplemented (to the extent such amendment,
              modification, novation or supplement is permitted or not
              prohibited by the terms of such agreement or document, this
              Agreement and any other Financing Document) and in effect from
              time to time and shall (unless otherwise expressly provided)
              include a reference to any document that amends, modifies, novates
              or supplements it, or is entered into, made or given pursuant to
              or in accordance with its terms;

       (i)    "this Agreement" and words of similar import shall mean this
              Agreement, together with all Schedules and Exhibits;

       (j)    the headings and table of contents contained in this Agreement are
              inserted for convenience of reference only and shall not affect
              the interpretation of this Agreement;

       (k)    references to days shall refer to calendar days, unless Business
              Days are expressly specified; references to weeks, months or years
              shall be to calendar weeks, months or years, respectively, unless
              expressly specified otherwise; and

                                      -3-

       (l)    to the extent capitalized terms used in this Agreement are defined
              by reference to any other Transaction Document (or by reference in
              such Transaction Document to any other Transaction Document), for
              purposes of this Agreement, such terms shall continue to have
              their original definitions notwithstanding any termination or
              expiration of such agreements, except to the extent the parties
              hereto agree to the contrary.

1.04   ACCOUNTING TERMS.

       (a)    Accounting Principles, Etc. Except as otherwise expressly provided
              in this Agreement, all accounting terms used herein or in any
              other Financing Document shall be interpreted, and all financial
              statements, certificates and reports as to financial accounting
              matters required to be delivered hereunder or thereunder, shall
              (unless otherwise notified as provided in Section 1.04(b)) be
              prepared or made in accordance with the Accounting Principles of
              the relevant Person to which such terms, financial statements,
              certificates and/or reports relate, applied on a basis consistent
              with those used in the preparation of the latest financial
              statements of such Person furnished hereunder or thereunder, as
              the case may be, except for such changes as are required by such
              Accounting Principles.

       (b)    Accounting Variations. In respect of any relevant period, the
              Borrower shall, except to the extent already required by the
              relevant Accounting Principles, deliver (or cause the relevant
              other Person to deliver) to the Administrative Agent, at the same
              time as the delivery of any financial statement for that period
              under Section 8.01, a description in reasonable detail of any
              material variation (and the consequence thereof) between the
              application of the Accounting Principles employed in the
              preparation of such statement and the application of the
              Accounting Principles employed in the preparation of the financial
              statements for the immediately preceding period.

       (c)    Fiscal Periods. To enable the ready and consistent determination
              of compliance with this Agreement, the Borrower shall not change
              the last day of its fiscal year from December 31 of each year, or
              the last days of the first three fiscal quarters in each of its
              fiscal years from March 31, June 30 and September 30 of each year,
              respectively, except to the extent required by any Government
              Rule. The Borrower shall notify the Administrative Agent promptly
              upon becoming aware of such proposed Government Rule requirement
              of the nature and the effective date of such proposed change.
              Promptly after the delivery of such notice, the Borrower and the
              Administrative Agent (acting at the direction or with the consent
              of the Majority Lenders) shall negotiate in good faith any
              amendments to the provisions of the Financing Documents that may
              be necessary to give fair effect to the intention of such
              provisions.

                                      -4-

                                   ARTICLE II

                                   COMMITMENTS

2.01   LOANS.

       (a)    Initial Term Loan Facility. Each Lender severally agrees, on the
              terms and conditions of this Agreement, to make a loan
              (collectively, the "INITIAL TERM LOANS") to the Borrower in
              Dollars on the Closing Date in an aggregate principal amount equal
              to the amount of the Initial Term Loan Commitment of such Lender;
              provided that: (i) there shall be no more than one borrowing of
              Initial Term Loans; and (ii) in no event shall the aggregate
              principal amount of all Initial Term Loans at any one time
              outstanding exceed the aggregate amount of the Initial Term Loan
              Commitments as in effect from time to time. Amounts prepaid or
              repaid in respect of the Initial Term Loans may not be reborrowed.

       (b)    Additional Term Loan Facility. Each Lender severally agrees, on
              the terms and conditions of this Agreement, to make a loan
              (collectively, the "ADDITIONAL TERM LOANS") to the Borrower in
              Dollars during the Additional Term Loan Availability Period in an
              aggregate principal amount at any one time outstanding up to, but
              not exceeding, the amount of the Additional Term Loan Commitment
              of such Lender as in effect from time to time; provided that: (i)
              there shall be no more than one borrowing of Additional Term
              Loans; and (ii) in no event shall the aggregate principal amount
              of all Additional Term Loans at any one time outstanding exceed
              the aggregate amount of the Additional Term Loan Commitments as in
              effect from time to time. Amounts prepaid or repaid in respect of
              the Additional Term Loans may not be reborrowed.

       (c)    Terms Applicable to All Loans; Conversions and Continuations.

              (i)    Borrowings of Loans shall be made and Continued solely in
                     the form of Eurodollar Loans; provided that the Borrower
                     may, subject to all other applicable terms and conditions
                     of this Agreement (including Section 5.04):

                     (A)    Subject to its prior delivery to the Administrative
                            Agent of a Conversion/Continuation Notice, convert
                            any Loans that are Eurodollar Loans into Prime Rate
                            Loans as provided in Sections 5.02 and 5.04;

                     (B)    in any other circumstance where the Borrower and the
                            Administrative Agent concur that, taking account of
                            the expected timing of repayment of any such Loan
                            and the duration of the Interest Periods available
                            for selection by the Borrower, Converting such Loan
                            into a Prime Rate

                                      -5-

                            Loan will enable the Borrower to avoid breakage
                            costs pursuant to Section 5.05, make such
                            Conversion; and

                     (C)    borrow Loans initially as Prime Rate Loans with the
                            consent of the Administrative Agent (not to be
                            unreasonably withheld or delayed) as and to the
                            extent necessary to synchronize the Interest Period
                            of such Loans with other outstanding Loans that are
                            Eurodollar Loans; provided that the Borrower shall,
                            subject to its prior delivery to the Administrative
                            Agent of a Conversion/Continuation Notice, Convert
                            such Prime Rate Loans to Eurodollar Loans as soon as
                            possible to achieve synchronization of such Loans.

              (ii)   Borrowings of Loans may be made initially in the form of
                     Prime Rate Loans if the Borrower is unable to provide
                     sufficient advance notice pursuant to Section 4.05 of the
                     borrowing of such Loans as Eurodollar Loans; provided that
                     such Loans shall be Converted as soon as practicable after
                     the initial borrowing thereof into Eurodollar Loans (unless
                     the Borrower and the Administrative Agent concur that,
                     taking account of the expected timing of repayment of any
                     such Loan and the duration of the Interest Periods
                     available for selection by the Borrower if such Loan were
                     so Converted, the Conversion of such Loan into a Eurodollar
                     Loan will likely subject the Borrower to additional costs
                     pursuant to Section 5.05).

              (iii)  Following the occurrence of any Default or Event of
                     Default, the Administrative Agent may suspend the right of
                     the Borrower to Continue any Loans as, or to Convert any
                     Loans into, Eurodollar Loans.

              (iv)   In connection with any Conversion hereunder, and
                     notwithstanding anything to the contrary contained in this
                     Agreement, a Lender may (in its sole discretion, subject to
                     Section 5.07(a)) change its Applicable Lending Office with
                     respect to the Loan so Converted.

       (d)    Limit on Eurodollar Loans. Only one Interest Period in respect of
              Eurodollar Loans may be outstanding at any one time.

2.02   BORROWINGS. The Borrower shall give the Administrative Agent (which shall
       promptly notify the Lenders) notice of each borrowing hereunder as
       provided in Section 4.05 pursuant to a Notice of Borrowing. Not later
       than 11:00 a.m., New York time, on the date specified for each borrowing
       hereunder, each Lender shall make available the amount of the Loan to be
       made by it on such date to the Administrative Agent at its

                                      -6-

       Principal Office, in immediately available funds, for the account of the
       Borrower. The aggregate principal amount of the Initial Term Loan
       Commitment shall, subject to the terms and conditions of this Agreement,
       be made available to the Borrower by the Administrative Agent's
       depositing the same in immediately available funds to such accounts as
       agreed between the Borrower and the Administrative Agent; provided that
       an amount equal to $724,000 of the proceeds of the Initial Term Loans
       shall, pursuant to said agreement between the Borrower and the
       Administrative Agent, be deposited to the Revenue Account.

2.03   REDUCTION OF COMMITMENTS.

       (a)    Optional Reduction of Additional Term Loan Commitments. Subject to
              Section 2.03(b), the Borrower may at any time reduce the aggregate
              unused amount of the Additional Term Loan Commitments that are
              surplus to the needs of the Borrower; provided that: (i) the
              Borrower shall give notice of each such reduction as provided in
              Section 4.05; and (ii) each partial reduction shall be in an
              aggregate amount at least equal to $500,000 and in integral
              multiples of $500,000 in excess thereof.

       (b)    No Reinstatement. Any Commitments reduced pursuant to paragraph
              (a) above shall for all purposes hereof be terminated and may not
              be reinstated.

       (c)    Termination of Commitments. Unless previously terminated, the
              Commitments of each Class shall terminate at 5:00 p.m., New York
              time, on the last day of the Initial Term Loan Availability Period
              or Additional Term Loan Availability Period, as the case may be.

2.04   FEES.

       (a)    Up-Front Fee. On the Closing Date the Borrower shall pay to the
              Administrative Agent, for the account of each Lender, an up-front
              fee in an amount equal to 2.00% of the sum of such Lender's
              Commitments; provided, however, that such fee payable to United,
              as Lender, shall be reduced by an amount equal to $50,000.

       (b)    Commitment Fees. The Borrower shall pay to the Administrative
              Agent, for the account of each Lender, a commitment fee on the
              daily average unused amount of such Lender's Commitments for the
              period from (and including) the Execution Date through (and
              including): (i) in the case of the Initial Term Loan Commitments,
              the earliest of (A) the Closing Date, (B) the day on which the
              Initial Term Loan Commitments are reduced to zero or terminated,
              and (C) the last day of the Initial Term Loan Availability Period
              and, (ii) in the case of the Additional Term Loan Commitments, the
              earliest of (A) the Second Closing Date, (B) the day on which the
              Additional Term Loan Commitments are reduced to zero or
              terminated, and (C) the last day of the Additional Term Loan
              Availability Period, in each case in the amount of 0.375% per
              annum.

                                      -7-

       (c)    Commitment Fees Generally. All accrued commitment fees payable
              pursuant to Section 2.04(b) shall be payable in arrears on each
              Quarterly Date and, with respect to the Commitments of any Class,
              on the earliest to occur of the date on which of the Commitments
              of such Class expire, the date the Commitments of such Class are
              terminated or reduced to zero, and the Final Maturity Date.

       (d)    Administrative Agency Fees. Commencing on the first anniversary of
              the Closing Date, and annually on each subsequent anniversary
              thereafter, the Borrower shall pay to the Administrative Agent,
              for the account of the Administrative Agent, an annual agency fee
              in an amount equal to $25,000. The Administrative Agent shall not
              be required to refund any fee it has already received.

2.05   LENDING OFFICES. The Loans of each Type made by each Lender shall be made
       and maintained at such Lender's Applicable Lending Office for Loans of
       such Type.

2.06   SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The obligations of the Lenders
       hereunder are several and not joint. The failure of any Lender to make
       any Loan to be made by it, or any payment required to be made by it
       hereunder, on the date specified therefor shall not relieve any other
       Lender of its obligation to make its Loan, or its payment, on such date.
       Neither any Lender nor any Agent shall be responsible for the failure of
       any other Lender to make a Loan, or a payment, to be made by such other
       Lender.

2.07   NOTES.

       (a)    Initial Term Loan Notes. The Initial Term Loan of each Lender
              shall be evidenced by a single promissory note of the Borrower
              (each, an "INITIAL TERM LOAN NOTE") substantially in the form of
              Exhibit A-1, dated the Closing Date, payable to such Lender in a
              principal amount equal to the amount of its Initial Term Loan
              Commitment as in effect on the Closing Date and otherwise duly
              completed.

       (b)    Additional Term Loan Notes. The Additional Term Loan of each
              Lender shall be evidenced by a single promissory note of the
              Borrower (each, an "ADDITIONAL TERM LOAN NOTE") substantially in
              the form of Exhibit A-2, dated the Closing Date, payable to such
              Lender in a principal amount equal to the amount of its Additional
              Term Loan Commitment as in effect on the Closing Date and
              otherwise duly completed.

       (c)    Loan Records. Each Lender shall maintain in accordance with its
              usual practice records evidencing the indebtedness of the Borrower
              to such Lender resulting from each Loan made by such Lender,
              including the amounts of principal and interest payable and paid
              to such Lender from time to time hereunder. The Administrative
              Agent shall maintain records in which it shall record: (i) the
              amount of each Loan made hereunder, the Class and Type thereof and
              each Interest Period therefor; (ii) the amount of any principal or
              interest due and

                                      -8-

              payable or to become due and payable from the Borrower to each
              Lender hereunder; and (iii) the amount of any sum received by the
              Administrative Agent hereunder for the account of the Lenders and
              each Lender's share thereof. The entries made in the records
              maintained pursuant to this paragraph (c) shall be prima facie
              evidence of the existence and amounts of the obligations recorded
              therein; provided that the failure of any Lender or the
              Administrative Agent to maintain such records or any error therein
              shall not in any manner affect the obligation of the Borrower to
              repay the Loans in accordance with the terms of this Agreement.

       (d)    Subdivision. No Lender shall be entitled to have any of its Notes
              subdivided, by exchange for promissory notes of lesser
              denominations or otherwise, except in connection with a permitted
              assignment of all or any portion of such Lender's related
              Commitment, related Loan and related Notes pursuant to Section
              11.06(b).

                                      -9-

                                  ARTICLE III

                       PAYMENTS OF PRINCIPAL AND INTEREST

3.01   REPAYMENT OF LOANS.

       The Borrower hereby promises to pay to the Administrative Agent for the
       account of each Lender the outstanding principal of such Lender's Loan in
       twenty (20) consecutive quarterly installments payable commencing on the
       first Quarterly Date following the Closing Date, on the next eighteen
       succeeding Quarterly Dates and on the Final Maturity Date, each such
       installment in the amount set forth below (a) if prior to the Second
       Closing Date, under the heading "Initial Term Loan Principal Payment" and
       (b) if on or after the Second Closing Date, under the heading "Initial
       and Additional Term Loan Principal Payment", in each case opposite the
       reference to such Quarterly Date, less any portion of any such Initial
       Term Loans prepaid in accordance with Sections 3.03 and 3.04:

                                                               INITIAL AND
                                                              ADDITIONAL TERM
                                      INITIAL TERM LOAN        LOAN PRINCIPAL
         PAYMENT DATE                 PRINCIPAL PAYMENT           PAYMENT

         March 31, 2003                 $  698,000             $  698,000
         June 30, 2003                  $  434,000             $  434,000
         September 30, 2003             $1,696,000             $1,696,000
         December 31, 2003              $1,698,700             $1,698,700
         March 31, 2004                 $  594,171             $  869,000
         June 30, 2004                  $  369,596             $  540,550
         September 30, 2004             $1,446,369             $2,115,375
         December 31, 2004              $1,446,369             $2,115,375
         March 31, 2005                 $  649,177             $  950,000
         June 30, 2005                  $  403,856             $  591,000
         September 30, 2005             $1,579,208             $2,311,000
         December 31, 2005              $1,579,209             $2,311,000
         March 31, 2006                 $  709,544             $1,039,000
         June 30, 2006                  $  441,161             $  646,000
         September 30, 2006             $1,726,399             $2,528,000
         December 31, 2006              $1,726,399             $2,528,000
         March 31, 2007                 $  446,306             $  683,000
         June 30, 2007                  $  277,062             $  424,000
         September 30, 2007             $1,085,379             $1,661,000
         December 31, 2007              $  993,095             $1,661,000

                                      -10-

       Notwithstanding anything to the contrary herein, to the extent not
       otherwise repaid in full prior to the Final Maturity Date, the Borrower
       unconditionally promises to pay to the Administrative Agent for the
       account of each Lender the outstanding principal amount of the Loans made
       by such Lender, and such Loans shall mature, on the Final Maturity Date.

3.02   INTEREST.

       (a)    General. The Borrower hereby promises to pay to the Administrative
              Agent for the account of each Lender, interest on the unpaid
              principal amount of each Loan made by such Lender for the period
              from and including the date of such Loan to but excluding the date
              such Loan shall be paid in full, at the following rates per annum:

              (i)    during such periods as such Loan is a Prime Rate Loan, the
                     Prime Rate (as in effect from time to time) plus the
                     Applicable Margin; and

              (ii)   during such periods as such Loan is a Eurodollar Loan, for
                     each Interest Period relating thereto, the Eurodollar Rate
                     for such Loan for such Interest Period plus the Applicable
                     Margin.

       (b)    Default Interest. Notwithstanding the foregoing, the Borrower
              hereby promises to pay to the Administrative Agent for the account
              of each Lender interest at the applicable Post-Default Rate on any
              principal of any Loan made by such Lender, and on any other amount
              payable by the Borrower hereunder or under any Note held by such
              Lender, to or for the account of such Lender, which shall not be
              paid in full when due (whether at stated maturity, by
              acceleration, by mandatory prepayment or otherwise), for the
              period from and including the due date thereof to but excluding
              the date the same is paid in full.

       (c)    Payment. Accrued interest on each Loan shall be payable: (i) in
              the case of a Prime Rate Loan, quarterly on the Quarterly Dates;
              (ii) in the case of a Eurodollar Loan, on the last day of each
              Interest Period therefor; and (iii) in the case of any Loan, upon
              the payment or prepayment thereof or the Conversion of such Loan
              to a Loan of another Type (but only on the principal amount so
              paid, prepaid or Converted).

              Interest payable at the Post-Default Rate as provided in Section
              3.02(b) shall be payable from time to time on demand (or, if no
              demand is made during any month, on the last day of such month).

                                      -11-

       (d)    Determination of Interest Rate. Promptly after the determination
              of any interest rate provided for herein or any change therein,
              the Administrative Agent shall give notice thereof to the Lenders
              to which such interest is payable and to the Borrower.

                                      -12-

3.03   OPTIONAL PREPAYMENTS.

       (a)    Subject to Section 4.04, the Borrower shall have the right to
              prepay any Loans, at any time and from time to time following the
              second anniversary of the Closing Date; provided that: (a) the
              Borrower shall give the Administrative Agent and the Collateral
              Agent notice of each such prepayment, as provided in Section 4.05
              (and, upon the date specified in any such notice of prepayment,
              the amount to be prepaid shall become due and payable hereunder);
              and (b) Eurodollar Loans may be prepaid only on the last day of
              the Interest Period for such Loans unless the Borrower pays all
              applicable breakage costs pursuant to Section 5.05 at the time of
              such prepayment.

       (b)    Simultaneously with any optional prepayment, in whole or in part,
              of the principal of any Loans pursuant to the foregoing clause (a)
              (other than any prepayment made pursuant to the final sentence of
              Section 5.07(a)) or any mandatory prepayment pursuant to Sections
              3.04(b) or 3.04(c), the Borrower agrees to pay to the
              Administrative Agent for the account of each Lender a prepayment
              commission in respect of each such prepayment in an amount equal
              to that percentage of the principal amount of the Loans so prepaid
              set forth below opposite the period in which such prepayment
              occurs:

         Period in Which Prepayment is Made               Prepayment Commission
         ----------------------------------               ---------------------

         From and including the second anniversary              2.00%
           of the Closing Date through and including the
           day prior to the third anniversary of the
           Closing Date

         From and including the third anniversary               1.00%
           of the Closing Date through and including the
           day prior to the fourth anniversary of the
           Closing Date

         From and including the fourth anniversary              0.00%
           of the Closing Date through and including the
           Final Maturity Date

3.04   MANDATORY PREPAYMENTS; ETC. The Borrower shall make the following
       mandatory payments in the amounts and at the times set out below, in each
       case, except as otherwise provided in Section 3.03(b), without any
       commission, premium or penalty:

                                      -13-

       (a)    Event of Loss.

              (i)    If a Project is declared a Total Loss by its insurers, then
                     on the later of the date of actual receipt of Loss Proceeds
                     with respect thereto and the date of such declaration; and

              (ii)   not later than the date specified for prepayment in
                     accordance with Section 8.05(d) with respect to: (A) any
                     Event of Loss (or upon such earlier date as the Borrower
                     shall have determined not to Restore the related Affected
                     Property); or (B) any period during which any of the
                     conditions of the Restoration under Section 8.05(d) shall
                     have ceased to be satisfied,

              in each case, the Borrower shall prepay the Loans in an amount
              equal to 100% of the Loss Proceeds with respect to such Event of
              Loss (less the amount expended on the Restoration of the related
              Affected Property as permitted by, and as expended in accordance
              with, Section 8.05(d)).

              Nothing in this paragraph (a) shall be deemed to limit any
              obligation of the Borrower to deposit (or cause to be deposited)
              in the Restoration Sub-Account the Loss Proceeds in respect of any
              Event of Loss.

       (b)    Project Documents. If any Project Document at any time is amended
              or terminated by any party thereto and in a manner that could
              reasonably be expected to result in a Material Adverse Effect and
              generate a current cash payment to the Borrower, then the Borrower
              shall, promptly upon receipt of such payment, prepay the Loans in
              an amount equal to the proceeds of such payment.

       (c)    Certain Asset Sales. If the Borrower at any time shall transfer,
              assign, sell or otherwise dispose of any material asset or
              Property pertaining to any Project, other than in accordance with
              Section 8.12 hereof, then the Borrower shall, promptly upon
              receipt of the proceeds of any payment relating to such
              transaction, prepay the Loans in an amount equal to the proceeds
              of such payment.

       (d)    Cash Sweeps. If, as of any Quarterly Date, the Borrower shall fail
              to comply with Section 8.13(iii) hereof, the Borrower shall, at
              its sole option as provided in Section 4.1(e) of the Depositary
              Agreement, prepay the Loans in the amounts set out in, and
              otherwise in accordance with, such Section 4.1(e).

3.05   Prepayment Mechanics. All prepayments described in Sections 3.03 and 3.04
       (other than any prepayment made pursuant to the final sentence of Section
       5.07(a) which prepayment shall be applied in accordance with such Section
       5.07(a)) shall be applied to the Initial Term Loans and the Additional
       Term Loans pro rata, and in the inverse order of the maturities of the
       installments of the Loans then outstanding. Amounts prepaid may

                                      -14-

       not be reborrowed. Any prepayment made or required to be made pursuant to
       Sections 3.03 or 3.04 shall be made together with all accrued but unpaid
       interest thereon and all other amounts (including, without limitation,
       any amounts due pursuant to Article V) then due from the Borrower
       hereunder.

                                   ARTICLE IV

                PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

4.01   PAYMENTS.

       (a)    General. Except to the extent otherwise provided herein, all
              payments of principal, interest and other amounts to be made by
              the Borrower under this Agreement and the Notes and, except to the
              extent otherwise provided therein, all payments to be made by the
              Borrower under any other Financing Document, shall be made in
              Dollars, in immediately available funds, without deduction,
              set-off or counterclaim, to the Administrative Agent at its
              Principal Office, or to such account as the Administrative Agent
              may specify in writing to the Borrower, not later than 1:00 p.m.,
              New York time, on the date on which such payment shall become due
              (each such payment made after such time on such due date to be
              deemed to have been made on the next succeeding Business Day).

       (b)    Application of Payments. The Borrower shall, at the time of making
              each payment under this Agreement or any Note for the account of
              any Lender, specify to the Administrative Agent (which shall so
              notify the intended recipient(s) thereof) the Loans or other
              amounts owing by the Borrower hereunder to which such payment is
              to be applied. In the event that the Borrower fails to so specify,
              or if an Event of Default has occurred and is continuing, the
              Administrative Agent may distribute such payment to the Lenders
              for application in such manner as the Administrative Agent or the
              Majority Lenders, subject to Section 4.02, may reasonably
              determine to be appropriate.

       (c)    Forwarding of Payments by Administrative Agent. Each payment
              received by the Administrative Agent under this Agreement or any
              Note for the account of any Lender or the Collateral Agent or the
              Depositary Bank shall be paid by the Administrative Agent promptly
              to such Person, in immediately available funds, for the account of
              such Lender's Applicable Lending Office for the Loan or other
              obligation in respect of which such payment is made or for the
              account of the Collateral Agent or the Depositary Bank, as
              applicable.

       (d)    Extensions to Next Business Day. If the due date of any payment
              under this Agreement or any Note would otherwise fall on a day
              that is not a Business Day, such date shall instead be extended to
              the first Business Day thereafter, and interest shall be payable
              for any principal so extended for the period of such

                                      -15-

              extension, unless such Business Day shall fall in a subsequent
              calendar month, in which case such payment shall be due on the
              immediately preceding Business Day.

                                      -16-

4.02   PRO RATA TREATMENT. Except to the extent otherwise provided herein:

       (a)    each borrowing of Loans from the Lenders under Section 2.01 shall
              be made from the relevant Lenders, each payment of commitment fees
              under Section 2.04 in respect of Commitments shall be made for the
              account of the relevant Lenders, and each termination or reduction
              of the amount of the Commitments under Section 2.03 shall be
              applied to the respective Commitments, pro rata according to the
              amounts of their respective Commitments;

       (b)    the making of Loans shall be made pro rata among the relevant
              Lenders according to the amounts of their respective Commitments;

       (c)    except to the extent indicated in Section 4.07(b) and except for
              prepayments made pursuant to the final sentence of Section
              5.07(a), each payment or prepayment of principal of Loans by the
              Borrower shall be made for the account of the relevant Lenders pro
              rata in accordance with the respective unpaid principal amounts of
              the Loans held by them; provided that if immediately prior to
              giving effect to any such payment in respect of any Loan the
              outstanding principal amount of the Loans shall not be held by the
              Lenders pro rata in accordance with their respective Commitments
              in effect at the time such Loans were made (by reason of a failure
              of a Lender to make a Loan hereunder in the circumstances
              described in the penultimate paragraph of Section 11.04), then
              such payment shall be applied to the Loans in such manner as shall
              result, as nearly as is practicable, in the outstanding principal
              amount of the Loans being held by the Lenders pro rata in
              accordance with their respective Commitments; and

       (d)    each payment of interest on Loans by the Borrower shall be made
              for the account of the relevant Lenders pro rata in accordance
              with the amounts of interest on such Loans then due and payable to
              the respective Lenders.

4.03   COMPUTATIONS. Interest on Eurodollar Loans and on other obligations of
       the Borrower or the Lenders that are computed on the basis of the Federal
       Funds Rate shall be computed on the basis of a year of 360 days and
       actual days elapsed (including the first day but excluding the last day)
       occurring in the period for which payable. Interest on Prime Rate Loans,
       on other obligations of the Borrower or the Lenders that are computed on
       the basis of the Prime Rate and commitment fees payable in accordance
       with Section 2.04 shall be computed on the basis of a year of 365 or 366
       days, as the case may be, and actual days elapsed (including the first
       day but excluding the last day) occurring in the period for which
       payable.

4.04   MINIMUM AMOUNTS. Except for mandatory prepayments pursuant to Section
       3.04 and the borrowing of Additional Term Loans, each borrowing and
       partial prepayment of principal of Loans shall be in an amount at least
       equal to $500,000 and in multiples of $100,000 in excess thereof.
       Borrowings or prepayments of Loans of different Types or, in the case of
       Eurodollar Loans, having different Interest Periods, at the same time

                                      -17-

       hereunder shall be deemed separate borrowings and prepayments for
       purposes of the foregoing, one for each Type or Interest Period.

4.05   NOTICES.

       (a)    Certain Notices.

              (i)    Notices by the Borrower to the Administrative Agent (and,
                     as applicable, the Collateral Agent) of optional
                     terminations or reductions of the Commitments, borrowings
                     of Loans, optional prepayments of Loans, Continuations of
                     Eurodollar Loans and Conversions of Loans shall be
                     irrevocable and shall be effective only if received by the
                     Administrative Agent (and, as applicable, the Collateral
                     Agent) not later than 11:00 a.m., New York time, on the
                     number of Business Days prior to the date of the relevant
                     termination, reduction, borrowing, prepayment, Continuation
                     or Conversion or the first day of such Interest Period
                     specified below:

                                                                             Number of
                                                                           Business Days
                                  Notice                                      Prior
      ----------------------------------------------------------------     -------------

      Optional termination or reduction of the Commitments; optional            5
      prepayment of Loans

      Borrowing of, Continuation of, or Conversion into Eurodollar Loans        3

      Borrowing of or Conversion into, Prime Rate Loans                         1

              (ii)   Each such notice of optional termination or reduction of
                     Commitments shall specify the amount of such Commitments to
                     be terminated or reduced.

              (iii)  Each such notice of borrowing, Conversion, Continuation or
                     optional prepayment shall specify the Class and Type of
                     Loans to be borrowed, Converted, Continued or prepaid, the
                     amount (subject to Section 4.04) of each Loan to be
                     borrowed, Converted, Continued or prepaid, and the date of
                     borrowing, Conversion, Continuation or optional prepayment
                     (which shall be a Business Day).

              (iv)   Each such notice of Conversion shall contain a
                     certification of an Authorized Officer of the Borrower that
                     the requirements of

                                      -18-

                     Section 2.01(c) have been satisfied with respect to such
                     Conversion.

              (v)    The Administrative Agent shall promptly notify the Lenders
                     of the contents of each such notice. In the event that the
                     Borrower fails to select the Type of Loan, within the time
                     period and otherwise as provided in this Section 4.05, such
                     Loan will be made or Continued, as applicable, as a
                     Eurodollar Loan having an Interest Period of three months.

4.06   NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT(a). Unless the
       Administrative Agent shall have been notified by the Borrower prior to
       the date on which the Borrower is to make payment to the Administrative
       Agent for the account of one or more of the Lenders hereunder (each such
       payment being herein called the "REQUIRED PAYMENT"), which notice shall
       be effective upon receipt, that the Borrower does not intend to make the
       Required Payment to the Administrative Agent, the Administrative Agent
       may assume that the Required Payment has been made and may, in reliance
       upon such assumption (but shall not be required to), make the amount
       thereof available to the intended recipient(s) on such date. If the
       Borrower has not in fact made the Required Payment to the Administrative
       Agent, the recipient(s) of such payment shall, on demand, repay to the
       Administrative Agent the amount made available by the Administrative
       Agent pursuant to the previous sentence, together with interest thereon
       in respect of each day during the period commencing on the date (the
       "ADVANCE DATE") such amount was so made available by the Administrative
       Agent until the date the Administrative Agent recovers such amount at a
       rate per annum equal to the Federal Funds Rate for such day.

4.07   SHARING OF PAYMENTS; ETC.

       (a)    Right of Set-Off. The Borrower agrees that, in addition to (and
              without limitation of) any right of set-off, banker's lien or
              counterclaim a Lender may otherwise have, each Lender shall be
              entitled, at its option, to offset balances held by it for the
              account of the Borrower at any of its offices, in Dollars or in
              any other currency, against any principal of or interest on any of
              such Lender's Loans, or any other amount payable to such Lender
              hereunder, that is not paid when due (regardless of whether such
              balances are then due to the Borrower), in which case it shall
              promptly notify the Borrower and the Administrative Agent thereof;
              provided that such Lender's failure to give such notice shall not
              affect the validity thereof.

       (b)    Sharing. If any Lender shall obtain from the Borrower payment of
              any principal of or interest on any Loan owing to it or payment of
              any other amount under this Agreement or any Note held by it or
              any other Financing Document through the exercise of any right of
              set-off, banker's lien or counterclaim or similar right or
              otherwise (other than: (i) from the Administrative Agent as
              provided herein; or (ii) in connection with any reimbursement or
              indemnification under Section 11.03

                                      -19-

              or any similar provision of any other Financing Document to which
              less than all of the Lenders are entitled under the terms hereof
              or thereof, as the case may be; or (iii) in connection with any
              assignment or participation pursuant to Section 11.06 or any
              replacement of any Lender pursuant to Article V) and, as a result
              of such payment, such Lender shall have received a greater
              percentage of the principal of or interest on the Loans or such
              other amounts then due hereunder or thereunder to such Lender than
              the percentage received by any other Lender(s) who were also
              entitled to receive such payments, it shall promptly purchase from
              such other Lenders participations in (or, if and to the extent
              specified by such Lender, direct interests in) the Loans or such
              other amounts, respectively, owing to such other Lenders (or in
              interest due thereon, as the case may be) in such amounts, and
              make such other adjustments from time to time as shall be
              equitable, to the end that all the Lenders shall share the benefit
              of such excess payment (net of any expenses that may be incurred
              by such Lender in obtaining or preserving such excess payment) pro
              rata in accordance with the unpaid principal of and/or interest on
              the Loans or such other amounts, respectively, owing to each of
              the Lenders; provided that if at the time of such payment, the
              outstanding principal amount of the Loans shall not be held by the
              Lenders pro rata in accordance with their respective Commitments
              in effect at the time such Loans were made (by reason of a failure
              of a Lender to make a Loan hereunder in the circumstances
              described in the penultimate paragraph of Section 11.04), then
              such purchases of participations and/or direct interests shall be
              made in such manner as will result, as nearly as is practicable,
              in the outstanding principal amount of the Loans being held by the
              Lenders pro rata according to the amounts of such Commitments. To
              such end all the Lenders shall make appropriate adjustments among
              themselves (by the resale of participations sold or otherwise) if
              such payment is rescinded or must otherwise be restored.

       (c)    Consent by the Borrower. The Borrower agrees that any Lender so
              purchasing such a participation (or direct interest) may exercise
              all rights of set-off, banker's liens, counterclaims or similar
              rights with respect to such participation as fully as if such
              Lender were a direct holder of Loans or other amounts (as the case
              may be) owing to such Lender in the amount of such participation.

       (d)    Rights of Lenders; Bankruptcy. Nothing contained in this Section
              4.07 shall require any Lender to exercise any such right or shall
              affect the right of any Lender to exercise, and retain the
              benefits of exercising, any such right with respect to any other
              indebtedness or obligation of the Borrower. If, under any
              applicable bankruptcy, insolvency or other similar law, any Lender
              receives a secured claim in lieu of a set-off to which this
              Section 4.07 applies, such Lender shall, to the extent
              practicable, exercise its rights in respect of such secured claim
              in a manner consistent with the rights of the Lenders entitled
              under this Section 4.07 to share in the benefits of any recovery
              on such secured claim.

                                      -20-

                                   ARTICLE V

                             YIELD PROTECTION; ETC.

5.01   ADDITIONAL COSTS.

       (a)    Costs of Making or Maintaining Eurodollar Loans. The Borrower
              shall pay directly to each Lender from time to time such amounts
              as such Lender may determine to be necessary to compensate it for
              any costs that such Lender determines are attributable to its
              making or maintaining of any Eurodollar Loans or its obligation to
              make any Eurodollar Loans hereunder, or any reduction in any
              amount receivable by such Lender hereunder in respect of any of
              such Loans or such obligation (such increases in costs and
              reductions in amounts receivable being herein called "ADDITIONAL
              COSTS"), resulting from any Regulatory Change that:

              (i)    shall subject any Lender (or its Applicable Lending Office
                     for any of such Loans) to any tax, duty or other charge in
                     respect of such Loans or changes the basis of taxation of
                     any amounts payable to such Lender under this Agreement or
                     the Notes in respect of such Loans (other than taxes
                     imposed on or measured by the overall net income of such
                     Lender or of its Applicable Lending Office for such Loans
                     by the jurisdiction in which such Lender has its principal
                     office or such Applicable Lending Office);

              (ii)   imposes or modifies any reserve, special deposit or similar
                     requirements (other than the Reserve Requirement utilized
                     in the determination of the Eurodollar Rate for any
                     Interest Period for such Loan) relating to any extensions
                     of credit or other assets of, or any deposits with or other
                     liabilities of, such Lender (including any of such Loans or
                     any deposits referred to in the definition of "Eurodollar
                     Base Rate"), or any Commitment of such Lender to make any
                     such Loans hereunder; or

              (iii)  imposes any other condition affecting this Agreement or the
                     Notes (or any of such extensions of credit or liabilities)
                     or its Commitments.

              If any Lender requests compensation from the Borrower under this
              paragraph (a), the Borrower may, by notice to such Lender (with a
              copy to the Administrative Agent), suspend the obligation of such
              Lender to make or Continue Eurodollar Loans or to Convert Prime
              Rate Loans into Eurodollar Loans, until the Regulatory Change
              giving rise to such request ceases to be in effect (in which case
              the

                                      -21-

              provisions of Section 5.04 shall apply); provided that such
              suspension shall not affect the right of such Lender to receive
              the compensation so requested.

       (b)    Election by Lender to Suspend Obligations. Without limiting the
              effect of the provisions of paragraph (a) above, in the event
              that, by reason of any Regulatory Change, any Lender either:

              (i)    incurs Additional Costs based on or measured by the excess
                     above a specified level of the amount of a category of
                     deposits or other liabilities of such Lender that includes
                     deposits by reference to which the interest rate on
                     Eurodollar Loans is determined as provided in this
                     Agreement or a category of extensions of credit or other
                     assets of such Lender that includes Eurodollar Loans; or

              (ii)   becomes subject to restrictions on the amount of such a
                     category of liabilities or assets that it may hold,

              then, if such Lender so elects by notice to the Borrower (with a
              copy to the Administrative Agent), the obligation of such Lender
              to make or Continue, or Convert Prime Rate Loans into, Eurodollar
              Loans hereunder shall be suspended until such Regulatory Change
              ceases to be in effect (in which case the provisions of Section
              5.04 shall apply).

       (c)    Capital Costs. Without limiting the effect of the foregoing
              provisions of this Section 5.01 (but without duplication), the
              Borrower shall pay directly to each Lender from time to time on
              request such amounts as such Lender may determine to be necessary
              to compensate such Lender (or, without duplication, the parent
              company of such Lender) for any costs that it determines are
              attributable to the maintenance by such Lender (or any Applicable
              Lending Office or such parent company) of capital in respect of
              its Commitments or Loans, pursuant to any law or regulation or any
              interpretation, directive or request (whether or not having the
              force of law) of any court, Government Authority or monetary
              authority:

              (i)    following any Regulatory Change; or

              (ii)   implementing any risk-based capital guideline or other
                     requirement (whether or not having the force of law and
                     whether or not the failure to comply therewith would be
                     unlawful) heretofore issued but not implemented, or
                     hereafter issued, by any Government Authority or
                     supervisory authority implementing at the national level
                     the Basle Accord (including the Final Risk-Based Capital
                     Guidelines of the Board of Governors of the Federal Reserve
                     System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
                     Appendix A) and the Final Risk-Based Capital Guidelines of
                     the

                                      -22-

                     Office of the Comptroller of the Currency (12 C.F.R. Part
                     3, Appendix A)).

              Such compensation shall include an amount equal to any reduction
              of the rate of return on assets or equity of such Lender (or any
              Applicable Lending Office or such parent company) to a level below
              that which such Lender (or any Applicable Lending Office or such
              parent company) could have achieved but for such law, regulation,
              interpretation, directive or request.

       (d)    Notification and Certification. Each Lender shall notify the
              Borrower of any event occurring after the date of this Agreement
              that will entitle such Lender to compensation under paragraph (a)
              or (c) above as promptly as practicable after such Lender obtains
              actual knowledge thereof. Each Lender will furnish to the Borrower
              a certificate setting out in reasonable detail the basis and
              amount of each request by such Lender for compensation under
              paragraph (a) or (c) above. Determinations and allocations by any
              Lender, for purposes of this Section 5.01, of the effect of any
              Regulatory Change pursuant to paragraph (a) or (b) above, or of
              the effect of capital maintained pursuant to paragraph (c) above,
              on its costs or rate of return of maintaining Loans or its
              obligation to make Loans, or on amounts receivable by it in
              respect of Loans, and of the amounts required to compensate such
              Lender under this Section 5.01, shall be conclusive absent
              manifest error.

       (e)    Delay in Requests. Failure or delay on the part of any Lender to
              demand compensation pursuant to this Section 5.01 shall not
              constitute a waiver of such Lender's right to demand such
              compensation; provided that the Borrower shall not be required to
              compensate a Lender pursuant to this Section 5.01 for any
              increased costs or reductions incurred more than 60 days prior to
              the date that such Lender notifies the Borrower of the Regulatory
              Change giving rise to such increased costs or reductions and of
              such Lender's intention to claim compensation therefor; provided,
              further, that, if the Regulatory Change giving rise to such
              increased costs or reductions is retroactive, then the 60-day
              period referred to above shall be extended to include the period
              of retroactive effect thereof.

5.02   LIMITATION ON EURODOLLAR LOANS. Anything herein to the contrary
       notwithstanding, if, on or prior to the determination of any Eurodollar
       Base Rate for any Interest Period:

       (a)    the Administrative Agent determines, which determination shall be
              conclusive absent manifest error, that quotations of interest
              rates for the relevant deposits referred to in the definition of
              "Eurodollar Base Rate" are not being provided in the relevant
              amounts or for the relevant maturities for purposes of determining
              rates of interest for Eurodollar Loans as provided herein; or

       (b)    the Majority Lenders determine, which determination shall be
              conclusive absent manifest error, and notify the Administrative
              Agent that the relevant rates of

                                      -23-

              interest referred to in the definition of "Eurodollar Base Rate",
              upon the basis of which the rate of interest for Eurodollar Loans
              for such Interest Period is to be determined, are not likely to
              adequately cover the cost to such Lenders of making or maintaining
              such Eurodollar Loans for such Interest Period,

       then the Administrative Agent shall give the Borrower and each Lender
       prompt notice thereof, and so long as such condition remains in effect,
       the obligation of the Lenders to make additional Eurodollar Loans,
       Continue existing Eurodollar Loans or Convert Prime Rate Loans into
       Eurodollar Loans shall be suspended, in which case the provisions of
       Section 5.04 shall be applicable.

5.03   ILLEGALITY. Notwithstanding any other provision of this Agreement, in the
       event that it becomes unlawful or any central bank or other Government
       Authority asserts that it is unlawful for any Lender or its Applicable
       Lending Office to honor its obligation to make or maintain Eurodollar
       Loans hereunder, and, in the opinion of such Lender (as stated in
       writing), the designation of a different Applicable Lending Office would
       either not avoid such unlawfulness or would be disadvantageous to such
       Lender, then such Lender shall promptly notify the Borrower thereof in
       writing (with a copy to the Administrative Agent) and such Lender's
       obligation to make or Continue, or to Convert Prime Rate Loans into,
       Eurodollar Loans shall be suspended until such time as such Lender may
       again make and maintain Eurodollar Loans (in which case the provisions of
       Section 5.04 shall be applicable).

5.04   TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make or
       Continue, or to Convert Prime Rate Loans into, Eurodollar Loans shall be
       suspended pursuant to Section 5.01, 5.02 or 5.03 (the "AFFECTED LOANS"),
       such Lender's Affected Loans shall be automatically Converted into Prime
       Rate Loans on the last day(s) of the then-current Interest Period(s) for
       the Affected Loans (or, in the case of a Conversion required by Section
       5.01(b) or 5.03, on such earlier date as such Lender may certify to the
       Borrower with a copy to the Administrative Agent as being the last
       permissible date for such Conversion under, or by reason of, the relevant
       Regulatory Change or circumstances described under Section 5.03, such
       certification to be conclusive absent manifest error) and, unless and
       until such Lender gives notice as provided below that the circumstances
       specified in Section 5.01, 5.02 or 5.03 which gave rise to such
       Conversion no longer exist:

       (a)    to the extent that such Lender's Affected Loans have been so
              Converted, all payments and prepayments of principal that would
              otherwise be applied to such Lender's Eurodollar Loans shall be
              applied instead to its Prime Rate Loans; and

       (b)    all Loans that would otherwise be made by such Lender as
              Eurodollar Loans shall be made instead as Prime Rate Loans.

       If such Lender gives notice to the Borrower with a copy to the
       Administrative Agent that the circumstances specified in Section 5.01,
       5.02 or 5.03 that gave rise to the Conversion

                                      -24-

       of such Lender's Eurodollar Loans of any Class pursuant to this Section
       5.04 no longer exist (which such Lender agrees to do promptly upon such
       circumstances ceasing to exist): (i) at a time when Eurodollar Loans made
       by other Lenders are outstanding, each of such Lender's Prime Rate Loans
       shall be automatically Converted to Eurodollar Loans, on the first day of
       the next succeeding Interest Period for, and having the same Interest
       Period as, such outstanding Eurodollar Loans and to the extent necessary
       so that, after giving effect thereto, all Prime Rate Loans and Eurodollar
       Loans are allocated among the Lenders ratably (as to principal amounts,
       Types and Interest Periods) as nearly as possible in accordance with
       their respective Commitments; and (ii) at any other time, the Borrower
       may thereafter provide to the Administrative Agent a notice of
       Conversion, in accordance with Section 4.05, of such Lender's Prime Rate
       Loans to Eurodollar Loans.

5.05   COMPENSATION. The Borrower shall pay to the Administrative Agent for the
       account of each Lender, upon the request of such Lender through the
       Administrative Agent, such amount or amounts as shall be sufficient (in
       the reasonable opinion of such Lender) to compensate such Lender for any
       loss, cost or expense that such Lender reasonably determines is
       attributable to:

       (a)    any payment, prepayment or Conversion of a Eurodollar Loan made by
              such Lender for any reason (including the acceleration of the
              Loans pursuant to Section 9.02) on a date other than the last day
              of an Interest Period for such Loan; or

       (b)    any failure by the Borrower for any reason (including the failure
              of any of the conditions precedent specified in Article VI to be
              satisfied) to borrow a Eurodollar Loan from such Lender on the
              date for such borrowing specified in the relevant Notice of
              Borrowing given pursuant to Section 2.02.

       Without limiting the effect of the preceding sentence, such compensation
       shall include an amount equal to the excess, if any, of: (i) the amount
       of interest that otherwise would have accrued on the principal amount so
       paid, prepaid, Converted or not borrowed for the period from the date of
       such payment, prepayment, Conversion or failure to borrow to the last day
       of the then-current Interest Period for such Loan (or, in the case of a
       failure to borrow, the Interest Period for such Loan which would have
       commenced on the date specified for such borrowing) at the applicable
       rate of interest for such Loan provided for herein; over (ii) the amount
       of interest that otherwise would have accrued on such principal amount at
       a rate per annum equal to the interest component of the amount such
       Lender would have bid in the London interbank market for Dollar deposits
       of the Reference Banks in amounts comparable to such principal amount and
       with maturities comparable to such period (as reasonably determined by
       such Lender).

5.06   TAXES.

       (a)    General. All payments to be made hereunder and under the Notes and
              any other Financing Document by the Borrower shall be made free
              and clear of and without

                                      -25-

              deduction for or on account of, any Taxes (other than Taxes
              imposed on either Agent or any Lender by the jurisdiction in which
              such Person is organized or has its principal office or, in the
              case of any Lender, by the jurisdiction in which its Applicable
              Lending Office is organized or located or, in each case, any
              political subdivision or taxing authority thereof or therein or
              otherwise imposed by any taxing authority upon, or measured by,
              income or assets as a result of the organization or location of
              such Lender in such taxing authority's jurisdiction (unless such
              organization or location is attributable to the execution of, or
              the exercise of any rights or remedies under or in connection
              with, the Transaction Documents)) (such Taxes being herein
              referred to as the "APPLICABLE TAXES").

              If any Applicable Taxes are imposed and required to be withheld
              from any amount payable by the Borrower hereunder or under the
              Notes or any other Financing Document, the Borrower shall (subject
              to the second sentence of Section 5.06(c)) be obligated to: (i)
              pay such additional amount so that the Agents and the Lenders, as
              applicable, shall receive a net amount (after giving effect to the
              payment of such additional amount and to the deduction of all
              Applicable Taxes) equal to the amount due hereunder; (ii) pay such
              Applicable Taxes to the appropriate taxing authority for the
              account of the Administrative Agent, for the benefit of the Agents
              and the Lenders, as applicable; and (iii) as promptly as possible
              thereafter, send to the Administrative Agent a certified copy of
              any original official receipt showing payment thereof, together
              with such additional documentary evidence as the Administrative
              Agent or such other Agent or Lender (as applicable) may from time
              to time reasonably require.

              If the Borrower fails to pay any Applicable Taxes when due to the
              appropriate taxing authority or fails to remit to the
              Administrative Agent the required receipts or other required
              documentary evidence, the Borrower shall be obligated to indemnify
              each Agent and each Lender for any incremental Taxes, as well as
              interest and penalties that may become payable by such Agent or
              such Lender as a result of such failure. The obligations of the
              Borrower under this Section 5.06(a) shall survive the termination
              of the Commitments and the repayment of the Loans.

       (b)    Evidence of Payment. Within 30 days after paying any amount to
              either Agent or any Lender from which it is required by law to
              make any deduction or withholding, and within 30 days after it is
              required by law to remit such deduction or withholding to any
              relevant taxing or other authority, the Borrower shall deliver to
              the Administrative Agent, for delivery to such Person, evidence
              reasonably satisfactory to such Person of such deduction,
              withholding or payment (as the case may be).

       (c)    Foreign Lenders. Any Foreign Lender that is entitled to an
              exemption from or reduction of withholding tax under the law of
              the jurisdiction in which the Borrower is located, or any treaty
              to which such jurisdiction is a party, with

                                      -26-

              respect to payments by the Borrower under this Agreement, the
              Notes or any other Financing Document shall deliver to the
              Borrower (with a copy to the Administrative Agent), at the time or
              times reasonably requested by the Borrower, such properly
              completed and executed documentation prescribed by applicable law
              as will permit such payments to be made without withholding or at
              a reduced rate. For any period during which a Foreign Lender has
              failed to provide the Borrower with the appropriate documentation
              as required by the preceding sentence, the Borrower shall not be
              obligated to pay, and such Foreign Lender shall not be entitled to
              receive, additional amounts under Section 5.06(a) with respect to
              Applicable Taxes imposed by the United States to the extent that
              such additional amounts would not have arisen but for such failure
              of such Foreign Lender. If a Foreign Lender that is otherwise
              exempt from or subject to a reduced rate of withholding tax
              becomes subject to Applicable Taxes, or a higher amount thereof,
              because of its failure to deliver documentation described in the
              first sentence of this paragraph (c), the Borrower shall take such
              steps as such Foreign Lender shall reasonably request to assist
              such Foreign Lender to recover such Applicable Taxes.

       (d)    Tax Refunds. If an Agent or a Lender receives a refund of, or in
              respect of, any Applicable Taxes with respect to which the
              Borrower has paid additional amounts pursuant to Section 5.06(a)
              and (i) either: (A) such refund (as received by such Agent or such
              Lender) is specifically referable to such Applicable Taxes; or (B)
              such Agent or such Lender determines (in its sole discretion) that
              such refund is in respect of, such Applicable Taxes; and (ii) such
              Agent's or such Lender's (as applicable) tax affairs for its tax
              year in respect of which such refund was obtained have been
              finally settled, then in each case such Agent or such Lender
              shall, to the extent it can do so without prejudice to the
              retention of such refund, pay to the Borrower an amount equal to
              such refund (but only to the extent of additional amounts paid by
              the Borrower under Section 5.06(a) with respect to the Applicable
              Taxes giving rise to such refund), net of all out-of-pocket
              expenses and Taxes incurred by such Agent or such Lender with
              respect thereto and without interest (other than any interest paid
              by the relevant Government Authority with respect to such refund).
              Any such payment by any Agent or any Lender shall be applied
              toward payments of amounts then owed by the Borrower under this
              Agreement if, at the time of such payment, an Event of Default has
              occurred and is continuing.

              The Borrower shall indemnify each Agent and each Lender on an
              after-tax basis for any Taxes that are imposed on such Person as a
              result of the disallowance, unavailability, recapture or reduction
              of any such refund, as to which such Person has already made
              payment in full to the Borrower as required by this paragraph (d).
              Nothing herein shall oblige any Agent or any Lender to disclose
              any of the tax returns, books or other records of such Person, nor
              shall anything herein interfere with the right of any Agent or any
              Lender to arrange its tax and

                                      -27-

              commercial affairs and its dealings with its various customers in
              whatever manner it thinks fit. In particular, no Agent or Lender
              shall be under any obligation to claim credit, relief, remission
              or repayment from or against its corporate profits or similar tax
              liability in respect of the amount of any Tax, deduction or
              withholding as aforesaid in priority to any other claims, reliefs,
              credits or deductions available to it or that it determines in its
              sole discretion to be inadvisable.

5.07   MITIGATION OBLIGATIONS; PREPAYMENTS; REPLACEMENT OF LENDERS.

       (a)    Designation of a Different Lending Office; Prepayments. If any
              Lender requests compensation under Section 5.01 or 5.06, or if the
              Borrower is required to pay any additional amount to any Lender or
              any Government Authority for the account of any Lender pursuant to
              Section 5.06, then such Lender shall use reasonable efforts
              (consistent with its internal policy and legal and regulatory
              restrictions) to designate a different Applicable Lending Office
              for the Loans of such Lender affected by such event or to assign
              its rights and obligations therein to another of its offices,
              branches or Affiliates, if, in the sole opinion of such Lender,
              such designation or assignment: (i) would eliminate or reduce
              amounts payable pursuant to Section 5.01 or 5.06, as the case may
              be, in the future; and (ii) would not be disadvantageous to such
              Lender; provided that such Lender shall have no obligation to
              designate an Applicable Lending Office located in the United
              States if such Lender's Applicable Lending Office is not then
              located in the United States. The Borrower shall pay all
              reasonable costs and expenses incurred by any Lender in connection
              with any such designation or assignment. In the event any such
              Lender requesting compensation is unable or, for any reason,
              declines to so designate a different Applicable Lending Office of
              its Loans, the Borrower shall have the right to prepay such Lender
              in whole or in part pursuant to the terms of Section 3.03(a) and
              Section 3.05, and such prepayment shall be exclusive of the
              prepayment commission described in Section 3.03(b).

       (b)    Replacement of Lenders. If any Lender requests compensation under
              Section 5.01 or 5.06, or if the Borrower is required to pay any
              additional amount to any Lender or any Government Authority for
              the account of any Lender pursuant to Section 5.06, or if any
              Lender exercises its rights under Section 5.03, then the Borrower
              may, at its sole expense and effort, upon notice to such Lender
              and the Administrative Agent, require such Lender to assign and
              delegate (in accordance with and subject to the restrictions
              contained in Section 11.06), without recourse and without
              compensation or payment of any type other than amounts referred to
              in clause (i) below, all its interests, rights and obligations
              under this Agreement to an assignee that shall assume such
              obligations (which assignee may be another Lender, if a Lender
              accepts such assignment); provided that: (i) such Lender shall
              have received payment of an amount equal to the outstanding
              principal of its Loans, accrued interest thereon, accrued fees and
              all other amounts payable to it hereunder, from the assignee (to
              the extent of such outstanding principal and accrued interest and
              fees) or the Borrower (in the case

                                      -28-

              of all other amounts); and (ii) such assignment will: (A) result
              in a reduction in such compensation or payments; or (B) effect the
              availability of Eurodollar Loans, as applicable. A Lender shall
              not be required to make any such assignment and delegation if,
              prior thereto, as a result of a waiver by such Lender or
              otherwise, the circumstances entitling the Borrower to require
              such assignment and delegation cease to apply.

                                      -29-

                                   ARTICLE VI

                              CONDITIONS PRECEDENT

6.01   INITIAL TERM LOANS. The obligation of any Lender to make its Initial Loan
       Term Loan hereunder is subject to the receipt by the Administrative Agent
       of each of the documents and the satisfaction of the conditions precedent
       set out in this Section 6.01, each of which shall be satisfactory to the
       Lenders in form, scope and substance.

       (a)    Certain Financing Documents. Each of the following Financing
              Documents, each such document to be duly executed and delivered by
              each of the intended parties thereto:

              (i)    this Agreement;

              (ii)   each of the Initial Term Loan Notes; and

              (iii)  the Consent and Agreement of each of the Operator and
                     Imperial Irrigation District relating to the Project
                     Documents to which such Project Party is a party or by
                     which it is otherwise bound, except as otherwise agreed in
                     writing by the Administrative Agent on or prior to the
                     Closing Date.

       (b)    Security Documents. Each of the following Security Documents, each
              such document to be duly executed and delivered by each of the
              intended parties thereto:

              (i)    the Borrower Security Agreement;

              (ii)   the Borrower Equity Interest Pledge;

              (iii)  the Deed of Trust; and

              (iv)   the Depositary Agreement.

       (c)    Project Documents. A copy (which, in the case of the Project
              Documents referred to in clauses (v), (viii), (ix) and (x) below,
              may be in electronic, CD-ROM format), certified by an Authorized
              Officer of the Borrower to be true, correct and complete, of each
              of the following Project Documents, each such document to be duly
              executed and delivered by each of the intended parties thereto:

              (i)    each PPA;

              (ii)   each Plant Connection Agreement;

                                      -30-

              (iii)  the O&M Contract;

              (iv)   each Transmission Services Agreement;

              (v)    each Real Property Document;

              (vi)   the Water Supply Agreement;

              (vii)  the Energy Services Agreement;

              (viii) each Acquisition Document;

              (ix)   each Restructuring Document;

              (x)    each Merger Document;

              (xi)   the Funding and Construction Agreement; and

              (xii)  the Unit Agreement.

       (d)    Limited Liability Company Documents. A certificate of the
              Secretary or Assistant Secretary of the Borrower or of its
              managing member, dated as of the Closing Date, certifying: (A)
              that attached thereto is a true, correct and complete copy of the
              Charter Documents (including the LLC Agreement) of the Borrower as
              in effect on the date of such certificate; (B) that attached
              thereto is a true, correct and complete copy of resolutions duly
              adopted by the managers or member of the Borrower, authorizing the
              execution, delivery and performance of the Financing Documents to
              which the Borrower is or is intended to be a party, and that such
              resolutions have not been modified, rescinded or amended and are
              in full force and effect; and (C) as to the incumbency and
              specimen signature of each officer of the Borrower executing each
              of the Financing Documents, to which the Borrower is or is
              intended to be a party and each other document to be delivered by
              the Borrower from time to time in connection therewith (and each
              Financing Party may conclusively rely on such certificate until it
              receives notice in writing to the contrary from the Borrower).

       (e)    Officers' Certificates. A certificate of an Authorized Officer of
              the Borrower, dated as of the Closing Date, certifying that: (A)
              the representations and warranties of the Borrower contained in
              Article VII and the material representations and warranties of the
              Borrower in each other Transaction Document to which it is a party
              are true and correct in all material respects as if made on and as
              of such date (or, if stated to have been made solely as of an
              earlier date, were true and correct as of such date); (B) the
              Borrower is in compliance with all of its covenants and
              obligations under each of the Financing Documents to which it is a
              party, and is in compliance in all material respects with all of
              its covenants and obligations under each of the Project Documents
              to which it is a

                                      -31-

              party; (C) all Transaction Documents are in full force and effect;
              and (D) no Default or Event of Default has occurred and is
              continuing on such date, in each case, both immediately prior to
              the initial extension of credit hereunder and after giving effect
              thereto and to the intended use thereof.

       (f)    Real Property Documents; Title Insurance; Survey.

              (i)    Title Insurance. A title policy or policies issued by the
                     relevant Title Company or Title Companies which is in ALTA,
                     extended coverage, Lender's Fee Policy form 1970 (revised
                     10/17/84) or such other form approved by the Lenders, or a
                     binding marked commitment to issue such policy or policies,
                     in form, scope and substance satisfactory to the Lenders,
                     insuring the Collateral Agent for the benefit of the
                     Secured Parties, in an amount satisfactory to the Lenders,
                     that the Borrower is lawfully seized and possessed of a
                     valid and subsisting leasehold interest in the Leasehold
                     Properties and estate or interest in the ROW and the Site
                     Licenses, as the case may be, in the Project and that such
                     interests are free and clear of all defects and
                     encumbrances except those approved by the Lenders.

                     Each Title Policy shall contain:

                     (A)    full coverage against Mechanics' Liens (filed and
                            inchoate);

                     (B)    a reference to the relevant Initial Survey with no
                            survey exceptions except those theretofore approved
                            by the Lenders; and

                     (C)    such affirmative insurance and endorsements as the
                            Lenders may require.

              (ii)   Initial Survey. An as-built survey of the Site current to
                     within 90 days of the Closing Date (each such survey, an
                     "INITIAL SURVEY"), which survey shall:

                     (A)    be a current "as-built" metes and bounds survey of
                            the Site, including easements that benefit such
                            Site;

                     (B)    be made in accordance with the "Minimum Standard
                            Detail Requirements for ALTA/ACSM Land Title
                            Surveys" jointly established and adopted by ALTA,
                            ACSM and NSPS in 1999 with all measurements made in
                            accordance with the "Minimum Angle, Distance and
                            Closure

                                      -32-

                            Requirements for Survey Measurements Which Control
                            Land Boundaries for ALTA/ACSM Land Title Surveys";

                     (C)    be prepared by a surveyor satisfactory to the
                            Lenders;

                     (D)    contain "Optional Survey Responsibilities and
                            Specifications" 2, 3, 8, 10 and 16 as specified on
                            Table A to the "Minimum Standard Detail Requirements
                            for ALTA/ACSM Land Title Surveys"; and

                     (E)    contain a certification from said surveyor
                            satisfactory to the Lenders.

              (iii)  Fees. Evidence that the Borrower shall have paid to each
                     Title Company all of its expenses and premiums in
                     connection with the issuance of the Title Policy and in
                     addition shall have paid to each Title Company an amount
                     equal to the relevant recording and stamp taxes payable in
                     connection with recording the Deed of Trust in the
                     appropriate county land offices.

       (g)    Financial Statements. The most recent unaudited quarterly
              financial statements (consolidated as appropriate) of the
              Borrower, prepared in accordance with the relevant Accounting
              Principles, together with a certificate from an Authorized Officer
              of the Borrower stating that: (A) no material adverse change in
              its consolidated assets, liabilities and operations or financial
              condition has occurred from those set out in such most recent
              financial statements; and (B) such financial statements fairly
              present in all material respects the financial condition of the
              Borrower.

       (h)    Government Actions.

              (i)    Government Approvals. Copies, certified by an Authorized
                     Officer of the Borrower to be true, correct and complete,
                     of all Government Approvals referred to in Schedule VI
                     (other than those listed on Schedule VII or otherwise
                     designated on such Schedule VII as unavailable), all of
                     which shall be in form and substance satisfactory to the
                     Lenders, together with a certificate from an Authorized
                     Officer of the Borrower stating that all such Government
                     Approvals, other than those listed on Schedule VII, are in
                     full force and effect.

              (ii)   Status. Evidence in form and substance satisfactory to the
                     Lenders that each of the Projects is a QF.

                                      -33-

       (i)    Independent Engineer's Report and Certificate. A report of the
              Independent Engineer, dated as of a recent date and in form, scope
              and substance satisfactory to the Lenders addressing (among other
              matters reviewed at the request of the Lenders as determined in
              their sole discretion): (i) the historical and projected operating
              and maintenance costs; (ii) the historic operation of the Project,
              including capacity ratings and actual energy production; (iii) the
              capability of the Resource, including (A) a review of Resource
              temperature, well production and operation and maintenance costs
              associated with the production and injection wells; (B) the
              historic production and injection volumes and temperature; (C) the
              ability of the Resource to continually provide sufficient
              temperatures and volumes of geothermal fluid to maintain the
              Project's electricity production and costs as set forth in the
              Closing Pro Forma; (D) the expected degradation of the Resource
              during the period beginning on the Closing Date and ending on the
              Final Maturity Date; (E) a review of the Resource management and
              well drilling plans, and the capabilities of the Operator to
              operate and maintain the Resource; (F) a review of the costs
              associated with management, maintenance, and development of the
              Resource to maintain temperature and production; and (G) the
              expected useful life of the Resource as currently used and as
              anticipated to be used following the Upgrade Project; (iv) the
              assumptions, formulae, methodologies and structure of the Closing
              Pro Forma; (v) the technical and economic ability and feasibility
              of the Project to produce and transmit the capacity and energy,
              and generate Project Cash Flow, in accordance with the Closing Pro
              Forma; (vi) the technical ability and feasibility of the Project
              to supply capacity and energy and otherwise fulfill its
              obligations under the PPAs; (vii) the projected availability of
              the Project; (viii) the Borrower's ability to perform under the
              Project Documents; (ix) the adequacy of the Plant Connection
              Agreements, the Transmission Services Agreements, and all other
              arrangements relating to interconnection; (x) the adequacy of the
              O&M Contract and the reasonableness of the costs and expenses of
              the Operator for performing services under the O&M Contract; (xi)
              the existence of skilled third party operators capable of
              performing such services at a comparable cost to the fees paid to
              the Operator under the O&M Contract; (xii) any environmental
              matters at or in relation to the Site, including (A) the
              Borrower's and the Project's compliance with all applicable
              Government Rules, including all Environmental Laws and all
              applicable Government Rules relating to health and safety; (B)
              whether the Borrower or the Project is subject to any federal,
              state or local investigation regarding any actual or potential
              remedial action or involving any actual or potential expenditure
              in excess of $100,000 in the aggregate with respect to any
              Environmental Law or in response to any Release; and (C) whether
              the Borrower or the Project has any contingent liability in excess
              of $100,000 in the aggregate in connection with any Release;
              (xiii) the adequacy of the plans relating to the Upgrade Project
              and an opinion that the expectations of the Upgrade Project are
              obtainable within the cost and time frame anticipated; and (xiv)
              any other technical or regulatory issue that may arise in

                                      -34-

              connection with the Independent Engineer's review of the Project
              on behalf of the Lenders.

       (j)    Closing Pro Forma. The Closing Pro Forma.

       (k)    Insurance.

              (i)    Acceptable Insurance Broker Certificate. A certificate of
                     an Acceptable Insurance Broker as to the Borrower's
                     compliance with Section 8.05(a) and Schedule IV, such
                     certificate to be in form and substance satisfactory to the
                     Administrative Agent.

              (ii)   Compliance Certificate. A certificate of an Authorized
                     Officer of the Borrower, dated as of the Closing Date,
                     certifying that insurance complying with Section 8.05(a)
                     and Schedule IV, covering the risks referred to therein,
                     has been obtained and is in full force and effect and, as
                     of the date thereof, no notice of cancellation has been
                     issued thereunder.

              (iii)  Insurance Advisor's Report. A report of the Insurance
                     Advisor, dated as of a recent date and satisfactory in
                     form, scope and substance: (A) addressing (among other
                     matters reviewed at the request of the Lenders as
                     determined in their sole discretion): (I) the adequacy of
                     the insurance required by Section 8.05 and Schedule IV and
                     confirming that such insurance and reinsurance provides
                     adequate cover for the Project and adequately protects the
                     interests of the Agents and the Lenders; and (II) the
                     comparability of such insurance with insurance maintained
                     with respect to similar projects by prudent power
                     producers; and (B) confirming that insurance complying with
                     Section 8.05 and Schedule IV, covering the risks referred
                     to therein: (I) is reasonably likely to remain available
                     through the Final Maturity Date; and (II) has been obtained
                     and is in full force and effect and as of the date thereof,
                     no notice of cancellation has been issued thereunder.

       (l)    Filings, Registrations and Recordings; Fees and Taxes.

              (i)    Financing Statements. Acknowledgment copies of all
                     financing statements under the Uniform Commercial Code (and
                     copies of Uniform Commercial Code search reports and tax
                     lien, judgment and litigation search reports) with respect
                     to the Borrower, in each jurisdiction (and, to the extent
                     applicable, county land offices) listed under the name of
                     such Person on Schedule V and in each other jurisdiction in
                     which such financing statements are necessary or, in the
                     opinion of special counsel to the Lenders, desirable to

                                      -35-

                     perfect the Liens created by the Security Documents
                     (including Liens in fixtures created by the Deed of Trust
                     and all other instruments to be recorded or filed or
                     delivered in connection with the Security Documents).

              (ii)   Recordation. Evidence satisfactory to the Administrative
                     Agent that the Security Documents have been duly recorded
                     and filed in all places wherein such recording and filing
                     are necessary to perfect the interests of the
                     Administrative Agent in and to the Collateral covered
                     thereby.

              (iii)  Fees and Taxes. Evidence that all filing, recordation,
                     subscription and inscription fees and all recording and
                     other similar fees, and all recording, stamp and other
                     taxes and other expenses related to such filings,
                     registrations and recordings necessary for the consummation
                     of the transactions contemplated by this Agreement and the
                     other Financing Documents have been paid in full by or on
                     behalf of the Borrower or otherwise provided for.

              (iv)   Other Action. Evidence satisfactory to the Administrative
                     Agent that all other action necessary in order to
                     effectively establish, create and perfect the Liens,
                     charges and security interests contemplated by the Security
                     Documents shall have been duly taken or made and remains in
                     full force and effect.

       (m)    No Proceedings.

              (i)    As of the Closing Date there is no: (I) injunction, writ,
                     preliminary restraining order or any order of any nature
                     issued by any Government Authority, arbitral tribunal or
                     other body directing that any of the transactions provided
                     for herein or in the other Transaction Documents not be
                     consummated as herein or therein provided; or (II)
                     litigation, proceeding or, to the Borrower's knowledge,
                     investigation, of or before any Government Authority,
                     arbitral tribunal or other body pending or, to the
                     Borrower's knowledge, threatened with respect to or
                     affecting any Project, this Agreement or any other
                     Transaction Document or any of the transactions
                     contemplated hereby or thereby.

              (ii)   A certificate of an Authorized Officer of the Borrower,
                     dated as of the Closing Date, certifying as to such effect.

       (n)    No Material Adverse Change.

                                      -36-

              (i)    As of the Closing Date, there has been no Material Adverse
                     Effect since November 7, 2002, and no act, event or
                     circumstance affecting the Borrower has arisen since such
                     date that could reasonably be expected to result in a
                     Material Adverse Effect.

              (ii)   A certificate of an Authorized Officer of the Borrower,
                     dated as of the Closing Date, certifying as to such effect.

       (o)    Opinions of Counsel. The following opinions of counsel, each
              acceptable in form and substance to the Agents and the Lenders:

              (i)    An opinion of Chadbourne & Parke LLP, as special New York
                     counsel to the Borrower and the Sponsor, and addressing
                     certain New York State and Federal law matters;

              (ii)   An opinion of David Chanover, special California counsel to
                     the Borrower; and

              (iii)  An opinion of Morris, Nichols, Arsht & Tunnell, as special
                     Delaware counsel to the Borrower and the Sponsor and
                     addressing certain general Delaware corporate, limited
                     liability Company, and Uniform Commercial Code matters.

       (p)    Fees and Expenses. Evidence that the Borrower shall have paid in
              full, on or before the Closing Date, all fees and expenses then
              due under or pursuant to this Agreement.

       (q)    Establishment and Funding of the Accounts. Each of the Accounts
              shall have been established as of the Closing Date in accordance
              with the terms of the Depositary Agreement. The Debt Service
              Reserve Account shall have on deposit a credit balance of
              immediately available funds in an amount not less than the Debt
              Service Reserve Required Amount, provided that the initial funding
              of the Debt Service Reserve Account may be made with the proceeds
              of the Initial Term Loans.

       (r)    Borrower's LLC Agreement. The Borrower's LLC Agreement shall be in
              form and substance satisfactory to the Administrative Agent.

       (s)    No Default. Immediately before and after giving effect to such
              proposed Loan, no Default or Event of Default shall have occurred
              and be continuing and no Default would result therefrom.

       (t)    Representations and Warranties. Immediately before and after
              giving effect to such proposed extension of credit, all
              representations of the Borrower and the Sponsor contained in the
              Financing Documents shall be true and correct on and as

                                      -37-

              of the Closing Date in all material respects as if made on and as
              of such date except for any such representations and warranties
              that were initially stated to have been made solely as of an
              earlier date, in which case such representations shall have been
              true and correct in all material respects as of such earlier date.

       (u)    Absence of Material Adverse Effect. Immediately before and after
              giving effect to such proposed extension of credit, no Material
              Adverse Effect shall have occurred and be continuing or would
              result therefrom.

       (v)    Government Approvals. All Government Approvals that are necessary
              for each Project as of the Closing Date shall have been obtained
              on or prior to the Closing Date and shall be in full force and
              effect and not subject to appeal. (w) Notice of Borrowing. The
              Borrower shall have delivered to the Administrative Agent (with a
              copy to the Collateral Agent) a Notice of Borrowing with respect
              to Initial Term Loans in an amount equal to the aggregate Initial
              Term Loan Commitments.

       (x)    Payment Instructions. Evidence that the Borrower shall have
              irrevocably instructed in writing each of SCE and Imperial
              Irrigation District to make all payments owing to the Borrower
              under any Project Document to which either SCE or Imperial
              Irrigation District is party to the Depositary Bank for deposit
              into the Revenue Account.

6.02   ADDITIONAL TERM LOANS. The obligation of any Lender to make its
       Additional Term Loan is subject to the receipt by the Administrative
       Agent of the documents and the satisfaction of the conditions precedent
       set out below on the date of such Loan, each of which shall be in form
       and substance satisfactory to the Administrative Agent and the Majority
       Lenders.

       (a)    No Default. Immediately before and after giving effect to such
              proposed extension of credit, no Default or Event of Default shall
              have occurred and be continuing and no Default would result
              therefrom.

       (b)    Representations and Warranties. Immediately before and after
              giving effect to such proposed extension of credit, all
              representations of the Borrower and the Sponsor contained in the
              Financing Documents shall be true and correct on and as of the
              date of such Additional Term Loan in all material respects as if
              made on and as of such date except for any such representations
              and warranties that were initially stated to have been made solely
              as of an earlier date, in which case such representations shall
              have been true and correct in all material respects as of such
              earlier date.

                                      -38-

       (c)    Absence of Material Adverse Effect. Immediately before and after
              giving effect to such proposed extension of credit, no Material
              Adverse Effect shall have occurred and be continuing or would
              result therefrom.

       (d)    Government Approvals. All Government Approvals that are necessary
              for the then current stage of the Development of each Project
              shall have been obtained on or prior to the date of such extension
              of credit and shall be in full force and effect and not subject to
              appeal.

       (e)    Upgrade Acceptance Test. The Project has successfully passed the
              Upgrade Acceptance Test on or before December 31, 2003.

       (f)    Upgrade Pro Forma. The Upgrade Pro Forma, containing assumptions
              and otherwise in form and substance satisfactory to the Lenders
              and the Independent Engineer, taking into account the effect of
              the Upgrade Project on the Projects' performance, and
              demonstrating an annual Debt Service Coverage Ratio of at least
              1.5:1.

       (g)    Independent Engineer's Upgrade Report; Defective Tower Repair. An
              update to the report of the Independent Engineer that was
              delivered on the Closing Date, confirming that the Upgrade
              Acceptance Test has been satisfied in all material respects in
              form and substance satisfactory to the Lenders, and a certificate
              of an Authorized Officer of the Borrower, dated no later than July
              1, 2003 certifying that the Tower Repairs have been substantially
              completed and that, as a result, the cooling towers subject
              thereof are, as of such date, in good working order and condition
              in accordance with generally accepted prudent utility practices.

       (h)    Title Policy Endorsement. An endorsement to the Title Policy to
              the date of such extension of credit, in the form approved by the
              Administrative Agent and setting out no additional exceptions
              (including survey exceptions).

       (i)    Notice of Borrowing. The Borrower shall have delivered to the
              Administrative Agent (with a copy to the Collateral Agent) a
              Notice of Borrowing with respect to Additional Term Loans in an
              amount not exceeding the present value, as calculated by the
              Administrative Agent, discounted at ten percent (10%), of
              two-thirds (2/3) of Additional Project Cash Flow, as set forth in
              the Upgrade Pro Forma, for the period from the date the Project
              passes the Upgrade Acceptance Test to the Final Maturity Date, but
              not to exceed the aggregate Additional Term Loan Commitments.

       (j)    Other. Such other statements, certificates, documents and
              information with respect to any Project or matters contemplated by
              this Agreement as either Agent or the Majority Lenders may
              reasonably request.

                                      -39-

                                  ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders and each Agent that:

7.01   EXISTENCE. The Borrower is duly organized or formed, validly existing and
       in good standing under the laws of the State of Delaware. The Borrower is
       duly qualified to do business and is in good standing in the State of
       California. The Borrower is duly qualified to do business and is in good
       standing in all other places where necessary in light of the business it
       conducts and the Property it owns and intends to conduct and own and in
       light of the transactions contemplated by this Agreement and the other
       Transaction Documents, except where the failure to so qualify or be in
       good standing could not reasonably be expected to have a Material Adverse
       Effect. No filing, recording, publishing or other act that has not been
       made or done is necessary in connection with the existence or good
       standing of the Borrower or the conduct of its business.

7.02   FINANCIAL CONDITION.

       (a)    Financial Statements. The financial statements delivered to the
              Administrative Agent pursuant to Section 8.01, and any related
              statements of income, owner's equity and cash flows: (i) fairly
              present, in all material respects, the financial condition of the
              Borrower as of the date delivered and the results of its
              operations for the period covered thereby (subject, in the case of
              any quarterly financial statements to normal year-end audit
              adjustments); and (ii) have been prepared in accordance with the
              Accounting Principles applicable to such Person.

       (b)    No Material Contingent Liabilities. As of the date of the relevant
              balance sheet included in such financial statements, the Borrower
              has no contingent liabilities, liabilities for taxes, unusual
              forward or long-term commitments or unrealized or anticipated
              losses from any unfavorable commitments or any other liabilities
              or obligations of a nature required to be reflected in a balance
              sheet for the period to which such financial statements relate
              that were not disclosed in such balance sheet and, either
              individually or in the aggregate would be material to the
              Borrower.

       (c)    No Material Adverse Change. The Borrower knows of no reasonable
              basis existing as of the date of its most recent balance sheet in
              accordance with Section 8.01 for the assertion against it of any
              liability or obligation of a nature required to be reflected in a
              balance sheet that is not fully reflected in its most recent
              balance sheet. Since the date of delivery of such balance sheet,
              there has been no material adverse change in the financial
              condition, operations or business of the Borrower from that set
              out in such financial statements as at such date.

                                      -40-

7.03   ACTION.

       (a)    Borrower. The Borrower has full limited liability company power,
              authority and legal right to execute and deliver the Transaction
              Documents to which it is or is intended to be a party and to
              perform its obligations thereunder. The execution, delivery and
              performance by the Borrower of each of the Transaction Documents
              to which it is or is intended to be a party and the consummation
              of the transactions contemplated thereby have been duly authorized
              by all necessary limited liability company action on its part.
              Each of the Transaction Documents to which the Borrower is a party
              has been duly executed and delivered by or on behalf of such
              Person and constitutes its legal, valid and binding obligation
              enforceable against it in accordance with its terms, except as the
              enforceability thereof may be limited by: (i) applicable
              bankruptcy, insolvency, moratorium or other similar laws affecting
              the enforcement of creditors' rights generally; and (ii) the
              application of general principles of equity (regardless of whether
              such enforceability is considered in a proceeding at law or in
              equity).

       (b)    Other Major Project Parties.

              (i)    Each of the other Major Project Parties has full corporate,
                     limited liability company or partnership power, authority
                     and legal right to execute and deliver each of the
                     Transaction Documents to which it is or is intended to be a
                     party and to perform its obligations thereunder;

              (ii)   the execution, delivery and performance by each other Major
                     Project Party of each of the Transaction Documents to which
                     it is or is intended to be a party and the consummation of
                     the transactions contemplated thereby have been duly
                     authorized by all necessary corporate, limited liability
                     company or partnership action on the part of such other
                     Major Project Party; and

              (iii)  each of the Transaction Documents to which any other Major
                     Project Party is a party has been duly executed and
                     delivered by such other Major Project Party and constitutes
                     the legal, valid and binding obligation of such other
                     Project Party enforceable against such other Major Project
                     Party in accordance with its terms, except as the
                     enforceability thereof may be limited by: (A) applicable
                     bankruptcy, insolvency, moratorium or other similar laws
                     affecting the enforcement of creditors' rights generally;
                     and (B) the application of general principles of equity
                     (regardless of whether such enforceability is considered in
                     a proceeding at law or in equity);

                                      -41-

              provided that these representations shall be made only to the
              knowledge of the Borrower with respect to any other Major Project
              Party that is not an Affiliate of the Borrower.

7.04   NO BREACH.

       (a)    Execution, Etc. of Transaction Documents. The execution, delivery
              and performance by the Borrower of each of the Transaction
              Documents to which it is or is intended to be a party and the
              consummation of the transactions contemplated thereby do not and
              will not: (i) require any consent or approval of any Person that
              has not been obtained (except for consents from the BLM, SCE and
              for certain consents by third parties to the right of the
              Collateral Agent on behalf of the Secured Parties under the
              Security Documents to step into, cure defaults under or substitute
              a counterparty to, certain Project Documents) and each such
              consent and approval that has been obtained is in full force and
              effect; (ii) violate any material Government Rule or material
              Government Approval applicable to any Project; (iii) conflict
              with, result in a breach of or constitute a default under: (A) the
              Borrower's Charter Documents or any corporate, limited liability
              company action or any resolution of the member of the Borrower; or
              (B) any Project Document other than with respect to the Consents
              described in clause (i) above that have not been obtained or any
              indenture or loan or credit agreement or any other material
              agreement, lease or instrument to which the Borrower is a party or
              by which it or its Property may be bound or affected in any
              material respect; or (iv) result in, or create any Lien (other
              than a Permitted Lien) upon or with respect to any of the
              properties now owned or hereafter acquired by the Borrower.

       (b)    No Breach. The Borrower is not in violation of any Government Rule
              or Government Approval that could reasonably be expected to result
              in a Material Adverse Effect. The Borrower is not in breach of or
              default under any indenture, loan or credit agreement or any other
              agreement, lease or instrument referred to in paragraph (a)(iii)
              above, except such breaches or defaults that, in the aggregate
              could not reasonably be expected to result in a Material Adverse
              Effect.

7.05   GOVERNMENT APPROVALS; GOVERNMENT RULES.

       (a)    Borrower. All Government Approvals necessary under Government
              Rules to be obtained by or on behalf of the Borrower on or prior
              to the Closing Date are set out in Schedules VI and, except for
              those Government Approvals set out in Schedule VII which are not
              currently required for any Project, have been duly obtained, were
              validly issued, are in full force and effect, are not subject to
              appeal, are held in the name, or on behalf of, such Person and are
              free from conditions or requirements compliance with which could
              reasonably be expected to result in a Material Adverse Effect or
              which such Person does not reasonably expect to be able to satisfy
              on or prior to the time when necessary.

                                      -42-

       (b)    Other Major Project Parties. To the Borrower's knowledge: (i) each
              other Major Project Party has obtained all Government Approvals
              necessary under Government Rules that are required to be obtained
              on or prior to the Closing Date in order for such other Major
              Project Party to perform its obligations under the Transaction
              Documents to which it is or is intended to be a party, other than
              those Government Approvals not currently required for any Project;
              and (ii) such Government Approvals are in full force and effect,
              are not subject to appeal, are held in the name of such other
              Major Project Party and are free from conditions or requirements
              compliance with which could reasonably be expected to result in a
              Material Adverse Effect or which the Borrower does not reasonably
              expect such other Major Project Party to be able to satisfy on or
              prior to the time when necessary.

       (c)    No Material Omission. The information set out in each application
              and all other written materials submitted by the Borrower (and to
              the Borrower's knowledge, each other Major Project Party) to the
              applicable Government Authority in connection with each of its
              Government Approvals is accurate and complete in all material
              respects as of the date submitted to such Government Authority and
              does not omit to state any material fact necessary to make such
              information not misleading.

       (d)    Future Government Approvals. The Borrower has no reason to believe
              that any Government Approvals that have not been obtained by it or
              any other Major Project Party as of the date of this Agreement,
              but which will be required in the future, will not be obtained in
              due course on or prior to the time when necessary and will be free
              from any condition or requirement, compliance with which could
              reasonably be expected to have a Material Adverse Effect.

       (e)    Compliance of Upgrade Project. The Upgrade Project, if constructed
              in accordance with the Plans and Specifications therefor and
              otherwise Developed as contemplated by the Project Documents, will
              conform to and comply, in all material respects, with all
              covenants, conditions, restrictions and reservations in the
              Government Approvals applicable thereto and all Government Rules.

       (f)    Copies Provided to Administrative Agent. In accordance with
              Section 6.01(h), the Administrative Agent has received a certified
              copy of each Government Approval heretofore obtained.

7.06   PROCEEDINGS. There is no action, suit or proceeding at law or in equity
       or by or before any Government Authority, arbitral tribunal or other body
       now pending or, to the knowledge of the Borrower, threatened against or
       affecting it, any of its Property (including any Project) or, to the
       knowledge of the Borrower, any other Major Project Party, that could
       reasonably be expected to result in a Material Adverse Effect. No winding
       up, dissolution or similar process is pending or threatened against the
       Borrower or (to the knowledge of the Borrower) any other Major Project
       Party except, after the

                                      -43-

       Closing Date, to the extent such process, if adversely determined, could
       not reasonably be expected to result in an Event of Default.

7.07   ENVIRONMENTAL MATTERS.

       (a)    Environmental Claims. Except as described in Part A of Schedule
              VIII, to the knowledge of the Borrower, there are no facts,
              circumstances, conditions or occurrences regarding any Project
              that could reasonably be expected to form the basis of an
              Environmental Claim arising with respect to any Project or against
              such Project, the Borrower or, in connection with its involvement
              in any Project, any other Environmental Party, that individually
              or in the aggregate could reasonably be expected to result in a
              Material Adverse Effect.

       (b)    Threatened Environmental Claims. Except as set out in Part B of
              Schedule VIII, there are no pending or, to the knowledge of the
              Borrower no past or, threatened Environmental Claims arising with
              respect to any Project or against such Project, the Borrower or,
              in connection with its involvement in the Development of any
              Project, any other Environmental Party, that individually or in
              the aggregate could reasonably be expected to result in a Material
              Adverse Effect.

       (c)    Hazardous Materials. Except as set out in Part C of Schedule VIII,
              to the Borrower's knowledge no Hazardous Materials have been Used
              or Released at, on, under or from any Project in an amount or
              concentration that is not otherwise in compliance with applicable
              Environmental Law and that individually or in the aggregate could
              reasonably be expected to result in a Material Adverse Effect.

       (d)    Other Materials. There are not now and, to the knowledge of the
              Borrower, never have been any underground storage tanks located at
              any Project. There is no asbestos contained in, forming part of,
              or contaminating any part of any Project, and no polychlorinated
              biphenyls are used, stored, located at or contaminate any part of
              any Project.

       (e)    Investigations. There have been no environmental investigations,
              studies, audits, reviews or other analyses conducted by or that
              are in the possession of the Borrower (or, with respect to such
              investigations, studies, audits, reviews and other analysis
              conducted prior to April 15, 2002, known by the Borrower to be in
              its possession) in relation to any Project that have not been
              provided to the Administrative Agent and the Lenders.

7.08   TAXES. The Borrower has filed or caused to be filed all tax returns that
       are required by applicable law to be filed, and has paid all Taxes shown
       to be due and payable on said returns or on any assessments made against
       the Borrower or any of its Property and all other Taxes imposed on the
       Borrower by any Government Authority (other than Taxes the payment of
       which are not yet due or that are being Contested) except, in each case,
       where such failure could not reasonably be expected to have a Material
       Adverse Effect.

                                      -44-

       No Liens for Taxes (other than Permitted Liens) against the Borrower or
       any of its Property exist and no claims are being asserted against the
       Borrower or any of its Property with respect to any Taxes. The aggregate
       amount of sales, excise or property taxes imposed or reasonably expected
       to be imposed on the Borrower or any of its Property does not exceed the
       amounts provided therefor in the Closing Pro Forma. The charges, accruals
       and reserves on its books in respect of Taxes are, in the opinion of the
       Borrower, adequate.

7.09   TAX STATUS.

       (a)    For Federal and state income tax purposes, the Borrower is
              disregarded as an entity separate from its owner.

       (b)    Neither the execution and delivery of this Agreement, the other
              Transaction Documents or the Non-Material Project Contracts nor
              the consummation of any of the transactions contemplated hereby or
              thereby shall affect the classification of the Borrower as set out
              in paragraph (a) above.

7.10   ERISA. No ERISA Event has occurred or is reasonably expected to occur
       that, when taken together with all other such ERISA Events for which
       liability is reasonably expected to occur, could reasonably be expected
       to result in a Material Adverse Effect. The present value of all
       accumulated benefit obligations under each Plan (based on the assumptions
       used for purposes of Statement of Financial Accounting Standards No. 87)
       did not, as of the date of the most recent financial statements
       reflecting such amounts, materially exceed the fair market value of the
       assets of such Plan, and the present value of all accumulated benefit
       obligations of all underfunded Plans (based on the assumptions used for
       purposes of Statement of Financial Accounting Standards No. 87) did not,
       as of the date of the most recent financial statements reflecting such
       amounts, materially exceed the fair market value of the assets of all
       such underfunded Plans.

7.11   NATURE OF BUSINESS. The Borrower has not engaged in any business other
       than the Development of the Projects and with respect to the SIGC Lease.
       Neither the business nor any Properties of the Borrower are or have been
       affected by any fire, explosion, accident, strike, lockout or other labor
       dispute, drought, storm, hail, earthquake, embargo, act of God or of the
       public enemy or other casualty (whether or not covered by insurance) that
       could reasonably be expected to have a Material Adverse Effect.

7.12   TITLE; SECURITY DOCUMENTS.

       (a)    Title. The Borrower owns and has good, legal and marketable title
              to the Collateral purported to be covered by the Security
              Documents to which it is a party, except for that portion of the
              Collateral which is Real Property, in which the Borrower has a
              valid estate or interest, and all such interests of the Borrower
              are free and clear of all Liens other than Permitted Liens.

                                      -45-

              (i)    The Borrower is lawfully possessed of a valid and
                     subsisting estate in and to the Real Property and rights to
                     the Real Property described in the Deed of Trust free and
                     clear of all Liens other than the Liens granted to the
                     Collateral Agent for the benefit of the Secured Parties
                     under the Security Documents and:

                     (A)    as at the Closing Date, exceptions shown on the
                            Title Policy delivered on the Closing Date in
                            relation thereto; and

                     (B)    Permitted Liens.

              (ii)   The Borrower enjoys peaceful and undisturbed possession of,
                     all of its Properties (subject only to the Permitted Liens
                     described above) that are necessary for the Projects.

       (b)    Security Documents. The provisions of the Security Documents are
              effective to create, in favor of the Collateral Agent for the
              benefit of the Secured Parties, a legal, valid and enforceable
              Lien on and security interest in all of the Collateral purported
              to be covered thereby in accordance with state law and as
              permitted pursuant to the rules and regulations of the BLM. All
              necessary and appropriate recordings and filings have been made,
              or are being made concurrently herewith, in all necessary and
              appropriate public offices (including in the jurisdictions set out
              in Schedule V), and all other necessary and appropriate action has
              been, or is concurrently herewith being, taken, so that, subject
              to the rules and regulations of the BLM, each such Security
              Document creates, or as to after-acquired property will create, to
              the extent set forth in such Security Document, a perfected Lien
              on and security interest in all right, title, estate and interest
              in the Collateral covered thereby, prior and superior to all other
              Liens other than Permitted Liens. Except as otherwise agreed by
              the Lenders, all necessary and appropriate consents to the
              creation, perfection and enforcement of such Liens have been
              obtained from each of the parties to the Project Documents except
              for the BLM and SCE. Subject to the rules and regulations of the
              BLM, no mortgage or financing statement or other instrument or
              recordation covering all or any part of the Collateral purported
              to be covered by the Security Documents is on file in any
              recording office, except such as may have been filed in favor of
              the Collateral Agent for the benefit of the Secured Parties or in
              respect of any Permitted Lien.

7.13   SUBSIDIARIES.

       (a)    No Subsidiaries. The Borrower has no subsidiaries.

       (b)    Ownership Interests in Borrower. There are no ownership interests
              in the Borrower other than the 100% member interest held by the
              Sponsor.

                                      -46-

7.14   UTILITY REGULATION.

       (a)    Holding Company. The Borrower is not a "public-utility company" or
              a "holding company", or an "affiliate" of a "holding company" or
              of a "public-utility company", or a "subsidiary company" of a
              "holding company", within the meaning of PUHCA nor is Borrower
              subject to regulation under PUHCA. None of the Projects is a
              "public-utility company" or a "holding company", or an "affiliate"
              of a "holding company" or of a "public-utility company", or a
              "subsidiary company" of a "holding company" within the meaning of
              PUHCA.

       (b)    Status. Each of the Projects is a QF. The Borrower is not, nor
              will any of the Secured Parties (solely as a result of its
              execution, delivery or performance of this Agreement or the other
              Financing Documents or the transactions contemplated thereby,
              other than the exercise of remedies under the Security Documents
              except to the extent that, following such exercise of remedies,
              the Borrower will remain as the owner of the Projects, and the
              Operator will remain as the operator thereof) be, subject to
              regulation as a "public-utility company", a "holding company" or a
              "subsidiary company" or an "affiliate" of any of the foregoing,
              under PUHCA.

       (c)    Public Utility. Except as set out on Schedule VII and provided in
              the Government Approvals identified therein, the Borrower is not,
              nor will any of the Secured Parties be (solely as a result of its
              execution, delivery or performance of this Agreement or the other
              Financing Documents or the transactions contemplated thereby,
              other than the exercise of remedies under the Security Documents
              except to the extent that, following such exercise of remedies,
              the Borrower will remain as the owner of the relevant Projects,
              and the Operator will remain as the operator thereof), subject to
              regulation: (i) respecting the rates of electric utilities or
              material financial and organizational regulation of electric
              utilities under the FPA or the applicable Government Rules of the
              State of California other than, solely with respect to the Secured
              Parties' exercise of remedies under the Security Documents,
              Section 203 of the FPA; or (ii) otherwise as a gas or other
              regulated utility, however denominated, under applicable
              Government Rules of the United States of America or the State of
              California.

       (d)    Investment Company. The Borrower is not an "investment company" or
              a company "controlled" by an "investment company" within the
              meaning of the Investment Company Act of 1940 or an "investment
              advisor" within the meaning of the Investment Company Act of 1940.

7.15   FINANCING DOCUMENTS; PROJECT DOCUMENTS; NON-MATERIAL PROJECT CONTRACTS;
       LICENSES, ETC.

       (a)    Financing Documents; Project Documents; Non-Material Project
              Contracts. The Financing Documents, Project Documents and the
              Non-Material Project Contracts constitute and include all
              contracts and agreements relating to the Projects. As at

                                      -47-

              the Closing Date, all Project Documents are set out in the
              definition thereof in Schedule I. There are no material services,
              materials or rights (other than Government Approvals) required for
              any Project other than those granted by, or to be provided to the
              Borrower pursuant to, the Project Documents. The Borrower has no
              reason to believe that any services, materials or rights (other
              than Government Approvals) that have not been obtained as of the
              date of this Agreement, but that will be required for a future
              stage of the Development of any Project (including, without
              limitation, the Upgrade Project), will not be obtained in due
              course on or prior to the commencement of the appropriate stage of
              Development of such Project and will not contain any condition or
              requirement compliance with which could reasonably be expected to
              have a Material Adverse Effect.

       (b)    Copies of Documents. The Administrative Agent has received a copy
              (certified by the Borrower) of each Project Document, in
              accordance with Section 6.01(c), in each case as in effect on the
              date of delivery and each amendment, modification or supplement
              thereto.

       (c)    No Amendment. Since their certification and delivery in accordance
              with Section 6.01(c) and except as permitted pursuant to Section
              8.22, none of the Project Documents has been amended, modified or
              supplemented or has been Impaired and all of the Project Documents
              are in full force and effect in all material respects. All
              conditions precedent to the obligations of the respective parties
              under the Project Documents have been satisfied or waived except
              for such conditions precedent that need not and cannot be
              satisfied until a later stage of Development of the relevant
              Project, and the Borrower has no reason to believe that any such
              condition precedent cannot be satisfied on or prior to the
              commencement of the appropriate stage of Development of such
              Project.

       (d)    Representations and Warranties. All material representations,
              warranties and other factual statements made by the Borrower and,
              to the knowledge of the Borrower, made by each other Person in the
              Project Documents are true and correct in all material respects
              (or, if stated to have been made solely as of an earlier date,
              were true and correct as of such date) and do not omit to state
              any material fact necessary to make such representations,
              warranties and other factual statements not misleading.

       (e)    No Default. The Borrower is not in default in the performance of
              any covenant or obligation set out in any Project Document in a
              manner that could reasonably be expected to result in a Material
              Adverse Effect. To the knowledge of the Borrower, no other party
              to any Project Document is in default in the performance of any
              covenant or obligation set out therein in a manner that could
              reasonably be expected to result in a Material Adverse Effect. No
              Default or Event of Default has occurred and is continuing.

                                      -48-

       (f)    Licenses. All material permits, licenses, trademarks, patents or
              agreements with respect to the usage of technology or other
              property (other than those constituting Government Approvals) that
              are necessary for each Project have been obtained, are final and
              are in full force and effect in all material respects and any such
              permits, licenses, trademarks, patents or agreements not currently
              necessary for each Project can reasonably be expected to be
              obtained when needed, free from conditions or requirements,
              compliance with which could reasonably be expected to result in a
              Material Adverse Effect.

7.16   UTILITY SERVICES. All utility services necessary for the Development of
       each Project, including, as necessary, water supply, storm and sanitary
       sewer, electric and telephone services and facilities, are available to
       such Project.

7.17   DISCLOSURE. All factual information in writing (taken as a whole)
       furnished by the Borrower or any Affiliate of the Borrower on its behalf,
       whether in print or electronic form, to any Financing Party was true and
       accurate in all material respects: on the dates as of which such
       information was furnished, and was not incomplete by omitting to state
       any material fact necessary to make such information (taken as a whole)
       not misleading in any material respect at such time in light of the
       circumstances under which such information was provided; provided,
       however, that, except as otherwise expressly provided in this Agreement,
       the Borrower's sole representation with respect to projections, estimates
       or other expressions of view as to future circumstances shall be that
       such projections, estimates or other expressions of view as to future
       circumstances: (i) were prepared in good faith and with due care; (ii)
       fairly present in all material respects the Borrower's expectations as to
       the matters covered thereby as of their respective date(s) of delivery;
       (iii) were based on reasonable assumptions as to all factual and legal
       matters material to the estimates therein as of their respective date(s)
       of delivery; (iv) were in all material respects consistent with the
       provisions of the Transaction Documents as of their respective date(s) of
       delivery; and (v) contain no statements or conclusions that are based
       upon or include information known to the Borrower to be misleading or
       that fail to take into account material information regarding the matters
       reported therein as of their respective date(s) of delivery. There are in
       existence no documents or agreements that have not been disclosed to the
       Lenders that are material in the context of the Transaction Documents or
       that have the effect of varying any of the Transaction Documents or the
       Projects. There is no fact known to the Borrower that has not been
       disclosed in writing to the Lenders and that has had, or that could
       reasonably be expected in the future to have, a Material Adverse Effect.

7.18   USE OF PROCEEDS. The proceeds of each Loan will be used solely in
       accordance with, and solely for the purposes contemplated by, Section
       8.09. No part of the proceeds of any Loan hereunder will be used for the
       purpose, whether immediate, incidental or ultimate, of buying or carrying
       any Margin Stock or to extend credit to others for such purpose.

7.19   FEES. On the Closing Date, except with respect to the financial advisor
       to the Borrower in connection with the transactions contemplated hereby,
       the Borrower does not have any

                                      -49-

       obligation to any Person in respect of any finder's, broker's, investment
       banking, legal or accounting or other similar fee (including any fee
       payable to engineers, environmental consultants, fuel consultants or
       similar experts) in connection with any of the transactions contemplated
       by the Transaction Documents for services rendered more than 60 days
       prior to the Closing Date other than fees payable to Lenders or fees
       specifically contemplated in the Closing Pro Forma.

7.20   INDEBTEDNESS. The Borrower is not directly or indirectly liable with
       respect to any Indebtedness outstanding as of the Closing Date other than
       Permitted Indebtedness.

7.21   INVESTMENTS. The Borrower has no Investments except Permitted
       Investments.

7.22   NO FORCE MAJEURE. No event, condition or circumstance has occurred on the
       basis of which the Borrower has either given a notice of "force majeure"
       or received such notice from any other Person that could reasonably be
       expected to entitle the Borrower or such notifying Person to excuse,
       defer or suspend the performance of any of the material obligations of
       the Borrower or such notifying Person under any Transaction Document to
       which it is a party on the basis of "force majeure."

7.23   ASSETS. The Borrower owns, leases and otherwise has full legal right to
       use all Real Property, subject to the rules and regulations of the BLM,
       buildings, machinery, equipment and other assets, whether tangible or
       intangible, that are necessary or useful for the conduct of its business
       as presently conducted and as proposed to be conducted through the Final
       Maturity Date. On and as of the Closing Date, each such asset is, except
       for the assets to be repaired and/or upgraded as part of the Upgrade
       Project and the Tower Repairs, free from defects (patent and latent), is
       in good operating condition and repair (subject to normal wear and tear),
       and is suitable for the purposes for which it is presently used and as
       proposed to be used through the Final Maturity Date. Since April 15,
       2002, each such asset, except for the assets to be repaired and/or
       upgraded as part of the Upgrade Project and the Tower Repairs, has been
       maintained in accordance with prudent and good industry practice.

                                  ARTICLE VIII

                                    COVENANTS

The Borrower covenants and agrees with the Lenders and the Agents that until the
Termination Date:

8.01   FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower shall deliver to
       the Administrative Agent (in sufficient copies for distribution to each
       of the Lenders):

       (a)    as soon as available and in any event within 60 days after the end
              of each quarterly fiscal period of each fiscal year of the
              Borrower, unaudited statements

                                      -50-

              of income, owners' equity and cash flows of the Borrower, for such
              period and for the period from the beginning of the respective
              fiscal year to the end of such period, and the related unaudited
              balance sheet as at the end of such period, setting out in each
              case in comparative form the corresponding figures for the
              corresponding period in the preceding fiscal year, accompanied by
              any material accounting variation report required by Section
              1.04(b) and a certificate of a senior financial officer of the
              Borrower, which certificate shall state that said financial
              statements fairly present in all material respects the financial
              condition and results of operations of the Borrower, in accordance
              with the Accounting Principles applicable to the Borrower as at
              the end of, and for, such period (subject to normal year-end audit
              adjustments);

       (b)    as soon as available and in any event within 120 days after the
              end of each fiscal year of the Borrower, audited statements of
              income, owners' equity and cash flows of the Borrower for such
              year and the related audited balance sheets as at the end of such
              year, setting out in each case in comparative form the
              corresponding figures for the preceding fiscal year, and
              accompanied by any material accounting variation report required
              by Section 1.04(b) and an opinion thereon of independent certified
              public accountants of recognized standing reasonably acceptable to
              the Lenders, which opinion shall state that said financial
              statements fairly present in all material respects the financial
              condition and results of operations of the Borrower as at the end
              of, and for, such fiscal year in accordance with the Accounting
              Principles applicable to the Borrower, and a certificate of such
              accountants stating that, in making the examination necessary for
              their opinion, they obtained no knowledge, except as specifically
              stated, of any Default or Event of Default (which certificate may
              be limited to the extent required by accounting rules or
              guidelines or customary accounting practice);

       (c)    promptly upon their becoming available, copies of all registration
              statements and regular periodic reports, if any, that the Borrower
              shall have filed with the Securities and Exchange Commission or
              any national securities exchange;

       (d)    prompt written notice of receipt by the Borrower of written notice
              of the occurrence of any ERISA Event that, alone or together with
              any other ERISA Events that have occurred, could reasonably be
              expected to result in liability of the Borrower in an aggregate
              amount that could reasonably be expected to result in a Default or
              have a Material Adverse Effect;

       (e)    promptly after the Borrower knows or has reason to believe that
              any Default or Event of Default has occurred, a notice of such
              event describing the same in reasonable detail and, together with
              such notice or as soon thereafter as practicable, a description of
              the action that the Borrower has taken or proposes to take with
              respect thereto;

                                      -51-

       (f)    promptly after the Borrower knows or has reason to believe that
              any fact, event, circumstance, condition or occurrence has
              occurred that results in, or could reasonably be expected to
              result in, a Material Adverse Effect, a notice of such fact,
              event, circumstance, condition or occurrence describing the same
              in reasonable detail and, together with such notice or as soon
              thereafter as practicable, a description of the action that the
              Borrower has taken or proposes to take with respect thereto;

       (g)    promptly after the Borrower knows or has reason to believe that
              any event, circumstance or condition in the nature of force
              majeure has occurred which could reasonably be expected to result
              in a materially adverse change from the Closing Pro Forma or, if
              the Second Closing Date has occurred, the Upgrade Pro Form, a
              notice of such event, describing the same in reasonable detail
              and, together with such notice or as soon thereafter as
              practicable, a description of the action that the Borrower has
              taken or proposes to take with respect thereto;

       (h)    promptly upon their becoming available, copies of all material
              notices or material documents received by the Borrower pursuant to
              any Project Document (including any notice or other document
              relating to a failure by the Borrower to perform any of its
              covenants or obligations under such Project Document);

       (i)    promptly upon their becoming available, copies of all material
              periodic reports received from the Operator and other material
              notices relating to any Project received from any Project Party;

       (j)    the notices required by Section 8.06;

       (k)    as soon as practicable as they are available, copies of each
              insurance policy relating to the Projects, together with a
              certificate of an Authorized Officer of the Borrower, dated as of
              the date of such delivery, certifying that the policies comply
              with Section 8.05(a) and Schedule IV, cover the risks referred to
              therein, are in full and effect, as of the date of such delivery,
              no notice of cancellation has been issued thereunder, and that all
              premiums then due and payable thereon have been paid; and

       (l)    from time to time such other information regarding the financial
              condition, operations, business or prospects of the Borrower
              (including any Plan or Multiemployer Plan and any reports or other
              information required to be filed under ERISA) as any Lender
              (through the Administrative Agent) or Agent may reasonably
              request.

8.02   MAINTENANCE OF EXISTENCE; ETC.The Borrower shall: (a) preserve and
       maintain its legal existence; (b) preserve and maintain its good standing
       and all material licenses, rights, privileges and franchises necessary
       for the proper operation of each Project and its qualification to do
       business; and (c) conduct its business in an orderly, efficient and

                                      -52-

       regular manner, unless the failure to so comply could not reasonably be
       expected to result in a Material Adverse Effect.

8.03   COMPLIANCE WITH GOVERNMENT RULES; ETC.

       (a)    Compliance with Government Rules. The Borrower shall comply with
              all applicable Government Rules and from time to time obtain,
              maintain, comply with and renew all Government Approvals as shall
              now or hereafter be necessary under applicable Government Rules
              (except any thereof the non-compliance with or non-renewal of
              which could not reasonably be expected to result in a Material
              Adverse Effect). The Borrower shall promptly upon receipt or
              publication furnish a copy (certified by the Borrower or, if
              available, the applicable Government Authority) of each such
              Government Approval to the Administrative Agent.

       (b)    No Amendment. Except as provided in Section 8.22(b)(vi), the
              Borrower shall not petition, request or take any legal or
              administrative action that seeks to amend, supplement or modify
              any Government Approval unless: (i) the Borrower theretofore shall
              have furnished to the Administrative Agent and the Lenders a
              detailed description of the proposed amendment, supplement or
              modification and the actions that the Borrower proposes to take
              with respect thereto; and (ii) such amendment, supplement or
              modification could not reasonably be expected to result in a
              Material Adverse Effect. The Borrower shall promptly upon receipt
              or publication thereof furnish a copy (certified by the Borrower
              or the applicable Government Authority) of each amendment,
              supplement or modification to any Government Approval to the
              Administrative Agent.

       (c)    QF Status. The Borrower shall maintain the status of the Projects
              as QFs.

8.04   ENVIRONMENTAL COMPLIANCE.

       (a)    No Use or Release. The Borrower shall not Use or Release, or
              permit the Use or Release of, Hazardous Materials at any Project
              other than in compliance with all applicable Environmental Laws
              and where such Use or Release could not reasonably be expected to
              result in a Material Adverse Effect.

       (b)    Investigation. The Borrower shall conduct and complete any
              investigation, study, sampling and testing and undertake any
              cleanup, removal, remedial or other action necessary to remove and
              clean up all Hazardous Materials Released at, on, in, under or
              from any Project, to the extent required by and consistent with
              the requirements of all applicable Environmental Laws except where
              failure to conduct or complete such clean-up, removal, remedial or
              other action could not reasonably be expected to result in a
              Material Adverse Effect.

       (c)    Environmental Claim. The Borrower shall deliver to the
              Administrative Agent and each Lender:

                                      -53-

              (i)    promptly upon obtaining knowledge of: (A) any fact,
                     circumstance, condition or occurrence that could form the
                     basis of an Environmental Claim arising with respect to any
                     Project or against such Project, the Borrower or, in
                     connection with its involvement in any Project, any other
                     Environmental Party, in each case, which could reasonably
                     be expected to have a Material Adverse Effect; or (B) any
                     pending or threatened material Environmental Claim arising
                     with respect to any Project or against such Project, the
                     Borrower or, in connection with its involvement in any
                     Project, any other Environmental Party, a notice thereof
                     describing the same in reasonable detail and, together with
                     such notice or as soon thereafter as practicable, a
                     description of the action that the Borrower has taken or
                     proposes to take with respect thereto and, thereafter, from
                     time to time such detailed reports with respect thereto as
                     the Administrative Agent or any Lender (through the
                     Administrative Agent) may reasonably request; and

              (ii)   promptly upon their becoming available, copies of all
                     material written communications with any Government
                     Authority relating to any violation or alleged violation of
                     any Environmental Law or any Environmental Claim relating
                     to any Project.

8.05   INSURANCE; EVENTS OF LOSS.

       (a)    Insurance Maintained by the Borrower. The Borrower shall keep its
              present and future properties and business insured as required by
              and in accordance with the terms and conditions described in
              Schedule IV.

       (b)    Compromise, Adjustment or Settlement. The Administrative Agent
              shall be entitled at its option to participate in any compromise,
              adjustment or settlement in connection with any Event of Loss
              under any policy or policies of insurance or any proceeding with
              respect to any condemnation (including a Condemnation) or other
              taking of Property of the Borrower in excess of $1,000,000. The
              Borrower shall, within five Business Days after request therefor,
              reimburse the Administrative Agent for all reasonable
              out-of-pocket expenses (including reasonable attorneys' and
              experts' fees) incurred by the Administrative Agent in connection
              with such participation. The Borrower shall not make any
              compromise, adjustment or settlement in connection with any such
              claim without the approval of the Administrative Agent, which
              approval shall not unreasonably be withheld, conditioned or
              delayed. The Borrower shall diligently pursue all claims and
              rights to compensation against all relevant insurers and/or
              Government Authorities, as applicable, in respect of any Event of
              Loss.

       (c)    Loss Proceeds. In the event that the Borrower receives any amount
              of Loss Proceeds in respect of any Event of Loss, the Borrower
              shall deposit the amount

                                      -54-

              of such Loss Proceeds in the Restoration Sub-Account. In the event
              that the Borrower receives any amount of proceeds of business
              interruption insurance and other payments received for
              interruption of operations in respect of any Event of Loss, the
              Borrower shall deposit the amount of such proceeds in the Revenue
              Account. In the event that the amount of such Loss Proceeds with
              respect to any Event of Loss is $2,500,000 or less, such amounts
              shall be made available to the Borrower for the purpose of
              Restoring the Affected Property and shall be applied by the
              Borrower to the payment of the cost of the Restoration of the
              Affected Property. In the event that the amount of such Loss
              Proceeds with respect to any Event of Loss is greater than
              $2,500,000, such amounts shall be made available to the Borrower
              from time to time in accordance with paragraph (d) and shall be
              applied by the Borrower to the payment of the cost of the
              Restoration of the Affected Property.

              In the event that the relevant Event of Loss has caused a Project
              to be declared a total loss by its insurers, the Loss Proceeds
              with respect to such Event of Loss shall be promptly applied by
              the Administrative Agent in accordance with Section 3.04.

       (d)    Restoration. Amounts to be made available to the Borrower from the
              Restoration Sub-Account to be applied to the Restoration of
              Affected Property following any Event of Loss ("RESTORATION WORK")
              shall be remitted to the Borrower by the Administrative Agent, in
              the event that the amount of Loss Proceeds with respect to such
              Event of Loss is greater than $2,500,000, subject to the
              satisfaction of the following conditions:

              (i)    in the event that the amount of Loss Proceeds with respect
                     to such Event of Loss is less than or equal to $5,000,000,
                     the Borrower has delivered to the Administrative Agent
                     plans and specifications for the Restoration Work,
                     including reasonable estimates of the costs and time
                     required to complete such Restoration Work ("RESTORATION
                     PLANS") and has certified in writing to the Administrative
                     Agent that the conditions set out in paragraphs (ii)(B),
                     (C), (E) and (F) below have been satisfied; and

              (ii)   in the event that the amount of Loss Proceeds with respect
                     to such Event of Loss is greater than $5,000,000:

                     (A)    the Borrower shall have delivered the relevant
                            Restoration Plan to the Administrative Agent and the
                            Independent Engineer;

                     (B)    the Restoration Plans provide for Restoration Work
                            that is technically feasible and will, upon
                            completion thereof, result in the Project being at
                            least equal in value, general

                                      -55-

                            utility and levels of performance as the Project
                            prior to the Event of Loss;

                     (C)    the Restoration Plans provide for the Restoration
                            Work to be completed within the period covered by
                            business interruption insurance, plus any additional
                            period agreed between the Borrower and the
                            Administrative Agent (after consultation with the
                            Independent Engineer) for a cost not to exceed the
                            relevant Loss Proceeds plus any necessary additional
                            funds ("ADDITIONAL RESTORATION FUNDS") to be
                            contributed towards such Restoration from: (I)
                            amounts then on deposit in the Revenue Account that
                            are distributable in accordance with Section 8.13,
                            which amounts shall be transferred to the
                            Restoration Sub-Account; or (II) cash actually
                            deposited into the Restoration Sub-Account by a
                            Person other than the Borrower;

                     (D)    the Independent Engineer shall have delivered to the
                            Administrative Agent and the Lenders a certificate
                            to the effect that the amount of Loss Proceeds with
                            respect to such Event of Loss that has been
                            deposited in the Restoration Sub-Account together
                            with any Additional Restoration Funds, business
                            interruption insurance proceeds relating thereto and
                            any projected revenues from the Project are
                            sufficient to Restore the Affected Property and to
                            pay all Operation and Maintenance Expenses and all
                            maintenance expenditures for such affected Project
                            and Debt Service, in each case during the period of
                            time that is required, in the opinion of the
                            Independent Engineer, to Restore the Affected
                            Property (the "RECONSTRUCTION PERIOD");

                     (E)    no Event of Default could reasonably be expected to
                            occur during Restoration as a consequence of
                            Restoration Work, assuming that Restoration Work on
                            such Project proceeds in accordance with the
                            Restoration Plan;

                     (F)    the Property constituting the Restoration Work shall
                            be subject to the Lien of the Security Documents
                            (whether by amendment to the Security Documents or
                            otherwise) free and clear of all Liens other than
                            Permitted Liens; and

                     (G)    Each request by the Borrower for a disbursement of
                            funds from the Restoration Sub-Account shall be made
                            on 10 days' prior written notice to the
                            Administrative Agent,

                                      -56-

                            Collateral Agent and the Depositary Bank and shall
                            be accompanied by: (I) a certificate of each of an
                            Authorized Officer of the Borrower and the
                            Independent Engineer that: (1) all of the
                            Restoration Work completed has been done
                            substantially in compliance with the Restoration
                            Plan therefor; (2) the sum requested is required to
                            pay, or to reimburse the Borrower for, costs
                            incurred in connection with such Restoration Work
                            (giving a brief description of the services and
                            materials provided in connection with such
                            Restoration Work); (3) the sum requested, when added
                            to all Loss Proceeds and Additional Restoration
                            Funds with respect to the relevant Event of Loss
                            previously paid out by the Depositary Bank, does not
                            exceed the cost of the Restoration Work done as of
                            the date of such certificate; and (4) the amount of
                            Loss Proceeds with respect to the relevant Event of
                            Loss remaining in the Restoration Sub-Account,
                            together with any remaining Additional Restoration
                            Funds, will be sufficient to complete the
                            Restoration Work (giving an estimate of the cost of
                            such completion in such reasonable detail as the
                            Administrative Agent may reasonably request); (II) a
                            certificate of an Authorized Officer of the Borrower
                            certifying that no Default or Event of Default shall
                            have occurred and is continuing at such date; and
                            (III) partial lien waivers executed by each
                            contractor and major subcontractor involved in the
                            Restoration Work that shall cover all labor,
                            materials (including equipment and fixtures of all
                            kinds), supplies or services done, performed or
                            furnished at, for or to the relevant Project in
                            connection with the Restoration Work performed to
                            the date of such payment.

              Once such Restoration Work is complete (such completion to be
              evidenced by a certificate of the Borrower delivered to the
              Administrative Agent, the Collateral Agent and the Depositary
              Bank), any remaining relevant Loss Proceeds shall be applied as
              set out in Section 4.3 of the Depositary Agreement.

              If the Borrower shall at any time abandon the Restoration Work or
              otherwise fail to pursue the Restoration Work substantially in
              accordance with the Restoration Plans, then, to the extent that
              such Loss Proceeds shall not otherwise have been remitted as
              aforesaid to the Borrower, such Loss Proceeds shall promptly (at
              the direction of the Majority Lenders) be applied by the
              Administrative Agent in accordance with Section 3.04(a). Anything
              to the contrary in this Section 8.05 notwithstanding, if as the
              result of such Event of Loss or Restoration Work an Event of
              Default shall have occurred and be continuing, the Administrative
              Agent

                                      -57-

              may instruct the Depositary Bank to apply any amount of such Loss
              Proceeds in the Restoration Sub-Account in accordance with Section
              3.05.

8.06   PROCEEDINGS. The Borrower shall, promptly upon: (a) obtaining knowledge
       of any action, suit or proceeding at law or in equity by or before any
       Government Authority, arbitral tribunal or other body pending or
       threatened against or otherwise affecting the Borrower or any other Major
       Project Party or any of such Person's Property, any Transaction Document,
       any Project or the Collateral, in each case that could reasonably be
       expected to result in a Material Adverse Effect; or (b) becoming aware of
       any other circumstance, act or condition (including the adoption,
       amendment or repeal of any Government Rule or the Impairment of any
       Government Approval or notice (whether formal or informal, written or
       oral) of the failure to comply with the terms and conditions of any
       Government Approval) that could reasonably be expected to result in a
       Material Adverse Effect, in each case, furnish to the Administrative
       Agent a notice of such event describing the same in reasonable detail
       and, together with such notice or as soon thereafter as practicable, a
       description of the action that the Borrower or such other Major Project
       Party has taken and, with respect to the Borrower, proposes to take with
       respect thereto.

8.07   TAXES. The Borrower shall pay and discharge all Taxes imposed on it or on
       its income or profits or on any of its Property or on any Transaction
       Document prior to the date on which penalties attach thereto and prepare
       and file Tax returns on or before their due date.

8.08   BOOKS AND RECORDS. The Borrower shall keep proper books of record and
       accounts in accordance with Accounting Principles applicable to it and
       permit representatives of either Agent, upon reasonable notice, to visit
       and inspect its properties, to examine, copy or make excerpts from its
       books, records and documents and to discuss its affairs, finances and
       accounts with its principal officers during normal business hours and at
       such intervals as either Agent may reasonably request. The Borrower shall
       notify the Agents of any change in its independent accountants. The
       Independent Engineer shall have the right to inspect any Project in order
       to perform its obligations under the Financing Documents, including, to
       witness and verify any acceptance tests and to discuss the Borrower's
       affairs with its principal officers and engineers, all at such reasonable
       times and at such intervals as the Independent Engineer may reasonably
       request. The Borrower shall at all times maintain and preserve a complete
       set of Plans and Specifications for each Project (and any Restoration
       Plans with respect to such Project) at such Project's Site, available for
       inspection by the Independent Engineer (in order to perform its
       obligations under the Financing Documents), the Agents and any Lender.

8.09   USE OF PROCEEDS. The Borrower shall utilize the proceeds of the Loans as
       provided in the second paragraph of this Agreement.

8.10   MAINTENANCE OF LIENS. The Borrower shall maintain and preserve the Liens
       created by the Security Documents and the priority thereof and shall from
       time to time execute or

                                      -58-

       cause to be executed any and all further instruments (including financing
       statements, continuation statements and similar statements with respect
       to any Security Document) reasonably requested by the Collateral Agent
       for such purposes. The Borrower shall promptly discharge, at the
       Borrower's cost and expense, any Lien (other than Permitted Liens) on the
       Collateral.

8.11   [INTENTIONALLY OMITTED].

8.12   PROHIBITION OF FUNDAMENTAL CHANGES.

       (a)    Merger or Consolidation. The Borrower shall not merge into or
              consolidate with, or acquire all or any substantial part of the
              assets or any class of stock or other ownership interests of, any
              other Person without the prior written consent of the Majority
              Lenders. The Borrower shall not convey, sell, lease, transfer or
              otherwise dispose of, in one transaction or a series of
              transactions, any assets except sales of (without duplication) (A)
              electrical energy or capacity or ancillary services pursuant to a
              PPA or otherwise in the ordinary course of its business; (B)
              assets in the ordinary course of its business, the proceeds of
              which do not in any year exceed the aggregate sum of $250,000 as
              to all Projects; and (C) assets made redundant by the Upgrade
              Project.

       (b)    No Acquisition. The Borrower shall not purchase or acquire any
              assets other than: (i) the purchase of assets reasonably required
              for the repair of the Defective Towers, and the Upgrade Project,
              in each case, in accordance with the respective plans therefor;
              (ii) the purchase of assets reasonably required in connection with
              Restoration of the Project in accordance with Section 8.05(d);
              (iii) the purchase of assets in the ordinary course of business as
              reasonably required in connection with the Project in accordance
              with the Project Documents and the Non-Material Project Contracts
              and as contemplated by the Closing Pro Forma or, if the Second
              Closing Date has occurred, the Upgrade Pro Forma; and (iv)
              Permitted Investments.

8.13   RESTRICTED PAYMENTS(a).

       The Borrower shall not, directly or indirectly, declare or make any other
       Restricted Payment unless each of the following conditions is satisfied
       both immediately before and after the date of payment thereof:

       (i)    the date of payment of such Restricted Payment shall be on or
              within 30 days after a Quarterly Date; provided that, if the
              Borrower has been precluded from making any Restricted Payment
              within such 30-day period solely as a consequence of the condition
              set out in paragraph (ii) below being unsatisfied during such
              period and such condition is subsequently satisfied, the Borrower
              may make such Restricted Payment on any date (the "EXTENDED

                                      -59-

              RESTRICTED PAYMENT DATE") within 10 days after the date such
              condition is first satisfied as long as all other conditions of
              this Section 8.13 are satisfied on and as of such Extended
              Restricted Payment Date;

       (ii)   no Default (other than any Default that (i) provides a cure period
              therefor of not less than 30 days, (ii) is reasonably capable of
              being remedied during such 30-day period, (iii) as to which the
              Borrower is diligently prosecuting or pursuing such remedy, and
              (iv) following the occurrence of which not more than 30 days have
              elapsed), or an Event of Default shall have occurred and shall be
              continuing or would result from the making of such Restricted
              Payment;

       (iii)  for any Quarterly Date on or prior to March 31, 2004, the
              Projected Debt Service Coverage Ratio shall be at least 1.20:1,
              and for any corresponding Quarterly Date thereafter, the Debt
              Service Coverage Ratio for the relevant Historical Computation
              Period shall be at least 1.20:1;

       (iv)   the balance on deposit in the Debt Service Reserve Account shall,
              on the date of payment of such Restricted Payment after giving
              effect thereto, be at least equal to the Debt Service Reserve
              Required Amount;

       (v)    the Restricted Payment shall only be made from and to the extent
              of Distributable Cash (as defined in the Depositary Agreement);
              and

       (vi)   each of the Administrative Agent and the Depositary Bank has
              received: (i) at least 10 days prior to the corresponding
              Quarterly Date and, if applicable, Extended Restricted Payment
              Date, a Distribution Certificate substantially in the form of
              Exhibit G.

       If any of the foregoing conditions to distribution are not satisfied, the
       relevant monies shall be applied as set out in Section 4.1 of the
       Depositary Agreement.

8.14   LIENS. The Borrower shall not create, incur, assume or suffer to exist
       any Lien on any of the Collateral or any of the other Property of the
       Borrower except Permitted Liens.

8.15   INVESTMENTS. The Borrower shall not make any Investments except Permitted
       Investments.

8.16   HEDGING ARRANGEMENTS. The Borrower shall, not later than 30 days
       following the Closing Date, enter into and at all times thereafter
       maintain in full force and effect one or

                                      -60-

       more Interest Rate Cap Agreements providing for the payment to the
       Borrower of an amount equal to the excess of the Eurodollar Rate minus
       (b) six percent (6%), and otherwise on terms reasonably acceptable to the
       Administrative Agent and the Borrower, with one or more hedge providers
       reasonably acceptable to the Administrative Agent and the Borrower, and
       in a notional equivalent amount at least equal to 60% of the principal
       amount of all Loans outstanding on any Quarterly Date prior to the Final
       Maturity Date.

8.17   INDEBTEDNESS. The Borrower shall not, directly or indirectly, create,
       incur, assume or otherwise be or become liable with respect to any
       Indebtedness except Permitted Indebtedness.

8.18   TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by this
       Agreement, the Borrower shall not, directly or indirectly, enter into any
       transaction directly or indirectly with or for the benefit of an
       Affiliate other than transactions that: (a) are in the ordinary course of
       business, including, without limitation, the Upgrade Project; (b) are on
       terms and conditions at least as favorable to the Borrower as would be
       obtainable at the time in a comparable "arm's-length" transaction with a
       Person other than an Affiliate; (c) would not result in any Default
       hereunder; and (d) are not otherwise prohibited hereunder.

8.19   NATURE OF BUSINESS. The Borrower shall not engage in any business other
       than the operation of the Projects as contemplated by the applicable
       Project Documents and Non-Material Project Contracts and as contemplated
       by the SIGC Lease.

8.20   MAINTENANCE OF PROPERTIES.

       (a)    Properties. The Borrower shall maintain and preserve all of its
              Properties necessary or useful in the proper conduct of its
              business in good working order and condition, ordinary wear and
              tear excepted, and in accordance with generally accepted prudent
              utility practices (and all other standards and requirements, to
              the extent more stringent, set out in any Project Document).

       (b)    Restoration. The Borrower shall Restore any of its Property now or
              hereafter the subject of an Event of Loss (whether or not insured
              against or insurable) except any of its Property that has been the
              subject of an Event of Loss that the Borrower determines in good
              faith (and, in relation to any Event of Loss for which the amount
              of the Loss Proceeds exceeds $2,000,000, with the approval of the
              Majority Lenders) not to be necessary to the conduct of its
              business.

       (c)    No Removal. The Borrower shall not permit all or any portion of
              any Project to be removed from such Project's Site (except in the
              ordinary course of business with respect to maintenance of
              components of such Project that is required to be conducted off of
              such Project's Site), demolished or materially altered; provided
              that spare parts and similar individual items of equipment may be
              moved from one Project to another Project as the Borrower may
              reasonably believe necessary.

                                      -61-

8.21   [INTENTIONALLY OMITTED]

8.22   PROJECT DOCUMENTS; ETC.

       (a)    Project Documents. The Borrower shall, unless prior written
              consent is obtained from the Majority Lenders: (i) perform and
              observe in all material respects all of its material covenants and
              obligations contained in each of the Project Documents to which it
              is a party; and (ii) except as permitted by Section 8.22(b): (A)
              take all reasonable and necessary action to prevent the
              termination or cancellation of any Project Documents in accordance
              with the terms thereof or otherwise; and (B) enforce against the
              relevant Project Party each material covenant or obligation of
              such Project Document in accordance with its terms, unless the
              failure to so comply could not reasonably be expected to result in
              a Material Adverse Effect. Anything in the foregoing to the
              contrary notwithstanding, the Borrower shall pay, or cause to be
              paid, when due, all claims for labor, material, supplies or
              services (under the Project Documents or otherwise) that, if
              unpaid, could by law result in a Mechanics' Lien; provided that:
              (A) in the event that, in accordance with the provisions of the
              relevant Project Document, any such claim may be paid in
              installments or may be deferred (whether or not interest shall
              accrue on the unpaid balance thereof), the Borrower may pay such
              claim in installments (together with accrued interest on the
              unpaid balance thereof, if any) as the same become due or prior to
              the end of such period of deferral; and (B) the Borrower shall
              have the right to contest the validity or amount of such claim.

       (b)    No Cancellation, Assignment, Etc. The Borrower shall not, without
              the prior written consent of the Majority Lenders:

              (i)    cancel or terminate any Project Document to which it is a
                     party or consent to or accept any cancellation or
                     termination thereof;

              (ii)   sell, assign (other than pursuant to the Security
                     Documents) or otherwise dispose of (by operation of law or
                     otherwise) any part of its interest in any Project
                     Document, except as permitted by Section 8.12;

              (iii)  waive any default under, or material breach of, any Project
                     Document or waive, fail to enforce, forgive, compromise,
                     settle, adjust or release any material right, interest or
                     entitlement, howsoever arising, under or in respect of any
                     Project Document or in any way vary, or agree to the
                     variation of, any material provision of such Project
                     Document or of the performance of any material covenant or
                     obligation by any other Person under any Project Document;

                                      -62-

              (iv)   exercise any "price reopener" or quantity adjustment
                     provisions or similar contractual adjustment provisions
                     (whether or not such provisions relate to price or
                     quantity) under any Project Document or act upon any "price
                     reopener" or quantity adjustment provisions or any such
                     similar contractual adjustment provisions under any Project
                     Document exercised by any other Project Party (except, in
                     each case, upon instructions of the Majority Lenders (after
                     Expert Consultation));

              (v)    petition, request or take any other legal or administrative
                     action that seeks, or may reasonably be expected, to Impair
                     any Project Document or amend, modify or supplement any
                     Project Document; or

              (vi)   amend, supplement or modify any Project Document (in each
                     case as in effect on the Closing Date (or if executed
                     subsequently, its execution date) other than as
                     contemplated by the Energy Services Agreement and as
                     thereafter amended, supplemented or modified in accordance
                     with this paragraph (b)) in any material respect.

       (c)    Additional Project Documents. The Borrower shall not enter into
              any Additional Project Document (other than Interest Rate Cap
              Agreements) without the prior approval of the Majority Lenders
              (such consent not to be unreasonably withheld or delayed) unless:
              (i) the terms of such Additional Project Document are in
              accordance with the terms of the then-current Annual Operating
              Plan and Budget; (ii) entering into such Additional Project
              Document could not reasonably be expected to have a Material
              Adverse Effect; (iii) the terms and conditions of such Additional
              Project Document are consistent with the Financing Documents; and
              (iv) the Borrower shall take (or cause to be taken) all action
              necessary to create and perfect the Lien and security interests of
              the Secured Parties thereon (including execution of all Ancillary
              Documents).

       (d)    Restrictions. The Borrower shall not enter into any contract or
              agreement (other than the Financing Documents and any Project
              Document related to the Upgrade Project) or take any other action
              that, directly or indirectly, restricts its ability to: (i) enter
              into amendments, modifications, supplements or waivers of any of
              the Transaction Documents; (ii) sell, transfer or otherwise
              dispose of its assets other than in the ordinary course of its
              business; (iii) create, incur, assume or suffer to exist any Lien
              upon any of its Property other than Permitted Liens; (iv) create,
              incur, assume, suffer to exist or otherwise become liable with
              respect to any Indebtedness other than Permitted Indebtedness; or
              (v) declare or make any Restricted Payment except in accordance
              with Section 8.13.

       (e)    Delivery of Documents. Promptly after the execution and delivery
              thereof, the Borrower shall furnish each Agent and the Lenders
              with: (i) copies (certified by

                                      -63-

              the Borrower) of: (A) all amendments, supplements, change orders
              or modifications of any Project Document to which such Person is a
              party; and (B) all Additional Project Documents to which it is a
              party; and (ii) all Ancillary Documents to which it is a party
              relating to any Additional Project Document.

       (f)    Fees Under O&M Contract. The Borrower and the Operator shall not,
              without the prior written consent of the Majority Lenders, permit
              "Extraordinary Operation Expenses" under and as defined in the O&M
              Contract to exceed $750,000 in any fiscal year of the Borrower.

8.23   ANNUAL OPERATING PLANS AND BUDGETS; OPERATING STATEMENTS.

       (a)    Annual Operating Plan and Budget.

              (i)    Scope of Annual Operating Plan and Budget. The Borrower
                     shall prepare and submit to the Administrative Agent (with
                     sufficient copies to permit distribution to each Lender and
                     the Independent Engineer), as and when required by this
                     Agreement, a consolidated annual operating plan and budget
                     for the Borrower for the upcoming Operating Year, including
                     operating and maintenance programs, capital expenditure
                     programs, and budgeted statements of income and sources and
                     uses of cash and balance sheets (the "ANNUAL OPERATING PLAN
                     AND BUDGET"). The Annual Operating Plan and Budget shall be
                     accompanied by a statement of a financial officer of the
                     Borrower to the effect that, to the best of such officer's
                     knowledge, such budget is a reasonable estimate for the
                     period covered thereby and is in compliance with the
                     requirements of this Section 8.23(a).

              (ii)   Contents. Each Annual Operating Plan and Budget shall
                     contain reasonable estimates of Project Revenues (broken
                     out by source), Operation and Maintenance Expenses,
                     Extraordinary Operation Expenses (as defined in the O&M
                     Contract (including a monthly breakdown thereof), capital
                     expenditures, projected working capital requirements of the
                     Borrower and production goals, including detailed
                     assumptions regarding the dispatch of each Project and
                     power prices, in each case, for each calendar month covered
                     by such Annual Operating Plan and Budget, based on the
                     reasonable projections at such time. Such projections shall
                     be based on all facts and circumstances then existing and
                     known to the Borrower and that reflect a reasonable
                     estimate of its future results for the upcoming Operating
                     Year and, in the case of its net income, the next
                     succeeding three (3) Operating Years. Each Annual Operating
                     Plan and Budget shall also address each Project's interface
                     requirements in relation to local utilities,

                                      -64-

                     proposed staffing levels and safety, regulatory and
                     environmental compliance programs. Each Annual Operating
                     Plan and Budget shall be prepared in good faith on the
                     basis of written assumptions stated therein which the
                     Borrower believes to be reasonable as to all factual and
                     legal matters material to such estimates.

              (iii)  Form of Annual Operating Plan and Budget. Unless otherwise
                     consented to by the Administrative Agent, which consent
                     shall not be unreasonably withheld, conditioned or delayed,
                     each Annual Operating Plan and Budget from year to year
                     shall be based on the same format as the "Data Import"
                     worksheet that is a part of the Closing Pro Forma and be
                     maintained on the same basis and provide sufficient detail
                     to permit a meaningful comparison to previous years.

              (iv)   At least 45 (but no more than 90) days prior to the end of
                     each Operating Year, the Borrower shall prepare and submit
                     to the Administrative Agent a draft Annual Operating Plan
                     and Budget for the upcoming Operating Year.

              (v)    Effectiveness and Approval of Annual Operating Plans and
                     Budgets. Subject to the following sentence, a draft Annual
                     Operating Plan and Budget shall become effective on the
                     first day of the relevant Operating Year. In relation to
                     any draft Annual Operating Plan and Budget delivered
                     pursuant to paragraph (iv) above in relation to a new
                     Operating Year, if: (A) expenses for the Operating Year
                     covered thereby for any Project exceed those set out for
                     such Project in the then-current Annual Operating Plan and
                     Budget by more than 10% on a consolidated basis; or (B)
                     actual expenditures for any Project in respect of Operation
                     and Maintenance Expenses in the then-current Operating Year
                     met the conditions set out in paragraph (b)(i)(B) below, in
                     each case: (I) the Borrower shall notify the Administrative
                     Agent thereof when submitting the draft Annual Operating
                     Plan and Budget pursuant to paragraph (a)(iv) above or (b)
                     below; and (II) Majority Lender approval of such draft
                     Annual Operating Plan and Budget shall be required, which
                     approval shall not unreasonably be withheld, conditioned or
                     delayed. If the Administrative Agent does not inform the
                     Borrower of the Majority Lenders' disapproval of the
                     submitted Annual Operating Plan and Budget within 30 days
                     after submission thereof to the Administrative Agent, such
                     Annual Operating Plan and Budget shall be deemed approved
                     by the Majority Lenders. If the Majority Lenders do not
                     approve an Annual Operating Plan and Budget, the
                     Administrative Agent shall

                                      -65-

                     advise the Borrower of the items that are disapproved and
                     the reason for such disapproval.

                     If all or any portion of an Annual Operating Plan and
                     Budget is disapproved, the Borrower shall adhere to all
                     approved aspects of such Annual Operating Plan and Budget.
                     With respect to those aspects of any Annual Operating Plan
                     and Budget that are not approved, the Annual Operating Plan
                     and Budget for the preceding Operating Year (if
                     applicable), adjusted (in relation to budgeted
                     expenditures) for inflation in a manner mutually acceptable
                     to the Borrower and the Administrative Agent (after Expert
                     Consultation), shall be applicable thereto (and shall for
                     all purposes hereof be deemed to be part of the approved
                     Annual Operating Plan and Budget for such Operating Year)
                     until such time as such aspects of the Annual Operating
                     Plan and Budget therefor have been approved by the Majority
                     Lenders.

              (vi)   O&M Contract Consistency. The Borrower shall ensure that
                     any budget or other applicable projection under the O&M
                     Contract is consistent with the Annual Operating Plan and
                     Budget hereunder (as modified from time to time hereunder).

       (b)    Operation and Maintenance Expenses.

              (i)    The Borrower shall not at any time during any Operating
                     Year make expenditures for any Project in respect of any
                     Operation and Maintenance Expenses for such Project in
                     excess of:

                     (A)    in the case of any line item or category of the
                            proposed Annual Operating Plan and Budget which is
                            not approved by the Majority Lenders (and until such
                            time as such amounts are so approved), the amounts
                            applicable thereto pursuant to the second paragraph
                            of paragraph (a)(v) above for the period from the
                            beginning of such Operating Year to the end of the
                            current month thereof;

                     (B)    in respect of all other such Operation and
                            Maintenance Expenses, any amount which would cause
                            the aggregate amount of such other expenditures to
                            exceed $250,000; or

                     (C)    solely in respect of the "Compromise Payment" under
                            and as defined in the Energy Services Agreement, an
                            aggregate amount exceeding $724,000;

                     in the case of (A) and (B), without having first proposed
                     an amendment to the then-current Annual Operating Plan and
                     Budget and the Majority

                                      -66-

                     Lenders having approved such amendment in accordance with
                     paragraph (ii) below; provided, however, that no such
                     approval shall be required for the "Compromise Payment"
                     referred to in the foregoing clause (C) or for Emergency
                     Operating Costs up to $1,000,000 per Project in any
                     Operating Year (prorated on the basis of a 365-day year for
                     any Operating Year which is less than a full calendar
                     year).

              (ii)   If at any time during any Operating Year: (A) Operation and
                     Maintenance Expenses to be paid by the Borrower during the
                     balance of such Operating Year exceed or could reasonably
                     be expected to exceed the allowance provisions of paragraph
                     (i) above; or (B) the Borrower believes such costs for the
                     balance of such year will exceed such allowance provisions,
                     in each case, the Borrower shall propose an amendment to
                     the then-current Annual Operating Plan and Budget (with
                     copies thereof delivered to the Administrative Agent and
                     the Independent Engineer). Such amendment shall become
                     effective on the date that such proposal is approved by the
                     Majority Lenders. At the time the Borrower submits such
                     proposal, the Borrower shall certify the purpose of such
                     amendment and that such amendment is reasonably necessary
                     or desirable for the operation and maintenance of the
                     Projects. If the Majority Lenders do not approve a proposed
                     amendment, the Administrative Agent shall advise the
                     Borrower of the items that are disapproved and the reason
                     for such disapproval. If all or any portion of a proposed
                     amendment is disapproved, the Borrower shall adhere to the
                     Operation and Maintenance Expenses included in the approved
                     Annual Operating Plan and Budget (subject to the allowance
                     provisions of paragraph (i) above).

      (c)     O&M Contract Operating Reports. The Borrower shall furnish to the
              Administrative Agent a copy of each Quarterly Operations Reports
              received by it pursuant to the terms of the O&M Contract which
              include: (i) technical performance of the Projects, including
              production, (ii) an accident incident report, (iii) safety and
              environmental compliance status, (iv) equipment operational
              status, (v) a summary of all major maintenance performed in the
              preceding quarter and that planned for the coming quarter,
              including a summary of Major Corrective Maintenance Work (as
              defined in the O&M Contract) performed in the preceding quarter,
              (vi) any other known conditions which may adversely affect the
              technical or financial performance of the Projects, and (vii) the
              incurrence or payment of any "Extraordinary Operation Expenses"
              under and as defined in the O&M Contract.

8.24   SPECULATIVE ACTIVITIES.

                                      -67-

       The Borrower shall not engage in any speculative activities. Nothing in
       this Section 8.24 shall prohibit the Borrower from entering into the
       Interest Rate Cap Agreements.

8.25   STATUS.

       (a)    The Borrower shall take, or cause to be taken, all action required
              to maintain the status of each of the Projects as a QF.

       (b)    The Borrower shall not take or permit any Affiliate to take, any
              action that would cause the Borrower: (i) to become regulated as a
              public utility under: (A) the FPA in a manner different than that
              contemplated by its Government Approvals set out on Schedule VI or
              any of its future Government Approvals regarding the rates of
              public utilities granted by FERC, such future Government Approvals
              not to be sought without the prior written consent of the Majority
              Lenders; or (B) any other material utility regulation under any
              Government Rule (excluding the FPA and the Government Rules
              promulgated thereunder), other than as set out on Schedule VI; or
              (ii) to become subject to any material utility regulation under
              any Government Rule, other than as set out on Schedule VI.

       (c)    Neither the Borrower nor any of its Affiliates shall take, or
              permit to be taken, any action that would cause the Borrower to be
              an "investment company" or a company "controlled" by an
              "investment company" within the meaning of the Investment Company
              Act of 1940.

8.26   UPDATED SURVEYS AND TITLE POLICY FOLLOWING UPGRADE PROJECT.

       (a)    Surveys. The Administrative Agent shall have received, no later
              than 100 days following completion of the Upgrade Project, a
              survey of the Site certified to the Borrower, the relevant Title
              Company and the Administrative Agent, updated, with respect to all
              relevant requirements and information required for the Initial
              Surveys under Section 6.01(f)(ii), to within 60 days of the date
              of receipt by the Administrative Agent.

       (b)    Title Policy. Promptly and in any event within 100 days after
              completion of the Upgrade Project, the Borrower shall cause the
              relevant Title Company to deliver to the Administrative Agent:

              (i)    an endorsement of the Title Policy issued in connection
                     with such Project deleting from the Title Policy: (A) any
                     exception in connection with pending disbursements; (B) any
                     exception with respect to unrecorded mechanics' and
                     materialmen's liens; and (C) any exception with respect to
                     survey matters; and

              (ii)   an abstractor's certificate or other title evidence showing
                     no Liens or other exceptions to the title of the Deed of
                     Trust Estate, other

                                      -68-

                     than Permitted Liens and those previously approved in
                     writing by the Administrative Agent.

8.27   ACCOUNTS. The Borrower shall not establish or maintain any account other
       than (a) the Accounts established and maintained pursuant to the
       Depositary Agreement and (b) any account that does not hold Project
       Revenues.

8.28   NO SUBSIDIARIES. The Borrower shall not form, establish, acquire or
       suffer to exist any Subsidiaries of the Borrower.

8.29   SCE CONSENT. The Borrower shall use commercially reasonable efforts to
       obtain and deliver to the Administrative Agent, on or prior to the date
       60 days following the Closing Date, an agreement among the Borrower, SCE
       and the Collateral Agent providing for the consent by SCE to the
       collateral assignment by the Borrower to the Collateral Agent of the
       Borrower's rights under each PPA.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

9.01   EVENTS OF DEFAULT. Each of the following events shall be and constitute
       an "EVENT OF DEFAULT":

       (a)    The Borrower shall default in the payment when due hereunder of
              any principal of or interest on any Loan and such default shall
              continue unremedied for a period of three (3) Business Days after
              such amount first became due.

       (b)    The Borrower shall default in the payment when due of any amount
              payable by it hereunder or under any other Financing Document
              (other than amounts described in paragraph (a) above) and such
              default shall continue unremedied for a period of 30 days after
              such amount first became due.

       (c)    Any material representation, warranty or statement confirmed or
              made by the Borrower, the Sponsor or any other Major Project Party
              under any Financing Document or contained in any certificate,
              statement, notice or other document provided to any Financing
              Party under or pursuant to any Financing Document shall have been
              incorrect or misleading in any material respect when made or
              deemed to be made or (except if stated to have been made solely as
              of an earlier date) repeated.

       (d)    The Borrower shall default in the performance of any of its
              obligations under any of:

              (i)    Section 8.02(a); (solely in relation to the maintenance of
                     its existence); 8.03(a) (in relation to the first sentence
                     thereof);

                                      -69-

                     8.03(b) (solely in relation to the first sentence thereof);
                     8.03(c); 8.04(a); 8.04(b); 8.04(c); 8.05(a); 8.05(b) (other
                     than in relation to the provisions of the second sentence
                     thereof); 8.05(d) (solely in relation to the provisions of
                     the first and second sentences thereof); 8.07; 8.09; 8.12;
                     8.13 (and such default shall continue for a period of five
                     (5) consecutive Business Days); 8.15 (and such default
                     shall continue for a period of five (5) consecutive
                     Business Days); 8.16; 8.17; 8.19; 8.22(b); 8.22(c);
                     8.22(d); 8.24; 8.25; 8.26; 8.27; or 8.28; or any other
                     provision of any Financing Document and such continues for
                     more than thirty (30) consecutive days after the Borrower
                     should reasonably become aware of such default;

              (ii)   Section 4.01(a), (b),(c) and(g); 4.02 (provided, that
                     solely if the Borrower has no knowledge of the existence of
                     any financing statement referred to therein, no Event of
                     Default shall occur until the date 30 days after the filing
                     of such financing statement); 4.04(a), 4.09, or 4.15 of the
                     Borrower Security Agreement;

              (iii)  Section 1.2, 1.3, 1.6, 1.7, 1.8, 1.9, 1.14 or 1.18 of the
                     Deed of Trust; or

              (iv)   Sections 3.1(a), 3.1(b) or 4.3 of the Depositary Agreement.

       (e)    The Sponsor shall default in the performance of any of its
              obligations under Sections 4.01(a), 4.02, 4.03, 4.05, 4.06, 4.07,
              4.09 or 4.10 of the Pledge Agreement; or any other provision of
              the Pledge Agreement and such continues for more than thirty (30)
              consecutive days after the Borrower should reasonably become aware
              of such default.

       (f)    The Borrower or any other Major Project Party shall default in the
              performance of any material covenant or undertaking contained in
              any Project Document other than any obligation for the payment of
              money, which default continues beyond the shorter of the
              applicable period of grace specified therefor in such document or
              (i) ten (10) days, in the case of a payment default, or (ii) 30
              days, in the case of any other default provided that, if such
              other default (x) is not capable of being remedied with diligent
              effort within such 30-day period, and (y) is reasonably capable of
              being remedied and the Borrower is diligently prosecuting or
              pursuing such remedy, such other default shall not give rise to an
              Event of Default unless such other default shall continue
              unremedied for a period of ninety (90) days after an Authorized
              Officer of the Borrower becomes aware or reasonably should have
              become aware of such other default.

       (g)    The Borrower or the Sponsor shall: (i) admit in writing its
              inability to, or be generally unable to, pay its debts as such
              debts become due; (ii) apply for or consent to the appointment of,
              or the taking of possession by, a receiver,

                                      -70-

              custodian, trustee or liquidator of itself or of all or a
              substantial part of its Property; (iii) make a general assignment
              for the benefit of its creditors; (iv) commence a voluntary case
              under the Bankruptcy Code; (v) file a petition seeking to take
              advantage of any other law relating to bankruptcy, insolvency,
              reorganization, winding-up, or composition or readjustment of
              debts; (vi) fail to controvert in a timely and appropriate manner,
              or acquiesce in writing to, any petition filed against it in an
              involuntary case under the Bankruptcy Code; or (vii) take any
              corporate, limited liability company or partnership action for the
              purpose of effecting any of the foregoing.

       (h)    (i) A proceeding or case shall be commenced against the Borrower
              or the Sponsor, in each case without the application or consent of
              such Person, in any court of competent jurisdiction, seeking: (A)
              its liquidation, reorganization, dissolution or winding-up, or the
              composition or readjustment of its debts; (B) the appointment of a
              trustee, receiver, custodian, liquidator or the like of such
              Person or of all or any substantial part of its Property; or (C)
              similar relief in respect of such Person under any law relating to
              bankruptcy, insolvency, reorganization, winding-up, or composition
              or adjustment of debts, and, in each case, such proceeding or case
              shall continue undismissed, or an order, judgment or decree
              approving or ordering any of the foregoing shall be entered and
              continue unstayed and in effect, for a period of 90 or more days;
              or (ii) an order for relief against such Person shall be entered
              in an involuntary case under the Bankruptcy Code.

       (i)    Prior to the completion of its duties under all Transaction
              Documents to which it is a party, any of SCE, the Operator or
              Imperial Irrigation District shall: (i) admit in writing its
              inability to, or be generally unable to, pay its debts as such
              debts become due; (ii) apply for or consent to the appointment of,
              or the taking of possession by, a receiver, custodian, trustee or
              liquidator of itself or of all or a substantial part of its
              Property; (iii) make a general assignment for the benefit of its
              creditors; (iv) commence a voluntary case under the Bankruptcy
              Code; (v) file a petition seeking to take advantage of any other
              law relating to bankruptcy, insolvency, reorganization,
              winding-up, or composition or readjustment of debts; (vi) fail to
              controvert in a timely and appropriate manner, or acquiesce in
              writing to, any petition filed against it in an involuntary case
              under the Bankruptcy Code; or (vii) take any corporate or
              partnership action for the purpose of effecting any of the
              foregoing.

       (j)    (i) Prior to the completion of its duties under all Transaction
              Documents to which it is a party, a proceeding or case shall be
              commenced against any of SCE, the Operator or Imperial Irrigation
              District, without the application or consent of such Person, in
              any court of competent jurisdiction, seeking: (A) its liquidation,
              reorganization, dissolution or winding-up, or the composition or
              readjustment of its debts; (B) the appointment of a trustee,
              receiver, custodian, liquidator or the like of such Person or of
              all or any substantial part of its Property; or (C) similar relief
              in respect of such Person under any law relating to bankruptcy,
              insolvency,

                                      -71-

              reorganization, winding-up, or composition or adjustment of debts,
              and, in each case, such proceeding or case shall continue
              undismissed, or an order, judgment or decree approving or ordering
              any of the foregoing shall be entered and continue unstayed and in
              effect, for a period of 90 or more days; or (ii) an order for
              relief against such Person shall be entered in an involuntary case
              under the Bankruptcy Code.

       (k)    Any Person referred to in paragraph (g) or (h) above shall be
              terminated or dissolved (as a matter of Government Rule or
              otherwise), or proceedings shall be commenced by any Person
              seeking the termination or dissolution of any Person referred to
              in paragraph (g) or (h) above and such proceedings shall continue
              undismissed or unstayed for a period of 90 or more days (or such
              shorter period of time which such Person has pursuant to
              Government Rule to cause the dismissal of such proceeding or stay
              the effectiveness of any such order, judgment or decree).

       (l)    A judgment or judgments for the payment of money is rendered by
              one or more Government Authorities against the Borrower in an
              aggregate amount (less any amount that applicable insurers have
              acknowledged liability for) exceeding $500,000 in the aggregate,
              and the same shall not be discharged (or provision shall not be
              made for such discharge), or a stay of execution thereof shall not
              be procured, within 45 days from the date of entry thereof, and
              such Person shall not, within said period of 45 days, or such
              longer period during which execution of the same shall have been
              stayed, appeal therefrom and cause the execution thereof to be
              stayed during such appeal, or any action shall be taken by a
              judgment creditor to attach or levy upon any assets of such Person
              to enforce any such judgment.

       (m)    An ERISA Event shall have occurred that, in the opinion of the
              Administrative Agent, when taken together with all other ERISA
              Events that have occurred, could reasonably be expected to result
              in a Material Adverse Effect.

       (n)    (i) Any Environmental Claim arising with respect to the
              Development of any Project shall have been asserted against such
              Project, the Borrower or the Operator or, in connection with its
              involvement with the Development of a Project, any other
              Environmental Party which, if adversely determined, could
              reasonably be expected to have a Material Adverse Effect; or (ii)
              any Release or Use of any Hazardous Materials at, on, under or
              from such Project shall have occurred which could reasonably be
              expected to have a Material Adverse Effect.

       (o)    Any Indebtedness of the Borrower in excess of $500,000 is not paid
              when due (after giving effect to any grace period applicable
              thereto), becomes due and payable by reason of any default or
              event of default with respect thereto (howsoever described), or
              could under the terms of the documentation evidencing such
              Indebtedness (after giving effect to any grace period applicable
              thereto)

                                      -72-

              become due and payable by reason of any default or event of
              default with respect thereto (howsoever described).

       (p)    (i) The Borrower, the Sponsor, SCE, the Operator or Imperial
              Irrigation District shall fail to obtain, renew, maintain or
              comply with all Government Approvals as shall now or hereafter be
              necessary or desirable; or (ii) any Government Approval related to
              any Project shall be Impaired or shall cease to be in full force
              and effect; or (iii) any action, suit, proceeding or investigation
              shall be commenced by or before any Government Authority that
              could reasonably to expected to result in the Impairment of any
              such Government Approval and such action, suit, proceeding or
              investigation is not dismissed or terminated within 90 days and,
              in each such case, such failure, Impairment, cessation or
              commencement could reasonably be expected to have a Material
              Adverse Effect.

       (q)    (i) Except as expressly contemplated pursuant to paragraph (u)
              below, any material provision of any Transaction Document shall at
              any time for any reason cease to be valid and binding or in full
              force and effect; or (ii) except as expressly contemplated
              pursuant to paragraph (u) below, any Transaction Document shall be
              Impaired in whole or part; or (iii) the validity or enforceability
              of any Transaction Document shall be contested by any party
              thereto (other than either Agent or the Lenders) or any Government
              Authority; or (iv) the Borrower, the Sponsor, SCE, the Operator or
              Imperial Irrigation District shall deny that it has any or further
              liability or obligation under any Transaction Document and, in
              each such case, such cessation, Impairment, contest or denial
              could reasonably be expected to have a Material Adverse Effect.

       (r)    Any Security Document shall cease to be in full force and effect
              or to be effective to grant a perfected Lien to the Collateral
              Agent for the benefit of the Secured Parties, on any part of the
              Collateral described therein having value in excess of $100,000 in
              the aggregate with the priority purported to be created thereby
              subject to the rules and regulations of the BLM.

       (s)    Any Material Adverse Effect shall occur and be continuing.

       (t)    One or more judgments or decrees is entered against the Borrower
              in the form of an injunction or other similar relief requiring
              suspension or abandonment of the Development of any Project (or a
              material portion thereof) for a continuous period of at least 90
              days, and such judgment or decree is not vacated, discharged or
              stayed or bonded pending appeal within 90 days (or any shorter
              appeal period as is available under applicable Government Rules
              from the date of entry thereof).

       (u)    The Borrower or the Operator ceases to carry on or suspends all or
              substantially all of its activities in connection with the
              Development of a Project or otherwise abandons or permits the
              abandonment of its Project, in each case for a period of 45 days
              or more, other than where the cessation or suspension is for bona
              fide

                                      -73-

              operational reasons or due to an event of force majeure and the
              Borrower is using commercially reasonable efforts to commence or
              recommence such construction or operation.

       (v)    The Tower Repairs fail to be substantially completed on or prior
              to July 1, 2003.

9.02   RIGHTS UPON AN EVENT OF DEFAULT. Upon the occurrence and during the
       continuation of an Event of Default:

       (a)    the Administrative Agent may, and, upon request of the Majority
              Lenders, shall, by notice to the Borrower and the Collateral
              Agent, terminate the Commitments and/or declare the principal
              amount then outstanding of, and the accrued interest on, the Loans
              and all other amounts payable by the Borrower hereunder and under
              the Notes (including, without limitation, any amounts payable
              under Section 5.05 or 5.06) to be forthwith due and payable,
              whereupon such amounts shall be immediately due and payable
              without presentment, demand, protest or other formalities of any
              kind, all of which are hereby expressly waived by the Borrower;
              and

       (b)    in the case of the occurrence of an Event of Default referred to
              in paragraph (g) or (h) above with respect to the Borrower, the
              Commitments shall automatically be terminated and the principal
              amount then outstanding of, and the accrued interest on, the Loans
              and all other amounts payable by the Borrower hereunder and under
              the Notes (including any amounts payable under Section 5.05 or
              5.06) shall automatically become immediately due and payable
              without presentment, demand, protest or other formalities of any
              kind, all of which are hereby expressly waived by the Borrower.

         Notwithstanding anything else provided herein, upon the occurrence and
         during the continuance of an Event of Default, the Collateral Agent may
         exercise any and all remedies available to it under law or equity and
         any Lender may exercise any right of set-off available to it. Without
         limiting the foregoing, remedies under any Security Document may only
         be exercised by the Collateral Agent, although any Secured Party shall
         have the right (but not the obligation) to cure any default under a
         Security Document subject to the rules and regulations of the BLM.

                                   ARTICLE X

                                   THE AGENTS

10.01  APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby appoints and
       authorizes each of the Administrative Agent and the Collateral Agent to
       act as its agent hereunder and under the other Financing Documents to
       which such Agent is or becomes a party with such powers as are
       specifically delegated to such Agent by the terms of this

                                      -74-

       Agreement and of such other Financing Documents, together with such other
       powers as are reasonably incidental thereto. Each Agent (which term as
       used in this sentence and in Section 10.05 and the first sentence of
       Section 10.06 shall include reference to its Affiliates and its own and
       its Affiliates' officers, directors, employees, representatives,
       attorneys and agents):

       (a)    shall have no duties or responsibilities except those expressly
              set out in this Agreement and in the other Financing Documents to
              which such Agent is or becomes a party, and shall not by reason of
              this Agreement or any such other Financing Document be a trustee
              for any Lender or subject to any fiduciary or other implied
              duties, regardless of whether a Default has occurred and is
              continuing;

       (b)    shall not be responsible to the Lenders for any recitals,
              statements, representations or warranties contained in this
              Agreement or in any other Financing Document, or in any
              certificate or other document referred to or provided for in, or
              received by any of them under, this Agreement or any other
              Financing Document, or for the value, validity, effectiveness,
              genuineness, enforceability or sufficiency of this Agreement or
              any other Financing Document or any other document referred to or
              provided for herein or therein, or for the validity or sufficiency
              of the security afforded hereby or thereby, or for any failure by
              the Borrower or any other Person to perform any of its obligations
              hereunder or thereunder;

       (c)    shall not, except (in the case of the Collateral Agent) to the
              extent expressly instructed by the Majority Lenders with respect
              to collateral security under the Security Documents, be required
              to initiate or conduct any litigation or collection proceedings
              hereunder or with respect hereto or under, or with respect to, any
              other Financing Document;

       (d)    shall not be liable or responsible for any action taken, suffered
              or omitted to be taken by it hereunder or under, or with respect
              to, any other Financing Document or under any other document or
              instrument referred to or provided for herein or therein or in
              connection herewith or therewith, except for its own gross
              negligence or willful misconduct as finally determined by a court
              of competent jurisdiction; and

       (e)    shall not be required to take any action which is contrary to the
              Financing Documents or applicable Government Rules.

       Each Agent may employ agents, experts and attorneys-in-fact and shall not
       be responsible for the negligence or misconduct of any such agents,
       experts or attorneys-in-fact selected by it in good faith. The
       Administrative Agent may deem and treat the payee of any Note as the
       holder thereof for all purposes hereof unless and until a notice of the
       assignment or transfer thereof shall have been filed with the
       Administrative

                                      -75-

       Agent, together with the consent of the Borrower to such assignment or
       transfer (to the extent provided in Section 11.06(b)).

10.02  RELIANCE BY AGENTS. Each Agent shall be entitled to rely upon, and shall
       not incur any liability for relying upon, any certification, notice or
       other written communication (including any thereof by telex, telegram or
       cable) reasonably believed by it to be genuine and correct and to have
       been signed or sent by or on behalf of the proper Person or Persons, and
       upon advice and statements of legal counsel, independent accountants and
       other experts selected by such Agent. Each Agent may also rely upon any
       statement made to it orally or by telephone and believed by it to be made
       by the proper Person, and shall not incur any liability for relying
       thereon. As to any matters not expressly provided for by this Agreement
       or any other Financing Document to which an Agent is intended to be a
       party, such Agent shall in all cases be fully protected in acting, or in
       refraining from acting, hereunder or thereunder in accordance with
       instructions given by the Majority Lenders or all of the Lenders as is
       required in such circumstance, and such instructions of such Lenders and
       any action taken, suffered or omitted or failure to act pursuant thereto
       shall be binding on all of the Lenders.

       Without limiting the foregoing, each Agent shall be entitled to advice of
       counsel and other professionals concerning all matters of trust and its
       duty hereunder, but no Agent shall be answerable or responsible for the
       professional malpractice of any attorney-at-law or certified public
       accountant or for the acts or omissions of any other professional in
       connection with the rendering of professional advice in accordance with
       the terms of this Agreement, if such attorney-at-law, certified public
       accountant or other professional was selected by such Agent with due
       care.

10.03  DEFAULTS. Each Agent shall be deemed not to have knowledge or notice of
       the occurrence of a Default (other than, in the case of the
       Administrative Agent, the non-payment of principal of or interest on
       Loans or of commitment fees payable to the Administrative Agent and, in
       the case of each Agent, fees payable to it under Financing Documents)
       unless such Agent has received notice from a Lender or the Borrower
       specifying such Default and stating that such notice is a "Notice of
       Default". In the event that any Agent receives such a notice of the
       occurrence of a Default, such Agent shall give prompt notice thereof to
       the Lenders (and, in the case of the Administrative Agent, shall give
       each Lender prompt notice of each such non-payment) and the other Agent.
       Each Agent shall (subject to Section 10.07) take such action with respect
       to such Default as shall be directed by the Majority Lenders or, if
       provided herein, all of the Lenders, as applicable; provided that, unless
       and until such Agent shall have received such directions, such Agent may
       (but shall not be obligated to) take such action, or refrain from taking
       such action, with respect to such Default as it shall deem advisable in
       the best interest of the Lenders except to the extent that this Agreement
       expressly requires that such action be taken, or not be taken, only with
       the consent or upon the authorization of the Majority Lenders or all of
       the Lenders, as applicable.

                                      -76-

10.04  RIGHTS AS A LENDER. With respect to its Commitments and the Loans made by
       it, United (and any successor acting as Administrative Agent or
       Collateral Agent) in its capacity as a Lender hereunder shall have the
       same rights and powers hereunder as any other Lender and may exercise the
       same as though it were not acting as the Administrative Agent or the
       Collateral Agent, and the term "Lender" or "Lenders" shall, unless the
       context otherwise indicates, include United in its individual capacity.
       United (and any successor acting as Administrative Agent or Collateral
       Agent, as applicable) and its Affiliates may (without having to account
       therefor to any Lender) accept deposits from, lend money to and generally
       engage in any kind of banking, trust or other business with the Borrower
       (and any of its Affiliates) as if it were not acting as the
       Administrative Agent or the Collateral Agent, as applicable, and United
       (and any successor acting as Administrative Agent or Collateral Agent, as
       applicable) and its Affiliates may accept fees and other consideration
       from the Borrower (and any of its Affiliates) for services in connection
       with this Agreement or otherwise without having to account for the same
       to the Lenders.

10.05  INDEMNIFICATION. The Lenders agree to indemnify each Agent (to the extent
       not reimbursed under Section 11.03, but without limiting the obligations
       of the Borrower under Section 11.03) ratably in accordance with the
       aggregate principal amount of the Loans held by the Lenders (or, if no
       Loans are at the time outstanding, ratably in accordance with their
       respective Commitments), for any and all liabilities, obligations,
       losses, damages, penalties, actions, judgments, fines, claims, demands,
       settlements, suits, costs, expenses or disbursements of any kind and
       nature whatsoever which may be imposed on, incurred by or asserted
       against such Agent (including by any Lender) arising out of or by reason
       of any investigation or in any way relating to or arising out of this
       Agreement or any other Transaction Document or any other documents
       contemplated by or referred to herein or therein or the transactions
       contemplated hereby or thereby (including the costs and expenses which
       the Borrower is obligated to pay under Section 11.03, but excluding,
       unless a Default has occurred and is continuing, normal administrative
       costs and expenses incident to the performance of its agency duties
       hereunder) or the enforcement of any of the terms hereof or thereof or of
       any such other documents; provided that no Lender shall be liable for any
       of the foregoing to the extent they arise from the gross negligence or
       willful misconduct (as finally determined by a court of competent
       jurisdiction) of the party to be indemnified. The obligations of the
       Lenders under this Section 10.05 shall survive the termination of this
       Agreement, the repayment of the Loans or the earlier resignation or
       removal of either Agent.

10.06  NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender agrees that it has,
       independently and without reliance on either Agent or any other Lender,
       and based on such documents and information as it has deemed appropriate,
       made its own credit analysis of the Borrower and its Affiliates and its
       own decision to enter into this Agreement and that it will, independently
       and without reliance upon either Agent or any other Lender, and based on
       such documents and information as it shall deem appropriate at the time,
       continue to make its own analysis and decisions in taking or not taking
       action under this Agreement or any other Transaction Document. No Agent
       shall be required to

                                      -77-

       keep itself informed as to the performance or observance by the Borrower
       or any other Person of this Agreement or any other Transaction Document
       or any other document referred to or provided for herein or therein or to
       inspect the Properties or books of the Borrower or such other Person.
       Except for notices, reports and other documents and information expressly
       required to be furnished to the Lenders by an Agent hereunder or under
       the Financing Documents, such Agent shall not have any duty or
       responsibility to provide any Lender with any credit or other information
       concerning the affairs, financial condition or business of the Borrower
       (or any Affiliate thereof) which may come into the possession of such
       Agent or any of its Affiliates.

10.07  FAILURE TO ACT. Except for action expressly required of an Agent
       hereunder and under the other Financing Documents to which such Agent is
       or becomes a party, such Agent shall in all cases be fully justified in
       failing or refusing to act hereunder and thereunder unless it shall
       receive further assurances to its satisfaction from the Lenders of their
       indemnification obligations under Section 10.05 against any and all
       liability and expense which may be incurred by it by reason of taking or
       continuing to take any such action. No provision of this Agreement shall
       require the Collateral Agent to expend or risk its own funds or otherwise
       incur financial liability in the performance of any of its duties
       hereunder or in the exercise of any of its rights or powers if it shall
       have reasonable grounds to believe that repayment of such funds or
       adequate indemnity against such risk or liability is not reasonably
       assured to it. Each Agent shall be entitled to interest (calculated on a
       per annum basis) on all amounts advanced by it hereunder in its
       discretion at the Federal Funds Rate. Each Agent shall at any time be
       entitled to cease taking any action if it no longer deems any indemnity
       or undertaking from the Lenders to be sufficient.

10.08  RESIGNATION OR REMOVAL OF AGENTS. Subject to the appointment and
       acceptance of a successor Agent as provided below, an Agent may resign at
       any time by giving notice thereof to the Lenders and the Borrower, and an
       Agent may be removed at any time with or without cause by the Majority
       Lenders. Upon any such resignation or removal, the Majority Lenders shall
       have the right to appoint, with the consent of the Borrower (unless a
       Default or Event of Default has occurred and is continuing), such consent
       not to be unreasonably withheld or delayed, a successor Agent. If no
       successor Agent shall have been so appointed by the Majority Lenders and
       shall have accepted such appointment within 30 days after the retiring
       Agent's giving of notice of resignation or the Majority Lenders' removal
       of the retiring Agent, then the retiring Agent, at its discretion, may,
       on behalf of the Lenders, appoint a successor Agent, which shall be a
       bank which has an office in New York, New York with capital, surplus and
       undivided profits of at least $500,000,000. Upon the acceptance of any
       appointment as Agent hereunder by a successor Agent, such successor Agent
       shall thereupon succeed to and become vested with all the rights, powers,
       privileges and duties of the retiring Agent, and the retiring Agent shall
       be discharged from its duties and obligations hereunder. After any
       retiring Agent's resignation or removal hereunder as Agent, the
       provisions of this Article X and Section 11.03 shall continue in effect
       for its benefit in respect of any actions taken,

                                      -78-

       suffered or omitted to be taken by it while it was acting as such Agent.
       Each Agent agrees not to resign solely as a result of the occurrence and
       continuance of a Default or an Event of Default.

10.09  CONSENTS. Except as otherwise provided in Section 11.04, each Agent may,
       with the prior written consent of the Majority Lenders (but not
       otherwise), consent to any modification, supplement or waiver under any
       Transaction Document; provided that, without the prior written consent of
       each Lender, the Collateral Agent shall not (except as provided herein or
       in the Security Documents) release any Collateral or otherwise terminate
       any Lien under any Security Document, or agree to additional obligations
       being secured by the Collateral (unless the Lien for such additional
       obligations shall be junior to the Lien in favor of the other obligations
       secured by such Security Document and is otherwise permitted hereunder)
       or alter the relative priorities of the obligations entitled to the
       benefits of the Liens created under the Security Documents with respect
       to any of the Collateral, except that no such consent shall be required,
       and the Collateral Agent is hereby authorized, to release any Lien
       covering the Borrower's Property that is the subject of a disposition of
       Property permitted under this Agreement or under the relevant Security
       Document or to which the Lenders have consented.

10.10  COLLATERAL AGENT. The Collateral Agent shall:

       (a)    forward promptly after receipt thereof (and use its best efforts
              to forward within five Business Days of such receipt): (i) to each
              Secured Party a copy of each document furnished to such Agent for
              such Secured Party under this Agreement, and any other Financing
              Documents to which such Agent is a party; and (ii) to the
              Administrative Agent any notice delivered to the Collateral Agent
              pursuant to any Consent and Agreement;

       (b)    have the right, but not the obligation, to: (i) refuse any item
              for credit to any Account except as required by the terms of the
              Financing Documents; (ii) refuse to honor any request for transfer
              in relation to any Account that is not consistent with the
              Financing Documents; (iii) charge to any Account all applicable
              charges; and (iv) pay fees, interest and other charges owing by
              the Borrower as provided herein and in the other Transaction
              Documents;

       (c)    except as otherwise provided herein and in the Depositary
              Agreement (including by the provision of standing instructions
              therein), and subject to the provisions of Section 10.07, take all
              actions and make all determinations with respect to the Collateral
              and the Security Documents, including as to the advisability of
              taking additional steps to perfect, or cause the perfection of,
              any security interest, as directed in writing by the
              Administrative Agent; and

       (d)    have the right at any time to seek clarification and instructions
              concerning the administration of the Financing Documents from the
              Administrative Agent, legal

                                      -79-

              counsel or any court of competent jurisdiction and shall be fully
              protected in relying upon such instructions.

                                   ARTICLE XI

                                  MISCELLANEOUS

11.01  WAIVER. No failure on the part of either Agent or any Lender to exercise
       and no delay in exercising, and no course of dealing with respect to, any
       right, power or privilege under this Agreement, any Note or any other
       Financing Document shall operate as a waiver thereof, and no single or
       partial exercise of any right, power or privilege under this Agreement,
       any Note or any other Financing Document shall preclude any other or
       further exercise thereof or the exercise of any other right, power or
       privilege. The remedies provided herein are cumulative and not exclusive
       of any remedies provided by law.

11.02  NOTICES. All notices, requests and other communications provided for
       herein and under the Financing Documents (including any modifications of,
       or waivers or consents under, this Agreement) shall be given or made in
       writing (including by telecopy) delivered to the intended recipient at
       the "Address for Notices" specified below its name on the signature pages
       hereof 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 with confirmation of
       receipt received or personally delivered or, in the case of a mailed
       notice, upon receipt, in each case given or addressed as aforesaid;
       provided, however, that if such transmission or delivery does not occur
       by 4:00 p.m. recipient's time, then such transmission or delivery shall
       be deemed to occur on the next Business Day.

11.03  EXPENSES; ETC.

       (a)    Expenses. The Borrower shall pay or reimburse each of the Lenders
              and each Agent for paying:

              (i)    all reasonable out-of-pocket costs and expenses of the
                     Agents (including the reasonable fees and expenses of: (A)
                     Bingham McCutchen LLP, special counsel to the Lenders; (B)
                     the Independent Engineer; (C) the Insurance Advisor; (D)
                     such other counsel or experts engaged by the Administrative
                     Agent at the request of the Majority Lenders (and, except
                     during the occurrence and continuation of a Default, with
                     the consent of the Borrower, such consent not to be
                     unreasonably withheld or delayed) from time to time; and
                     (E) counsel engaged by the Collateral Agent from time to
                     time with (except during the occurrence and continuation of
                     a Default) the consent of the Borrower, such

                                      -80-

                     consent not to be unreasonably withheld or delayed), in
                     each case in connection with: (I) the negotiation,
                     preparation, execution and delivery of this Agreement and
                     the other Transaction Documents and the extension of credit
                     hereunder; or (II) any amendment, modification or waiver of
                     any of the terms of this Agreement or any other Transaction
                     Document;

              (ii)   all reasonable costs and expenses of the Lenders and each
                     Agent (including reasonable counsels' fees and expenses and
                     reasonable experts' fees and expenses) in connection with:
                     (A) any Default and any enforcement or collection
                     proceedings resulting therefrom or in connection with the
                     negotiation of any restructuring or "work-out" (whether or
                     not consummated) of the obligations of the Borrower under
                     this Agreement or the obligations of any Project Party
                     under any other Transaction Document; and (B) the
                     enforcement of this Section 11.03;

              (iii)  all transfer, stamp, documentary or other similar taxes,
                     assessments or charges levied by any Government Authority
                     in respect of this Agreement or any other Transaction
                     Document or any other document referred to herein or
                     therein and all costs, expenses, taxes, assessments and
                     other charges incurred in connection with any filing,
                     registration, recording or perfection of any Lien
                     contemplated by this Agreement or any other Financing
                     Document or any other document referred to herein or
                     therein; and

              (iv)   all costs, expenses and other charges in respect of title
                     insurance procured with respect to the Liens created
                     pursuant to the Deed of Trust.

              In relation to payments referred to under clause (iii) above,
              within 30 days after paying such amount, the Borrower shall
              deliver to the Administrative Agent, evidence reasonably
              satisfactory to the Administrative Agent of such payment.

       (b)    Indemnity. The Borrower shall indemnify each Agent, each Lender,
              their respective Affiliates and their respective shareholders,
              officers, directors, employees, representatives, attorneys and
              agents (each, an "INDEMNITEE") from, and shall hold each of them
              harmless against, any and all losses, liabilities, claims,
              damages, expenses, obligations, penalties, fines, demands,
              settlements, actions, judgments, suits, costs or disbursements of
              any kind or nature whatsoever (including the reasonable fees and
              expenses of counsel and consultants for each Indemnitee in
              connection with any investigative, administrative or judicial
              proceeding commenced or threatened, whether or not such Indemnitee
              shall be designated a party thereto, but excluding any such
              losses, liabilities, claims, damages, expenses, obligations,
              penalties, actions, judgments, suits, costs or

                                      -81-

              disbursements incurred solely by reason of the gross negligence or
              willful misconduct of such Indemnitee) that may at any time
              (including at any time following the Termination Date) be imposed
              on, asserted against or incurred by any Indemnitee as a result of,
              or arising out of, or in any way related to or by reason of:

              (i)    any of the transactions contemplated hereby or by any other
                     Transaction Document or the execution, delivery or
                     performance of this Agreement or any other Transaction
                     Document;

              (ii)   the extensions of credit hereunder or the actual or
                     proposed use by the Borrower of any of the extensions of
                     credit hereunder or the grant to the Collateral Agent for
                     the benefit of, or to any of, the Secured Parties of any
                     Lien on the Collateral or on any other Property of the
                     Borrower, the Sponsor or any ownership interest in the
                     Borrower;

              (iii)  the exercise by the Collateral Agent or the other Secured
                     Parties of their rights and remedies (including
                     foreclosure) under any agreements creating any such Lien;
                     and

              (iv)   any Environmental Law (including any Lien filed against any
                     Project by or in favor of any Government Authority) as a
                     result of the past, present or future operations of the
                     Borrower, the Sponsor (as it relates to the Projects) or
                     the Operator (or any predecessor in interest to any such
                     person), or the past, present or future condition of any
                     site or facility owned, operated or leased at any time by
                     the Borrower, the Sponsor or the Operator (or any such
                     predecessor in interest to any such person), or any Release
                     or Use or threatened Release of any Hazardous Materials at
                     any such site or facility, that is not otherwise in
                     accordance with applicable Environmental Law, including any
                     such Release or Use or threatened Release which shall occur
                     during any period when such Indemnitee shall be in
                     possession of any such site or facility following the
                     exercise by either Agent or any other Secured Party of any
                     of its rights and remedies hereunder or under any Financing
                     Document or any other Transaction Document.

       (c)    Records. Each relevant Financing Party shall maintain in
              accordance with its usual practice records evidencing the amounts
              payable by the Borrower under this Section 11.03; provided that
              the failure of any Financing Party to maintain such records shall
              not in any manner affect the obligation of the Borrower to make
              such payments.

                                      -82-

11.04  AMENDMENTS; ETC. 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 each of the Borrower, the
       Administrative Agent, the Collateral Agent and the Majority Lenders, or
       by each of the Borrower and the Collateral Agent and the Administrative
       Agent acting with the consent of the Majority Lenders, and any provision
       of this Agreement may be waived by the Majority Lenders or by the
       Administrative Agent acting with the consent of the Majority Lenders;
       provided that:

       (a)    no amendment, modification or waiver shall, unless by an
              instrument signed by all of the Lenders or by the Administrative
              Agent acting with the consent of all of the Lenders: (i) increase
              or extend the term, or extend the time or waive any requirement
              for the reduction or termination, of the Commitments; (ii) extend
              the date fixed for the payment of principal of or interest on any
              Loan or any fee hereunder; (iii) reduce the amount of any such
              payment of principal; (iv) reduce the rate at which interest is
              payable thereon or any fee is payable hereunder; (v) alter the
              rights or obligations of the Borrower to prepay Loans; (vi) alter
              the manner in which payments or prepayments of principal, interest
              or other amounts hereunder shall be applied among the Lenders or
              Types or Classes of Loans; (vii) alter the terms of this Section
              11.04; (viii) amend the definition of the term "Majority Lenders"
              or modify in any other manner the number or percentage of the
              Lenders required to make any determinations or waive any rights
              hereunder or to modify any provision hereof; (ix) waive any of the
              conditions precedent set out in Section 6.01; or (x) release all
              or any material portion of the Collateral; and

       (b)    any amendment, modification, waiver or supplement of the rights or
              duties of either Agent hereunder shall require the consent of such
              Agent.

       Anything in this Agreement to the contrary notwithstanding, if at any
       time when the conditions precedent set out in Article VI to any extension
       of credit hereunder are, in the opinion of the Majority Lenders,
       satisfied, any Lender shall fail to fulfill its obligations to make such
       extension of credit, then, for so long as such failure shall continue,
       such Lender shall (unless the Majority Lenders, determined as if such
       Lender were not a "Lender" hereunder, shall otherwise consent in writing)
       be deemed for all purposes relating to amendments, modifications, waivers
       or consents under this Agreement or any other Financing Document
       (including under this Section 11.04 and under Section 10.09) to have no
       Loans or Commitments, shall not be treated as a "Lender" hereunder when
       performing the computation of Majority Lenders, and shall have no rights
       under the preceding paragraph of this Section 11.04.

       Anything in this Agreement to the contrary notwithstanding, no waiver or
       modification of any provision of this Agreement that has the effect
       (either immediately or at some later time) of enabling the Borrower to
       satisfy a condition precedent to the making of a Loan of any Class shall
       be effective against the Lenders making Loans of such Class for purposes
       of the Commitments of such Class unless the Majority Lenders making Loans
       of such Class shall have concurred with such waiver or modification, and
       no waiver or

                                      -83-

       modification of any provision of this Agreement or any other Financing
       Document that could reasonably be expected to adversely affect the
       Lenders making Loans of any Class in a manner that does not affect all
       Classes equally shall be effective against the Lenders making Loans of
       such Class unless the Majority Lenders making Loans of such Class shall
       have concurred with such waiver or modification.

11.05  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.

11.06  ASSIGNMENTS AND PARTICIPATIONS.

       (a)    Borrower. The Borrower may not assign its rights or obligations
              hereunder or under the Notes without the prior consent of all of
              the Lenders and the Administrative Agent.

       (b)    Lenders. Subject to the terms of clause (g) below, each Lender may
              assign any of its Loans, its Notes and its Commitments (but only
              with the consent of, in the case of an outstanding Commitment, the
              Administrative Agent, not to be unreasonably withheld) to an
              Eligible Assignee; provided that: (i) no such consent by the
              Administrative Agent shall be required in the case of any
              assignment to another Lender or an Affiliate (or Approved Fund) of
              a Lender; (ii) except in the case of an assignment to a Lender or
              an Affiliate (or Approved Fund) of a Lender or an assignment of
              the entire remaining amount of the assigning Lender's Commitments,
              any such partial assignment shall be in an amount at least equal
              to $5,000,000; and (iii) each assignment by a Lender of its
              Commitment, Loans or Note of a particular Class shall be made in
              such a manner so that the same portion of its Commitment, Loans
              and Note of such Class is assigned to the respective assignee.

              Upon execution and delivery by the assignee to the Borrower and
              the Administrative Agent of an instrument in writing pursuant to
              which such assignee agrees to become a "Lender" hereunder (if not
              already a Lender) having the Commitments and Loans specified in
              such instrument, and upon consent thereto by the Administrative
              Agent, to the extent required above, the assignee shall have, to
              the extent of such assignment (unless otherwise provided in such
              assignment with the consent of the Administrative Agent, to the
              extent required above), the obligations, rights and benefits of a
              Lender hereunder holding the Commitments and Loans (or portions
              thereof) assigned to it (in addition to the Commitments and Loans,
              if any, theretofore held by such assignee) and the assigning
              Lender shall, to the extent of such assignment, be released from
              the Commitments (or portion thereof) so assigned. Upon each such
              assignment (other than such an assignment by United), the
              assigning Lender shall pay the Administrative Agent an assignment
              fee of $3,000.

                                      -84-

              In furtherance of the foregoing, on the date of any such
              assignment pursuant to this Section 11.06(b), the Borrower shall
              deliver to the assigning Lender and the assignee Lender, in
              exchange for the Notes theretofore delivered by the Borrower to
              the assigning Lender, appropriately completed Notes, dated the
              effective date of such assignment, payable to such assigning
              Lender and to such assignee, in an aggregate amount equal to their
              respective Commitments after giving effect to such assignment, and
              otherwise duly completed.

              [Intentionally omitted.]

       (c)    Participants. A Lender may sell or agree to sell to one or more
              other Persons a participation in all or any part of any Loan held
              by it, or in its Commitments (provided that partial participations
              shall be in an amount at least equal to $5,000,000 or the entire
              remaining amount of the assigning Lender's Loans and Commitments,
              whichever is the lesser). Each purchaser of a participation (a
              "PARTICIPANT") shall be entitled to the rights and benefits of the
              provisions of Section 8.01(m) with respect to its participation in
              such Loans and Commitments as if (and the Borrower shall be
              directly obligated to such Participant under such provision as if)
              such Participant were a "Lender" for purposes of said Section,
              but, except as otherwise provided in Section 4.07(c), shall not
              have any other rights or benefits under this Agreement or any Note
              or any other Financing Document (the Participant's rights against
              such Lender in respect of such participation to be those set out
              in the agreements executed by such Lender in favor of the
              Participant). All amounts payable by the Borrower to any Lender
              under Article V in respect of Loans and its Commitments, shall be
              determined as if such Lender had not sold or agreed to sell any
              participations in such Loans and Commitments, and as if such
              Lender were funding each of such Loans and Commitments in the same
              way that it is funding the portion of such Loans and Commitments
              in which no participations have been sold. In no event shall a
              Lender that sells a participation agree with the Participant to
              take or refrain from taking any action hereunder or under any
              other Financing Document, except that such Lender may agree with
              the Participant that it will not, without the consent of the
              Participant, agree to: (i) increase or extend the term, or extend
              the time or waive any requirement for the reduction or
              termination, of such Lender's Commitment; (ii) extend the date
              fixed for the payment of principal of or interest on the related
              Loans or any portion of any fee hereunder payable to the
              Participant; (iii) reduce the amount of any such payment of
              principal; (iv) reduce the rate at which interest is payable
              thereon, or any fee hereunder payable to the Participant, to a
              level below the rate at which the Participant is entitled to
              receive such interest or fee; (v) alter the rights or obligations
              of the Borrower to prepay the related Loans; or (vi) consent to
              any modification or waiver hereof or of any Financing Document to
              the extent that the same, under Section 10.09 or 11.04, requires
              the consent of each Lender.

                                      -85-

              Notwithstanding anything else provided herein, no Person
              purchasing a participation in accordance with the terms hereof
              shall be considered a "Lender" for any purposes of the Financing
              Documents by reason of the purchase of such participation.

       (d)    Assignment to Federal Reserve Bank. Anything in this Section 11.06
              to the contrary notwithstanding, any Lender may (without notice to
              the Borrower, either Agent or any other Lender, and without
              payment of any fee) assign and pledge all or any portion of its
              Loans and its Notes to any Federal Reserve Bank as collateral
              security pursuant to Regulation A of the Board of Governors of the
              Federal Reserve System and any Operating Circular issued by such
              Federal Reserve Bank. No such assignment shall release the
              assigning Lender from its obligations hereunder.

       (e)    Information. A Lender may furnish any information concerning the
              Borrower in the possession of such Lender from time to time to
              assignees and participants (including prospective assignees and
              participants), subject, however, to the provisions of Section
              11.08.

       (f)    Assignment to Borrower. Anything in this Section 11.06 to the
              contrary notwithstanding, no Lender may assign or participate any
              interest in any Loan held by it hereunder to the Borrower or any
              of its Affiliates without the prior consent of each Lender.

       (g)    United. Notwithstanding anything to the contrary in this Section
              11.06, United shall not assign any interest in any Commitment or
              Loan such that at any time it shall cease to own less than 50.1%
              of the aggregate principal amount of the Loans from time to time
              outstanding.

11.07  MARSHALLING; RECAPTURE. None of the Administrative Agent, the Collateral
       Agent, or any Lender shall be under any obligation to marshal any assets
       in favor of the Borrower or any other party or against or in payment of
       any or all of the Secured Obligations. To the extent either Agent or any
       Lender receives any payment by or on behalf of the Borrower, which
       payment or any part thereof is subsequently invalidated, declared to be
       fraudulent or preferential, set aside or required to be repaid to the
       Borrower or its estate, trustee, receiver, custodian or any other party
       under any bankruptcy or insolvency law, state or Federal law, common law
       or equitable cause, then to the extent of such payment or repayment, the
       obligation or part thereof that has been paid, reduced or satisfied by
       the amount so repaid shall be reinstated by the amount so repaid and
       shall be included within the liabilities of the Borrower to such Agent or
       such Lender as of the date such initial payment, reduction or
       satisfaction occurred.

11.08  CONFIDENTIALITY. Each Lender and each Agent agrees (on behalf of itself
       and each of its Affiliates, directors, officers, employees and
       representatives) to keep confidential, any non-public information
       supplied to it by the Borrower pursuant to this Agreement that is

                                      -86-

       identified by the Borrower as being confidential at the time the same is
       delivered to such Lender or such Agent; provided that nothing herein
       shall limit the disclosure of any such information: (i) to the extent
       required by any Government Rule or judicial process; provided that,
       unless prohibited by applicable Government Rules or not reasonably
       practicable: (A) notice shall be given to the Borrower of such request;
       and (B) such Lender or such Agent, as applicable, shall reasonably
       cooperate with the Borrower to the extent the Borrower may seek to
       challenge such requirement, so long as the Borrower pays all costs of
       such challenge and the disclosing party determines that such challenge
       would not adversely affect it; (ii) to counsel for any of the Lenders or
       either Agent; (iii) to banking, securities exchange or other regulatory
       or supervisory authorities, auditors or accountants; (iv) to either Agent
       or any other Lender; (v) in connection with the exercise of any remedies
       hereunder or under any of the Financing Documents or any suit, action or
       proceeding relating to this Agreement or any other Financing Document or
       the enforcement of rights hereunder or thereunder; (vi) to the
       Independent Engineer, the Insurance Advisor or to other experts engaged
       by either Agent or any Lender in connection with this Agreement and the
       transactions contemplated hereby; (vii) to the extent that such
       information is required to be disclosed to a Government Authority in
       connection with a tax audit or dispute; (viii) in connection with any
       Default and any enforcement or collection proceedings resulting therefrom
       or in connection with the negotiation of any restructuring or "work-out"
       (whether or not consummated) of the obligations of the Borrower under
       this Agreement or the obligations of the Borrower, the Sponsor, the
       Operator or other Project Party under any other Transaction Document; or
       (ix) to any assignee or participant (or prospective assignee or
       participant) so long as such assignee or participant (or prospective
       assignee or participant) first executes and delivers to the respective
       Lender and the Borrower a confidentiality agreement pursuant to which it
       agrees to comply with the requirements of this Section 11.08.
       Notwithstanding the foregoing provisions of this Section 11.08(b), the
       foregoing obligation of confidentiality shall not apply to any such
       information that: (A) was known to any Lender or either Agent prior to
       the time it received such confidential information from the Borrower or
       its Affiliates pursuant to the Transaction Documents; or (B) becomes part
       of the public domain independently of any act of any Lender or either
       Agent not permitted hereunder (through publication or otherwise); or (C)
       is received by any Lender or either Agent, as applicable, without
       restriction as to its disclosure or use, from a Person other than the
       Borrower or its Affiliates; provided that such Lender or such Agent, as
       applicable has no actual knowledge that such source is disclosing such
       information to such Lender or such Agent, as applicable, in violation of
       a confidentiality agreement with respect to such information.

11.09  NON-RECOURSE. No recourse shall be had for the payment of any obligations
       under any Loan or upon any other obligation, covenant or agreement under
       this Agreement or any other Financing Document, against the Sponsor or
       any Affiliate thereof, any incorporator, direct or indirect stockholder,
       member, partner, officer, director, as such, whether past, present or
       future of the Sponsor or the Borrower or any Affiliate thereof or of any
       successor corporation thereto (either directly or through the Sponsor or
       the Borrower or a

                                      -87-

       successor corporation) (each hereinafter, a "NON-RECOURSE PERSON"),
       whether by virtue of any constitutional provision, statute or rule of
       law, or by the enforcement of any assessment or penalty or otherwise. It
       is expressly agreed and understood that:

       (a)    this Agreement and each other Financing Document are solely
              limited liability company obligations of the Borrower, and that no
              personal liability whatsoever shall attach to, or be incurred by,
              any Non-Recourse Person, either directly or indirectly through the
              Borrower or any successor Person, because of the indebtedness
              thereby authorized or under or by reason of any of the
              obligations, covenants or agreements contained in this Agreement
              or any of the Financing Documents or to be implied herefrom or
              therefrom; and

       (b)    any claim of or relating to such personal liability is hereby
              expressly waived and released as a condition of, and as part of
              the consideration for, the execution of this Agreement and each
              other Financing Document.

       Notwithstanding the foregoing, nothing in this Section 11.09 shall impair
       or in any way limit any liabilities or obligations of: (i) the Sponsor
       under or pursuant to its obligations as set forth in the Borrower Equity
       Interest Pledge; or (ii) any Non-Recourse Party for fraud or willful
       misconduct.

11.10  SURVIVAL. The obligations of the Borrower under Sections 5.01, 5.05, 5.06
       and 11.03, the obligations of the Lenders under Section 10.05 and the
       obligations of the Borrower and the Lenders under the penultimate
       sentence of Section 10.08 and under Section 11.08 shall survive after the
       Termination Date. In addition, each representation and warranty made, or
       deemed to be made by a notice of any Disbursement, herein or pursuant
       hereto shall survive the making of such representation and warranty, and
       no Lender shall be deemed to have waived, by reason of making any
       Disbursement hereunder, any Default that may arise by reason of such
       representation or warranty proving to have been false or misleading,
       notwithstanding that such Lender or either Agent may have had notice or
       knowledge or reason to believe that such representation or warranty was
       false or misleading at the time such Disbursement was made.

11.11  COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed
       in any number of counterparts, all of which taken together shall
       constitute one and the same instrument and any party hereto may execute
       this Agreement by signing any such counterpart. This Agreement and the
       other Financing Documents constitute the entire agreement and
       understanding among the parties hereto with respect to matters covered by
       this Agreement and the other Financing Documents and supersede any and
       all prior agreements and understandings, written or oral, relating to the
       subject matter hereof. This Agreement shall become effective at such time
       as the Administrative Agent shall have received counterparts hereof
       signed by all of the intended parties hereto.

11.12  NO THIRD PARTY BENEFICIARIES IN RELATION TO DISBURSEMENTS. THE AGREEMENT
       OF THE LENDERS TO MAKE THE LOANS TO THE

                                      -88-

       BORROWER, ON THE TERMS AND CONDITIONS SET OUT IN THIS AGREEMENT, ARE
       SOLELY FOR THE BENEFIT OF THE BORROWER, AND NO OTHER PERSON (INCLUDING
       ANY AFFILIATE OF THE BORROWER, OR ANY PROJECT PARTY, CONTRACTOR,
       SUBCONTRACTOR, SUPPLIER, WORKMAN, CARRIER, WAREHOUSEMAN OR MATERIALMAN
       FURNISHING LABOR, SUPPLIES, GOODS OR SERVICES TO OR FOR THE BENEFIT OF
       ANY PROJECT) SHALL HAVE ANY RIGHTS HEREUNDER OR UNDER ANY OTHER FINANCING
       DOCUMENT AS AGAINST EITHER AGENT OR ANY LENDER OR WITH RESPECT TO ANY
       EXTENSION OF CREDIT CONTEMPLATED HEREBY.

11.13  GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT AND THE
       NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
       THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
       NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
       SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN
       NEW YORK COUNTY (INCLUDING ANY APPELLATE DIVISION THEREOF), AND OF ANY
       OTHER APPELLATE COURT IN THE STATE OF NEW YORK, FOR THE PURPOSES OF ALL
       LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
       TRANSACTIONS CONTEMPLATED HEREBY (OTHER THAN ENFORCEMENT OF THE DEED OF
       TRUST). EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
       PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT 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 A COURT HAS
       BEEN BROUGHT IN AN INCONVENIENT FORUM.

11.14  WAIVER OF JURY TRIAL. EACH OF THE BORROWER, EACH AGENT AND EACH OF THE
       LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
       APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
       PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
       TRANSACTIONS CONTEMPLATED HEREBY.

11.15  SPECIAL EXCULPATION. NO CLAIM MAY BE MADE BY THE BORROWER, ANY OF ITS
       AFFILIATES, ANY PARTY TO THIS AGREEMENT OR THE AFFILIATES, SHAREHOLDERS,
       DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM
       AGAINST EITHER AGENT OR ANY LENDER OR THE AFFILIATES, SHAREHOLDERS,
       DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM FOR
       ANY SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE LOSS OR
       DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
       THEORY OF LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
       OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
       THEREBY, OR ANY ACT,

                                      -89-

       OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER
       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.

11.16  SERVICE OF PROCESS. Each party hereto hereby irrevocably consents to the
       service of process in any suit, action or proceeding in such courts by
       the mailing thereof by any of the other parties hereto by registered or
       certified mail, postage prepaid, to the "Address for Notices" specified
       below its name on the signature pages hereof.

11.17  SERVICE OF PROCESS. Nothing herein shall in any way be deemed to limit
       the ability of any party hereto to serve any writs, process or summonses
       in any other manner permitted by applicable law or to obtain jurisdiction
       over any other party hereto in such jurisdiction, and in such manner, as
       may be permitted by applicable law.

11.18  SEVERABILITY. Any provision of this Agreement or the other Financing
       Documents that is prohibited or unenforceable in any particular
       jurisdiction shall, as to that jurisdiction, be ineffective to the extent
       of that prohibition or unenforceability without invalidating the
       remaining provisions of this Agreement or the other Financing Documents,
       and any such prohibition or unenforceability in any particular
       jurisdiction shall not invalidate or render unenforceable that provision
       in any other jurisdiction.

                            [SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

                                  BORROWER
                                  --------

                                  ORMESA LLC

                                  By: ORMAT FUNDING CORP.,
                                      its Sole Member and Controlling Manager

                                  By: /s/ Connie Stechman
                                     ------------------------------------------
                                     Name: Connie Stechman
                                     Title: Director, Chief Financial Officer
                                            and Assistant Secretary

                                  Address for Notices:

                                  Ormesa LLC
                                  980 Greg Street
                                  Sparks, Nevada 89431
                                  Telephone No.: (775) 356-9029
                                  Facsimile No.: (775) 356-9039
                                  Attention: President

                                  Schedule I to the Credit Agreement

                                      I-2

                                  LENDERS
                                  -------

                                  UNITED CAPITAL,
                                    a division of Hudson United Bank

                                  By: /s/ Jerome P. Peters, Jr.
                                      -----------------------------------------
                                     Name: Jerome P. Peters, Jr.
                                     Title: Senior Vice President

                                  Address for Notices:

                                  United Capital, a division
                                  of  Hudson United Bank
                                  87 Post Road East
                                  Westport, Connecticut 06880

                                  Telephone No.: (203) 291-6600
                                  Facsimile No.: (203) 291-6652
                                  Attention: Mr. Jerome P. Peters, Jr.

                                  Schedule I to the Credit Agreement

                                      I-3

                                  ADMINISTRATIVE AGENT
                                  --------------------

                                  UNITED CAPITAL,
                                     a division of Hudson United Bank,
                                     not in its individual capacity but solely
                                     as Administrative Agent

                                  By: /s/ Jerome P. Peters, Jr.
                                      -----------------------------------------
                                     Name: Jerome P. Peters, Jr.
                                     Title: Senior Vice President

                                  Address for Notices:

                                  United Capital, a division
                                  of  Hudson United Bank
                                  87 Post Road East
                                  Westport, Connecticut 06880

                                  Telephone No.: (203) 291-6600
                                  Facsimile No.: (203) 291-6632
                                  Attention: Mr. Jerome P. Peters, Jr.

                                  Schedule I to the Credit Agreement

                                      I-4

                                  COLLATERAL AGENT
                                  ----------------

                                  UNITED CAPITAL,
                                     a division of Hudson United Bank,
                                     not in its individual capacity but solely
                                     as Collateral Agent

                                  By: /s/ Jerome P. Peters, Jr.
                                      -----------------------------------------
                                     Name: Jerome P. Peters, Jr.
                                     Title: Senior Vice President

                                  Address for Notices:

                                  United Capital, a division
                                  of  Hudson United Bank
                                  87 Post Road East
                                  Westport, Connecticut 06880
                                  Telephone No.: (203) 291-6600
                                  Facsimile No.: (203) 291-6632
                                  Attention: Mr. Jerome P. Peters, Jr.

                                  Schedule I to the Credit Agreement

                                                                      SCHEDULE I

                                   DEFINITIONS

"ACCEPTABLE INSURANCE BROKER" shall mean a nationally or internationally
recognized, independent insurance broker satisfactory to the Administrative
Agent.

"ACCOUNTING PRINCIPLES" shall mean, with respect to any Person at any date, the
generally accepted accounting principles and standards then in effect in such
Person's jurisdiction of incorporation or formation, in all cases, consistently
applied.

"ACCOUNTS" shall have the meaning assigned to such term in the Depositary
Agreement.

"ACQUISITION DOCUMENTS" shall mean those documents delivered to the Collateral
Agent by the Borrower on four cd-roms labeled (i) "Acquisition of Ormesa I and
GEM Geothermal Power Facilities by Ormat", (ii) "Acquisition of Ormesa
Geothermal II Power Facilities by Ormat", (iii) "Acquisition of Ormesa II
Geothermal Project by Ormat" and (iv) "Acquisition of Ormesa Geothermal Trust by
Ormat", including the Sale and Purchase Agreements and all other documents
contained therein.

"ADDITIONAL COSTS" shall have the meaning assigned to such term in Section
5.01(a).

"ADDITIONAL PROJECT DOCUMENT" shall mean any contract or agreement relating to
any Project (other than Non-Material Project Contracts) entered into by the
Borrower subsequent to the Closing Date.

"ADDITIONAL RESTORATION FUNDS" shall have the meaning assigned to such term in
Section 8.05(d)(ii)(C).

"ADDITIONAL TERM LOAN AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date through (and including) December 31, 2003.

"ADDITIONAL TERM LOAN COMMITMENT" shall mean for each Lender, the obligation of
such Lender to make an Additional Term Loan in an aggregate principal amount at
any one time outstanding equal to the amount set out opposite such Lender's name
in Schedule III under the heading "Additional Term Loan Commitment" (as the same
may be adjusted from time to time pursuant to Section 2.03 or as a consequence
of an assignment in accordance with Section 11.06(b)). The initial aggregate
amount of the Additional Term Loan Commitments available to the Borrower at any
time shall not exceed $7,500,000.

"ADDITIONAL TERM LOAN FACILITY" shall mean the credit facility to be provided
pursuant to Section 2.0l(b).

"ADDITIONAL TERM LOAN NOTE" shall have the meaning assigned to such term in
Section 2.07(b).

"ADDITIONAL TERM LOANS" shall have the meaning assigned to such term in Section
2.0l(b).

                       Schedule I to the Credit Agreement

                                      I-2

"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in the
opening paragraph of this Agreement.

"ADVANCE DATE" shall have the meaning assigned to such term in Section 4.06.

"AFFECTED LOANS" shall have the meaning assigned to such term in Section 5.04.

"AFFECTED PROPERTY" shall mean, with respect to any Event of Loss, any Project
Property lost, destroyed, damaged, condemned (including through a Condemnation)
or otherwise taken as a result of such Event of Loss.

"AFFILIATE" shall mean, as to any Person, any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
first Person. As used in this definition, "CONTROL" (including, with its
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person that owns directly or indirectly 10% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership, limited
liability company or other ownership interests of any other Person will be
deemed to control such corporation or other Person. The term "AFFILIATED" shall
have a correlative meaning.

"AGENT" shall mean either of the Administrative Agent or the Collateral Agent.

"AGREEMENT" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.

"ANCILLARY DOCUMENTS" shall mean, with respect to each Additional Project
Document entered into by the Borrower subsequent to the Closing Date: (a) each
security agreement or instrument (which may consist of an amendment to a
Security Document), together with all recorded financing statements and other
filings, necessary or desirable to grant to the Collateral Agent for the benefit
of the Secured Parties a first priority perfected Lien in such Additional
Project Document and all property interests received by the Borrower in
connection therewith; (b) a Consent and Agreement from each party (other than
the Borrower) to such Additional Project Document; (c) evidence of the
authorization of the Borrower and the other parties to such Additional Project
Document to execute, deliver and perform such Additional Project Document; (d)
evidence that all Government Approvals necessary for the execution, delivery and
performance of such Additional Project Document have been duly obtained, were
validly issued, are in full force and effect and are not subject to appeal; and
(e) such other certificates, documents and information with respect to such
Additional Project Document as either Agent or any Lender may reasonably
request, all in form and substance reasonably satisfactory to the Administrative
Agent.

"ANNUAL OPERATING PLAN AND BUDGET" shall have the meaning assigned to such term
in Section 8.23(a).

                       Schedule I to the Credit Agreement

                                      I-3

"APPLICABLE LENDING OFFICE" shall mean, for each Lender party hereto on the
Closing Date and for each Type of Loan, the "Lending Office" of such Lender (or
of an Affiliate of such Lender) designated for such Type of Loan in Schedule II
and for each Lender which may become a party hereto after the Closing Date, the
"Lending Office" of such Lender (or of an affiliate of such Lender) designated
for such Type of Loan in the instrument referred to in Section 11.06(b);
provided that any Lender may from time to time change its "Applicable Lending
Office" for any Type of Loan by delivering notice of such change to the Agents
and the Borrower; and provided, further, that the Borrower shall not be
responsible for any costs or expenses in connection with any change of an
Applicable Lending Office that was not consented to in writing by the Borrower
in its discretion.

"APPLICABLE MARGIN" shall mean, with respect to any Loan that is a Eurodollar
Loan, a rate per annum equal to 5.00%; and with respect to any Loan that is a
Prime Rate Loan, a rate per annum equal to 2.15%.

"APPLICABLE TAXES" shall have the meaning assigned to such term in Section
5.06(a).

"APPROVED FUND" shall mean, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

"AUTHORIZED OFFICER" shall mean, (a) with respect to any Person that is a
corporation, the President, Vice President, Treasurer, Controller, Assistant
Treasurer, Secretary or Assistant Secretary of such Person; (b) with respect to
any Person that is a partnership, the President, Vice President, Treasurer,
Controller, Assistant Treasurer, Secretary or Assistant Secretary of the
managing general partner of such Person; and (c) with respect to any Person that
is a limited liability company, the President, Vice President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary of such Person or of the
managing member of such Person.

"BANKRUPTCY CODE" shall mean Title II of the United States Code entitled
"Bankruptcy" or any successor statute, and all rules promulgated thereunder.

"BASLE ACCORD" shall mean the proposals for a risk-based capital framework
described by the Basle Committee on Banking Regulation and Supervisory Practices
in its paper entitled "International Convergence of Capital Measurement and
Capital Standards" dated July 1988.

"BLM" shall mean the United States Department of the Interior, Bureau of Land
Management.

"BLM LEASES" shall mean the following leases between BLM and the Borrower: CACA
964, CACA 966, CACA 1903, CACA 6217, CACA 6218, CACA 17568, CACA 25081, and CACA
6219.

"BORROWER" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.

                       Schedule I to the Credit Agreement

                                      I-4

"BORROWER EQUITY INTEREST PLEDGE" shall mean the Pledge Agreement executed by
the Sponsor in favor of the Collateral Agent for the benefit of the Secured
Parties, substantially in the form of Exhibit B-2.

"BORROWER SECURITY AGREEMENT" shall mean the Borrower Security Agreement
executed by the Borrower in favor of the Collateral Agent for the benefit of the
Secured Parties, substantially in the form of Exhibit B-l.

"BUSINESS DAY" shall mean any day on which commercial banks are not authorized
or required to close in New York City and, if such day relates to a borrowing
of, a payment or prepayment of principal of or interest on, a Conversion of or
into, a Continuation of, or an Interest Period for, a Eurodollar Loan or a
notice by the Borrower with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.

"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property of such Person to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under the relevant Accounting Principles with
respect to such Person (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board) and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with the relevant Accounting Principles with
respect to such Person (including such Statement No. 13).

"CHARTER DOCUMENTS" shall mean, with respect to any Person, the articles of
incorporation, bylaws, limited liability company agreements, partnership
agreements or such other documents or instruments that are required to be
registered or lodged in the place of incorporation, formation or organization of
such Person and which establish the legal existence of such Person.

"CLASS" shall have the meaning assigned to such term in Section 1.02.

"CLOSING DATE" shall mean the date on which: (a) all of the conditions set out
in Section 6.01 shall have been satisfied or waived by the Lenders; and (b) the
initial extension of credit hereunder shall occur.

"CLOSING PRO FORMA" shall mean pro forma cash flow projections for the Borrower
certified by an Authorized Officer of the Borrower, together with a detailed
statement of the assumptions underlying such projections, in form, scope and
substance satisfactory to the Independent Engineer and demonstrating, without
consideration of the Upgrade Project or any borrowing of the Additional Term
Loan Facility, that the Borrower's Debt Service Coverage Ratio for each year
during such period is not less than 1.50:1.

"CODE" shall mean the Internal Revenue Code of 1986, any successor statute, and
all rules and regulations promulgated thereunder.

                       Schedule I to the Credit Agreement

                                      I-5

"COLLATERAL" shall mean, collectively, the "Collateral" as defined in each
Security Document and all other collateral of whatsoever nature purported to be
subject to the Lien of any Security Document.

"COLLATERAL AGENT" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.

"COMMITMENT FEES" shall mean, collectively, the fees payable to the
Administrative Agent pursuant to Section 2.04(a), (b) and (d).

"COMMITMENTS" shall mean, at any time for any Lender, such Lender's Initial Term
Loan Commitment and Additional Term Loan Commitment.

"CONDEMNATION" shall mean any taking, seizure, condemnation, confiscation or
requisition, including severance damage, by eminent domain or by inverse
condemnation or for any public or quasi-public use under any Government Rule or
any conveyance in anticipation thereof.

"CONDEMNATION PROCEEDS" shall mean all compensation, awards, damages and other
payments or relief arising out of any Condemnation or any part thereof.

"CONSENT AND AGREEMENT" shall mean each agreement among a Project Party and the
Collateral Agent, providing for the consent by such Project Party to the
collateral assignment by the Borrower to the Collateral Agent of the Borrower's
rights under each Project Document between the Borrower and such Project Party.

"CONTEST" shall mean with respect to any Person, with respect to any Taxes or
any Lien imposed on Property of such Person (or the related underlying claim for
labor, material, supplies or services) by any Government Authority for Taxes or
any Mechanics' Lien (each, a "SUBJECT CLAIM"), a contest of the amount, validity
or application, in whole or in part, of such Subject Claim pursued in good faith
and by appropriate legal, administrative or other proceedings diligently
conducted so long as: (a) prior to commencing such contest, such Person shall
have advised the Administrative Agent of the Subject Claim and the nature of the
contest; (b) reserves have been established with respect to Subject Claim in the
amount required by and otherwise in accordance with any relevant Accounting
Principles; (c) during the period of such contest, the enforcement of such
Subject Claim is effectively stayed and any Lien arising thereby shall be
effectively removed of record by the posting of a surety bond or similar
instrument permitted hereunder by a reputable surety company or, with the
consent of the Majority Lenders (not to be unreasonably withheld, conditioned or
delayed), the posting of security satisfactory to the Majority Lenders, in
either case in an amount sufficient to assure the discharge of the Subject Claim
and any actual or proposed deficiency, additional charge, penalty or expense
arising from or incurred as a result of such contest; (d) neither such Person,
its officers, nor any Financing Party could be exposed to any risk of criminal
liability or civil liability as a result of such contest; and (e) such contest
and any resultant failure to pay such Subject Claim under the circumstances
described above could not otherwise reasonably be expected to have a Material
Adverse Effect or result in the loss or forfeiture of any Property of such
Person. The term "CONTEST" used as a verb shall have a correlative meaning.

                       Schedule I to the Credit Agreement

                                       1-6

"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the continuation
pursuant to Section 2.0l(c) of a Eurodollar Loan as a Eurodollar Loan from one
Interest Period to the next Interest Period.

"CONVERSION/CONTINUATION NOTICE" shall mean a conversion or continuation notice
substantially in the form of Exhibit E hereto and duly completed and executed by
the Borrower.

"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion of Loans of
one Type into Loans of another Type.

"DEBT SERVICE" shall mean, for any period, the sum, computed without
duplication, of the following: (a) all amounts payable by the Borrower to the
Lenders in respect of principal of Indebtedness during such period; plus (b) all
amounts payable by the Borrower to the Lenders in respect of Interest Expense
for such period; plus (c) all fees payable in accordance with Section 2.04; plus
(d) all other amounts payable by the Borrower during such period to the Secured
Parties (in each case, upon the payment date thereof, by acceleration or
otherwise).

"DEBT SERVICE COVERAGE RATIO" shall mean, for any period, the quotient of: (a)
Project Cash Flow for such period; divided by (b) Debt Service (other than
prepayments of Loans pursuant to Sections 3.03 and 3.04) payable during such
period.

"DEBT SERVICE RESERVE ACCOUNT" shall have the meaning assigned to such term in
the Depositary Agreement.

"DEBT SERVICE RESERVE REQUIRED AMOUNT" shall mean, as of any date of
determination, the amount that is equal to one-third (1/3) of the aggregate
scheduled Debt Service for the next twelve-month period (or such shorter period
as shall end on the Final Maturity Date).

"DEED OF TRUST" shall mean that certain leasehold deed of trust executed by the
Borrower in favor of the Collateral Agent as of the Closing Date and encumbering
the Projects to secure the payment of the Secured Obligations.

"DEFAULT" shall mean an event that, after giving of notice, lapse of time or the
fulfillment of any contingency (or any combination of the foregoing), would
become an Event of Default.

"DEPOSITARY AGREEMENT" shall mean the Depositary Agreement among the
Administrative Agent, the Collateral Agent, Wealth Management, a division of
Hudson United Bank, as Depositary Bank, and the Borrower, substantially in the
form of Exhibit C.

"DEPOSITARY BANK" shall have the meaning assigned to such term in the Depositary
Agreement.

"DEVELOP" and "DEVELOPMENT" shall mean, with respect to any Project, the
acquisition, ownership, leasing, occupation, construction, testing, repair,
operation, maintenance and use of such Project and the financing of such
Project.

"DISBURSEMENT" shall mean the making of any Loan pursuant to the Initial Term
Loan Facility or the Additional Term Loan Facility.

                       Schedule I to the Credit Agreement

                                      I-7

"DISTRIBUTION CERTIFICATE" shall mean a Distribution Certificate and related
attachments and certifications, substantially in the form of Exhibit G, executed
by an Authorized Officer of the Borrower, and otherwise duly completed.

"DISTRIBUTION DATE" shall mean any Quarterly Date or Extended Restricted Payment
Date on which the Borrower is permitted, in accordance with the Financing
Documents, to make equity distributions.

"DOLLARS" and "$" shall mean lawful money of the United States.

"ELIGIBLE ASSIGNEE" means:

(a)  any Lender or any Affiliate or Approved Fund of a Lender; and

(b)  any bank, institutional investor or other financial institution having
     combined capital and surplus in excess of $100,000,000; provided that
     neither such entity nor any of its Subsidiaries is an Affiliate of the
     Borrower.

"EMERGENCY OPERATING COSTS" shall mean those amounts required to be expended in
order to prevent or mitigate the consequences of an event or circumstance that
was unforeseeable at the time of the Borrower's delivery of the then-current
Annual Operating Plan and Budget and that, in the good-faith judgment of the
Operator and/or the Borrower, requires the taking of immediate measures to
prevent or mitigate an emergency situation.

"ENERGY SERVICES AGREEMENT" shall mean the Energy Services Agreement,
substantially in the form of the draft thereof dated as of December 20, 2002, to
be entered into between the Borrower and Imperial Irrigation District pursuant
to the Memorandum of Understanding dated as of November 21, 2002 by and between
the Borrower and Imperial Irrigation District that will replace the Interim
Distribution Service Agreement dated March 8, 1999 between the Borrower and
Imperial Irrigation District.

"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any notice, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
communication by any other Person alleging or asserting such first Person's
liability for investigatory costs, clean-up costs, governmental response costs,
damages to natural resources or other Property of such second Person, personal
injuries, fines or penalties or seeking injunctive relief, in each case arising
out of, based on or resulting from: (a) the presence, Use or Release into the
environment of any Hazardous Material at any location, whether or not owned by
such first Person that is not otherwise in compliance with applicable
Environmental Laws; or (b) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include any claim by any Government
Authority for enforcement, clean-up, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and any claim
by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.

                       Schedule I to the Credit Agreement

                                      I-8

"ENVIRONMENTAL LAWS" shall mean any and all Government Rules to the extent
relating to the environment or human health, or the Release or threatened
Release of Hazardous Materials into the environment including ambient air, soil,
surface water, groundwater, wetlands, land or subsurface strata or otherwise
relating to the Use of Hazardous Materials, whether now or hereafter in effect.

"ENVIRONMENTAL PARTY" shall mean the Borrower, the Operator, or any other Person
involved in the development, construction, operation or maintenance of any
Project (other than any Financing Party) and any officer, director, employee or
agent of any of the foregoing in his or her capacity as such.

"ERISA" means the Employee Retirement Income Security Act of 1974, any successor
statute, and all rules and regulations promulgated thereunder.

"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

"ERISA EVENT" means: (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

"EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar Loan for any
Interest Period therefor, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for the
offering of Dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the Eurodollar Base Rate for such Interest Period shall be the arithmetic mean
(rounded upwards, if necessary, to the

                       Schedule I to the Credit Agreement

                                      I-9

nearest 1/100 of 1%) of the respective rates per annum quoted by each Reference
Bank at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on the date two Business Days prior to the first day of such
Interest Period for the offering by such Reference Bank to leading banks in the
London interbank market of Dollar deposits having a term comparable to such
Interest Period and in an amount comparable to the principal amount of such
Eurodollar Loan for such Interest Period.

"EURODOLLAR LOANS" shall mean Loans that bear interest at rates determined on
the basis of the Eurodollar Rate.

"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Administrative Agent to be equal to (a) the Eurodollar
Base Rate for such Loan for such Interest Period divided by (b) 1 minus the
Reserve Requirement for such Loan for such Interest Period.

"EVENT OF DEFAULT" shall have the meaning assigned to such term in Section 9.01.

"EVENT OF LOSS" shall mean, with respect to any Property of the Borrower, any
loss of, destruction of or damage to, or any condemnation (including a
Condemnation) or other taking of, such Property.

"EXECUTION DATE" shall mean the date on which this Agreement shall have been
signed by all of the parties intended to be a party hereto.

"EXPERT CONSULTATION" shall mean, with respect to any matter, such consultation
(which may be oral or in writing) with the Independent Engineer, the Insurance
Advisor, legal counsel or such other expert advisors as may be engaged in
connection with such matter as either Agent (or the Majority Lenders through
such Agent) shall deem appropriate under the particular circumstances.

"EXTENDED RESTRICTED PAYMENT DATE" shall have the meaning assigned to such term
in Section 8.13(a).

"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that: (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day; and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to United
on such day on such transactions as determined by the Administrative Agent.

"FERC" shall mean the Federal Energy Regulatory Commission.

 "FINAL MATURITY DATE" shall mean the fifth anniversary of the Closing Date.

                       Schedule 1 to the Credit Agreement

                                      I-10

"FINANCING DOCUMENTS" shall mean this Agreement, the Notes, the Security
Documents, each Consent and Agreement and each Interest Rate Cap Agreement.

"FINANCING PARTY" shall mean any Lender, the Depositary Bank, the Collateral
Agent or the Administrative Agent.

"FOREIGN LENDER" shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

"FPA" shall mean the Federal Power Act and the rules and regulations promulgated
thereunder.

"FUNDING AND CONSTRUCTION AGREEMENT" shall mean the Funding and Construction
Agreement (Heber-Mirage Transmission Line), dated as of June 29, 1987, between
the Borrower, Imperial Irrigation District, and the other Participants named
therein.

"GEM 2 PROJECT" shall mean the nominal 20.5 MW geothermal power plant, employing
double flash design, located at East Mesa, Imperial County, California. The GEM
2 Project has been mothballed and is not currently operating.

"GEM 3 PROJECT" shall mean the nominal 20.5 MW geothermal power, employing
double flash design, plant located at East Mesa, Imperial County, California.

"GOVERNMENT APPROVAL" shall mean: (a) any authorization, consent, approval,
license, lease, ruling, permit, tariff, rate, certification, exemption, filing,
variance, claim, order, judgment, decree, sanction or publication of, by or
with; (b) any notice to; (c) any declaration of or with; or (d) any registration
by or with, or any other action or deemed action by or on behalf of, any
Government Authority or (e) to the extent any such Government Approval
materially references such application, any application therefor for in each
case relating to: (i) the due execution and delivery of, and the performance by
each intended party (other than the Financing Parties) of its obligations and
the exercise of its rights under, each Transaction Document to which it is (or
is intended to be) a party; or (ii) the Development of any Project as
contemplated by the Transaction Documents.

"GOVERNMENT AUTHORITY" shall mean any federal, state, municipal, local,
territorial, or other governmental department, commission, board, bureau,
agency, regulatory authority, instrumentality, judicial or administrative body,
domestic or foreign.

"GOVERNMENT RULE" shall mean any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive or rule of common law, requirement of, or other
governmental restriction or any similar form of decision of or determination by,
or any interpretation or administration of any of the foregoing by, any
Government Authority, whether now or hereafter in effect.

"GUARANTEE" shall mean a guarantee, an indemnity obligation in respect of
guarantees or performance bonds, an endorsement, a contingent agreement to
purchase or to furnish funds for

                       Schedule I to the Credit Agreement

                                      I-11

the payment or maintenance of, or otherwise to be or become contingently liable
under or with respect to, or an agreement to assure a creditor against loss with
respect to, any Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property of any Person,
products, materials, supplies or services primarily for the purpose of enabling
a debtor to make payment of his, her or its obligations or an agreement to
assure a creditor against loss, and including causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or deposit
in the ordinary course of business. The terms "GUARANTEE" and "GUARANTEED" used
as verbs shall have correlative meanings.

"HAZARDOUS MATERIAL" shall mean: (a) any petroleum or petroleum products,
flammable materials, explosives, radioactive materials, asbestos that is
friable, urea formaldehyde foam insulation and equipment that contains
dielectric fluid containing polychlorinated biphenyls; (b) any materials or
substances which are defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental
Law; and (c) any other material or substance, exposure to which is prohibited,
limited or regulated as such under any Environmental Law including the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., or any similar state statute.

"HISTORICAL COMPUTATION PERIOD" shall mean, on any Distribution Date, the period
of four consecutive complete fiscal quarters of the Borrower ending on or
immediately prior to such Distribution Date.

"IMPAIRMENT" shall mean, with respect to any Transaction Document or Government
Approval, the rescission, termination, cancellation, repeal, invalidity,
suspension (other than by reason of events of force majeure to the extent
suspension by reason of events of force majeure is expressly permitted by such
Transaction Document or Government Approval), injunction, inability to satisfy
stated conditions or amendment, modification or supplementation (other than, in
the case of a Project Document, any such amendment, modification or
supplementation effected in accordance with Section 8.22 and, in the case of a
Government Approval, any such amendment, modification or supplementation
effected in accordance with Section 8.03(b)) of such Transaction Document or
Government Approval in whole or in part. The verb "IMPAIR" shall have a
correlative meaning.

"IMPERIAL IRRIGATION DISTRICT" shall mean the Imperial Irrigation District, an
irrigation district organized under the Water Code of the State of California.

"INDEBTEDNESS" shall mean, for any Person without duplication: (a) indebtedness
created, issued or incurred by such Person for borrowed money (whether by loan
or the issuance and sale of debt securities or the sale of Property of such
Person to another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property of such Person from such

                       Schedule I to the Credit Agreement

                                      I-12

Person); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property of such Person or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 120 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for the account of such Person; (e)
obligations of such Person in respect of surety bonds or similar instruments;
(f) Capital Lease Obligations of such Person; (g) any Guarantee issued or
provided by such Person; and (h) Indebtedness of others Guaranteed by such
Person.

"INDEMNITEE" shall have the meaning assigned to such term in Section 11.03(b).

"INDEPENDENT ENGINEER" shall mean Harris Group Inc., and/or such other Person as
the Administrative Agent may engage on behalf of the Lenders to act as
Independent Engineer for the purposes of this Agreement.

"INITIAL SURVEY" shall have the meaning assigned to such term in Section
6.01(f)(ii).

"INITIAL TERM LOAN AVAILABILITY PERIOD" shall mean the period from (and
including) the Closing Date through (and including) February 28, 2003.

"INITIAL TERM LOAN COMMITMENT" shall mean, for each Lender, the obligation of
such Lender to make Initial Term Loans up to an aggregate principal amount at
any one time outstanding equal to the amount set out opposite such Lender's name
in Schedule III under the heading "Initial Term Loan Commitment" (as the same
may be adjusted from time to time pursuant to Section 2.03 or as a consequence
of an assignment in accordance with Section 11.06(b)). The maximum aggregate
amount of the Initial Term Loan Commitments of the Lenders available to the
Borrower at any time shall not exceed $20,000,000.

"INITIAL TERM LOAN FACILITY" shall mean the credit facility to be provided
pursuant to Section 2.01 (a).

"INITIAL TERM LOAN NOTE" shall have the meaning assigned to such term in Section
2.07(a).

"INITIAL TERM LOANS" shall have the meaning assigned to such term in Section
2.01 (a).

"INSURANCE ADVISOR" shall mean Hudson Insurance Services, Inc. and/or such other
Person as the Administrative Agent may engage on behalf of the Lenders to act as
Insurance Advisor for the purposes of this Agreement.

"INTEREST EXPENSE" shall mean, for any period, the sum of the following: (a) all
interest in respect of Indebtedness accrued or capitalized during such period
(whether or not actually paid during such period); plus (b) the net amounts
payable (or minus the net amounts receivable) under Interest Rate Cap Agreements
accrued during such period (whether or not actually paid or received during such
period).

                       Schedule I to the Credit Agreement

                                      I-13

"INTEREST PERIOD" shall mean, in respect of any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Loan of
another Type or (in the event of a Continuation) the last day of the next
preceding Interest Period for such Loan, and ending on the numerically
corresponding day in the third calendar month thereafter, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a) no
Interest Period may end after the Final Maturity Date; (b) each Interest Period
that would otherwise end on a day that is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the immediately preceding Business Day);
and (c) notwithstanding clause (a) above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loan would otherwise be a shorter period, such Loan shall not be available
hereunder.

"INTEREST RATE CAP AGREEMENT" shall mean any interest rate cap agreement or
similar arrangement providing for the transfer or mitigation of interest risks
either generally or under specific contingencies in a manner satisfactory to the
Majority Lenders, which is entered into by the Borrower pursuant to Section
8.16.

"INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for cash,
Property of such Person, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another Person subject
to an understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension of
credit having a term not exceeding 90 days representing the purchase price of
inventory or supplies sold in the ordinary course of business); (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person; and (d)
the entering into of any Interest Rate Cap Agreement.

"LEASEHOLD PROPERTIES" shall mean the land and premises described as "Property"
on Exhibit A to the Deed of Trust.

"LENDERS" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.

"LIEN" shall mean, with respect to any Property of any Person, any mortgage,
lien, pledge, charge, lease, easement, servitude, right of others or security
interest or encumbrance of any kind in respect of such Property. For purposes of
this Agreement and the other Financing Documents, any Person shall be deemed to
own subject to a Lien any Property that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an operating lease)
relating to such Property.

                       Schedule I to the Credit Agreement

                                      I-14

"LLC AGREEMENT" shall mean the Second Amended and Restated Limited Liability
Company Agreement of the Borrower, dated as of December 27, 2002, executed by
the Sponsor and the Borrower.

"LOANS" shall mean the loans made by the Lenders to the Borrower pursuant to
Section 2.01.

"LOSS PROCEEDS" shall mean, with respect to any Event of Loss, insurance
proceeds, condemnation awards (including Condemnation Proceeds) or other
compensation, awards, damages and other payments or relief (exclusive, in each
case, of the proceeds of liability insurance and business interruption insurance
and other payments for interruption of operations) with respect to any Event of
Loss, less any expenses reasonably incurred by Borrower in collecting such
amounts.

"MAJOR PROJECT PARTY" shall mean the Borrower, the Operator, the Imperial
Irrigation District, SCE and any counterparty to any other Project Document.

"MAJORITY LENDERS" shall mean, subject to the penultimate paragraph of Section
11.04, as of any date of determination prior to the Closing Date, the Lenders
holding at least 50.1% of the aggregate Commitments, and as of any date of
determination thereafter, the Lenders holding at least 50.1% of the aggregate
principal amount of Loans then outstanding.

"MARGIN STOCK" shall mean margin stock within the meaning of Regulation U and
Regulation X.

"MATERIAL ADVERSE EFFECT" shall mean, a material adverse effect on:

(a)  the business, operations, Property, assets or condition (financial or
     otherwise), liabilities, or capitalization of the Borrower;

(b)  the ability of the Borrower, the Operator, SCE or the Imperial Irrigation
     District to perform its respective material obligations under any
     Transaction Document to which it is a party;

(c)  the validity or enforceability of any Transaction Document in its entirety
     or with respect to any material provision thereof (including, in the case
     of any Security Document, any Lien in favor of the Collateral Agent for the
     benefit of the Secured Parties thereunder);

(d)  the timely payment of the principal of or interest on the Loans; or

(e)  the ability of the Projects to maintain their QF status under PURPA.

"MECHANICS' LIENS" shall mean carriers', warehousemen's, mechanics', workmen's,
materialmen's, construction or other like statutory Liens (other than Liens
described in paragraphs (a) and (b) of the definition of "Permitted Liens").

"MERGER DOCUMENTS" shall mean (i) the Agreement and Plan of Merger by and among
the Borrower, GEM Resources LLC, a Delaware limited liability company, Ormesa
Geothermal, Ormesa Geothermal II, and OrResource, a California general
partnership, dated as of

                       Schedule I to the Credit Agreement

                                      I-15

December 16,2002 and (iii) the Statement of Merger filed with the Secretary of
State of the State of California on December 16,2002.

"MOODY'S" means Moody's Investors Service, Inc.

"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

"NON-MATERIAL PROJECT CONTRACTS" shall mean any contracts or agreements entered
into by the Borrower in the ordinary course of business in connection with any
Project under which the Borrower shall have obligations not in excess of
$2,000,000 under any such agreement, excluding, however: (a) any contract or
agreement providing for non-monetary obligations of the Borrower the performance
or non-performance of which could reasonably be expected to have a Material
Adverse Effect; and (b) any contract or agreement providing for: (i) the
conveyance to the Borrower of Real Property or rights therein (including
leasehold interests, easements or licenses) that are integral to such Project;
or (ii) the acquisition by the Borrower of other Property, or the delivery to
the Borrower of services, that are integral to such Project; with respect to
contracts or agreements to which the Borrower is a party, any contracts or
agreements relating to Permitted Indebtedness of the type described in clause
(h) of the definition thereof at any time the aggregate amount of all such
Permitted Indebtedness (measured as equivalent to the total contingent liability
of the Borrower assumed under all such contracts and agreements) would exceed
$2,000,000. For purposes of this definition, indemnity or similar obligations of
the Borrower subject to a maximum dollar amount shall be computed at such
amount, and all other indemnity or similar obligations of the Borrower shall be
computed at the amount thereof which could, at the time such agreement is
entered into, reasonably be expected to become due and payable. Notwithstanding
the foregoing, contracts or agreements customarily used in connection with the
acquisition of Permitted Investments described in paragraphs (a), (b), (c) and
(d) of the definition of "Permitted Investments" shall be deemed to be
Non-Material Project Contracts.

"NON-RECOURSE PERSON" shall have the meaning assigned to such term in Section
11.09.

"NOTES" shall mean, collectively, the Initial Term Loan Notes and the Additional
Term Loan Notes.

"NOTICE OF BORROWING" shall mean a notice of borrowing of Loans hereunder
substantially in the form of Exhibit D hereto and duly completed and executed by
the Borrower.

"O&M CONTRACT" shall mean the Operations and Maintenance Agreement dated as of
April 15, 2002, between the Operator and the Borrower and any other contract or
agreement between the Borrower and any other Person whereby such other Person
agrees to operate and/or maintain a Project on behalf of the Borrower.

"OECS" shall mean modular Ormat Energy Converters, organic Rankine cycle modular
power plants utilizing geothermal fluid and sweetwater to vaporize organic
motive fluid to generate electricity.

                       Schedule I to the Credit Agreement

                                      I-16

"OGII PROJECT" shall mean the nominal 18.5 MW geothermal power plant utilizing
20 OECs and employing binary technology located at East Mesa, Imperial County,
California.

"OGI PPA" shall mean the Power Purchase Contract dated July 18, 1984 between the
Borrower and SCE, as amended by (i) Amendment No. 1 thereto dated December
23, 1988, (ii) Agreement Addressing Renewable Energy Pricing and Payment Issues
between the Borrower and SCE dated as of June 19, 2001, and identified by SCE as
QFID No. 3010, and (iii) Amendment No. 1 to Agreement Addressing Renewable
Energy Pricing and Payment Issues, dated November 29, 2001.

"OGII PPA" shall mean the Power Purchase Contract dated June 13, 1984 between
the Borrower and SCE, as amended by (i) an Agreement Addressing Renewable Energy
Pricing and Payment Issues between the Borrower and SCE dated as of June
19, 2001, and identified by SCE as QFID No. 3012, and (ii) Amendment No. 1 to
Agreement Addressing Renewable Energy Pricing and Payment Issues, dated November
29, 2001.

"OPERATING YEAR" shall mean the period commencing on the Closing Date and ending
on December 31, 2003 and each successive 12-month period thereafter.

"OPERATION AND MAINTENANCE EXPENSES" shall mean, for any period, the sum of the
following for each Project, computed without duplication: (a) expenses of
administering and operating such Project and of maintaining it in good repair
and operating condition payable during such period, including, without
duplication, amounts payable during such period under the O&M Agreement; plus
(b) direct operating and maintenance costs of such Project payable during such
period; plus (c) insurance costs payable during such period; plus (d) sales and
excise taxes payable by or on behalf of the Borrower with respect to the sale of
electrical energy during such period; plus (e) property taxes payable by or on
behalf of the Borrower during such period; plus (f) franchise taxes payable by
or on behalf of the Borrower during such period; plus (g) costs and fees
attendant to obtaining and maintaining in effect the Government Approvals
payable during such period; plus (h) reasonable legal, accounting and other
professional fees attendant to any of the foregoing items payable during such
period; plus (i) federal and state income taxes payable by or on behalf of the
Borrower during such period; plus (j) electrical start-up costs and
interconnection fees. Operation and Maintenance Expenses shall exclude, to the
extent otherwise included, any depreciation or other non-cash expense during or
for such period.

"OPERATOR" shall mean Ormat Nevada Inc., a Delaware corporation, and/or any
successor operator of any Project.

"ORMESA I PROJECT" shall mean the nominal 24 MW geothermal power plant employing
binary technology located at East Mesa, Imperial County, California.

"ORMESA IE PROJECT" shall mean the nominal 10 MW geothermal power plant
employing binary technology located at East Mesa, Imperial County, California.

"ORMESA IH PROJECT" shall mean the nominal 10 MW geothermal power plant
employing binary technology located at East Mesa, Imperial County, California.

                       Schedule I to the Credit Agreement

                                      I-17

"OTHER MATERIAL PROJECT CONTRACT" shall mean any contract or agreement relating
to the Development of any Project to which, on and as of the Closing Date, the
Borrower is party, other than: (a) any Non-Material Project Contracts; and (b)
any Financing Documents.

"PARTICIPANT" shall have the meaning assigned to such term in Section 11.06(c).

"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

"PERMITTED INDEBTEDNESS" shall mean:

(a)  Indebtedness under this Agreement;

(b)  Indebtedness of the type described in paragraph (b) of the definition of
     "Indebtedness" in respect of current accounts and other amounts payable
     under Project Documents or Non-Material Project Contracts in the ordinary
     course of business, but only to the extent such amounts are incurred in
     connection with any Project, including any Upgrade Project (and only to the
     extent such Indebtedness is contemplated in the then-current Annual
     Operating Plan and Budget in relation to such Project);

(c)  any Interest Rate Cap Agreement; and

(d)  Indebtedness owed by the Borrower to the Sponsor in an aggregate principal
     amount not exceeding $35,000,000 under the Subordinated Promissory Note
     dated December 31, 2002 made by the Borrower in favor of the Sponsor.

"PERMITTED INVESTMENTS" of any Person shall mean:

(a)  direct obligations of the United States, or of any agency thereof, or
     obligations guaranteed as to principal and interest by the United States or
     any agency thereof, maturing in not more than 90 days from the date of
     acquisition thereof by such Person;

(b)  time deposits or certificates of deposit issued by any Lender or any other
     bank or trust company that is organized under the laws of the United States
     or any state thereof and has capital, surplus and undivided profits of at
     least $500,000,000 and outstanding senior unsecured long-term debt which is
     rated "AA" or better by S&P and "Aa2" or better by Moody's (or an
     equivalent rating by another nationally recognized statistical rating
     organization of similar standing if neither such corporation is in the
     business of rating unsecured bank indebtedness), maturing in not more than
     90 days from the date of acquisition thereof by such Person;

(c)  commercial paper rated (on the date of acquisition thereof by such Person)
     "A-l" or "P-l" by S&P and Moody's, respectively (or an equivalent rating
     by another nationally recognized statistical rating organization of similar
     standing if neither of such corporations is then in the business of rating
     commercial paper), maturing in not more than 90 days from the date of
     acquisition thereof by such Person;

                       Schedule I to the Credit Agreement

                                      I-18

(d)  repurchase agreements with any Lender or any other bank or trust company
     that is organized under the laws of the United States or any state thereof
     and has capital, surplus and undivided profits of at least $500,000,000 and
     outstanding senior unsecured long-term debt which is rated "AA" or better
     by S&P and "Aa2" or better by Moody's (or an equivalent rating by another
     nationally recognized statistical rating organization of similar standing
     if neither such corporation is in the business of rating unsecured bank
     indebtedness), with maturities not in excess of 30 days relating to
     securities referred to in paragraph (a) above;

(e)  investments in mutual and money market funds organized under the laws of
     the United States of America or any state thereof, in each case sponsored
     by a securities broker dealer of recognized national standing, with a
     consistent dollar value and whose investments are limited to investments
     described in any one or more of the foregoing clauses having a rating of
     "AA" or "A-l" or better by S&P or "Aa2" or "P-l" or better by Moody's;

(f)  for purposes of Sections 7.21, 8.12 and 8.15, the Project Documents and the
     Non-Material Project Contracts to the extent the same constitute
     Investments; and

(g)  for purposes of Sections 7.21, 8.12 and 8.15, the Interest Rate Cap
     Agreements entered into by the Borrower in accordance with Section 8.16.

"PERMITTED LIENS" shall mean:

(a)  Liens under worker's compensation, unemployment insurance or other social
     security legislation (other than ERISA) and Liens to secure other statutory
     obligations, in each case for which appropriate reserves have been made;

(b)  Liens imposed by any Government Authority for Taxes that are not yet due or
     that are being Contested;

(c)  Mechanics' Liens arising in the ordinary course of business or incident to
     the construction, improvement or Restoration of a Project in respect of
     obligations which are not yet due or which are being Contested and which do
     not in the aggregate exceed $250,000;

(d)  minor defects, easements, rights-of-way, restrictions and other similar
     encumbrances incurred in the ordinary course of business and encumbrances
     consisting of zoning restrictions, licenses, restrictions on the use of
     property or minor imperfections in title that do not materially impair the
     property affected thereby for the purpose for which title was acquired or
     interfere with the Development of any Project and that individually or in
     the aggregate could not reasonably be expected to result in a Material
     Adverse Effect;

(e)  Liens created pursuant to this Agreement and the Security Documents or
     otherwise in favor of a Financing Party;

                       Schedule I to the Credit Agreement

                                      I-19

(f)  Liens to secure obligations incurred in the ordinary course of business
     (excluding any obligation to repay borrowed money) under the Project
     Documents to which it is a party and for which appropriate reserves have
     been made;

(g)  Liens resulting from any money judgment, writ or warrant of attachment in
     an aggregate amount not exceeding $50,000;

(h)  leases entered into by the Borrower with any Person (other than an
     Affiliate of the Borrower) in the ordinary course of business; provided
     that: (i) annual payments under such leases do not exceed $50,000 in the
     aggregate at any time; (ii) such leases do not individually or in the
     aggregate interfere with the Development of such Project; and (iii) such
     leases individually or in the aggregate could not reasonably be expected to
     result in a Material Adverse Effect;

(i)  those matters listed as exceptions to title (except California mechanics'
     liens but including Mechanics' Liens referred to clause (c) above) as set
     out in the Title Policy as of the Closing Date;

(j)  any interests or estates now or hereafter permitted by the BLM in
     accordance with its rules and regulations; and

(k)  Liens of any judgment rendered or claim filed in connection with any
     Project, which the Borrower or others on its behalf are contesting
     diligently and in good faith by appropriate proceedings, for which adequate
     reserves have been established in accordance with applicable Accounting
     Principles and which do not in the aggregate exceed $100,000.

"PERMITTED TRANSFEREE" shall mean (A) any Affiliate of the transferor or (B) any
third-party transferee that, in each case, (i) is a financial institution or
another entity experienced in the ownership or operation of renewable power
generation facilities, (ii) shall have agreed that the transferred Collateral
shall remain subject to the Lien of the Borrower Equity Interest Pledge and
(iii) shall have executed and delivered such instruments and documents that are,
in the reasonable opinion of the Collateral Agent, necessary to carry out the
purposes of the Borrower Equity Interest Pledge.

"PERSON" shall mean any individual, firm, corporation, company, limited
liability company, voluntary association, partnership, joint venture, trust,
unincorporated organization, Government Authority, committee, department
authority or any other body, whether incorporated or unincorporated.

"PLAN" means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

                       Schedule I to the Credit Agreement

                                      I-20

"PLANS AND SPECIFICATIONS" shall mean, for any Project, the drawings, plans,
specifications, operating and maintenance manuals, and other similar data and
documentation describing the technical parameters of such Project.

"PLANT" shall mean, for any Project, the electrical generating plant consisting
of electrical generating components, the electrical interconnection, associated
materials and environmental control equipment and ancillary structures,
equipment and systems.

"PLANT CONNECTION AGREEMENTS" means, collectively, (a) the Plant Connection
Agreement dated as of October 1, 1985, between the Borrower and Imperial
Irrigation District for the Ormesa I Project, providing, among other things, for
the connection of such Project to Imperial Irrigation District's electric system
for the delivery by the Borrower of the electrical output of such Project to
Imperial Irrigation District for the account of SCE, (b) the Plant Connection
Agreement dated as of October 21, 1988, between the Borrower and Imperial
Irrigation District for the Ormesa IH Project, providing, among other things,
for the connection of such Project to Imperial Irrigation District's electric
system for the delivery by the Borrower of the electrical output of such Project
to Imperial Irrigation District for the account of SCE, (c) the Plant Connection
Agreement dated as of October 3, 1989, between the Borrower and Imperial
Irrigation District for the Ormesa IH Project, providing, among other things,
for the connection of such Project to Imperial Irrigation District's electric
system for the delivery by the Borrower of the electrical output of such Project
to Imperial Irrigation District for the account of SCE, (d) the Plant Connection
Agreement dated as of May 26, 1987, between the Borrower and Imperial Irrigation
District for the OGII Project, providing, among other things, for the connection
of such Project to Imperial Irrigation District's electric system for the
delivery by the Borrower of the electrical output of such Project to Imperial
Irrigation District for the account of SCE, (e) the Plant Connection Agreement
dated as of March 21, 1989, between the Borrower and Imperial Irrigation
District for the GEM 2 Project, providing, among other things, for the
connection of such Project to Imperial Irrigation District's electric system for
the delivery by the Borrower of the electrical output of such Project to
Imperial Irrigation District for the account of SCE, and (f) the Plant
Connection Agreement dated as of March 21, 1989, between the Borrower and
Imperial Irrigation District for the GEM 3 Project, providing, among other
things, for the connection of such Project to Imperial Irrigation District's
electric system for the delivery by the Borrower of the electrical output of
such Project to Imperial Irrigation District for the account of SCE.

"POST-DEFAULT RATE" shall mean, in respect of any principal of any Loan or any
other amount under this Agreement, any Note, or any other Financing Document
that is not paid when due (whether at stated maturity, by acceleration, by
optional or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to: (a) in the case of overdue principal of any
Loan, 2% plus the interest rate otherwise applicable to such Loan; or (b) in the
case of any other amount, the Prime Rate plus the Applicable Margin plus 2%.

"PPAS" shall mean the OGI PPA and the OGII PPA.

"PRIME RATE" shall mean, for any day, the prime commercial lending rate most
recently published in The Wall Street Journal.

                       Schedule I to the Credit Agreement

                                      I-21

"PRIME RATE LOANS" shall mean Loans which bear interest at rates determined upon
the basis of the Prime Rate.

"PRINCIPAL OFFICE" shall mean the principal office of the Administrative Agent
presently located at Mahwah, New Jersey.

"PROJECT" shall mean each of the Ormesa I Project, the Ormesa IE Project, the
Ormesa IH Project, the OGII Project, the GEM 2 Project, the GEM 3 Project and
the Resource, which, in each case, shall include the Plant and Site of such
Project.

"PROJECT CASH FLOW" shall mean, without duplication, for any period, the excess
(if any) of: (a) Project Revenues for such period (exclusive of extraordinary or
non-recurring items; over (b) the aggregate Operation and Maintenance Expenses
for such period.

"PROJECT DOCUMENTS" shall mean, without duplication, the PPAs, the Plant
Connection Agreements (as each may be modified by, and to the extent not
terminated by, the Energy Services Agreement), the O&M Contract, the Unit
Agreement, the Transmission Services Agreements (as each may be modified by, and
to the extent not terminated by, the Energy Services Agreement), the Real
Property Documents, the Water Supply Agreement, the Funding and Construction
Agreement, when entered into by the parties thereto and in full force and
effect, the Energy Services Agreement, the SIGC Lease, the Acquisition
Documents, the Restructuring Documents, the Merger Documents, the LLC Agreement,
the Charter Documents of the Borrower and, to the extent not included above, any
Other Material Project Contract and, to the extent not included above and not
constituting a Non-Material Project Contract, each Additional Project Document.

"PROJECTED DEBT SERVICE COVERAGE RATIO" shall mean, on any Distribution Date,
the quotient of (a) Project Cash Flow divided by (b) Debt Service scheduled to
be payable, in each case as reflected in the Closing Pro Forma and, in each
case, for the period of four consecutive complete fiscal quarters of the
Borrower ending on the fourth Quarterly Date next succeeding such Distribution
Date.

"PROJECT PARTY" shall mean each Person (other than any Agent or any Lender) from
time to time party to or otherwise bound by a Project Document.

"PROJECT REVENUES" shall mean, for any period (without duplication), all cash
revenues received by or on behalf of the Borrower during such period from: (a)
the sale of electrical energy, capacity or other ancillary services from any
Project; (b) all interest earned with respect to such period on Permitted
Investments held in the Accounts; (c) excess amounts transferred to the Revenue
Account from the Debt Service Reserve Account in accordance with the Depositary
Agreement during such period; (d) amounts received by the Borrower from Project
Parties constituting the refund of deposits during such period; and (e) all
other income, howsoever earned, or revenue howsoever generated or proceeds of
any nature whatsoever received by or on behalf of the Borrower during such
period. Project Revenues shall exclude, to the extent included: (i) proceeds of
Permitted Indebtedness, and (ii) contributions to the Borrower's capital.

                       Schedule I to the Credit Agreement

                                      I-22

"PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible
and the Real Property.

"PUHCA" shall mean the Public Utility Holding Company Act of 1935, any successor
statute and the rules and regulations promulgated thereunder.

"PURCHASE ORDER" shall mean one or more purchase orders or other arrangements
executed or made by the Borrower to provide for the goods and services necessary
to effect the Tower Repairs.

"PURPA" shall mean the Public Utility Regulatory Policies Act of 1978, any
successor statute and the rules and regulations promulgated thereunder.

"QF" shall mean qualified small power production facilities under PURPA.

"QUARTERLY DATES" shall mean the last day of March, June, September and December
in each year, the first of which shall be the first such day after the Closing
Date.

"QUARTERLY PERIOD" shall mean any period commencing on a Quarterly Date and
ending on the day immediately preceding the next succeeding Quarterly Date.

"REAL PROPERTY" shall mean the land described in the BLM Leases, the Site
Licenses and the ROWS.

"REAL PROPERTY DOCUMENTS" shall mean the BLM Leases, the Site Licenses, the
ROWs, and all documents and agreements in the possession of the Borrower related
thereto.

"RECONSTRUCTION PERIOD" shall have the meaning assigned to such term in Section
8.05(d)(ii)(D).

"REFERENCE BANKS" shall mean JP Morgan Chase and Citibank, N.A. (or their
Applicable Lending Offices, as the case may be), as any of the same may be
replaced by the Administrative Agent (in consultation with the Borrower).

"REGULATION D, REGULATION U AND REGULATION X" shall mean, respectively,
Regulation D, Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System.

"REGULATORY CHANGE" shall mean, with respect to any Lender, any change after the
Execution Date in United States Federal, state or foreign law or regulations
(including Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks including such
Lender of or under any United States Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.

"RELEASE" shall mean, with respect to any Hazardous Material, any release,
spill, emission, emanation, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or

                       Schedule I to the Credit Agreement

                                      I-23

migration of such Hazardous Material into the environment, including the
movement of such Hazardous Material through ambient air, soil, surface water,
groundwater, wetlands, land or subsurface strata.

"REQUIRED PAYMENT" shall have the meaning assigned to such term in Section 4.06.

"RESERVE REQUIREMENT" shall mean, for any Interest Period for any Eurodollar
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required under Regulation D to be
maintained during such Interest Period by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D) in an amount
of $100,000 or more. Without limiting the effect of the foregoing, the Reserve
Requirement shall include any other reserves required to be maintained by such
member banks by reason of any Regulatory Change with respect to: (a) any
category of liabilities which includes deposits by reference to which the
Eurodollar Base Rate is to be determined as provided in the definition of
"Eurodollar Base Rate"; or (b) any category of extensions of credit or other
assets which includes Eurodollar Loans.

"RESOURCE" shall mean the geothermal resource for the Project known as the East
Mesa Field geothermal resource reservoir and well field located adjacent to the
southeast corner of the Imperial Valley, California, approximately 20 miles east
of El Centro, California.

"RESTORATION PLANS" shall have the meaning given to that term in Section
8.05(d)(i).

"RESTORATION SUB-ACCOUNT" shall have the meaning given to that term in the
Depositary Agreement.

"RESTORATION WORK" shall have the meaning assigned to such term in Section
8.05(d).

"RESTORE" shall mean, for any Affected Property, to rebuild, repair, restore or
replace such Affected Property. The term "RESTORATION" shall have a correlative
meaning.

"RESTRICTED PAYMENT" shall mean:

(a)  (i) any dividend or distribution (in cash, Property or obligations) on, or
     any other payment or distribution on account of, or any payment for, or any
     purchase, redemption, retirement or other acquisition, directly or
     indirectly of, any limited liability company interests of the Borrower;
     (ii) any option or warrant for the purchase or acquisition of any such
     limited liability company interests; or (iii) the setting apart of any
     money for a sinking or other analogous fund for any of the foregoing; and

(b)  (i) any payment (in cash, Property or obligations) with respect to
     principal or interest on, or any other payment or distribution on account
     of, or any payment for, the purchase, redemption, retirement or other
     acquisition of, subordinated Indebtedness of the Borrower; or (ii) the
     setting apart of any money for a sinking or other analogous fund for any of
     the foregoing.

                       Schedule I to the Credit Agreement

                                      I-24

"RESTRUCTURING DOCUMENTS" shall mean those documents delivered to the Collateral
Agent by the Borrower on a cd-rom labeled "Restructuring Subsequent to
Acquisition of Ormesa and GEM Interests by Ormat", including the Certificates of
Transfer, Bills of Sale, Assignments, and all other documents contained therein.

"REVENUE ACCOUNT" shall have the meaning assigned to such term in the Depositary
Agreement.

"ROWS" shall mean the following rights-of-way held by the Borrower and granted
by BLM: CACA 25634, CACA 26346, CACA 17188, CACA 22562, CACA 22563, CACA 22567,
CACA 25544, CACA 25633, CACA 26355, CACA 26356, and CACA 20267.

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc.

"SCE" shall mean Southern California Edison Company, a California corporation.

"SECOND CLOSING DATE" shall mean the date on which (a) all of the conditions set
out in Section 6.02 shall have been satisfied or waived by the Lenders; and (b)
the Borrower shall have borrowed the Additional Term Loan.

"SECURED OBLIGATIONS" shall mean, as at any date, the sum, computed without
duplication, of the following: (a) the aggregate outstanding principal amount of
the Loans plus accrued interest thereon; plus (b) all other amounts from time to
time payable to the Secured Parties under the Financing Documents plus accrued
interest thereon. For purposes hereof, it is understood that any Secured
Obligations to any Person arising under an agreement entered into at a time such
Person (or an affiliate thereof) is party to this Agreement as a "Lender" shall
continue to constitute Secured Obligations, notwithstanding that such Person (or
its Affiliate) has ceased to be a "Lender" party thereto (by assigning all of
its Commitments, Loans, and other interests therein) at the time a claim is to
be made in respect of such Secured Obligations.

"SECURED PARTIES" shall mean the Administrative Agent, the Collateral Agent, the
Depositary Bank and the Lenders.

"SECURITY DOCUMENTS" shall mean the Borrower Security Agreement, the Borrower
Equity Interest Pledge, the Deed of Trust, the Depositary Agreement, any
security agreement or instrument referred to in paragraph (a) of the definition
of "Ancillary Documents" and all Uniform Commercial Code financing statements
required by this Agreement and/or any of the foregoing documents, and any such
Ancillary Document, to be filed with respect to the Liens created pursuant
thereto on personal property or any fixtures of the Borrower.

"SIGC" shall mean Second Imperial Geothermal Company.

"SIGC LEASE" shall mean the Lease Agreement, effective October 30, 2002, by and
between the Borrower and SIGC.

"SITE" shall mean, for any Project, the ROWs, the Site Licenses and any
Leasehold Properties relating to such Project.

                       Schedule I to the Credit Agreement

                                      I-25

"SITE LICENSES" shall mean the following site licenses granted by BLM: CACA
17129, CACA 22405, CACA 24678, CACA 20172, and CACA 22079.

"SPONSOR" shall mean Ormat Funding Corp., a Delaware corporation.

"SUBSIDIARY" shall mean, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

"TAX" shall mean any present or future tax, assessment, fee, excise, impost,
duty, governmental charge or levy of any kind imposed directly or indirectly by
or on behalf of any Government Authority.

"TERMINATION DATE" shall mean the date on which: (a) the Secured Parties shall
have received final and indefeasible payment in full of all of the Secured
Obligations and all other amounts owing to the Secured Parties under the
Financing Documents (and provision for payment reasonably satisfactory to each
Agent of all amounts reasonably expected to become due and owing to the Secured
Parties pursuant to Sections 2.04, 5.01, 5.05, 5.06, and 11.03, and similar
provisions in the other Financing Documents, shall have been made); and (b) the
Commitments shall have terminated, expired or been reduced to zero.

"TITLE COMPANY" shall mean First American Title Insurance Company, a California
corporation.

"TITLE POLICY" shall mean the policy of title insurance issued on the Closing
Date by the Title Company to the Collateral Agent for the benefit of the Secured
Parties pursuant to Section 6.01(f)(i).

"TOTAL LOSS" shall mean, in relation to any insured property, any of the
following: (a) the complete destruction of such insured property; (b) the
destruction of such insured property such that there remains no substantial
remnant thereof which a prudent owner, uninsured, desiring to restore such
insured property to its original condition would utilize as the basis of such
restoration; (c) the destruction of such insured property irretrievably beyond
repair; or (d) the destruction of such insured property such that the insured
may claim the whole amount of the relevant insurance policy covering such
insured property upon abandoning such insured property to the insurance
underwriters therefor.

"TOWER REPAIRS" shall mean the structural repairs of, and replacement of the
cooling towers of the Ormesa I Project, the OGII Project and the Ormesa IE
Project to restore performance of such cooling towers to good working order in
accordance with generally prudent utility practice.

"TRANSACTION DOCUMENTS" shall mean the Financing Documents and the Project
Documents.

                       Schedule I to the Credit Agreement

                                      I-26

"TRANSMISSION SERVICES AGREEMENTS" shall mean, collectively, (a) the
Transmission Services Agreement dated as of October 3, 1989 between the Borrower
and Imperial Irrigation District for the Ormesa I Project, the Ormesa IE Project
and the Ormesa IH Project; (b) the Transmission Services Agreement for
Alternative Resources dated as of September 26, 1985 between SCE and Imperial
Irrigation District for the OGII Project, as amended by Plant Amendment No. 1
dated as of August 25, 1987; (c) the Transmission Services Agreement dated as of
March 21, 1989 between the Borrower and Imperial Irrigation District for the GEM
2 Project; (d) the Transmission Services Agreement dated as of March 21, 1989
between the Borrower and Imperial Irrigation District for the GEM 3 Project; (e)
the Interim Distribution Service Agreement dated March 8, 1999 between Imperial
Irrigation District and the Borrower; (f) the Memorandum of Understanding dated
November 21, 2002 between Imperial Irrigation District and the Borrower; and (g)
the Funding and Construction Agreement dated June 29, 1987 among Imperial
Irrigation District, the Borrower and various other parties

"TYPE" shall have the meaning assigned to such term in Section 1.02.

"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in effect
from time to time in the State of New York and in any other jurisdiction the
laws of which control the creation or perfection of security interests under the
Security Documents.

"UNIT AGREEMENT" shall mean that certain Unit Agreement for Exploration,
Development and Operation of the East Mesa Unit Area County of Imperial, State
of California, No. 14-08-0001-20927, dated as of July 30, 1984 by and between
Republic-1975 Geothermal Energy Program and Republic 1977B Geothermal Energy
Drilling Program and Republic Geothermal, Inc., as Unit Operator.

"UNITED" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.

"UNITED STATES" and "U.S." shall mean the United States of America.

"UPGRADE ACCEPTANCE TEST" shall mean the test, the parameters of which are set
forth as Schedule IX.

"UPGRADE PRO FORMA" shall mean pro forma cash flow projections for the Borrower
updating the Closing Pro Forma, entitled "Updated Ormesa United Capital
Proposal" and dated December 18, 2002.

"UPGRADE PROJECT" shall mean the Borrower's planned capital expenditure program
to upgrade the Project.

"USE" shall mean, with respect to any Hazardous Material and with respect to any
Person, the generation, manufacture, processing, distribution, handling, use,
treatment, recycling or storage of such Hazardous Material or transportation to
or from the Property of such Person of such Hazardous Material.

                       Schedule I to the Credit Agreement

                                      I-27

"WATER SUPPLY AGREEMENT" shall mean the Amended and Restated Water Supply
Agreement dated as of March 6, 1990 between the Borrower and the Imperial
Irrigation District.

"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

                       Schedule I to the Credit Agreement

                                                                     Schedule II
                                                             to Credit Agreement

                           Applicable Lending Offices

Lender                                Applicable Lending Office
------                                -------------------------
United Capital,
   a division of Hudson United Bank   87 Post Road East
                                      Westport, Connecticut 06880

                                                                    Schedule III
                                                             to Credit Agreement

                                   Commitments

                                        Initial Term    Additional Term
                                      Loan Commitment   Loan Commitment
                                      ---------------   ---------------
United Capital,
   a division of Hudson United Bank     $20,000,000        $7,500,000

                                                                     Schedule IV
                                                             to Credit Agreement

                                    INSURANCE

At all times commencing on the Closing Date, the Borrower will be required to
maintain, or cause to be maintained, insurance for the Projects for coverages
and in amounts similar to that insurance maintained by other owners of similar
projects as determined by the Insurance Consultant. The insurance coverage shall
include:

1. Liability insurance for all risks in an amount not less than $5,000,000.

2. Property insurance to cover all risks in an amount not less than the full
replacement cost of the Project with customarily related business interruption
protection.

3. General Liability, Automobile Liability and Excess/Umbrella Liability,
General Liability limits of US $1,000,000/US $2,000,000, the Automobile
Liability limit designated as US $1,000,000 and the Excess/Umbrella Liability
coverage limit is US $5,000,000.

4. Material property damage limit of US $50,000,000 covering all real and
personal property, subject to certain terms, conditions and exclusions on an
"All Risk" of direct physical loss or damage including earthquake (subject to a
US $5,000,000 limit).

     The Collateral Agent shall be named as loss payee for the property
insurance (in respect of insurance proceeds in excess of $1,000,000) and shall
be named as additional insured for the liability insurance.

     Notification of the renewal terms and conditions will be provided 30 days
in advance of the renewal dates.

                                                                      Schedule V
                                                             to Credit Agreement

                              FILING JURISDICTION

1.   Imperial County, California

2.   Delaware Secretary of State

                                                                     Schedule VI
                                                             to Credit Agreement

                              GOVERNMENT APPROVALS

BUREAU OF LAND MANAGEMENT LEASES AND RIGHTS OF WAY IDENTIFIED AS LEASE NO.:

CACA 964 (Lease)
CACA 966 (Lease)
CACA 1903 (Lease)
CACA 6217 (Lease)
CACA 6218 (Lease)
CACA 6219 (Lease)
CACA 25081 (Lease)
CACA 17568 (Lease)
CACA 17188 (ROW)
CACA 20267 (ROW)
CACA 25544 (ROW)
CACA 22562 (ROW)
CACA 22563 (ROW)
CACA 22567 (ROW)
CACA 25633 (ROW)
CACA 25634 (ROW)
CACA 26346 (ROW)
CACA 26355 (ROW)
CACA 26356 (ROW)

AIR PERMITS ISSUED BY THE IMPERIAL COUNTY AIR POLLUTION CONTROL DISTRICT AND THE
U.S. ENVIRONMENTAL PROTECTION AGENCY

 OGI    PTO 1716D               Geothermal (Plant & 21 Wells)
        PTO 2570A               Petroleum Storage (Gas Tank)

 OGIE   PTO 1942E               Geothermal Power Plant
        PTO 2371A               Geothermal Wells / 7

 OGII   PTO 1883B               Geothermal Power Plant & Wells
        PTO 2424A               Misc. (Sand Blasting)
        PTO 2755A               Combustion (Electric Gen. and Fire Pump)

 OGIH   PTO 2047B               Geothermal Power Plant
        PTO 2370C               Geothermal Wells / 8

 GEM    PTO 2002E               Geothermal Power Plant
        PTO 2132D               Geothermal Wells (39 Wells)
        Permit No. V-2002 PEM

                                       -2-

IMPERIAL COUNTY AIR POLLUTION CONTROL DISTRICT (ICAPCD) PERMITS TO OPERATE
(PTO):

OGI, Plant and 21 Geothermal Wells    PTO 1716E

OGIE, plant and 7 Geothermal wells    PTO 1942F

OGII, plant and 14 Geothermal wells   PTO 1883D

OGIH, plant and 8 Geothermal wells    PTO 2047C

GEM, plant and 39 Geothermal wells    PTO 2002F

GEM Title V Operating Permit          Number V-2002

CALIFORNIA REGIONAL WATER BOARD WASTE DISCHARGE ORDERS (WDO)

OGI    00-103   7A132035403

OGIE   00-102   7A132035404

OGII   00-090   7A132035301

OGIH   00-085   7A132035401

GEM    00-101   7A132040013

BUREAU OF LAND MANAGEMENT SITE LICENSES

OGI    CACA 17129

OGII   CACA 20172

OGIE   CACA 22405

OGIH   CACA 24678

GEM    CACA 22079

FEDERAL COMMUNICATIONS COMMISSION

OGII   Radio Station License Number 9904D125452   Call Sign: WPNY538

                                       -3-

IMPERIAL COUNTY PUBLIC HEALTH SERVICE (DIVISION OF ENVIRONMENTAL HEALTH)

     Surface Water Treatment Permit (Potable Water System)
     OGII Permit # 4S-8660-02

U.S. ENVIRONMENTAL PROTECTION AGENCY (USEPA) REGION 9:

     OGI RCRA EPA ID Number CA0000138271

     OGII RCRA EPA ID Number CAD983613449

     GEM RCRA EPA ID Number CAR000045096

CALIFORNIA BOARD OF EQUALIZATION (BOE) HAZARDOUS WASTE GENERATOR ACCOUNT:

     OGI HA EF 36-057873

     OGII HA EF 38-057602

     GEM HA EF 36-051259

IMPERIAL COUNTY DEPARTMENT OF PLANNING COMMISSION CONDITIONAL USE PERMITS (CUP):

     OGI & OGIE   Aug 14, 1988 (No Number)   Conditional Use Permit (CUP)
                                             approved and issued for five
                                             Groundwater Wells to be utilized
                                             for cooling tower makeup.

     OGII         April 8, 1985 No. 711-85   Conditional Use Permit (CUP)
                                             Approved and issued for three
                                             Groundwater Wells to be utilized
                                             for cooling tower makeup.

                                                                    Schedule VII
                                                             to Credit Agreement

                          Deferred Government Approvals

Authority to Construct (ATC) Permit - Issued by the Imperial County Air
Pollution Control District (ICAPCD). An application for issuance of an ATC has
been submitted.

Building Permits for all phases of construction - Issued by the Imperial County
Planning Department. Approvals are awarded on a continuous basis.

Environmental Assessment (EA). The Imperial County Planning Department is the
local lead agency for the California Environmental Quality Act (CEQA). The EA
concentrates on the Biological and Archeological parameters and is expected to
be done by Jan. 2003.

                                                                   Schedule VIII
                                                             to Credit Agreement

                              ENVIRONMENTAL CLAIMS

PART A - ENVIRONMENTAL CLAIMS:

On November 12, 2002, the California Regional Water Quality Control Board issued
a "Notice to Comply" as a result of an inspection of the Projects conducted on
October 23, 2002. Three (3) non-Compliance issues with the Ormesa Waste
Discharge Requirements were noted, as listed below (the status of each is
included as a parenthetical statement at the end):

1. Ormesa Geothermal I (West Cooling Tower) - West Wall of the concrete basin
has substantial cracking and appears to be falling apart. Repairs to the
concrete basin are required to be completed by February 15, 2003. (The contract
to repair the wall is about to be let for completion of the repairs before the
required date.)

2. Cooling Tower Basin solids - Piles of solids from cleanout of cooling tower
basins were noted at well pads 16-30, 15-32, 18-5, and the containment basin
west of OGIH. Proper disposal of these solids is required before December 31,
2002. (Samples have been collected and tested, and authorization to dispose has
been received from the California Regional Water Quality Control Board. However,
written authorization from the Imperial County Health Department has not yet
been received. The California Regional Water Quality Control Board has agreed to
extend the required disposal date because of the delay in receiving the written
authorization from the Imperial County Health Department to dispose of the
wastes.)

3. North Wall of pond at GEM 2&3 - Staff noted an area in need of repair to
liner and concrete in the upper wall on the north side. Repairs to the liner and
concrete are required before November 30, 2002. (Repairs were completed on
November 25, 2002.)

PART B - THREATENED ENVIRONMENTAL CLAIMS:

FPL Energy Operating Services, Inc. (FPLE) received a letter, dated August
1, 2000, from the Imperial County District Attorney's office indicating that a
request to initiate legal action regarding the handling of the Ormesa IE Project
cooling tower fill and wood debris waste in June and July of 1999 had been filed
by the U.S. Department of the Interior, Bureau of Land Management (BLM), and
suggested that FPLE schedule an appointment to discuss any additional
information FPLE may want to submit. Two meetings were held between the District
Attorney's office and FPLE, and FPLE believes that the BLM and the Imperial
County District Attorney's office no longer intends to pursue the matter,
although no specific resolution to the matter was documented.

PART C - HAZARDOUS MATERIALS:

Cotton-wound steel-core filters were historically used by the Ormesa I, Ormesa
II, Ormesa IE and Ormesa IH projects since the commencement of operation (in
December of 1986, 1987, 1988 and 1989, respectively) to remove fine sand,
produced from the geothermal fluid production wells, from the geothermal fluid
prior to injection into the geothermal fluid injection wells. Waste injection
filters were routinely disposed of off-site as common, non-hazardous industrial
waste in a local municipal waste landfill. In late 1992, a sample of the
injection filters was tested and determined to be a California (non-RCRA)
hazardous waste because of the concentrations of some heavy metals, which
normally occur only in low concentrations in the East Mesa geothermal fluids
used by these Ormesa Geothermal projects. All litigation concerning this issue
was settled prior to the acquisition of the East Mesa projects by FPLE (in 1994
the projects settled with the Imperial County District Attorney; the California
Environmental Protection Agency, Department of Toxic Substance Control; and the
California Regional Water Quality Board, Colorado River Basin Region, and in
1996 the projects settled with the local municipal waste landfill into which the
filters were disposed). These Ormesa Geothermal have not used filters to remove
sand from the geothermal injection fluid prior to injection since late 1992.
None of the waste geothermal fluid injection filters were disposed of on-site.

                                       2

                                                                     Schedule IX
                                                             to Credit Agreement

                       UPGRADE ACCEPTANCE TEST PARAMETERS

These parameters are to outline the methods to be used to update the report of
the Independent Engineer that was delivered on the Closing Date, which update
shall be delivered pursuant to Schedule 6.2(g) of the Credit Agreement.

The Upgrade Acceptance Test is to demonstrate that the Projects are collectively
capable of generating net energy sales of 445,000 MWh per year. The Upgrade
Acceptance Test is to be conducted over a continuous period of 168 hours (7
days) with all Project systems in normal operating configurations for
continuous, long-term operation with a normal complement of operating personnel.
Criterion for successful completion of the Upgrade Acceptance Test shall be that
during the 168-hour period the Project generate 8,535 MWh for sale to SCE,
corrected for ambient conditions and net of all Project auxiliary loads and line
losses. A detailed Upgrade Acceptance Test protocol, including appropriate
ambient correction factors, measurement points, etc., is to be developed by
the Borrower and approved by the Independent Engineer within 30 days prior to
commencement of the test.

                                                                     Exhibit A-1
                                                             to Credit Agreement

                         FORM OF INITIAL TERM LOAN NOTE

$                                                                         , 2002
 ---------------                                            --------- ----
                                                              New York, New York

     FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of UNITED CAPITAL, a division of Hudson United Bank, a New Jersey
banking corporation (the "Lender"), in lawful money of the United States of
America and in immediately available funds, the principal amount of
____________________________________ ($_______________) or, if less, the unpaid
principal amount of the Initial Term Loan made by the Lender pursuant to Section
2.01(a) of the Credit Agreement hereinafter defined. The principal amount shall
be paid in the amounts and on the dates specified in Section 3.01 of the Credit
Agreement. The Borrower further agrees to pay interest in like money on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in Section 3.02 of such Credit Agreement.

     The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.

     This Note (a) is an Initial Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.

     Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

     All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.

                             Initial Term Loan Note

     Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.

                             Initial Term Loan Note

                                        ORMESA LLC

                                        ----------------------------------------
                                        By ORMAT FUNDING CORP.,
                                        Its Sole Member and Control Manager

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                             Initial Term Loan Note

                                                                     Exhibit A-2
                                                             to Credit Agreement

                        FORM OF ADDITIONAL TERM LOAN NOTE

[$7,500,000.00]                                               ____________, 200_
                                                              New York, New York

     FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of [__________________________________] (the "Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal amount of [SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00)], or, if less, the unpaid principal amount of the Additional
Term Loan made by the Lender pursuant to Section 2.01(b) of the Credit Agreement
hereinafter defined. The principal amount shall be paid in the amounts and on
the dates specified in Section 3.01 of the Credit Agreement. The Borrower
further agrees to pay interest in like money on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 3.02 of such Credit Agreement.

     The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.

     This Note (a) is an Additional Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.

     Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

     All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.

Promissory Note

     Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.

                                        ORMESA LLC

                                        By ORMAT FUNDING CORP.,
                                           Its Sole Member and Control Manager

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                                                     Exhibit A-2
                                                             to Credit Agreement

                                 PROMISSORY NOTE

[$7,500,000.00]
                                                               ___________, 200_
                                                              New York, New York

     FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of [_______________________________________] (the "Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal amount of [SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00)], or, if less, the unpaid principal amount of the Additional
Term Loan made by the Lender pursuant to Section 2.0l(b) of the Credit
Agreement hereinafter defined. The principal amount shall be paid in the amounts
and on the dates specified in Section 3.01 of the Credit Agreement. The Borrower
further agrees to pay interest in like money on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 3.02 of such Credit Agreement.

     The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.

     This Note (a) is an Additional Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.

     Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

     All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.

Promissory Note

     Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.

                                        ORMESA LLC

                                        By ORMAT FUNDING CORP.,
                                           Its Sole Member and Control Manager

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                                                     Exhibit B-l
                                                             to Credit Agreement

                       FORM OF BORROWER SECURITY AGREEMENT

     This BORROWER SECURITY AGREEMENT (this "AGREEMENT"), dated as of ______ __,
2002, between ORMESA LLC, a Delaware limited liability company (the "BORROWER"),
and UNITED CAPITAL, a division of Hudson United Bank, a New Jersey banking
corporation ("UNITED"), not in its individual capacity, but solely as collateral
agent for the Lenders and other Secured Parties under and as defined in the
Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "COLLATERAL AGENT").

     WHEREAS, pursuant to that certain Credit Agreement, dated as of December
31, 2002 (as amended, modified, supplemented and in effect from time to time,
the "CREDIT AGREEMENT"), among the Borrower, the Lenders party thereto from time
to time, United, not in its individual capacity, but solely as administrative
agent for such Lenders, and the Collateral Agent, the Lenders have agreed to
make loans to the Borrower for the purpose of financing certain costs of
acquiring, improving and operating various geothermal power plant facilities and
related expenses;

     WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Borrower shall have executed
and delivered this Agreement and granted the Liens provided for herein; and

     WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce certain of the Secured Parties to make loans
to the Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower has agreed to pledge
and grant a security interest in the Collateral (as defined below) as security
for the Secured Obligations (as defined in the Credit Agreement).

     Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     1.01 DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in Schedule I to the
Credit Agreement. All terms used herein which are not defined herein or in the
Credit Agreement and are defined in the Uniform Commercial Code (as such term is
defined below) shall have the meanings therein stated. In addition, capitalized
terms used in the preamble hereto shall have the respective meanings given
thereto, and the following terms shall have the following meanings under this
Agreement:

     "ACCOUNTS RECEIVABLE" shall have the meaning assigned to such term in
Article III(5).

     "ARTICLE 9" shall mean Article 9 of the Uniform Commercial Code, as revised
and in effect on and after July 1, 2001.

     "ASSIGNED AGREEMENT(S)" shall have the meaning assigned to such term in
Article III(2).

     "COLLATERAL" shall have the meaning assigned to such term in Article III.

     "COPYRIGHT COLLATERAL" shall mean all Copyrights, whether now owned or
hereafter acquired by the Borrower, including each Copyright identified in Annex
2.

                           Borrower Security Agreement

                                      -2-

     "COPYRIGHTS" shall mean all copyrights, copyright registrations and
applications for copyright registrations, including, without limitation, all
renewals and extensions thereof, the right to recover for all past, present and
future infringements thereof, and all other rights of any kind whatsoever
accruing thereunder or pertaining thereto.

     "EQUIPMENT" shall have the meaning assigned to such term in Article III(9).

     "INSTRUMENTS" shall have the meaning assigned to such term in Article
III(6).

     "INTELLECTUAL PROPERTY" shall mean, collectively, all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with: (a) all
inventions, processes, production methods, proprietary information, know-how and
trade secrets; (b) all licenses or user or other agreements granted to the
Borrower with respect to any of the foregoing, in each case whether now or
hereafter owned or used including, without limitation, the contracts, licenses
or other agreements with respect to the Copyright Collateral, the Patent
Collateral or the Trademark Collateral, listed in Annex 5; (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery software and
programs; (d) all field repair data, sales data and other information relating
to sales or service of products now or hereafter manufactured; (e) all
accounting information and all media in which or on which any information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data; and (f) all causes of action, claims and warranties now or hereafter owned
or acquired by the Borrower in respect of any of the items listed above.

     "INVENTORY" shall have the meaning assigned to such term in Article III(7).

     "MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership.

     "PATENT COLLATERAL" shall mean all Patents, whether now owned or hereafter
acquired by the Borrower, including each Patent identified in Annex 3.

     "PATENTS" shall mean all patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties, damages and
payments now or hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, the right to sue for past, present and future
infringements, thereof, and all rights corresponding thereto throughout the
world.

     "RECORDS" shall have the meaning assigned to such term in Section 2.07.

     "TRADEMARK COLLATERAL" shall mean all Trademarks, whether now owned or
hereafter acquired by the Borrower, including each Trademark identified in Annex
4. Notwithstanding the foregoing, the Trademark Collateral does not and shall
not include any Trademark that would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the Trademark
Collateral.

     "TRADEMARKS" shall mean all trade names, trademarks and service marks,
logos, trademark and service mark registrations, and applications for trademark
and service mark registrations, including, without limitation, all renewals of
trademark and service mark registrations, all rights corresponding thereto
throughout the world, the right to recover for all past, present and future
infringements thereof, all other rights

                           Borrower Security Agreement

                                      -3-

of any kind whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the product lines and goodwill of the business connected with
the use of, and symbolized by, each such trade name, trademark and service mark.

     1.02 INTERPRETATION. The principles of interpretation set out in Article I
of the Credit Agreement shall apply equally to this Agreement mutatis mutandis.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Agent and Secured Parties that:

     2.01 CREDIT AGREEMENT REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Borrower contained in Article VII of the
Credit Agreement is incorporated herein by reference and made a part hereof as
if fully set out in this Agreement for the benefit of the Collateral Agent and
the Borrower shall be deemed to have made each such representation and warranty
as of each date provided for in the Credit Agreement.

     2.02 COPYRIGHTS, PATENTS AND TRADEMARKS. Annexes 2, 3 and 4, respectively,
set out a complete and correct list of all Copyrights, Patents and Trademarks
owned by the Borrower on the date hereof. Except pursuant to licenses and other
user agreements entered into by the Borrower in the ordinary course of business
that are listed in Annex 5, the Borrower owns and possesses the right to use,
and has done nothing to authorize or enable any other Person to use, any
Copyright, Patent or Trademark listed in Annexes 2, 3 and 4. All registrations
listed in Annexes 2, 3 and 4 are valid and in full force and effect. Except as
may be set out in Annex 5, the Borrower owns and possesses the right to use all
Copyrights, Patents and Trademarks.

     2.03 LICENSES. Annex 5 sets out a complete and correct list of all licenses
and other user agreements existing with respect to the Intellectual Property on
the date hereof.

     2.04 NO VIOLATIONS IN RESPECT OF COPYRIGHTS, PATENTS AND TRADEMARKS. To the
Borrower's knowledge: (i) except as set out in Annex 5, there is no violation by
others of any right of the Borrower with respect to any Copyright, Patent or
Trademark listed in Annexes 2, 3 and 4, respectively; and (ii) the Borrower is
not infringing in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted or are pending against the
Borrower or, to the Borrower's knowledge, threatened, and no claim against the
Borrower has been received by the Borrower, alleging any such violation, except
as may be set out in Annex 5.

     2.05 TRADEMARK COLLATERAL. The Borrower does not own any Trademarks
registered in the United States of America to which the last sentence of the
definition of Trademark Collateral applies.

     2.06 INVENTORY AND EQUIPMENT. All existing Inventory and Equipment: (a) is
located at the Borrower's Address for Notices set out beneath its name on the
signature pages hereto or at one of the locations identified in Annex 6 or in
transit from one of such locations to another; and (b) is in the Borrower's
exclusive control on the date hereof.

     2.07 RECORDS. The place of business or, if there is more than one place of
business, the chief executive office of the Borrower is located at the
Borrower's Address for Notices set out on the signature

                           Borrower Security Agreement

                                       -4-

page hereto, and the Borrower has no books and records concerning the Collateral
(hereinafter, collectively called the "RECORDS") at any location other than at
such address or at one of the locations identified in Annex 6 or in transit from
one of such locations to another.

     2.08 INSTRUMENTS. The Borrower has delivered to the Collateral Agent,
without exception, all Collateral that consists of Instruments, which Collateral
is listed on Annex 7 hereto. Annex 7 correctly and completely sets forth all
obligors of such Instruments and their respective aggregate principal amounts.

     2.09 CHANGES IN CIRCUMSTANCES. The Borrower has not, within the period of
four months prior to the date hereof: (a) changed its location (as determined
pursuant to Section 9-307 of Article 9); (b) changed its name; or (c) become a
"new debtor" (as defined in Section 9-102(a)(56) of Article 9) with respect to a
security agreement previously entered into by any other Person.

     2.10 OTHER ASSETS. All assets of each Project not described in Sections
2.02 through 2.08 are located at the Borrower's Address for Notices set out
beneath its name on the signature pages hereto or at one of the locations
identified in Annex 6 or in transit from one of such locations to another. All
such assets are under the exclusive control of the Borrower. The Borrower will
not change the location of any such assets without 30 days' prior written notice
to the Collateral Agent.

     2.11 ASSIGNED AGREEMENTS. All copies of the Assigned Agreements delivered
by the Borrower to the Collateral Agent are true, correct and complete copies
thereof, and such Assigned Agreements have not been amended, modified or
otherwise changed in any respect, except for such amendments, modifications and
changes which are attached to the Assigned Agreements so delivered. Borrower has
obtained all consents and approvals necessary for the assignment of the Assigned
Agreements, except from the BLM and SCE.

     2.12 GENERAL.

          (a) None of the Collateral constitutes, or is the proceeds of, "FARM
     PRODUCTS" as defined in Section 9-102(a)(34) of the UCC.

          (b) Other than BLM, none of the account debtors or other persons
     obligated on any of the Collateral is a governmental authority covered by
     the Federal Assignment of Claims Act or like federal, state or local
     statute or rule in respect of such Collateral.

          (c) The Borrower holds no commercial tort claims.

          (d) The Borrower has at all times operated its business in compliance
     in all material respects with all applicable provisions of the federal Fair
     Labor Standards Act, as amended, and with all applicable provisions of
     federal, state and local statutes and ordinances dealing with the control,
     shipment, storage or disposal of hazardous materials or substances.

                                   ARTICLE III

                                   COLLATERAL

     As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations now
existing or hereafter arising, the Borrower hereby pledges and grants to the
Collateral Agent, for the benefit of the Secured Parties as hereinafter
provided, and subject to the rules and regulations of the BLM, a lien on and
security interest in, all of the

                           Borrower Security Agreement

                                       -5-

Borrower's right, title and interest in, to and under the following, whether now
owned by the Borrower or hereafter acquired and whether now existing or
hereafter coming into existence and wherever located (all being collectively
referred to herein as "COLLATERAL"):

          1. the assets of the Projects, including all rights of access to and
     inspection and use of all books and records of the Projects (including
     computer software and computer software programs), all payments (including
     fees) or distributions, whether in cash, property or otherwise, at any time
     owing or payable to the Borrower in its capacity as owner of the Projects
     and all other rights, interests, property or claims to which the Borrower
     may be entitled in its capacity as owner of the Projects;

          2. except to the extent expressly prohibited by the terms thereof, the
     agreements, contracts and documents listed in Annex 1 (including all
     exhibits and schedules thereto), as each such agreement, contract and
     document may be amended, supplemented or modified and in effect from time
     to time (such agreements, contracts and documents, being, individually, an
     "ASSIGNED AGREEMENTS" and collectively, the "ASSIGNED AGREEMENTS"),
     including: (i) all rights of the Borrower to receive moneys due and to
     become due under or pursuant to the Assigned Agreements; (ii) all rights of
     the Borrower to receive proceeds of any insurance, bond, indemnity,
     warranty or guaranty with respect to the Assigned Agreements; (iii) all
     claims of the Borrower for damages arising out of or for breach of or
     default under the Assigned Agreements; and (iv) all rights of the Borrower
     to terminate, amend, supplement, modify or waive performance under the
     Assigned Agreements, to perform thereunder and to compel performance and
     otherwise to exercise all remedies thereunder;

          3. all Government Approvals now or hereafter held in the name, or for
     the benefit of the Borrower (provided, that any Government Approval which
     by its terms or by operation of law would become void, voidable, terminable
     or revocable if mortgaged, pledged or assigned hereunder or if a security
     interest therein were granted hereunder is expressly excepted and excluded
     from the Lien and terms of this Agreement to the extent necessary so as to
     avoid such voidness, avoidability, terminability or revocability);

          4. all Accounts and all balances therein and all instruments,
     certificates and notes in respect of Permitted Investments held or
     maintained from time to time therein, and all interest and other property
     from time to time receivable in respect thereof;

          5. all general intangibles (including payment intangibles and
     software) and accounts (each as defined in the Uniform Commercial Code) of
     the Borrower constituting any right to the payment of money, including all
     moneys due and to become due to the Borrower in respect of any loans or
     advances or for Inventory or Equipment or other goods sold or leased or for
     services rendered, all deposit accounts (including all Accounts established
     pursuant to the Depositary Agreement), all moneys due and to become due to
     the Borrower under any Guarantee (including a letter of credit) and all Tax
     refunds (such accounts, general intangibles and moneys due and to become
     due, and Tax refunds, being herein called collectively "ACCOUNTS
     RECEIVABLE");

          6. all instruments, chattel paper (whether tangible or electronic)
     (each as defined in the Uniform Commercial Code) or letters of credit of
     the Borrower evidencing, representing, arising from or existing in respect
     of, relating to, securing or otherwise supporting the payment of, any of
     the Accounts Receivable, including promissory notes, drafts, bills of
     exchange and trade acceptances (herein collectively called "INSTRUMENTS")
     and all interest, cash, instruments and other Property from time to time
     received, receivable or otherwise distributed in respect of or in exchange
     for any of the Instruments;

                           Borrower Security Agreement

                                      -6-

          7. all inventory (as defined in the Uniform Commercial Code) of the
     Borrower, including Motor Vehicles held by the Borrower for lease, fuel,
     tires and other spare parts, all goods obtained by the Borrower in exchange
     for such inventory, and any products made or processed from such inventory,
     including all substances, if any, commingled therewith or added thereto
     (herein collectively called "INVENTORY");

          8. all Intellectual Property and all other accounts or general
     intangibles of the Borrower not constituting Intellectual Property or
     Accounts Receivable;

          9. all equipment (as defined in the Uniform Commercial Code) of the
     Borrower, including all Motor Vehicles owned by the Borrower (herein
     collectively called "EQUIPMENT");

          10. each contract and other agreement of the Borrower relating to the
     sale or other disposition of Inventory or Equipment;

          11. all documents (as defined in the Uniform Commercial Code) or other
     receipts of the Borrower covering, evidencing or representing Inventory or
     Equipment;

          12. all rights, claims (including insurance claims) and benefits of
     the Borrower against any Person arising out of, relating to or in
     connection with Inventory or Equipment, including any such rights, claims
     or benefits against any Person storing or transporting such Inventory or
     Equipment; and

          13. all other tangible and intangible personal property and fixtures
     of the Borrower, including all cash, products, offspring, rents, revenues,
     issues, profits, royalties, income, benefits, accessions, letter-of-credit
     rights, supporting obligations, additions, substitutions and replacements
     of and to any and all of the foregoing, including all proceeds and products
     of and to any of the property of the Borrower described in the preceding
     paragraphs of this Article III (including, without limitation, any proceeds
     of insurance thereon (whether or not the Collateral Agent is loss payee
     thereof), and any indemnity, warranty or guarantee, payable by any reason
     of loss or damage to or otherwise with respect to any of the foregoing, and
     all causes of action, claims and warranties now or hereafter held by the
     Borrower in respect of any of the items listed above) and, to the extent
     related to any property described in such paragraphs or such proceeds,
     products and accessions, all books, correspondence, credit files, records,
     invoices and other papers, including all tapes, cards, computer runs and
     other papers and documents in the possession or under the control of the
     Borrower or any computer bureau or service company from time to time acting
     for the Borrower;

     provided, however, (a) any distributions, payments or releases (whether in
     the form of cash, instruments or otherwise) properly made by or to the
     Borrower pursuant to Section 8.13 of the Credit Agreement shall
     automatically be released from the Lien granted hereunder and shall no
     longer be part of the Collateral upon the making of such distribution,
     payment or release and (b) any sale, transfer or other disposition of the
     Collateral permitted by Section 8.12(a) of the Credit Agreement shall
     automatically be released from the Lien granted hereunder and shall no
     longer be part of the Collateral upon consummation of such sale, transfer
     or other disposition.

                           Borrower Security Agreement

                                       -7-

                                    ARTICLE IV

                         CERTAIN ASSURANCES; REMEDIES

     In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Borrower agrees with each Secured Party as follows:

     4.01 DELIVERY AND OTHER PERFECTION. The Borrower shall:

          (a) if any of the Collateral required to be pledged and delivered by
     the Borrower under Article III is received by the Borrower, forthwith: (i)
     transfer and deliver to the Collateral Agent for the benefit of the Secured
     Parties such Collateral so received by the Borrower, all of which
     thereafter shall be held by the Collateral Agent, pursuant to the terms of
     this Agreement, as part of the Collateral; and/or (ii) take such other
     action as the Collateral Agent shall deem necessary or appropriate to duly
     record the Lien created hereunder in such Collateral;

          (b) deliver and pledge to the Collateral Agent any and all
     Instruments, endorsed and/or accompanied by instruments of assignment and
     transfer in such form and substance as the Collateral Agent may request;
     provided, that so long as no Event of Default shall have occurred and be
     continuing, the Borrower may retain for collection in the ordinary course
     any Instruments received by the Borrower in the ordinary course of business
     and the Collateral Agent shall, promptly upon request of the Borrower, make
     appropriate arrangements for making any Instrument pledged by the Borrower
     and held by the Collateral Agent available to the Borrower for purposes of
     presentation, collection or renewal (any such arrangement to be effected,
     to the extent requested by the Collateral Agent, against trust receipt or
     like document);

          (c) give, execute, deliver, file and/or record any financing
     statement, continuation statement, notice, instrument, document, agreement
     or other papers that may be necessary or desirable (in the reasonable
     judgment of the Collateral Agent): (i) to create, preserve, perfect or
     validate the pledge and security interest granted pursuant hereto; or (ii)
     to enable the Collateral Agent to exercise and enforce its rights hereunder
     with respect to such pledge and security interest, including, without
     limitation, upon the occurrence and during the continuance of any Event of
     Default, causing any or all of the Collateral to be transferred of record
     into the name of the Collateral Agent or its nominee (and the Collateral
     Agent agrees that if any Collateral is transferred into its name or the
     name of its nominee, the Collateral Agent will thereafter promptly give to
     the Borrower copies of any notices and communications received by it with
     respect to the Collateral pledged by the Borrower hereunder); provided,
     that notices to account debtors in respect of any Accounts Receivable or
     Instruments shall be subject to the provisions of paragraph (g) below;

          (d) without limiting the obligations of the Borrower under Section
     4.04(d), promptly notify the Collateral Agent upon the acquisition after
     the date hereof by the Borrower of any Equipment covered by a certificate
     of title or ownership having a value in excess of $500,000 in the
     aggregate, and upon the request of the Collateral Agent, cause the
     Collateral Agent to be listed as the lienholder on such certificate of
     title or ownership and within 60 days of the acquisition thereof deliver
     evidence of the same to the Collateral Agent;

          (e) keep full and accurate Records, and stamp or otherwise mark such
     Records in such manner as the Collateral Agent may reasonably require in
     order to reflect the pledge and security interest granted by this
     Agreement;

                           Borrower Security Agreement

                                       -8-

          (f) (i) upon reasonable prior notice, at any time during normal
     business hours, permit representatives of the Collateral Agent to inspect
     and make abstracts from the Records; and (ii) upon the occurrence and
     during the continuance of any Event of Default, permit representatives of
     the Collateral Agent to be present at the Borrower's place of business to
     receive copies of all communications and remittances relating to the
     Collateral;

          (g) upon the occurrence and during the continuance of any Event of
     Default, upon request of the Collateral Agent, promptly notify (and the
     Borrower hereby authorizes the Collateral Agent so to notify) each account
     debtor in respect of any Accounts Receivable or Instruments that such
     Collateral has been assigned to the Collateral Agent hereunder, and that
     any payments due or to become due in respect of such Collateral are to be
     made directly to the Collateral Agent, with a copy of such notice to the
     Collateral Agent;

          (h) furnish to the Collateral Agent from time to time (but, unless any
     Event of Default shall have occurred and be continuing, no more frequently
     than annually) statements and schedules further identifying and describing
     the Copyright Collateral, the Patent Collateral and the Trademark
     Collateral, respectively, and such other reports in connection with the
     Copyright Collateral, the Patent Collateral and the Trademark Collateral as
     the Collateral Agent may reasonably request, all in reasonable detail;

          (i) promptly upon request of the Collateral Agent, following receipt
     by the Collateral Agent of any statements, schedules or reports pursuant to
     clause (h) above, modify this Agreement by amending Annexes 2, 3 and/or 4,
     as the case may be, to include any Copyright, Patent or Trademark that
     becomes part of the Collateral under this Agreement, and deliver any such
     amended Annexes to the Collateral Agent;

          (j) for each deposit account (including, without limitation, the
     Accounts) that the Borrower, now or at any time hereafter, opens or
     maintains, at the Collateral Agent's request and option, pursuant to an
     agreement in form and substance reasonably satisfactory to the Collateral
     Agent, either (a) cause the bank to agree to comply, without further
     consent of the Borrower, at any time with instructions from the Collateral
     Agent to such bank directing the disposition of funds from time to time
     credited to such deposit account, or (b) arrange for the Collateral Agent
     to become the customer of the bank with respect to the deposit account,
     with the Borrower being permitted, only with the consent of the Collateral
     Agent, to exercise rights to withdraw funds from such deposit account;
     provided, the provisions of this paragraph shall not apply to (i) a deposit
     account for which the Collateral Agent is the bank and is in automatic
     control, and (ii) any deposit accounts specially and exclusively used for
     payroll, payroll taxes and other employee wage and benefit payments to or
     for the benefit of the Borrower's salaried employees. To the extent that
     the Borrower shall have any cash, funds or sums of money in its possession
     constituting Project Revenues, all such cash, funds or sums of money shall
     be paid directly to the Collateral Agent or the Depositary Bank for deposit
     into the appropriate Account in accordance with the terms of the Credit
     Agreement and the Depositary Agreement;

          (k) if any Collateral is, now or at any time hereafter, in the
     possession of a bailee, promptly notify the Collateral Agent thereof and,
     at the Collateral Agent's request and option, promptly obtain an
     acknowledgement from the bailee, in form and substance satisfactory to the
     Collateral Agent, that the bailee holds such Collateral for the benefit of
     the Collateral Agent and such bailee's agreement to comply, without further
     consent of the Borrower, at any time with instructions of the Collateral
     Agent as to such Collateral;

          (l) if the Borrower, now or at any time hereafter, holds or acquires
     an interest in any electronic chattel paper or any "transferable record,"
     as that term is defined in Section 201 of the federal Electronic Signatures
     in Global and National Commerce Act, or in Section 16 of the Uniform

                           Borrower Security Agreement

                                       -9-

     Electronic Transactions Act as in effect in any relevant jurisdiction,
     promptly notify the Collateral Agent thereof and, at the request and option
     of the Collateral Agent, take such action as the Collateral Agent may
     reasonably request to vest in the Collateral Agent control, under Section
     9-105 of the Uniform Commercial Code, of such electronic chattel paper or
     control under Section 201 of the federal Electronic Signatures in Global
     and National Commerce Act or, as the case may be, Section 16 of the Uniform
     Electronic Transactions Act, as so in effect in such jurisdiction, of such
     transferable record; provided that the Collateral Agent and the Secured
     Parties agree that the Collateral Agent will arrange, pursuant to
     procedures satisfactory to the Collateral Agent and so long as such
     procedures will not result in the Collateral Agent's loss of control, for
     the Borrower to make alterations to the electronic chattel paper or
     transferable record permitted under the Uniform Commercial Code or, as the
     case may be, Section 201 of the federal Electronic Signatures in Global and
     National Commerce Act or Section 16 of the Uniform Electronic Transactions
     Act, for a party in control to make without loss of control, unless an
     Event of Default has occurred and is continuing or would occur after taking
     into account any action by the Borrower with respect to such electronic
     chattel paper or transferable record;

          (m) if the Borrower is, now or at any time hereafter, a beneficiary
     under a letter of credit with a face value in excess of $250,000, promptly
     notify the Collateral Agent thereof and, at the request and option of the
     Collateral Agent, pursuant to an agreement in form and substance reasonably
     satisfactory to the Collateral Agent, either (a) arrange for the issuer and
     any confirmer of such letter of credit to consent to an assignment to the
     Collateral Agent of the proceeds of the letter of credit, or (b) arrange
     for the Collateral Agent to become the transferee beneficiary of the letter
     of credit, with the Collateral Agent agreeing, in each case, that the
     proceeds of the letter of credit are to be applied as provided in the
     Credit Agreement; and

          (n) take any and all other actions as the Collateral Agent may
     reasonably determine to be necessary or useful for the attachment,
     perfection and first priority of, and the ability of the Collateral Agent
     to enforce, the Collateral Agent's security interest in any and all of the
     Collateral, including, without limitation, (i) complying with any provision
     of any statute, regulation or treaty of the United States as to any
     Collateral if compliance with such provision is a condition to attachment,
     perfection or priority of, or ability of the Collateral Agent to enforce,
     the Collateral Agent's security interest in such Collateral, (ii) obtaining
     governmental and other third party waivers, consents and approvals, in form
     and substance reasonably satisfactory to the Collateral Agent, including,
     without limitation, any consent of any licensor, lessor or other person
     obligated on Collateral, (iii) obtaining waivers from mortgagees and
     landlords in form and substance reasonably satisfactory to the Collateral
     Agent, and (iv) taking all actions under any earlier versions of the
     Uniform Commercial Code or under any other law, as reasonably determined by
     the Collateral Agent to be applicable under the Uniform Commercial Code or
     in any other jurisdiction, including any foreign jurisdiction.

     4.02 OTHER FINANCING STATEMENTS AND LIENS. Except for Permitted Liens,
without the prior written consent of the Collateral Agent, the Borrower shall
not file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Collateral Agent is not named as the sole
secured party for the benefit of the Secured Parties.

     4.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be required to
take any steps to preserve any rights against prior parties to any of the
Collateral.

     4.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.

                           Borrower Security Agreement

                                      -10-

          (a) Adverse Claims. The Borrower shall defend, all at its own cost and
     expense, the Borrower's title and the existence, perfection and first
     priority (subject to any Permitted Liens) of the Collateral Agent's
     security interest in the Collateral against all adverse claims.

          (b) Distributions to Collateral Agent. If any Event of Default shall
     have occurred and be continuing, and whether or not the Collateral Agent or
     any other Secured Party exercises any available right to declare any
     Secured Obligation due and payable or seeks or pursues any other relief or
     remedy available to it under applicable law or under this Agreement or any
     other Transaction Document or any other agreement relating to such Secured
     Obligation, all distributions on and other payments in respect of the
     Collateral shall be paid directly to the Collateral Agent and retained by
     it as part of the Collateral, subject to the terms of this Agreement, and,
     if the Collateral Agent shall so request, the Borrower agrees to execute
     and deliver to the Collateral Agent appropriate additional distribution and
     other orders and documents to that end; provided, that if such Event of
     Default is waived or cured, any such distribution or other payment
     theretofore paid to the Collateral Agent shall, upon request of the
     Borrower (except to the extent theretofore applied to the Secured
     Obligations in accordance with the Credit Agreement), be returned by the
     Collateral Agent to the Borrower.

          (c) Assigned Agreements.

               (i)  Anything herein to the contrary notwithstanding, the
                    Borrower shall remain liable to perform all of its duties
                    and obligations under each of the Assigned Agreements and in
                    respect of the Collateral to the same extent as if this
                    Agreement had not been executed. The exercise by the
                    Collateral Agent or any other Secured Party of any of the
                    rights and remedies hereunder shall not release the Borrower
                    from any of its duties or obligations under any of the
                    Assigned Agreements or in respect of the Collateral. Neither
                    the Collateral Agent nor any other Secured Parry shall have
                    any obligation or liability under any of the Assigned
                    Agreements or otherwise in respect of the Collateral by
                    reason of this Agreement or be obligated to perform any of
                    the obligations or duties of the Borrower under any of the
                    Assigned Agreements or otherwise in respect of the
                    Collateral or to take any action to collect or enforce any
                    claim for payment or any other right assigned hereunder.

               (ii) If the Borrower fails to perform any agreement contained
                    herein or in any of the Assigned Agreements, the Collateral
                    Agent may (but shall not be obligated to) cause the
                    performance of such agreement, subject to the rules and
                    regulations of the BLM, and the reasonable fees, costs and
                    expenses (including reasonable attorneys' fees and expenses)
                    of the Collateral Agent incurred in connection therewith
                    shall, in accordance with Section 4.15, be payable by or on
                    behalf of the Borrower and shall be Secured Obligations to
                    the Collateral Agent secured under Article III.

          (d) Motor Vehicles. At any time after the occurrence and during the
     continuance of an Event of Default, the Borrower shall, upon the request of
     the Collateral Agent, deliver to the Collateral Agent originals of the
     certificates of title or ownership for the Motor Vehicles owned by it with
     the Collateral Agent listed as lienholder and take such other action as the
     Collateral Agent shall reasonably deem necessary or desirable to perfect
     the security interest created hereunder in all such Motor Vehicles.

                           Borrower Security Agreement

                                      -11-

          (e) Intellectual Property.

               (i)  For the purpose of enabling the Collateral Agent to exercise
                    rights and remedies under Section 4.07 at such time as the
                    Collateral Agent shall be lawfully entitled to exercise such
                    rights and remedies, and for no other purpose, the Borrower
                    hereby grants to the Collateral Agent, to the extent
                    assignable, an irrevocable, non-exclusive license
                    (exercisable without payment of royalty or other
                    compensation to the Borrower) to use, assign, license or
                    sublicense any of the Intellectual Property now owned or
                    hereafter acquired by the Borrower, wherever the same may be
                    located, including in such license reasonable access to all
                    media in which any of the licensed items may be recorded or
                    stored and to all computer programs used for the compilation
                    or printout thereof.

               (ii) Notwithstanding anything contained herein to the contrary,
                    but subject to the provisions of Section 8.12 of the Credit
                    Agreement that limit the rights of the Borrower to dispose
                    of its property, so long as no Event of Default shall have
                    occurred and be continuing, the Borrower will be permitted
                    to exploit, use, enjoy, protect, license, sublicense,
                    assign, sell, dispose of or take other actions with respect
                    to the Intellectual Property in the ordinary course of the
                    business of the Borrower. In furtherance of the foregoing,
                    unless an Event of Default shall have occurred and be
                    continuing the Collateral Agent shall from time to time,
                    upon the request and at the sole cost and expense of the
                    Borrower, execute and deliver any instruments, certificates
                    or other documents, in the form so requested, that the
                    Borrower shall have certified are appropriate (in its
                    judgment) to allow it to take any action permitted above
                    (including relinquishment of the license provided pursuant
                    to clause (i) immediately above as to any specific
                    Intellectual Property). Further, upon the Termination Date,
                    the Collateral Agent shall transfer to the Borrower the
                    license granted pursuant to clause (i) immediately above.
                    The exercise of rights and remedies under Section 4.07 by
                    the Collateral Agent shall not terminate the rights of the
                    holders of any licenses or sublicenses theretofore granted
                    by the Borrower in accordance with the first sentence of
                    this clause (ii).

     4.05 CUSTODY AND PRESERVATION. The Collateral Agent's obligation to use
reasonable care in the custody and preservation of Collateral shall be satisfied
if it uses the same care as it uses in the custody and preservation of its own
Property.

     4.06 RIGHTS OF SECURED PARTIES. The Collateral Agent or any other Secured
Party may (but shall not be obligated to) pay or secure payment of any Tax or
other claim that may be secured by or result in a Lien on any Collateral. The
Collateral Agent or any other Secured Party may (but shall not be obligated to)
do or cause to be done any other thing that is necessary or desirable to
preserve, protect or maintain the Collateral or, after an Event of Default has
occurred and for so long as it shall be continuing, to enhance its value. The
Collateral Agent shall have no obligation to any Person to act or refrain from
acting or exercising any of its rights under this Agreement; provided, however,
that anything to the contrary contained herein notwithstanding, the Collateral
Agent shall be liable for its own gross negligence or willful misconduct. The

                           Borrower Security Agreement

                                      -12-

Borrower, in accordance with Section 4.15, shall immediately reimburse the
Collateral Agent or any other Secured Party for any reasonable payment or
expense (including reasonable attorneys' fees and expenses) that the Collateral
Agent or such other Secured Party may incur pursuant to this Section 4.06.

     4.07 EVENTS OF DEFAULT ETC. During the period during which an Event of
Default shall have occurred and be continuing:

          (a) the Collateral Agent shall have the rights and remedies with
     respect to this Agreement as more particularly provided herein or in the
     Credit Agreement;

          (b) the Borrower shall, at the request of the Collateral Agent,
     assemble Collateral owned by it that is movable (and not otherwise in the
     possession of the Collateral Agent), if any, at such place or places,
     reasonably convenient to both the Collateral Agent and the Borrower, as
     designated in such request;

          (c) subject to applicable law and to the extent permitted by the BLM,
     the Collateral Agent may (but shall not be obligated to), without notice to
     the Borrower and at such times as the Collateral Agent in its sole judgment
     may determine, exercise any or all of the Borrower's rights in, to and
     under, or in any way connected to the Collateral and the Collateral Agent
     shall otherwise have and may (but shall not be obligated to) exercise all
     of the rights, powers, privileges and remedies with respect to the
     Collateral of a secured party under the Uniform Commercial Code (whether or
     not said Code is in effect in the jurisdiction where the rights, powers,
     privileges and remedies are asserted) and such additional rights, powers,
     privileges and remedies to which a secured party is entitled under the laws
     in effect in any jurisdiction where any rights, powers, privileges and
     remedies hereunder may be asserted, including, without limitation, the
     right, to the maximum extent permitted by applicable 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
     thereof (and the Borrower agrees to take all such action as may be
     appropriate to give effect to such right);

          (d) the Collateral Agent may (but shall not be obligated to) make any
     reasonable compromise or settlement it reasonably deems desirable with
     respect to any of the Collateral and may (but shall not be obligated to)
     extend the time of payment, arrange for payment in installments, or
     otherwise modify the terms, of all or any part of the Collateral;

          (e) the Collateral Agent may (but shall not be obligated to), in its
     name or in the name of the Borrower 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 any of the Collateral; and

          (f) subject to applicable law and to the extent permitted by the BLM,
     the Collateral Agent may (but shall not be obligated to), upon 10 Business
     Days' prior written notice to the Borrower of the time and place, with
     respect to the Collateral or any part thereof which shall then be or shall
     thereafter come into the possession, custody or control of the Collateral
     Agent, any other Secured Party or any of their respective agents, sell,
     lease, assign or otherwise dispose of all or any part of such Collateral,
     at such place or places as the Collateral Agent deems reasonable, and for
     cash or for credit or for future delivery (without thereby assuming any
     credit risk), at public or private sale, without demand of performance or
     notice of intention to effect any such disposition or of the time or place
     thereof (except such notice as is required above or by applicable statute
     and cannot be waived). The Collateral Agent or any other Secured Party or
     anyone else may be the purchaser, lessee, assignee or recipient of any or
     all of the Collateral so disposed of at any public sale (or, to the maximum
     extent permitted by applicable law, at any private sale) and thereafter
     hold the same absolutely, free from any claim or right of whatsoever

                           Borrower Security Agreement

                                      -13-

     kind, including any right or equity of redemption (statutory or otherwise),
     of the Borrower, any such demand, notice and right or equity being hereby
     expressly waived and released to the maximum extent permitted by applicable
     law. Subject to applicable law and to the extent permitted by the BLM, 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.

The proceeds of each collection, sale or other disposition under this Section
4.07 shall be applied in accordance with Section 4.11.

     The Borrower recognizes that, by reason of certain prohibitions contained
in the Securities Act of 1933, as amended, and applicable state securities laws,
the Collateral Agent may be compelled, subject to the notice provision as
provided in paragraph (f) of this Section 4.07, with respect to any sale of all
or any part of the Collateral constituting a security (as such term is defined
in the Securities Act of 1933), to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Borrower acknowledges that any such private sale may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the Borrower or the issuer thereof to
register it for public sale.

     4.08 DEFICIENCY. If the proceeds of sale, collection or other realization
of or upon the Collateral by virtue of the exercise of remedies under Section
4.07 are insufficient to cover the costs and expenses of such realization and
the payment in full of the Secured Obligations, the Collateral Agent shall
retain all rights and remedies under the Transaction Documents, and the Borrower
shall remain liable, with respect to any deficiency to the extent the Borrower
is obligated under this Agreement.

     4.09 REMOVALS, ETC. Without at least 30 days' prior written notice to the
Collateral Agent, the Borrower shall not: (a) maintain any of its Records at any
office, or permit any Inventory, Equipment or assets of the Projects to be
located anywhere, other than at the Borrower's Address for Notices set out
beneath its name on the signature pages hereto or at one of the locations
identified in Annex 6 or in transit from one of such locations to another; (b)
maintain its chief executive office at any place other than at the Borrower's
Address for Notices set out beneath its name on the signature pages hereto; (c)
change its corporate name, or the name under which it does business, from the
name shown on the signature pages hereto; or (d) change the jurisdiction in
which it is organized from that in which it is organized on the date hereof. The
signature page hereto correctly specifies the place of business of the Borrower
or, if the Borrower had more than one place of business, the location of the
chief executive office of the Borrower, in each case during the period of four
months ending on December 31, 2002.

     4.10 PRIVATE SALE. The Collateral Agent and the other Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 4.07 conducted in a
commercially reasonable manner. Subject to and without limitation of the
preceding sentence, the Borrower hereby waives any claims against the Collateral
Agent or any other Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale to an unrelated
third party was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.

                           Borrower Security Agreement

                                      -14-

     4.11 APPLICATION OF PROCEEDS.

          (a) Application of Proceeds. Except as otherwise herein expressly
     provided, the proceeds of any collection, sale or other realization of all
     or any part of the Collateral pursuant hereto, and any other cash at the
     time held by the Collateral Agent under this Agreement, shall be applied by
     the Depositary Bank at the direction of the Collateral Agent to the Secured
     Obligations in accordance with Article IV of the Depositary Agreement.

          (b) Borrower Remains Obligated. No sale or other disposition of all or
     any part of the Collateral pursuant to Section 4.07 shall be deemed to
     relieve the Borrower of its obligations under any Transaction Document to
     which it is a party except to the extent the proceeds thereof are applied
     to the payment of such obligations.

          (c) Proceeds. As used in this Article IV, "PROCEEDS" of Collateral
     means cash, securities and other property realized in respect of, and
     distributions in kind of, Collateral, including any thereof received under
     any reorganization, liquidation or adjustment of debt of the Borrower or
     any issuer of or obligor on any of the Collateral.

     4.12 ATTORNEY-IN-FACT. Without limiting any rights or powers granted by
this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent is hereby appointed the attorney-in-fact of the
Borrower for the purpose of carrying out the provisions of this Article IV and
taking any action and executing any instruments which the Collateral Agent may
deem necessary or desirable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Article IV to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Borrower
representing any payment or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same.

     4.13 PERFECTION. Prior to or on the Closing Date, the Borrower shall: (a)
file such financing statements and other documents in the offices set out on
Annex 8 in order to perfect the security interests granted by Article III to the
extent such security interests may be perfected by such filings; (b) cause the
Collateral Agent (to the extent requested by the Collateral Agent) to be listed
as the lienholder on all certificates of title or ownership relating to Motor
Vehicles owned by the Borrower; and (c) stamp or mark the books of the Borrower
to record the Liens granted hereunder. Copies of any such financing statement or
amendment thereto shall promptly be delivered to the Collateral Agent. The
Borrower hereby authorizes the Collateral Agent to cause the filing of one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Borrower where
permitted by applicable law. Copies of any such statement or amendment thereto
shall promptly be delivered to the Borrower.

     4.14 TERMINATION.

          (a) Upon any distribution or transfer of any Collateral in accordance
     with Section 8.12 or 8.13 of the Credit Agreement, the Collateral Agent
     shall, upon the written request of (and at the sole cost and expense of)
     the Borrower, promptly execute and deliver to the Borrower such Uniform
     Commercial Code termination statements and such other documentation as
     shall be reasonably requested by the Borrower to evidence the termination
     and release of the Liens on such Collateral.

                           Borrower Security Agreement

                                      -15-

          (b) Upon the Termination Date, the security interest created by this
     Agreement shall terminate and all rights to the Collateral shall revert to
     the Borrower, and the Collateral Agent shall (at the written request and
     sole cost and expense of the Borrower) promptly cause to be transferred and
     delivered, against receipt but without any recourse, warranty or
     representation whatsoever, any remaining Collateral and money received in
     respect thereof, to or on the order of the Borrower and to be released and
     cancelled all licenses and rights referred to in Section 4.04. The
     Collateral Agent shall also (at the written request and sole cost and
     expense of the Borrower) promptly execute and deliver to the Borrower upon
     such termination such Uniform Commercial Code termination statements,
     certificates for terminating the Liens on the Motor Vehicles and such other
     documentation as shall be reasonably requested by the Borrower to effect
     the termination and release of the Liens on the Collateral. Without
     limiting the generality of the foregoing, the Collateral Agent shall,
     within 30 days of its receipt of a request from the Borrower at any time
     following the Termination Date, and at the expense of the Borrower, (i) pay
     to the Borrower or deposit into a deposit account in the Borrower's name
     the balance on deposit in any Account that is a deposit account, (ii) send
     to the Depositary Bank an authenticated statement that releases the
     Depositary Bank from any further obligation to comply with entitlement
     orders originated by the Collateral Agent with respect to any Account that
     is a securities account, (iii) communicate the authoritative copy of any
     electronic chattel paper constituting part of the Collateral to the
     Borrower or its designated custodian, (iv) send to each Person having an
     unfulfilled obligation to pay or deliver to the Collateral Agent proceeds
     arising from any letter of credit right constituting Collateral an
     authenticated release from any further obligation to pay or deliver to the
     Collateral Agent proceeds arising from any such letter of credit right, and
     (v) execute and deliver to the Borrower statements terminating any Consent
     and Agreement then in effect.

     4.15 EXPENSES.

          (a) Subject to, and without duplication of amounts described in,
     Section 11.03 of the Credit Agreement, the Borrower agrees promptly to pay
     to the Collateral Agent all reasonable fees and out-of-pocket expenses
     (including reasonable fees and expenses for legal services) of, or incident
     to, the enforcement of any of the provisions of this Article IV, or the
     exercise by experts, agents or attorneys selected by the Collateral Agent
     in good faith of any rights or privileges of the Borrower in respect of the
     Collateral, or any actual or attempted sale, or any exchange, enforcement,
     collection, compromise or settlement in respect of any of the Collateral,
     and for the care of the Collateral and defending or asserting rights and
     claims of the Collateral Agent and the other Secured Parties in respect
     thereof, by litigation or otherwise, in each case in accordance with the
     terms of this Agreement, and all such reasonable fees and expenses,
     together with interest thereon at the applicable Post-Default Rate, shall
     be Secured Obligations of the Collateral Agent secured under Article III.

          (b) The terms, conditions, covenants and agreements to be observed or
     performed by the Borrower under this Agreement shall be observed or
     performed by it at its sole cost and expense.

     4.16 FURTHER ASSURANCES. The Borrower agrees that, at any time and from
time to time, at its sole cost and expense, it shall promptly execute and
deliver all further agreements, instruments, documents and certificates and take
all further action that, in the reasonable judgment of the Collateral Agent, may
be necessary or desirable in order to fully effect the purposes of this
Agreement (including the delivery of possession of any Collateral that hereafter
comes into existence or is acquired in the future by the Collateral Agent as
pledgee for the benefit of the Secured Parties) and to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
the Collateral or any part thereof.

                           Borrower Security Agreement

                                      -16-

     4.17 RELEASE OF MOTOR VEHICLES. So long as no Event of Default shall have
occurred and be continuing, at the written request and, in accordance with
Section 4.15, sole cost and expense of the Borrower, the Collateral Agent shall
execute and deliver to the Borrower such instruments as the Borrower shall
reasonably request to remove the notation of the Collateral Agent as lienholder
on any certificate of title for any Motor Vehicle; provided, that any such
instruments shall be delivered, and the release shall be effective, only upon
receipt by the Collateral Agent of a certificate from the Borrower stating that
the Motor Vehicle the lien on which is to be released is to be sold or has
suffered a casualty loss (with title thereto passing to the casualty insurance
company therefor in settlement of the claim for such loss) and that the sale or
casualty proceeds thereon shall first have been delivered to the Collateral
Agent.

                                    ARTICLE V

                                  MISCELLANEOUS

     5.01 COLLATERAL AGENT'S RIGHT TO PERFORM ON BORROWER'S BEHALF. If the
Borrower shall fail to observe or perform any of the terms, conditions,
covenants and agreements to be observed or performed by it under this Agreement,
the Collateral Agent may (but shall not be obligated to), upon reasonable notice
to the Borrower, do the same or cause it to be done or performed or observed by
experts, agents or attorneys selected by the Collateral Agent in good faith at
the sole cost and expense of the Borrower, either in its name or in the name and
on behalf of the Borrower, and the Borrower hereby authorizes the Collateral
Agent so to do.

     5.02 WAIVERS OF RIGHTS INHIBITING ENFORCEMENT. The Borrower waives, to the
maximum extent permitted by applicable law:

          (a) any claim that, as to any part of the Collateral, a public sale,
     should the Collateral Agent elect so to proceed, is, in and of itself, not
     a commercially reasonable method of sale for the Collateral;

          (b) the right to assert in any action or proceeding between it and the
     Collateral Agent any offsets that it may have;

          (c) except as otherwise provided in this Agreement, NOTICE OR JUDICIAL
     HEARING IN CONNECTION WITH THE COLLATERAL AGENTS TAKING POSSESSION OR
     DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND
     HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
     BORROWER WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
     UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME,
     PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE
     ENFORCEMENT OF THE COLLATERAL AGENT'S RIGHTS HEREUNDER;

          (d) all rights of redemption, appraisement, valuation, stay and
     extension or moratorium; and

          (e) all other rights the exercise of which would, directly or
     indirectly, prevent, delay or inhibit the enforcement of any of the rights
     or remedies of the Collateral Agent and the other Secured Parties under
     this Agreement or the absolute sale of the Collateral, now or hereafter in
     force under any applicable law, and the Borrower, for itself and all who
     may claim under it,

                          Borrower Security Agreement

                                      -17-

     insofar as it or they now or hereafter lawfully may, hereby waive the
     benefit of all such laws and rights.

     5.03 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of the
Collateral Agent, any other Secured Party or any of such Person's agents to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise by the Collateral Agent, any other Secured Party or
any of such Person's agents of any right, power or remedy hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies herein or in any other
Transaction Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which either Collateral Agent or any other Secured
Party would otherwise have. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of either Collateral
Agent or any other Secured Party to any other or further action in any
circumstances without notice or demand, except to the extent notice is expressly
required by this Agreement or any other Financing Document.

     5.04 NOTICES. All notices, requests 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 in the manner
set out in Section 11.02 of the Credit Agreement Unless otherwise so changed in
accordance with the Credit Agreement by a party hereto, all notices, requests
and other communications to such party shall be sent to the address of such
party set out on the signature pages hereto.

     5.05 AMENDMENTS, ETC. This Agreement may be amended, supplemented, modified
or waived only by an instrument in writing duly executed by the Borrower and the
Collateral Agent. Any such amendment, supplement, modification or waiver shall
be binding upon the Collateral Agent and each Lender, each holder of any of the
Secured Obligations and the Borrower. Any waiver shall be effective only in the
specific instance and for the specified purpose for which it was given.

     5.06 EXPENSES. The parties hereto agree that all costs and expenses covered
by Section 11.03 of the Credit Agreement shall be Secured Obligations entitled
to the benefits of the collateral security provided pursuant to Article III.

     5.07 SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in full force
and effect until the termination hereof pursuant to Section 4.14; and (b) be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Borrower and the Collateral Agent, the Lenders and each holder of
any of the Secured Obligations; provided, however, that the Borrower shall not
assign or transfer its rights hereunder without the prior written consent of the
Collateral Agent.

     5.08 SURVIVAL, ETC. The obligations of the Borrower under Section 4.15
shall survive after termination of this Agreement or the resignation or the
removal of the Collateral Agent. In addition, the representations and warranties
of the Borrower set out in this Agreement or contained in any documents
delivered to the Collateral Agent or any other Secured Party pursuant to this
Agreement shall be considered to have been relied upon by the Secured Parties in
entering into the Credit Agreement and the relevant Financing Documents and
making each Loan, notwithstanding any investigation on their respective parts.

     5.09 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and either of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all

                           Borrower Security Agreement

                                      -18-

prior agreements and understandings, written or oral, relating to the subject
matter hereof. This Agreement shall become effective at such time as the
Collateral Agent shall have received counterparts hereof signed by all of the
intended parties hereto.

     5.10 AGENTS, ETC. The Collateral Agent may employ agents, experts and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents, experts or attorneys-in-fact
selected by it in good faith.

     5.11 SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by applicable law: (a)
the other provisions hereof shall remain in full force and effect in such
jurisdiction in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     5.12 HEADINGS. Headings appearing herein are used solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.

     5.13 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, NEITHER THE COLLATERAL AGENT NOR ANY OTHER SECURED PARTY SHALL HAVE
LIABILITY WITH RESPECT TO, AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE FOR:

          (a) ANY LOSS OR DAMAGE SUSTAINED BY THE BORROWER, OR ANY LOSS, DAMAGE,
     DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY
     OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO,
     ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT EXCEPT FOR ANY
     SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME
     IS THE RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH SECURED PARTY
     CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE; OR

          (b) ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
     DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH ANY CLAIM RELATED TO
     THIS AGREEMENT.

     5.14 SECURITY INTEREST ABSOLUTE. To the maximum extent permitted by
applicable law and subject to the rules and regulations of the BLM, the rights
and remedies of the Collateral Agent hereunder, the Liens created hereby, and
the obligations of the Borrower under this Agreement are absolute, irrevocable
and unconditional and will remain in full force and effect without regard to,
and will not be released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever (other than termination
pursuant to Section 4.14), including:

          (a) any renewal, extension, amendment, or modification of, or addition
     or supplement to or deletion from, any of the Transaction Documents or any
     other instrument or agreement referred to therein, or any assignment or
     transfer of any thereof;

          (b) any waiver of, consent to or departure from, extension, indulgence
     or other action or inaction under or in respect of any of the Secured
     Obligations, this Agreement, any other Transaction Document or other
     instrument or agreement relating thereto, or any exercise or non-exercise
     of any right, remedy, power or privilege under or in respect of the Secured
     Obligations,

                           Borrower Security Agreement

                                      -19-

     this Agreement, any other Transaction Document or any such other instrument
     or agreement relating thereto;

          (c) any furnishing of any additional security for the Secured
     Obligations or any part thereof to the Collateral Agent or any other person
     or any acceptance thereof by the Collateral Agent or any other person or
     any substitution, sale, exchange, release, surrender or realization of or
     upon any such security by the Collateral Agent or any other person or the
     failure to create, preserve, validate, perfect or protect any other Lien
     granted to, or purported to be granted to, or in favor of, the Collateral
     Agent or any other Secured Party;

          (d) any invalidity, irregularity or unenforceability of all or any
     part of the Secured Obligations, any other Transaction Document or any
     other agreement or instrument relating thereto or any security therefor;

          (e) the acceleration of the maturity of any of the Secured Obligations
     or any other modification of the time of payment thereof; or

          (f) any other event or circumstance whatsoever which might otherwise
     constitute a legal or equitable discharge of a surety or a guarantor, it
     being the intent of this Section 5.14 that the obligations of the Borrower
     hereunder shall be absolute, irrevocable and unconditional under any and
     all circumstances.

     5.15 REINSTATEMENT. This Agreement and the Lien created hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must otherwise be restored by any holder of the Secured
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Borrower shall indemnify the Collateral
Agent, each other Secured Party and its respective employees, officers and
agents on demand for all reasonable fees, costs and expenses (including, without
limitation, reasonable fees, costs and expenses of counsel) incurred by the
Collateral Agent, such other Secured Party or its respective employees, officers
or agents in connection with such reinstatement, rescission or restoration.

     5.16 NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES HERETO ARE
SOLELY FOR THE BENEFIT OF THE BORROWER, THE COLLATERAL AGENT AND THE OTHER
SECURED PARTIES, AND NO PERSON (OTHER THAN THE PARTIES HERETO, THE OTHER SECURED
PARTIES AND THEIR SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY
RIGHTS HEREUNDER.

     5.17 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. EACH OF THE BORROWER AND THE COLLATERAL AGENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY
(INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT IN THE
STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
COLLATERAL AGENT AND THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY 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 A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

                           Borrower Security Agreement

                                      -20-

     5.18 WAIVER OF JURY TRIAL. THE BORROWER AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     5.19 SERVICE OF PROCESS. Nothing herein shall in any way be deemed to limit
the ability of the Financing Parties or the Borrower to serve any writs, process
or summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Borrower or the Collateral Agent, as applicable, in such
jurisdiction, and in such manner, as may be permitted by applicable law.

     5.20 AUTHORITY OF THE COLLATERAL AGENT. The Borrower acknowledges and
agrees that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken, or determination or request made, by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any power, right or remedy provided for or resulting or arising out of this
Agreement shall, as between the Collateral Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Borrower, the Collateral Agent shall be conclusively
presumed to be acting as the Collateral Agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Borrower shall be
under no obligation or entitlement to make any inquiry respecting such
authority.

     5.21 LIMITATION OF RECOURSE. The obligations of the Borrower under this
Agreement shall be obligations of the Borrower only and neither the Collateral
Agent nor any Secured Party shall have any claim against or recourse to (whether
by operation of law or otherwise) any Non-Recourse Person (other than claims
against and recourse to the Sponsor with respect to its obligations under the
Borrower Equity Interest Pledge) in respect of such obligations of the Borrower.
Notwithstanding the foregoing, nothing in this Section 5.21 shall impair or in
any way limit any liabilities or obligations of (a) the Sponsor under or
pursuant to its obligations as set forth in the Borrower Equity Pledge, or (b)
any Non-Recourse Party for fraud or willful misconduct.

                           Borrower Security Agreement

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                  ORMESA LLC

                                  BY: ORMAT FUNDING CORP.,
                                      ITS SOLE MEMBER AND CONTROL MANAGER

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  Address for Notices: 980 Greg Street
                                                       Sparks, NV 89431
                                                       Attn: President

                                  Telephone: (775) 356-9029
                                  Telecopy: (775) 356-9039

                                  UNITED CAPITAL,
                                  a division of Hudson United Bank,
                                     not in its individual capacity, but solely
                                     as Collateral Agent

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  Address for Notices: 87 Post Road East
                                                       Westport, CT 06880

                                  Telecopier No.: (203) 291-6652
                                  Telephone No.: (203) 291-6639
                                  Attention: Jerry Peters, Senior Vice President

                           Borrower Security Agreement

                                                                         ANNEX 1

                               Assigned Agreements

1.    each PPA

2.    the O&M Contract

3.    each Plant Connection Agreement

4.    the Energy Services Agreement, upon execution and delivery thereof

5.    the Water Supply Agreement

6.    each BLM Lease

7.    each Site License

8.    each ROW

9.    the LLC Agreement

10.   the Unit Agreement

11.   each Transmission Service Agreement

12.   the Funding and Construction Agreement

13.   the Purchase Order

                           Borrower Security Agreement

                                                                         ANNEX 2

                 List of Copyrights, Copyright Registrations and
                    Applications for Copyright Registrations

                                      NONE

                           Borrower Security Agreement

                                                                         ANNEX 3

                     List of Patents and Patent Applications

                                      NONE

                          Borrower Security Agreement

                                                                         ANNEX 4

                 List of Trade Names, Trademarks, Service Marks,
                  Trademark and Service Mark Registrations and
            Applications for Trademark and Service Mark Registrations

                                      NONE

                           Borrower Security Agreement

                                                                         ANNEX 5

                List of Contracts, Licenses and Other Agreements

                                      NONE

                           Borrower Security Agreement

                                                                         ANNEX 6

                                    Locations

3300 East Evan Hewes Highway
Holtville, CA 92250

                           Borrower Security Agreement

                                                                         ANNEX 7

                                   Instruments

                                      NONE

                           Borrower Security Agreement

                                                                         ANNEX 8

                                Filing Locations

Secretary of State of the State of Delaware

Imperial County, California

                           Borrower Security Agreement

                                                                     Exhibit B-2
                                                             to Credit Agreement

                        FORM OF BORROWER PLEDGE AGREEMENT

     This PLEDGE AGREEMENT (this "AGREEMENT"), dated as of __________ ___, 2002,
between ORMAT FUNDING CORP., a Delaware corporation (the "PLEDGOR"), and UNITED
CAPITAL, a division of Hudson United Bank, a New Jersey banking corporation
("UNITED"), not in its individual capacity, but solely as Collateral Agent for
the Lenders and other Secured Parties under and as defined in the Credit
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "COLLATERAL AGENT").

     WHEREAS, pursuant to the Credit Agreement, dated as of December 31, 2002
(as amended, modified and supplemented and in effect from time to time, the
"CREDIT AGREEMENT"), among Ormesa LLC, a Delaware limited liability company (the
"BORROWER"), the lenders party thereto from time to time (the "LENDERS"),
United, not in its individual capacity, but solely as administrative agent for
such Lenders, and the Collateral Agent, the Lenders have agreed to make loans
and extend other credit to the Borrower for the purpose of financing certain
costs of acquiring, improving and operating various geothermal power plant
facilities and related expenses;

     WHEREAS, the Borrower is a direct, wholly-owned subsidiary of the Pledgor;

     WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Pledgor shall have executed
and delivered this Agreement and granted the Liens provided for herein; and

     WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce the Lenders to make loans to the Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Pledgor has agreed to pledge and grant a
security interest in the Collateral (as defined below) as security for the
Secured Obligations (as defined in the Credit Agreement).

     Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

     1.01 DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in Schedule I to the
Credit Agreement. All terms used herein which are not defined herein or in the
Credit Agreement and are defined in the Uniform Commercial Code (as such term is
defined below) shall have the meanings therein stated. In addition, capitalized
terms used in the preamble hereto shall have the respective meanings given
thereto and the following terms shall have the following meanings under this
Agreement.

     "ARTICLE 9" shall mean Article 9 of the Uniform Commercial Code of the
State of New York, as revised and in effect on and after July 1, 2001.

     "BORROWER INSOLVENCY EVENT" shall mean the insolvency, bankruptcy or
reorganization of the Borrower or any other event described in Section 9.01 (g)
or (h) of the Credit Agreement with respect to the Borrower.

     "BORROWER INSOLVENCY PROCEEDINGS" shall have the meaning assigned to such
term in Section 4.05.

                                Pledge Agreement

     "COLLATERAL" shall have the meaning assigned to such term in Article III.

     "OWNERSHIP COLLATERAL" shall have the meaning assigned to such term in
Article III(c).

     "PLEDGED INTERESTS" shall have the meaning assigned to such term in Article
III(a).

     "RECORDS" shall have the meaning assigned to such term in Section 2.01.

     1.02 INTERPRETATION. The principles of interpretation set out in Article I
of the Credit Agreement shall apply equally to this Agreement mutatis mutandis.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

     The Pledgor represents and warrants to the Secured Parties that:

     2.01 RECORDS. The place of business or, if there is more than one place of
business, the chief executive office of the Pledgor is located at the Pledgor's
Address for Notices set out on the signature page hereto, and the Pledgor has no
books and records concerning the Collateral (hereinafter, collectively called
the "Records") at any location other man at such address.

     2.02 LEGAL TITLE. The Pledgor is the sole legal and beneficial owner of the
Collateral free and clear of all Liens (other than Permitted Liens and the
pledge and security interest granted to the Collateral Agent hereunder for the
benefit of the Secured Parties, which pledge and security interest shall,
following a filing described in Section 5.13 hereof, constitute a first priority
perfected pledge and security interest in and to all of the Collateral) and no
right or option to acquire all or any part of the Collateral exists in favor of
any other Person. The Pledgor has not agreed to secure any Indebtedness by any
Lien upon and does not have outstanding any obligation to create Liens on, or
with respect to, any Collateral (other than Permitted Liens and the Liens
granted to the Collateral Agent hereunder for the benefit of the Secured
Parties). All filings and other actions necessary to create, preserve, validate,
perfect and protect such pledge and security interest and the priority thereof
have been duly made or taken (other than any such filings or other actions
permitted to be made or taken after the Closing Date in accordance with this
Agreement and the other Financing Documents).

     2.03 PLEDGED INTERESTS. The Pledged Interests identified in Annex 1 are,
and all other Pledged Interests in which the Pledgor shall hereafter grant a
security interest pursuant to Article III will be, duly authorized, validly
existing, fully paid and non-assessable and none of such Pledged Interests is or
will be subject to any contractual restriction, or any restriction under the
Charter Documents of the Borrower, upon the transfer of such Pledged Interests
(except for any such restriction contained herein or in the other, Financing
Documents).

     2.04 ANNEX 1. The Pledged Interests identified in Annex 1 constitute all of
the membership interests or other ownership interests of any class or character
of the Borrower beneficially owned by the Pledgor on the date hereof (whether or
not registered in the name of the Pledgor), and constitute one hundred percent
(100%) of the membership or other ownership interests of the Borrower. Annex 1
correctly identifies, as at the date hereof, the registered owner of such
Pledged Interests and the respective percentage of membership interests
comprising such Pledged Interests.

                                Pledge Agreement

     2.05 CORPORATE STATUS. The Pledgor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

     2.06 DUE AUTHORIZATION, LEGALITY AND ENFORCEABILITY. The Pledgor has full
corporate power, authority and legal right to execute and deliver the
Transaction Documents to which it is a party and to perform its obligations
thereunder. The execution, delivery and performance by the Pledgor of each of
the Transaction Documents to which it is or is intended to be a party and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on its part. Each of the Transaction Documents
to which the Pledgor is a party has been duly executed and delivered by or on
behalf of the Pledgor and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by, (i) applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally; and (ii) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).

     2.07 NO CONSENT, BREACH, ETC. The execution, delivery and performance by
the Pledgor of each Transaction Document to which it is or is intended to be a
party do not and will not: (a) require any consent or approval of any Person
that has not been obtained and each such consent and approval that has been
obtained is in full force and effect; (b) violate any Government Rule or
Government Approval applicable to it; (c) conflict with, result in a breach of
or constitute a default under (A) its Charter Documents or any corporate action,
or any resolution of the board of directors, or (B) any Project Document or any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which it is a party or by which it or its Property may be bound or
affected in any material respect; or (d) result in, or create any Lien (other
than a Permitted Lien) upon or with respect to any of the Collateral now owned
or hereafter acquired by the Pledgor. The Pledgor is not in violation of any
Government Rule or Government Approval applicable to it or any of its
Properties, except where such violation could not reasonably be expected to
result in a Material Adverse Effect. The Pledgor is not in breach of or default
under any indenture, loan or credit agreement or any other agreement, lease or
instrument referred to in clause (c) of this Section 2.08, except such breaches
or defaults that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

     2.08 GOVERNMENT APPROVALS. The Pledgor possesses all Government Approvals
necessary under Government Rules for it to own its Properties and conduct its
business, and no Government Approval by, and no filing (other than the filing
described in Section 5.13) with, any Government Authority is required for the
execution, delivery and performance of its obligations under this Agreement and
each other Transaction Document to which it is a party or the validity and
enforceability of such obligations.

     2.09 NO PROCEEDINGS. There is no action, suit or proceeding at law or in
equity or by or before any Government Authority, arbitral tribunal or other body
now pending or, to the best knowledge of the Pledgor, threatened against or
affecting the Pledgor or its Property, that could reasonably be expected to
result in a Material Adverse Effect.

     2.10 INVESTMENT COMPANY ACT. The Pledgor is not an "investment company" or
a company "controlled" by an "investment company" or an "investment advisor",
within the meaning of the Investment Company Act of 1940.

     2.11 REGULATION OF PLEDGOR. The Pledgor is not, and is not subject to
regulation as, a "public-utility company", an "electric utility company", a
"holding company" or as an "affiliate" or a "subsidiary company" of any of the
foregoing under PUHCA, and is not subject to regulation as a "public utility"
under the Federal Power Act, as amended, or under state law with respect to
rates, financial or organizational regulation.

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     2.12 TAXES. The Pledgor has filed or caused to be filed all tax returns
that are required by applicable law to be filed, and has paid all Taxes shown to
be due and payable on said returns or on any assessments made against it or any
of its Property and all other Taxes, imposed on it by any Government Authority
(other than Taxes the payment of which is not yet due or that are being
Contested) except, in each case, where such failure could not reasonably be
expected to have a Material Adverse Effect. No Liens for Taxes (other than
Permitted Liens) against the Pledgor or any of its Property exist and no claims
are being asserted against the Pledgor or any of its Property with respect to
any Taxes.

     2.13 CERTIFICATED SECURITIES. No portion of the Collateral is represented
by certificates or instruments.

     2.14 CHANGES IN CIRCUMSTANCES. The Pledgor has not, within the period of
four months prior to the date hereof: (a) changed its location (as determined
pursuant to Section 9-307 of Article 9); (b) changed its name; or (c) become a
"new debtor" (as defined in Section 9-102(a)(56) of Article 9) with respect to a
security agreement previously entered into by any other Person.

                                   ARTICLE III

                                   THE PLEDGE

     As collateral security for the prompt payment and performance in full when
due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations now existing or hereafter arising, the Pledgor hereby pledges and
grants to the Collateral Agent for the benefit of the Secured Parties as
hereinafter provided, a lien on and security interest in, all of the Pledger's
right, title and interest in, to and under the following, whether now owned by
the Pledgor or hereafter acquired and whether now existing or hereafter coming
into existence and wherever located (all being collectively referred to herein
as "COLLATERAL"):

(a)  the membership interests of the Borrower identified in Annex 1 and all
     other ownership interests of whatever class or character of the Borrower,
     now owned or hereafter acquired by the Pledgor, in each case together with
     all certificates, if any, evidencing the same (collectively, the "PLEDGED
     INTERESTS");

(b)  all certificates, shares, securities, moneys, membership interests, stock
     or other Property representing a dividend or distribution on any of the
     Pledged Interests or other Ownership Collateral, or representing a
     distribution or return of capital upon or in respect of any of the Pledged
     Interests or other Ownership Collateral, or resulting from a split-up,
     revision, reclassification or other like change of any of the Pledged
     Interests or other Ownership Collateral or otherwise received in exchange
     therefor, and any subscription warrants, rights or options issued to the
     holders of, or otherwise in respect of, any of the Pledged Interests or
     other Ownership Collateral;

(c)  without prejudice to Section 8.02, 8.12 or 8.25 of the Credit Agreement and
     without affecting the obligations of the Pledgor or the Borrower under any
     provision prohibiting such action under any Financing Document or any other
     Transaction Document, in the event of any consolidation or merger in which
     the Borrower is not the surviving entity: (i) all ownership interests of
     any class or character of the successor entity (unless such successor
     entity is the Borrower itself) formed by or resulting from such
     consolidation or merger received in consideration of, or in exchange for,
     the Collateral described in paragraphs (a) and (b) above; and (ii) all
     other consideration (including, without limitation, all personal property,
     tangible or intangible) received in exchange

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     for such Collateral (the Pledged Interests, together with all other
     certificates, shares, securities, moneys, membership interests, stock or
     other Property as may from time to time be pledged hereunder pursuant to
     paragraph (a) or (b) above and this paragraph (c) and the proceeds of and
     to any such property and, to the extent related to any such property or
     such proceeds, all books, correspondence, credit files, records, invoices
     and other papers, being herein collectively called the "OWNERSHIP
     COLLATERAL");

(d)  (i) all of Pledgor's right, title and interest (x) under the LLC Agreement,
     including all voting and management rights and all rights to grant and
     withhold consents and approvals, and (y) regarding access to and inspection
     and use of all books and records, including computer software and computer
     software programs, of the Borrower, and (ii) all other rights, interests,
     property or claims to which the Pledgor may be entitled in its capacity as
     member of the Borrower; and

(e)  all proceeds of any of the foregoing;

provided, however, any distributions, payments or releases (whether in the form
of cash, instruments or otherwise) properly made by the Borrower to the Pledgor
pursuant to Section 8.13 of the Credit Agreement shall automatically be released
from the Lien granted hereunder and shall no longer be part of the Collateral
upon the making of such distribution, payment or release.

                                   ARTICLE IV

                                    COVENANTS

     In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Pledgor hereby agrees with each Secured Party and the
Collateral Agent as follows:

     4.01 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Pledgor shall (a)
preserve and maintain its legal existence, (b) preserve and maintain its good
standing and all of its material licenses, rights, privileges and franchises
necessary for the maintenance of its existence and qualification to do business,
and (c) conduct of its business in an orderly, efficient and regular manner,
unless the failure to so comply could not reasonably be expected to result in a
Material Adverse Effect.

     4.02 NO DISSOLUTION. The Pledgor shall not cause or consent to any
dissolution or termination of the Borrower, nor shall the Pledgor join in or
consent to any election to dissolve or terminate the Borrower.

     4.03 LIENS. Except for any Liens arising under this Agreement, the Pledgor
will not secure or agree to secure any Indebtedness by any Lien upon, or have
outstanding at any time any Lien or obligation to create Liens on or with
respect to, any Collateral.

     4.04 NOTICES. The Pledgor shall promptly upon: (a) obtaining knowledge of
any action, suit or proceeding at law or in equity by or before any Government
Authority, arbitral tribunal or other body pending or threatened against or
otherwise affecting the Pledgor that could reasonably be expected to result in a
Material Adverse Effect; (b) becoming aware of any other circumstance, act or
condition (including the adoption, amendment or repeal of any Government Rule or
the Impairment of any Government Approval or notice affecting the Pledgor
(whether formal or informal, written or oral) of the failure to comply with the
terms and conditions of any Government Approval) that could reasonably be
expected to result in a Material Adverse Effect; or (c) knowing or having reason
to believe that any Default or Event of Default relating to the Pledgor has
occurred, in each case, furnish to the Collateral Agent a notice of such event
describing the

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same in reasonable detail and, together with such notice or as soon thereafter
as practicable, a written description of the action that the Pledgor has taken
or proposes to take with respect thereto.

     4.05 BANKRUPTCY PROCEEDINGS. To the maximum extent permitted by applicable
law, the Pledgor hereby agrees that it shall not: (a) institute, take, cause to
be taken, or consent to, any action (whether as member or otherwise) intended to
result in the institution against the Borrower of any proceedings (whether of a
legal or equitable nature or otherwise) which may lead to a Borrower Insolvency
Event (such proceedings, "BORROWER INSOLVENCY PROCEEDINGS"); (b) consent to the
taking by the Borrower of any action which would result in the commencement of
any Borrower Insolvency Proceedings; or (c) to the extent it is entitled or
lawfully able to do so, fail to timely controvert, or to cause the Borrower to
timely controvert, any Borrower Insolvency Proceedings.

     4.06 TRANSFERS. The Pledgor shall not create or consent to the creation of
any other membership or ownership interest in the Borrower without the prior
written consent of the Collateral Agent. Except pursuant to the exercise by the
Collateral Agent of any of its rights hereunder or as otherwise expressly
permitted herein, the Pledgor shall not sell, assign, transfer or otherwise
dispose of all or any portion of its ownership interest (whether voting or
economic) in the Borrower (whether any such ownership interest is owned by the
Pledgor on the date of this Agreement or is acquired by the Pledgor at any time
after the date hereof) or sell, assign, transfer, exchange or otherwise dispose
of all or any part of the other Collateral (or any interest therein), in each
case, unless each of the following conditions is satisfied at all times
immediately prior to and after giving effect to such proposed sale or transfer:

     (i)  no Default or Event of Default shall have occurred and is then
          continuing;

     (ii) the proposed purchaser or transferee is a Permitted Transferee;

     (iii) the Pledgor will at all times continue to directly own at least
          fifty-one percent (51%) of the membership or other ownership interests
          of the Borrower;

     (iv) there shall not at any time be more than three Permitted Transferees
          holding the membership or other ownership interests of the Borrower;

     (v)  the Pledgor will at all times be the managing member of the Borrower
          or the owner of at least fifty-one percent (51%) of the membership or
          other ownership interests in the managing member of the Borrower;

     (vi) all such Collateral so sold or transferred will at all times remain
          subject to the Lien granted hereunder notwithstanding such sale or
          transfer, and such proposed purchaser or transferee shall have
          executed and delivered to the Collateral Agent documentation to that
          effect satisfactory to the Collateral Agent, including without
          limitation (A) a pledge agreement substantially in the form of this
          Agreement, (B) written acknowledgement of such continuing Lien and (C)
          appropriate Uniform Commercial Code financing statements;

     (vii) all Uniform Commercial Code financing statements determined by the
          Collateral Agent to be necessary or desirable to maintain and preserve
          such continuing Lien against such proposed purchaser or transferee
          shall have been filed in all locations determined by the Collateral
          Agent to be necessary or desirable for such purpose, and such proposed
          purchaser or transferee shall have taken all other action requested by
          the Collateral Agent in connection therewith; and

                                Pledge Agreement

     (viii) all reasonable fees and expenses of the Collateral Agent and its
          counsel in connection with any such proposed sale or transfer shall be
          reimbursed by the Pledgor on demand.

     4.07 CERTAIN DISTRIBUTIONS. Section 8.13 of the Credit Agreement contains a
covenant of the Borrower with respect to the making by the Borrower of
Restricted Payments. The Pledgor hereby agrees that if it or any of its
Affiliates receives a Restricted Payment in contravention of Section 8.13, then
the Pledgor shall hold, or cause to be held, such Restricted Payment (or an
amount equal thereto) in trust for the Secured Parties, and promptly pay the
same, or cause the same to be paid over, to the Collateral Agent.

     4.08 COMPLIANCE WITH GOVERNMENT RULES, ETC. The Pledgor shall comply with
all applicable Government Rules and shall from time to time obtain, maintain,
comply with and renew, all Government Approvals necessary for it to perform its
obligations under the Transaction Documents to which it is a party (except any
thereof the non-compliance with or non-renewal of which could not reasonably be
expected to result in a Material Adverse Effect. The Pledgor shall promptly upon
receipt or publication furnish a copy of each such Government Approval to the
Collateral Agent.

     4.09 TAXES. The Pledgor shall pay and discharge all Taxes imposed on it or
on its income or profits or on any of its Property prior to the date on which
penalties attach thereto and prepare and file Tax returns on or before their due
date; provided, that the Pledgor shall have the right to Contest the validity or
amount of any such Tax.

     4.10 REGULATORY STATUS. The Pledger: (a) shall take, or cause to be taken,
all action required to cause the representations and warranties set out in
Sections 2.11 and 2.12 to be and remain, at all times, true and correct; and (b)
shall not take, or permit to be taken, any action which could cause the
representations and warranties set out in Sections 2.11 or 2.12 to cease to be
true and correct.

     4.11 SUBORDINATED PROMISSORY NOTE. The Pledgor will not amend, modify or
otherwise change, or consent to any amendment, modification or other change to,
that certain Subordinated Promissory Note dated as of December 31, 2002 by
Borrower in favor of Pledgor, without the prior written consent of the
Collateral Agent (not to be unreasonably withheld).

                                    ARTICLE V

                          CERTAIN ASSURANCES; REMEDIES

     In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Pledgor agrees with each Secured Party as follows:

     5.01 DELIVERY AND OTHER PERFECTION. The Pledgor shall:

     (a)  if any of the Pledged Interests, other Collateral, securities,
          participations, interests, moneys or other Property required to be
          pledged by the Pledgor under Article III is received by the Pledgor,
          forthwith: (i) transfer and deliver to the Collateral Agent for the
          benefit of the Secured Parties, such Collateral so received by the
          Pledgor, all of which thereafter shall be held by the Collateral
          Agent, pursuant to the terms of this Agreement, as part of the
          Collateral; and/or (ii) take such other action as the Collateral Agent
          shall deem necessary or appropriate to duly record the Lien created
          hereunder in such Collateral;

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     (b)  give, execute, deliver, file and/or record any Uniform Commercial Code
          financing statement, continuation statement, notice, instrument,
          document, agreement or other papers mat may be necessary or desirable
          (in the reasonable judgment of the Collateral Agent): (i) to create,
          preserve, perfect or validate the pledge and security interest granted
          pursuant hereto; or (ii) to enable the Collateral Agent to exercise
          and enforce its rights hereunder with respect to such pledge and
          security interest, including, without limitation, upon the occurrence
          or during the continuation of an Event of Default, causing any or all
          of the Collateral to be transferred of record into the name of the
          Collateral Agent or its nominee (and the Collateral Agent agrees that
          if any Collateral is transferred into its name or the name of its
          nominee, the Collateral Agent will thereafter promptly give to the
          Pledgor copies of any notices and communications received by it with
          respect to the Collateral pledged by the Pledgor hereunder). Without
          limiting the generality of the foregoing, the Pledgor shall, if any
          Collateral shall be evidenced by a promissory note or other
          instrument, deliver and pledge to the Collateral Agent such note or
          instrument duly endorsed or accompanied by duly executed instruments
          of transfer or assignment, all in such form and substance as will
          allow the Collateral Agent to realize upon the Collateral pursuant to
          Section 5.07;

     (c)  keep full and accurate Records, and stamp or otherwise mark such
          Records in such manner as the Collateral Agent may reasonably require
          in order to reflect the pledge and security interest granted by this
          Agreement; and

     (d)  (i) upon reasonable prior notice, at any time during normal business
          hours, permit representatives of the Collateral Agent to inspect and
          make abstracts from the Records, and promptly forward to the
          Collateral Agent copies of any notices or communications received by
          the Pledgor with respect to the Collateral that could reasonably be
          expected to impair the Lien granted to the Collateral Agent hereunder;
          and (ii) upon the occurrence and during the continuance of any Event
          of Default, permit representatives of the Collateral Agent to be
          present at the Pledgor's place of business to receive copies of all
          communications and remittances relating to the Collateral.

     5.02 OTHER FINANCING STATEMENTS AND LIENS. Except for Permitted Liens,
without the prior written consent of the Collateral Agent, the Pledgor shall not
file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any Uniform Commercial Code financing statement or
like instrument with respect to the Collateral in which the Collateral Agent is
not named as the sole secured party for the benefit of the Secured Parties.

     5.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be required to
take any steps to preserve any rights against prior parties to any of the
Collateral.

     5.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.

     (a)  Ownership Collateral. Except as otherwise permitted hereunder or
          pursuant to the Credit Agreement, the Pledgor shall cause the
          Ownership Collateral to constitute at all times 100% of the membership
          or other ownership interests of any class or character of the Borrower
          then outstanding. Until the termination of the pledge and the security
          interest created hereby pursuant to Section 5.14, the Pledgor shall
          not enter into any voting trust, grant any proxies or enter into any
          other commitment, understanding or arrangement with respect to the
          Ownership Collateral (including without limitation the ability to
          vote, transfer or receive dividends in respect of, the Ownership
          Collateral), except for the pledge and security interest in favor of
          the Collateral Agent provided for herein.

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     (b)  Powers of Ownership. So long as no Event of Default shall have
          occurred and be continuing, the Pledgor shall have the right to
          exercise all voting, consensual and other powers of ownership
          pertaining to the Ownership Collateral for all purposes not
          inconsistent with the terms of this Agreement, the Credit Agreement,
          any other Transaction Document or any other instrument or agreement
          referred to herein or therein; provided, that the Pledgor agrees that
          it will not vote the Ownership Collateral in any manner that is
          inconsistent with the terms of this Agreement, the Credit Agreement,
          any other Transaction Document or any such other instrument or
          agreement; and the Collateral Agent shall execute and deliver to the
          Pledgor, or cause to be executed and delivered to the Pledgor, all
          such proxies (if the Ownership Collateral shall be registered in the
          name of the Collateral Agent), powers of attorney, dividend and other
          orders, and all such instruments, without recourse, as the Pledgor may
          reasonably request for the purpose of enabling the Pledgor to exercise
          the rights and powers that it is entitled to exercise pursuant to this
          Section 5.04(b).

     (c)  Restricted Payments. Without limiting Section 4.07, the Pledgor shall
          not receive or retain any dividends or distributions on the Ownership
          Collateral except to the extent permitted under Section 8.13 of the
          Credit Agreement.

     (d)  Adverse Claims. The Pledgor shall defend, all at its own cost and
          expense, the Pledgor's title and the existence, perfection and first
          priority (subject to any Permitted Liens) of the Collateral Agent's
          security interest in the Collateral against all adverse claims.

     (e)  Distributions to Collateral Agent. If any Event of Default shall have
          occurred and be continuing, and whether or not the Collateral Agent or
          any other Secured Party exercises any available right to declare any
          Secured Obligation due and payable or seeks or pursues any other
          relief or remedy available to it under applicable law or under this
          Agreement or any other Transaction Document or any other agreement
          relating to such Secured Obligation, the Pledgor shall direct that all
          distributions on and other payments in respect of the Collateral shall
          be paid directly to the Collateral Agent and retained by it as part of
          the Collateral, subject to the terms of this Agreement, and, if the
          Collateral Agent shall so request, the Pledgor agrees to execute and
          deliver to the Collateral Agent appropriate additional distribution
          and other orders and documents to that end; provided, that if such
          Event of Default is waived or cured, any such distribution or other
          payment theretofore paid to the Collateral Agent shall, upon request
          of the Pledgor (except to the extent theretofore applied to the
          discharge of the Secured Obligations in accordance with the Credit
          Agreement), be returned promptly by the Collateral Agent to the
          Pledgor.

     5.05 CUSTODY AND PRESERVATION. The Collateral Agent's obligation to use
reasonable care in the custody and preservation of Collateral shall be satisfied
if it uses the same care as it uses in the custody and preservation of its own
Property.

     5.06 RIGHTS OF SECURED PARTIES. The Collateral Agent or any other Secured
Party may (but shall not be obligated to) pay or secure payment of any Tax or
other claim that may be secured by or result in a Lien on any Collateral. The
Collateral Agent or any other Secured Party may (but shall not be obligated to)
do or cause to be done any other thing that is necessary or desirable to
preserve, protect or maintain the Collateral or, after an Event of Default has
occurred and for so long as it shall be continuing, to enhance its value. The
Collateral Agent shall have no obligation to any Person to act or refrain from
acting or exercising any of its rights under this Agreement; provided, however,
that anything to the contrary contained herein notwithstanding, the Collateral
Agent shall be liable for its own gross negligence or willful misconduct. The
Pledgor, in accordance with Section 5.15, shall immediately reimburse the
Collateral Agent or any other

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Secured Party for any reasonable payment or expense (including reasonable
attorneys' fees and expenses) that the Collateral Agent or such other Secured
Party may incur pursuant to this Section 5.06.

     5.07 EVENTS OF DEFAULT, ETC. During the period during which an Event of
Default shall have occurred and be continuing:

     (a)  the Collateral Agent shall have the rights and remedies with respect
          to this Agreement as more particularly provided herein or in the
          Credit Agreement;

     (b)  the Pledgor shall, at the request of the Collateral Agent, assemble
          Collateral owned by it that is movable (and not otherwise in the
          possession of the Collateral Agent), if any, at such place or places,
          reasonably convenient to both the Collateral Agent and the Pledgor, as
          designated in such request;

     (c)  subject to applicable law, the Collateral Agent may (but shall not be
          obligated to), without notice to the Pledgor and at such times as the
          Collateral Agent in its sole judgment may determine, exercise any or
          all of the Pledger's rights in, to and under, or in any way connected
          to the Collateral and the Collateral Agent shall otherwise have and
          may (but shall not be obligated to) exercise all of the rights,
          powers, privileges and remedies with respect to the Collateral of a
          secured party under the Uniform Commercial Code (whether or not said
          Code is in effect in the jurisdiction where the rights, powers,
          privileges and remedies are asserted) and such additional rights,
          powers, privileges and remedies to which a secured party is entitled
          under the laws in effect in any jurisdiction where any rights, powers,
          privileges and remedies hereunder may be asserted, including, without
          limitation, the right, to the maximum extent permitted by applicable
          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 thereof (and the Pledgor agrees to take all such
          action as may be appropriate to give effect to such right);

     (d)  the Collateral Agent may (but shall not be obligated to) make any
          reasonable compromise or settlement it reasonably deems desirable with
          respect to any of the Collateral and may (but shall not be obligated
          to) extend the time of payment, arrange for payment in installments,
          or otherwise modify the terms, of all or any part of the Collateral;

     (e)  the Collateral Agent may (but shall not be obligated to), in its name
          or in the name of the Pledgor 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 any of the Collateral; and

     (f)  subject to applicable law, the Collateral Agent may (but shall not be
          obligated to), upon 10 Business Days' prior written notice to the
          Pledgor of the time and place, with respect to the Collateral or any
          part thereof which shall then be or shall thereafter come into the
          possession, custody or control of the Collateral Agent, any other
          Secured Party or any of their respective agents, sell, lease, assign
          or otherwise dispose of all or any part of such Collateral, at such
          place or places as the Collateral Agent deems reasonable, and for cash
          or for credit or for future delivery (without thereby assuming any
          credit risk), at public or private sale, without demand of
          performance or notice of intention to effect any such disposition or
          of the time or place thereof (except such notice as is required above
          or by applicable statute and cannot be waived). The Collateral Agent,
          any other Secured Party, the Pledgor or anyone else may be the
          purchaser, lessee, assignee or recipient of any or all of the
          Collateral so disposed of at any public sale (or, to the maximum
          extent permitted by applicable law, at any private sale) and
          thereafter hold the same absolutely,

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          free from any claim or right of whatsoever kind, including any right
          or equity of redemption (statutory or otherwise), of the Pledgor, any
          such demand, notice and right or equity being hereby expressly waived
          and released to the maximum extent permitted by applicable law.
          Subject to applicable law, 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.

The proceeds of each collection, sale or other disposition under this Section
5.07 shall be applied in accordance with Section 5.11.

     The Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended, and applicable state securities laws,
the Collateral Agent may be compelled, subject to the notice provision as
provided in paragraph (f) of this Section 5.07, with respect to any sale of all
or any part of the Collateral constituting a security (as such term is defined
in the Securities Act of 1933), to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the Pledgor or the issuer thereof to
register it for public sale.

     5.08 DEFICIENCY. If the proceeds of sale, collection or other realization
of or upon the Collateral by virtue of the exercise of remedies under Section
5.07 are insufficient to cover the costs and expenses of such realization and
the payment in full of the Secured Obligations, the Collateral Agent shall
retain all rights and remedies under the Transaction Documents, and the Pledgor
shall remain liable, with respect to any deficiency to the extent the Pledgor is
obligated under this Agreement.

     5.09 REMOVALS, ETC. Without at least 30 days' prior written notice to the
Collateral Agent, the Pledgor shall not: (a) maintain any of its Records at any
office other than at the Pledger's Address for Notices set out beneath its name
on the signature pages hereto; (b) maintain its chief executive office at any
place other than at the Pledger's Address for Notices set out beneath its name
on the signature pages hereto; (c) change its corporate name, or the name under
which it does business, from the name shown on the signature pages hereto; or
(d) change the jurisdiction in which it is organized from that in which it is
organized on the date hereof. The signature page hereto correctly specifies the
place of business of the Pledgor or, if the Pledgor had more than one place of
business, the location of the chief executive office of the Pledgor, in each
case during the period of four months ending on December 31, 2002.

     5.10 PRIVATE SALE. The Collateral Agent and the other Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 5.07 conducted in a
commercially reasonable manner. Subject to and without limitation of the
preceding sentence, the Pledgor hereby waives any claims against the Collateral
Agent or any other Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale to an unrelated
third party was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.

     5.11 APPLICATION OF PROCEEDS.

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     (a)  Application of Proceeds. Except as otherwise herein expressly
          provided, the proceeds of any collection, sale or other realization of
          all or any part of the Collateral pursuant hereto, and any other cash
          at the time held by the Collateral Agent under this Agreement, shall
          be applied by the Collateral Agent to the Secured Obligations in
          accordance with Article IV of the Depositary Agreement.

     (b)  Pledgor Remains Obligated. No sale or other disposition of all or any
          part of the Collateral pursuant to Section 5.07 shall be deemed to
          relieve the Pledgor of its obligations under any Transaction Document
          to which it is a party except to the extent the proceeds thereof are
          applied to the payment of such obligations.

     (c)  Proceeds. As used in this Article V, "PROCEEDS" of Collateral means
          cash, securities and other property realized in respect of, and
          distributions in kind of, Collateral, including any thereof received
          under any reorganization, liquidation or adjustment of debt of the
          Pledgor or any issuer of or obligor on any of the Collateral.

     5.12 ATTORNEY-IN-FACT. Without limiting any rights or powers granted by
this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent is hereby appointed the attorney-in-fact of the
Pledgor for the purpose of carrying out the provisions of this Article V and
taking any action and executing any instruments which the Collateral Agent may
deem necessary or desirable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Article V to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Pledgor
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.

     5.13 PERFECTION. Prior to or on the Closing Date, the Pledgor shall: (a)
file such Uniform Commercial Code financing statements and other documents in
the offices set out on Annex 2 in order to perfect the security interests
granted by Article III, to the extent such security interests can be perfected
by such filing; (b) register the pledge of any applicable Collateral for
purposes of Article 8 of the Uniform Commercial Code; and (c) cause the Borrower
to stamp or mark the books of the Borrower to record the Liens granted
hereunder. Copies of any such Uniform Commercial Code financing statement or
amendment thereto shall promptly be delivered to the Collateral Agent. The
Pledgor hereby authorizes the Collateral Agent to cause the filing of one or
more Uniform Commercial Code financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral without the
signature of the Pledgor where permitted by applicable law. Copies of any such
statement or amendment thereto shall promptly be delivered to the Pledgor.

     5.14 TERMINATION.

     (a)  Upon any transfer of any Collateral in accordance with Section 8.12 or
          8.13 of the Credit Agreement or Section 4.06 or 4.07, the Collateral
          Agent shall, upon the written request of (and at the sole cost and
          expense of) the Pledgor, promptly execute and deliver to the Pledgor
          such Uniform Commercial Code termination statements and such other
          documentation as shall be reasonably requested by the Pledgor to
          evidence the termination and release of the Liens on such Collateral.

     (b)  Upon the Termination Date, the security interest created by this
          Agreement shall terminate and all rights to the Collateral shall
          revert to the Pledgor, and the Collateral Agent shall (at the written
          request and sole cost and expense of the Pledgor) promptly

                                Pledge Agreement

          cause to be transferred and delivered, against receipt but without any
          recourse, warranty or representation whatsoever, any remaining
          Collateral and money received in respect thereof, to or on the order
          of the Pledgor. The Collateral Agent shall also (at the written
          request and sole cost and expense of the Pledgor) promptly execute and
          deliver to the Pledgor upon such termination such Uniform Commercial
          Code termination statements and such other documentation as shall be
          reasonably requested by the Pledgor to effect the termination and
          release of the Liens on the Collateral.

     5.15 EXPENSES.

     (a)  Subject to, and without duplication of amounts described in, Section
          11.03 of the Credit Agreement, the Pledgor agrees promptly to pay to
          the Collateral Agent to the extent not paid by or recovered from the
          Borrower all reasonable fees and out-of-pocket expenses (including
          reasonable fees and expenses for legal services) of, or incident to,
          the enforcement of any of the provisions of this Article V, or the
          exercise by experts, agents or attorneys selected by the Collateral
          Agent in good faith of any rights or privileges of the Pledgor in
          respect of the Collateral, or any actual or attempted sale, or any
          exchange, enforcement, collection, compromise or settlement in respect
          of any of the Collateral, and for the care of the Collateral and
          defending or asserting rights and claims of the Collateral Agent and
          the other Secured Parties in respect thereof, by litigation or
          otherwise, in each case in accordance with the terms of this
          Agreement, and all such reasonable fees and expenses, together with
          interest thereon at the applicable Post-Default Rate, shall be Secured
          Obligations of the Collateral Agent secured under Article III.

     (b)  The terms, conditions, covenants and agreements to be observed or
          performed by the Pledgor under this Agreement shall be observed or
          performed by it at its sole cost and expense.

     5.16 FURTHER ASSURANCES. The Pledgor agrees that, at any time and from time
to time, at its sole cost and expense, it shall promptly execute and deliver all
further agreements, instruments, documents and certificates and take all further
action that, in the reasonable judgment of the Collateral Agent, may be
necessary or desirable in order to fully effect the purposes of this Agreement
(including the delivery of possession of any Collateral that hereafter comes
into existence or is acquired in the future by the Collateral Agent as pledgee
for the benefit of the Secured Parties) and to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral or any part thereof.

                                   ARTICLE VI

                                  MISCELLANEOUS

     6.01 COLLATERAL AGENT'S RIGHT TO PERFORM ON PLEDGOR'S BEHALF. If the
Pledgor shall fail to observe or perform any of the terms, conditions, covenants
and agreements to be observed or performed by it under this Agreement, the
Collateral Agent may (but shall not be obligated to), upon reasonable notice to
the Pledgor, do the same or cause it to be done or performed or observed by
experts, agents or attorneys selected by the Collateral Agent in good faith at
the sole cost and expense of the Pledgor, either in its name or in the name and
on behalf of the Pledgor, and the Pledgor hereby authorizes the Collateral Agent
so to do.

     6.02 WAIVERS OF RIGHTS INHIBITING ENFORCEMENT. The Pledgor waives, to the
maximum extent permitted by applicable law:

                                Pledge Agreement

     (a)  any claim that, as to any part of the Collateral, a public sale,
          should the Collateral Agent elect so to proceed, is, in and of itself,
          not a commercially reasonable method of sale for the Collateral;

     (b)  the right to assert in any action or proceeding between it and the
          Collateral Agent any offsets that it may have;

     (c)  except as otherwise provided in this Agreement, NOTICE OR JUDICIAL
          HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR
          DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR
          NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
          RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
          ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
          REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER
          REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF THE COLLATERAL AGENT'S
          RTGHTS HEREUNDER;

     (d)  all rights of redemption, appraisement, valuation, stay and extension
          or moratorium; and

     (e)  all other rights the exercise of which would, directly or indirectly,
          prevent, delay or inhibit the enforcement of any of the rights or
          remedies of the Collateral Agent and the other Secured Parties under
          this Agreement or the absolute sale of the Collateral, now or
          hereafter in force under any applicable law, and the Pledgor, for
          itself and all who may claim under it, insofar as it or they now or
          hereafter lawfully may, hereby waive the benefit of all such laws and
          rights.

     6.03 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of the
Collateral Agent, any other Secured Party or any of such Person's agents to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise by the Collateral Agent, any other Secured Party or
any of such Person's agents of any right, power or remedy hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies herein or in any other
Transaction Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which either Collateral Agent or any other Secured
Party would otherwise have. No notice to or demand on the Pledgor in any case
shall entitle the Pledgor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of either the
Collateral Agent or any other Secured Party to any other or further action in
any circumstances without notice or demand, except to the extent notice is
expressly required by this Agreement or any other Financing Document.

     6.04 NOTICES. All notices, requests 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 in the manner
set out in Section 11.02 of the Credit Agreement. Unless otherwise so changed in
accordance with the Credit Agreement by a party hereto, all notices, requests
and other communications to such party shall be sent to the address of such
party set out on the signature pages hereto.

     6.05 AMENDMENTS, ETC. This Agreement may be amended, supplemented, modified
or waived only by an instrument in writing duly executed by the Pledgor and the
Collateral Agent. Any such amendment, supplement, modification or waiver shall
be binding upon the Collateral Agent and each Lender, each holder of any of the
Secured Obligations and the Pledgor. Any waiver shall be effective only in the
specific instance and for the specified purpose for which it was given.

                                Pledge Agreement

     6.06 EXPENSES. The parties hereto agree that all costs and expenses covered
by Section 11.03 of the Credit Agreement shall be Secured Obligations entitled
to the benefits of the collateral security provided pursuant to Article III.

     6.07 SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in full force
and effect until the termination hereof pursuant to Section 5.14; and (b) be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Pledgor and the Collateral Agent, the Lenders and each holder of
any of the Secured Obligations; provided, however, that the Pledgor shall not
assign or transfer its rights hereunder without the prior written consent of the
Collateral Agent.

     6.08 SURVIVAL, ETC. The obligations of the Pledgor under Section 5.15 shall
survive after termination of this Agreement or the resignation or the removal of
the Collateral Agent. In addition, the representations and warranties of the
Pledgor set out in this Agreement or contained in any documents delivered to the
Collateral Agent or any other Secured Party pursuant to this Agreement shall be
considered to have been relied upon by the Secured Parties in entering into the
Credit Agreement and the relevant Financing Documents and making each Loan,
notwithstanding any investigation on their respective parts.

     6.09 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and either of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof. This
Agreement shall become effective at such time as the Collateral Agent shall have
received counterparts hereof signed by all of the intended parties hereto.

     6.10 AGENTS, ETC. The Collateral Agent may employ agents, experts and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents, experts or attorneys-in-fact
selected by it in good faith.

     6.11 SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by applicable law: (a)
the other provisions hereof shall remain in full force and effect in such
jurisdiction in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     6.12 HEADINGS. Headings appearing herein are used solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.

     6.13 LIMITATION OF LIABILITY.

     (a)  The liability of the Pledgor for the payment and performance of the
          Secured Obligations shall be limited as and to the extent provided
          under Section 11.09 of the Credit Agreement.

     (b)  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER THE
          COLLATERAL AGENT NOR ANY OTHER SECURED PARTY SHALL HAVE LIABILITY WITH
          RESPECT TO, AND THE PLEDGOR HEREBY WAIVES, RELEASES AND AGREES NOT TO
          SUE FOR:

                                Pledge Agreement

          (i)  ANY LOSS OR DAMAGE SUSTAINED BY THE PLEDGOR, OR ANY LOSS, DAMAGE,
               DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL,
               THAT MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN
               ANY WAY RELATED TO, ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER
               THIS AGREEMENT EXCEPT FOR ANY SUCH LOSS, DAMAGE, DEPRECIATION OR
               DIMINUTION TO THE EXTENT THAT THE SAME IS THE RESULT OF ACTS OR
               OMISSIONS ON THE PART OF SUCH SECURED PARTY CONSTITUTING WILLFUL
               MISCONDUCT OR GROSS NEGLIGENCE; OR

          (ii) ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
               DAMAGES SUFFERED BY THE PLEDGOR IN CONNECTION WITH ANY CLAIM
               RELATED TO THIS AGREEMENT.

     6.14 SECURITY INTEREST ABSOLUTE. To the maximum extent permitted by
applicable law, the rights and remedies of the Collateral Agent hereunder, the
Liens created hereby, and the obligations of the Pledgor under this Agreement
are absolute, irrevocable and unconditional and will remain in full force and
effect without regard to, and will not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever
(other than termination pursuant to Section 5.14), including:

     (a)  any renewal, extension, amendment, or modification of, or addition or
          supplement to or deletion from, any of the Transaction Documents or
          any other instrument or agreement referred to therein, or any
          assignment or transfer of any thereof;

     (b)  any waiver of, consent to or departure from, extension, indulgence or
          other action or inaction under or in respect of any of the Secured
          Obligations, this Agreement, any other Transaction Document or other
          instrument or agreement relating thereto, or any exercise or
          non-exercise of any right, remedy, power or privilege under or in
          respect of the Secured Obligations, this Agreement, any other
          Transaction Document or any such other instrument or agreement
          relating thereto;

     (c)  any furnishing of any additional security for the Secured Obligations
          or any part thereof to the Collateral Agent or any other person or any
          acceptance thereof by the Collateral Agent or any other person or any
          substitution, sale, exchange, release, surrender or realization of or
          upon any such security by the Collateral Agent or any other person or
          the failure to create, preserve, validate, perfect or protect any
          other Lien granted to, or purported to be granted to, or in favor of,
          the Collateral Agent or any other Secured Party;

     (d)  any invalidity, irregularity or unenforceability of all or any part of
          the Secured Obligations, any other Transaction Document or any other
          agreement or instrument relating thereto or any security therefor;

     (e)  the acceleration of the maturity of any of the Secured Obligations or
          any other modification of the time of payment thereof; or

     (f)  any other event or circumstance whatsoever which might otherwise
          constitute a legal or equitable discharge of a surety or a guarantor,
          it being the intent of this Section 6.14 that the obligations of the
          Pledgor hereunder shall be absolute, irrevocable and unconditional
          under any and all circumstances.

                                Pledge Agreement

     6.15 SUBROGATION. The Pledgor shall not exercise, and hereby irrevocably
defers the exercise of, any claim, right or remedy that it may now have or may
hereafter acquire against the Borrower arising under or in connection with this
Agreement, including, without limitation, any claim, right or remedy of
subrogation, contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by applicable law or otherwise in any
claim, right or remedy of the Collateral Agent or the other Secured Parties
against the Borrower or any other Person or any Collateral which the Collateral
Agent or any other Secured Party may now have or may hereafter acquire, until
the indefeasible payment and satisfaction in full of all Secured Obligations and
the expiration and termination of the Commitments. If, notwithstanding the
preceding sentence, any amount shall be paid to the Pledgor on account of such
subrogation rights at any time when any of the Secured Obligations shall not
have been paid in full, such amount shall be held by the Pledgor in trust for
the Collateral Agent and the other Secured Parties, segregated from other funds
of the Pledgor and be turned over to the Collateral Agent in the exact form
received by the Pledgor (duly endorsed by the Pledgor to the Collateral Agent,
if required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Financing Documents.

     6.16 REINSTATEMENT. This Agreement and the Lien created hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must otherwise be restored by any holder of the Secured
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Pledgor shall indemnify the Collateral
Agent, each other Secured Party and its respective employees, officers and
agents on demand for all reasonable fees, costs and expenses (including, without
limitation, reasonable fees, costs and expenses of counsel) incurred by the
Collateral Agent, such other Secured Party or its respective employees, officers
or agents in connection with such reinstatement, rescission or restoration.

     6.17 NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES HERETO ARE
SOLELY FOR THE BENEFIT OF THE PLEDGOR, THE COLLATERAL AGENT AND THE OTHER
SECURED PARTIES, AND NO PERSON (OTHER THAN THE PARTIES HERETO, THE OTHER SECURED
PARTIES AND THEIR SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY
RIGHTS HEREUNDER.

     6.18 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. EACH OF THE PLEDGOR AND THE COLLATERAL AGENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY
(INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT IN THE
STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
PLEDGOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY 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 A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

     6.19 WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                Pledge Agreement

     6.20 SERVICE OF PROCESS. The Pledgor hereby irrevocably consents to the
service of process in any suit, action or proceeding in such courts by the
mailing thereof by any of the other parties hereto by registered or certified
mail, postage prepaid, to the Address for Notices specified below its name on
the signature pages hereof. Nothing herein shall in any way be deemed to limit
the ability of the Financing Parties or the Pledgor to serve any writs, process
or summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Pledgor or the Collateral Agent, as applicable, in such
jurisdiction, and in such manner, as may be permitted by applicable law.

     6.21 AUTHORITY OF THE COLLATERAL AGENT. The Pledgor acknowledges and agrees
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken, or determination or request made, by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any power, right or remedy provided for or resulting or arising out of this
Agreement shall, as between the Collateral Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Pledgor, the Collateral Agent shall be conclusively
presumed to be acting as the Collateral Agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Pledgor shall be
under no obligation or entitlement to make any inquiry respecting such
authority.

                                Pledge Agreement

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                        ORMAT FUNDING CORP.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        Address for Notices:

                                        980 Greg Street
                                        Sparks, NV 89431
                                        Attn: President
                                        Telephone: (775) 356-9029
                                        Telecopy: (775) 356-9039

                                Pledge Agreement

                                      S-23

                                        UNITED CAPITAL,
                                           a division of Hudson United Bank,
                                              not in its individual capacity,
                                              but solely as Collateral Agent

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        Address for Notices: 87 Post Road East
                                                             Westport, CT 06880

                                        Telecopier No.: (203) 291-6652
                                           Telephone No.: (203) 291-6639
                                           Attention: Jerry Peters, Senior
                                                      Vice President

                    Borrower Equity Interest Pledge Agreement

                                                                         ANNEX 1

                                PLEDGED INTERESTS

One Hundred Percent (100%) of the membership or other ownership interests of
Ormesa LLC, all of which are currently owned by Ormat Funding Corp.

                                Pledge Agreement

                                                                         ANNEX 2

                                FILING LOCATIONS

1. Secretary of State of the State of Delaware

                                Pledge Agreement

                                                                       Exhibit C
                                                             to Credit Agreement

                          FORM OF DEPOSITARY AGREEMENT

     This DEPOSITARY AGREEMENT dated as of December 31, 2002 (this "AGREEMENT"),
among ORMESA LLC, a Delaware limited liability company (the "BORROWER"), UNITED
CAPITAL, a division of Hudson United Bank ("UNITED"), not in its individual
capacity, but solely as administrative agent for the Lenders under and as
defined in the Credit Agreement referred to below (in such capacity, the
"ADMINISTRATIVE AGENT"), UNITED, not in its individual capacity, but solely as
collateral agent for the benefit of the Secured Parties under and as defined in
the Credit Agreement referred to below (in such capacity, the "COLLATERAL
AGENT"), and WEALTH MANAGEMENT, a division of Hudson United Bank, a New Jersey
banking corporation, not in its individual capacity, but solely as the
"securities intermediary" in accordance with Article 8 of the Uniform Commercial
Code (as defined below) and as a "bank" with respect to any "deposit accounts"
(each as defined in the Uniform Commercial Code) in which a security interest
may be granted under the Uniform Commercial Code and herein for the benefit of
the Collateral Agent and the Secured Parties under and as defined in the Credit
Agreement referred to below (the "DEPOSITARY BANK").

                                    RECITALS

     WHEREAS, pursuant to that certain Credit Agreement, dated as of December
31, 2002 (as amended, modified, supplemented and in effect from time to time,
the "CREDIT AGREEMENT"), among the Borrower, the Lenders party thereto from time
to time, the Administrative Agent, and the Collateral Agent, the Lenders have
agreed to make certain loans to the Borrower;

     WHEREAS, the Depositary Bank is willing to serve as the depositary bank for
the benefit of the Collateral Agent and the Secured Parties on the terms and
subject to the conditions of this Agreement;

     WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Borrower shall have executed
and delivered this Agreement;

     WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce certain of the Secured Parties to make loans
to the Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower has agreed to execute
and deliver this Agreement.

                                       -2-

     Accordingly, the parties hereto agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

     SECTION 1.1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings assigned to them in Schedule I
to the Credit Agreement. All terms used herein which are not defined herein or
in the Credit Agreement and are defined in the Uniform Commercial Code (as such
term is defined below) shall have the meanings therein stated. In addition,
capitalized terms used in the preamble and recitals hereto shall have the
respective meanings given thereto, and the following terms shall have the
following meanings under this Agreement:

     "ACCOUNTS" shall mean the Revenue Account, and the Debt Service Reserve
Account.

     "DEBT SERVICE RESERVE ACCOUNT" shall have the meaning assigned to such term
in Section 2.2(c).

     "DISTRIBUTABLE CASH" shall have the meaning assigned to such term in
Section 4.1(b).

     "MONTHLY DATE" shall mean the last Business Day of each calendar month
following the Closing Date.

     "RESTORATION SUB-ACCOUNT" shall have the meaning assigned to such term in
Section 2.2(e).

     "REVENUE ACCOUNT" shall have the meaning assigned to such term in Section
2.2(a), and shall include the Restoration Sub-Account.

     "WITHDRAWAL APPROVAL NOTICE" shall have the meaning assigned to such term
in Section 4.1(d)(ii).

     SECTION 1.2. INTERPRETATION. The rules of interpretation set out in Section
1.03 of the Credit Agreement shall apply equally to this Agreement mutatis
mutandis.

                                       -3-

                                   ARTICLE II.
                         APPOINTMENT OF DEPOSITARY BANK;
                            CREATION OF THE ACCOUNTS

     SECTION 2.1. APPOINTMENT OF DEPOSITARY BANK. The Depositary Bank is
appointed to act as depositary bank and disbursement agent hereunder and agrees
to act as such, to accept all cash, payments and other amounts delivered to or
held by it pursuant to the terms of this Agreement or any other Financing
Document and to distribute all such funds and perform all of its other
obligations in accordance with this Agreement. The Depositary Bank shall hold
and safeguard the Accounts and shall treat the cash, instruments and securities
in the Accounts as funds, instruments and securities pledged by the Borrower to
the Collateral Agent to be held in the custody of the Depositary Bank, as agent
solely for the benefit of the Collateral Agent and Secured Parties, in trust and
in accordance with the provisions of this Agreement.

     SECTION 2.2. CREATION OF ACCOUNTS. On or prior to the Closing Date, the
Borrower shall establish with the Depositary Bank at its corporate trust office
in Westport, Connecticut the following special and segregated interest bearing
accounts, which shall be in the name of the Collateral Agent for the benefit of
the Secured Parties maintained at all times until the termination of this
Agreement:

          (a)  an account entitled "Ormesa Revenue Account" with account number
               2080000692834, ABA no. 061 000 227, account name Reliance Trust,
               Attn. Gwen Fore, FBO Ormesa PRA 2897400272 (the "REVENUE
               ACCOUNT");

          (b)  an account entitled "Ormesa Debt Service Reserve Account" with
               account number 2080000692834, ABA no. 061 000 227, account name
               Reliance Trust, Attn. Gwen Fore, FBO Ormesa DSRA 2897400281 (the
               "DEBT SERVICE RESERVE ACCOUNT"); and

          (c)  a sub-account of the Revenue Account entitled "Ormesa Restoration
               Sub-Account" with account number 2080000692834, ABA no. 061 000
               227, account name Reliance Trust, Attn. Gwen Fore, FBO Ormesa
               Restoration Sub-Account 2897400316 (the "RESTORATION
               SUB-ACCOUNT").

Each Account shall be subject to debit or withdrawal solely by the Depositary
Bank as provided in this Agreement and no Person shall have any control over or
right of withdrawal from the Accounts except as provided in this Agreement. Each
Account shall

                                       -4-

constitute a part of the Collateral and shall not constitute payment of the
Secured Obligations until applied as provided in this Agreement.

     SECTION 2.3. SECURITY INTEREST. As collateral security for the prompt and
complete payment and performance when due of all of the Secured Obligations, the
Borrower has granted to the Collateral Agent, pursuant to the Borrower Security
Agreement, a first priority Lien in and to (a) the Accounts and (b) all cash,
investments and securities at any time on deposit in the Accounts, including all
income or gain earned thereon and all proceeds thereof.

                                  ARTICLE III.
                       DEPOSITS INTO THE REVENUE ACCOUNT

     SECTION 3.1. DEPOSITS.

     (a) The Borrower agrees, and confirms to the Collateral Agent that it has
instructed all of its Affiliates, SCE, SIGC and Imperial Irrigation District
that all Project Revenues (and any other cash or other revenues received by it
other than distributions previously made in accordance with this Agreement)
shall be paid directly to the Depositary Bank for deposit in the Revenue
Account. In the event that, notwithstanding the foregoing, any such payment is
remitted directly to the Borrower, the Borrower shall promptly (but in any event
within five 5) Business Days of receipt thereof) deliver such payment to the
Depositary Bank for deposit in the Revenue Account.

     (b) The Borrower has directed and confirms to the Collateral Agent that it
has so instructed all of its Affiliates to direct, all insurers with whom the
Borrower or any of its Affiliates maintains the insurance required by Section
8.05 of the Credit Agreement that all insurance proceeds other than Loss
Proceeds in respect of any Event of Loss, which shall be applied in accordance
with Section 4.3) payable to Borrower or any of its Affiliates in connection
with all insurance required by said Section 8.05 shall be paid directly to the
Collateral Agent, as loss payee, for transfer to the Depositary Bank and deposit
in the Revenue Account. In the event that, notwithstanding the foregoing, any
such proceeds are remitted directly to the Borrower, the Sponsor or any of their
respective Affiliates and such party is not entitled to retain such insurance
proceeds pursuant to Section 8.05 of the Credit Agreement, then such party shall
promptly (but in any event within five 5) Business Days of receipt thereof)
deliver such proceeds to the Depositary Bank for deposit in the Revenue Account.

     (c) The Depositary Bank shall only be required to accept such monies as are
delivered to it for deposit into the Accounts and shall not be required to
monitor the amount of such deposits or pursue the collection of such sums from
any Person.

                                       -5-

                                   ARTICLE IV.
                                DEPOSITS INTO AND
                           DISTRIBUTIONS FROM ACCOUNTS

     SECTION 4.1. WITHDRAWALS FROM THE REVENUE ACCOUNT.

     (a) Distributions from Revenue Account on Monthly Dates. On each Monthly
Date prior to the Termination Date (other than any Monthly Date that also is a
Quarterly Date and such Quarterly Date's corresponding Business Day, on which
distributions shall be made solely in accordance with Section 4.1(b) instead of
this Section 4.1 (a)), the Depositary Bank shall distribute funds from the
Revenue Account (including all income earned and gains from investments in
Permitted Investments pursuant to Section 5.5) and apply the same at the times,
in the amounts and in the following priorities:

          FIRST: subject to the provisions of Section 4.1(g), withdraw and
          transfer to the Operator an amount, as set forth in a Withdrawal
          Approval Notice, equal to the cumulative amount of Operation and
          Maintenance Expenses scheduled to be payable by or on behalf of the
          Borrower in the then-current calendar year through and including the
          next succeeding calendar month (i) in accordance with the then-current
          Annual Operating Plan and Budget (as such amount may be adjusted by
          the Borrower in accordance with Section 8.23(b) of the Credit
          Agreement), less all amounts previously withdrawn as Operation and
          Maintenance Expenses in the then-current calendar year, and (ii)
          solely on the initial two Monthly Dates following the Closing Date, in
          respect of the "Compromise Payment" under and as defined in the Energy
          Services Agreement, provided that the amount of such "Compromise
          Payment", together with all amounts previously withdrawn and
          transferred in respect of such "Compromise Payment", shall not exceed
          $724,000 in the aggregate; and

          SECOND: after making the withdrawal and transfer, if any, specified in
          priority FIRST above, and subject to the provisions of Section 4.1(g),
          withdraw and transfer to the Operator an amount, as set forth in a
          Withdrawal Approval Notice, equal to the cumulative amount of capital
          expenditures scheduled to be payable by or on behalf of the Borrower
          in the then-current calendar year through and including the next
          succeeding calendar month in accordance with the then-current Annual
          Operating Plan and Budget (as such amount may be adjusted by the
          Borrower in accordance with Section 8.23(b) of the Credit Agreement),
          less all amounts previously withdrawn for capital expenditures in the
          then-current calendar year.

                                       -6-

     (b) Distributions from Revenue Account on Quarterly Dates. On each
Quarterly Date falling after the Closing Date and on or prior to the Termination
Date (or, if any such Quarterly Date is not a Business Day, the Business Day
next succeeding such Quarterly Date, unless such next succeeding Business Day
falls in the subsequent calendar month, in which case the effective Business Day
corresponding to such Quarterly Date shall be the Business Day immediately
preceding such Quarterly Date), the Depositary Bank shall distribute funds from
the Revenue Account (including all income earned and gains from investments in
Permitted Investments pursuant to Section 5.5) and apply the same at the times,
in the amounts and in the following priorities:

          FIRST: subject to the provisions of Section 4.1 (g), withdraw and
          transfer to the Operator an amount, as set forth in a Withdrawal
          Approval Notice, equal to the cumulative amount of Operation and
          Maintenance Expenses scheduled to be payable by or on behalf of the
          Borrower in the then-current calendar year through and including the
          next succeeding calendar month (i) in accordance with the then-current
          Annual Operating Plan and Budget (as such amount may be adjusted by
          the Borrower in accordance with Section 8.23(b) of the Credit
          Agreement), less all amounts previously withdrawn as Operation and
          Maintenance Expenses in the then-current calendar year;

          SECOND: after making the withdrawal, if any, specified in priority
          FIRST above, withdraw and transfer to the Administrative Agent, the
          Collateral Agent and the Depositary Bank an amount equal to any fee or
          expense then due and owing to such Person (including in respect of the
          making of any Permitted Investment) by Borrower hereunder or under any
          other Financing Document, as set forth in a Withdrawal Approval
          Notice;

          THIRD: after making the withdrawal, if any, specified in priority
          SECOND above, withdraw and transfer to the Administrative Agent for
          the account of each Lender an amount equal to the amount of interest
          then due on the Loans held by such Lender and the amount of all fees
          owed to such Lender, each as set forth in a Withdrawal Approval
          Notice;

          FOURTH: after making the withdrawal specified in priority THIRD above,
          (i) withdraw and transfer to the Administrative Agent for the account
          of each Lender an amount equal to the principal amount then due on the
          Loans held by such Lender; and (ii) with respect to any additional
          principal due on such Loans as required by any mandatory prepayment
          then due under Section 3.04(d) of the Credit Agreement, withdraw and
          transfer to the Administrative Agent for the account of each Lender an

                                       -7-

          amount equal to such additional principal due on such Loans, in each
          case as set forth in a Withdrawal Approval Notice;

          FIFTH: after making the withdrawal specified in priority FOURTH above,
          deposit into the Debt Service Reserve Account an amount equal to the
          difference between the Debt Service Reserve Required Amount on such
          date and the then-current balance of the Debt Service Reserve Account,
          as set forth in a Withdrawal Approval Notice;

          SIXTH: after making the withdrawal, if any, specified in priority
          FIFTH above, and subject to the provisions of Section 4.1(g), withdraw
          and transfer to the Operator an amount, as set forth in a Withdrawal
          Approval Notice, equal to the cumulative amount of capital
          expenditures scheduled to be payable by or on behalf of the Borrower
          in the then-current calendar year through and including the next
          succeeding calendar month in accordance with the then-current Annual
          Operating Plan and Budget (as such amount may be adjusted by the
          Borrower in accordance with Section 8.23(b) of the Credit Agreement),
          less all amounts previously withdrawn for capital expenditures in the
          then-current calendar year; and

          SEVENTH: after making the withdrawal, if any, specified in priority
          SIXTH above, and subject to the restrictions and provisions of
          Sections 4.1(d), 4.1(e) and 4.1(g), withdraw and transfer to the
          Borrower, the Sponsor or such other Person as directed by the Borrower
          all or any portion of any funds remaining in the Revenue Account
          ("DISTRIBUTABLE CASH").

     (c) Revenue Account Has Insufficient Funds for Principal. Interest and Fees
Payment. In the event funds available in the Revenue Account are insufficient to
make the payments set forth in priorities THIRD and FOURTH of Section 4.1(b),
the Collateral Agent will direct the Depositary Bank in writing (with a copy to
the Borrower) to withdraw funds from the Debt Service Reserve Account and apply
the same towards the payment of such priorities THIRD and FOURTH and thereafter
the Debt Service Reserve Account shall be replenished pursuant to the operation
of priority FIFTH of Section 4.1(b).

     (d) Distributions from Revenue Account. No payment pursuant to priority
SEVENTH of Section 4.1(b) will be permitted unless:

                                       -8-

          (i) The Borrower has delivered a duly executed Distribution
     Certificate to the Administrative Agent no fewer than three (3) Business
     Days prior to the date such withdrawal is scheduled to be made; and

          (ii) The Collateral Agent has confirmed to the Depositary Bank and the
     Borrower (A) the accuracy of the information set forth in such Distribution
     Certificate, (B) that all conditions to such payment set forth in Section
     8.13 of the Credit Agreement have been satisfied, and (C) that no Default
     (other than any Default that (i) provides a cure period therefor of not
     more than 30 days, (ii) is reasonably capable of being remedied during such
     30-day period, (iii) as to which the Borrower is diligently prosecuting or
     pursuing such remedy, and (iv) following the occurrence of which not more
     than 30 days have elapsed) or Event of Default has occurred and is
     continuing or will occur as a result of the Depositary Bank's allowing such
     withdrawal, by the Collateral Agent's delivery to the Depositary Bank of
     such Distribution Certificate and a written notice from the Collateral
     Agent authorizing the Depositary Bank to permit such withdrawal (which may
     take the form of the Collateral Agent's countersignature on a Distribution
     Certificate) (A "WITHDRAWAL APPROVAL NOTICE") at least one (1) Business Day
     prior to the date such withdrawal is scheduled to be made.

     (e) Failure to Meet Minimum Debt Service Coverage Ratio. If, as of any
Quarterly Date, the Borrower shall fail to comply with Section 8.13(iii) of the
Credit Agreement, then on such Quarterly Date (or corresponding Business Day,
if such Quarterly Date is not A Business Day), the Borrower shall, in its
related Distribution Certificate, instruct the Collateral Agent who in turn will
instruct the Depositary Bank either (i) to fund the Debt Service Reserve Account
via priority SEVENTH of Section 4.1(b) (and in lieu of priority SEVENTH as set
forth in Section 4.1(b)) in an amount equal to the credit balance of the Revenue
Account on such date, or (ii) to apply the credit balance of the Revenue Account
on such date to prepay the Loans pursuant to Section 3.04(d) of the Credit
Agreement via priority SEVENTH of Section 4.1(b) (and in lieu of priority
SEVENTH as set forth in Section 4.1(b)). Such funding of the Debt Service
Reserve Account or, alternatively, prepayment of the Loans, shall be required on
each succeeding Quarterly Date (or corresponding Business Day) until such time
as Borrower has demonstrated its compliance with Section 8.13(iii) of the Credit
Agreement.

     (f) No failure of the Borrower to deliver a Distribution Certificate to the
Administrative Agent will restrict or otherwise affect the Collateral Agent's
right to cause the Depositary Bank to withdraw and transfer funds pursuant to
(i) priorities FIRST through SIXTH of Section 4.1 (b), or (ii) Section 4.1(e)(i)
or 4.1(e)(ii), as the Collateral Agent shall select.

                                       -9-

     (g) Notwithstanding anything to the contrary in Section 4.1(a) or (b), the
Borrower shall be permitted to specify in any Distribution Certificate a
Business Day, which shall be not more than 10 days after the Monthly Date or
Quarterly Date to which such Distribution Certificate pertains, on which
payments (i) to the Operator pursuant to priorities FIRST or SECOND of Section
4.1(a) or priorities FIRST or SIXTH of Section 4.1(b) shall be made to the
Operator and (ii) to the Borrower, the Sponsor or such other Person as directed
by the Borrower pursuant to priority SEVENTH of Section 4.1(b) shall be made to
the Borrower, the Sponsor or such other Person, and the Depositary Bank shall
make any such payments to the Operator or to the Borrower, the Sponsor or such
other Person as directed by the Borrower on any such later Business Day so
specified in such Distribution Certificate.

     SECTION 4.2. DEBT SERVICE RESERVE ACCOUNT.

     (a) Initial Funding of Debt Service Reserve Account. On the Closing Date,
proceeds of the Initial Term Loans shall be used to fund the Debt Service
Reserve Account in an amount equal to the Debt Service Reserve Required Amount
on such date.

     (b) Funding of Debt Service Reserve Account on Each Quarterly Date. On the
Quarterly Date next succeeding the Closing Date (or, pursuant to Section 4.1,
the corresponding Business Day) and on each subsequent Quarterly Date (or
corresponding Business Day) thereafter, the Debt Service Reserve Account shall
be funded via priority FIFTH of Section 4.1(b) in an amount equal to the
difference between the Debt Service Reserve Required Amount on such date and the
then-current balance of the Debt Service Reserve Account; provided, however,
that additional deposits to the Debt Service Reserve Account may from time to
time be made pursuant to Section 4.1(e).

     (c) Excess Required Balance in Debt Service Reserve Account. If on any
Quarterly Date (or corresponding Business Day), the funds on deposit in the Debt
Service Reserve Account (including any gain realized from investments in
Permitted Investments pursuant to Section 5.5) exceed the Debt Service Reserve
Required Amount, subject to the prior written approval of the Collateral Agent
(which shall be given so long as no Default or Event of Default has occurred and
is continuing), the Borrower may direct the Depositary Bank in writing to
withdraw and transfer to the Revenue Account or, so long as the Borrower is in
compliance with its obligations under Section 8.13 of the Credit Agreement, to
the Borrower or as directed by the Borrower, all or a portion of such excess
funds.

     SECTION 4.3. Restoration Sub-Account. The Borrower agrees that in the event
that it receives any amount of Loss Proceeds in respect of any Event of Loss,
within five (5) Business Days it shall deposit the amount of such Loss Proceeds
in the Restoration Sub-

                                      -10-

Account. Distributions from the Restoration Sub-Account shall be requested by
the Borrower, and made by the Depositary Bank to the Borrower, solely in
accordance with Sections 8.05(c) and 8.05(d) of the Credit Agreement, except
that Loss Proceeds remaining in the Restoration Sub-Account upon completion of
Restoration Work relating thereto shall be transferred promptly to to the
Revenue Account

                                   ARTICLE V.
                               ACCOUNTS GENERALLY

     SECTION 5.1. BENEFIT OF ACCOUNTS. All right, title and interest in and to
the Accounts and the funds in the Accounts and any interest accrued on such
funds shall be collaterally assigned to the Collateral Agent in accordance with
the terms of the Borrower Security Agreement until the Termination Date. Funds
shall be distributed from the Accounts only in accordance with this Agreement
and funds deposited in the Accounts shall be applied as provided in this
Agreement and the other Financing Documents, as applicable. Notwithstanding the
foregoing, no Agent nor any Lender shall be liable for any tax, assessment, fee
or other governmental or other charge or claim on or arising out of the Accounts
or any interest or earnings thereon, all of which shall be for the account
of Borrower.

     SECTION 5.2. BOOKS OF ACCOUNT; STATEMENTS.

     (a) The Depositary Bank shall maintain books of account on a cash basis and
record therein all deposits into and transfers to and from the Accounts and all
investment transactions effected by the Depositary Bank, all in accordance with
its normal recordkeeping practices. The Depositary Bank shall make such books of
account available during normal business hours for inspection and audit by the
Administrative Agent, the Collateral Agent, the Borrower and their respective
representatives.

     (b) Not later than the tenth Business Day of each month during the term of
this Agreement, the Depositary Bank shall deliver to each of the other parties
hereto a rollforward statement setting forth the beginning balance of each
Account and the transactions comprising the additions into and withdrawals out
of each Account during the preceding month which shall total to the amounts held
in each Account at the close of business on the last day of such preceding
month.

     SECTION 5.3. ACCOUNTS GENERALLY.

     (a) Except as expressly set forth in this Agreement, the Borrower shall not
have any right of withdrawal in respect of any of the Accounts, and the Borrower
shall

                                      -11-

not make, attempt to make or consent to the making of any withdrawal or transfer
from any Account except in strict adherence to this Agreement.

     (b) The Collateral Agent shall have sole signatory authority with respect
to directing the Depositary Bank to make withdrawals from the Accounts. Those
persons who are authorized to sign with respect to the Accounts shall be
designated by the Collateral Agent from time to time by written notice to the
Depositary Bank.

     (c) It shall be sufficient, for purposes of this Agreement, that the
Depositary Bank has received a Withdrawal Approval Notice signed by an
individual designated by the Collateral Agent as provided in Section 5.3(b), and
the Depositary Bank shall not require any further evidence of authorization
prior to making any disbursement hereunder.

     (d) Subject to (i) the timely receipt of a Withdrawal Approval Notice
(which, for purposes of this Agreement, shall mean not later than 3:00 p.m. (New
York City time) on the Business Day preceding the requested date of payment or
action), (ii) the availability of cash in the applicable Account, (iii) the
Federal wire transfer system functioning in a normal fashion and (iv) other
circumstances beyond the control of the Depositary Bank, the Depositary Bank
shall make any payment required hereunder pursuant to any Withdrawal Approval
Notice (except transfers between Accounts and between Accounts and other
accounts) by means of wire transfer of immediately available funds to the
address of the payee set forth in such Withdrawal Approval Notice prior to 11:00
a.m. (New York City time) on the date specified herein for such payment, or by
such other means of payment, to such other address or at such later time as may
be specified by such payee.

     SECTION 5.4. LIMITATION ON DEPOSITARY BANK'S OBLIGATIONS. The Depositary
Bank has no obligation to the Borrower, the Sponsor or any third party to make
any payment (or authorize any withdrawal with respect thereto) for which the
appropriate Account does not contain adequate funds.

     SECTION 5.5. PERMITTED INVESTMENTS. All funds paid to or retained by the
Depositary Bank in Accounts shall, until paid or applied as provided herein, be
invested by the Depositary Bank at the written authorization and direction of
the Borrower from time to time and at the risk and expense of the Borrower in
Permitted Investments (and in the absence of a written authorization and
direction from the Borrower, in U.S. Government money market mutual funds);
provided, that upon the occurrence and during the continuance of an Event of
Default, such funds shall be so invested in Permitted Investments at the
Collateral Agent's direction and at the risk and expense of the Borrower. All
gains (including interest received) realized as the result of any such

                                      -12-

investment (net of all fees, commissions and other expenses, if any, incurred in
connection with such investment) shall be deposited into the applicable Account.
The Depositary Bank will have no liability for any loss resulting from any
Permitted Investment other than by reason of its willful misconduct, gross
negligence or bad faith. The Depositary Bank may sell any Permitted Investment
(without regard to its maturity date, but in accordance with Section 8.2)
whenever the Depositary Bank in its sole discretion deems it necessary to make
any distribution required by this Agreement and the Depositary Bank will not be
liable to any Person for any loss suffered because of any such sale, other than
by reason of its willful misconduct, gross negligence or bad faith.

     SECTION 5.6. DEPOSITS IRREVOCABLE. All deposits made into any Account,
absent manifest error, shall be irrevocable and such deposits and all
instruments or security held in such Account and all interest thereon shall be
held in trust by the Depositary Bank and applied solely as provided herein.

     SECTION 5.7. EVENTS OF DEFAULTS; MANDATORY PREPAYMENTS. Notwithstanding any
other provision contained in this Agreement, upon receipt by the Depositary Bank
of a written notice from the Collateral Agent stating that a Default or an Event
of Default has occurred and is continuing or that a mandatory prepayment is
required (upon which notice the Depositary Bank shall be entitled to rely
without independent investigation), the Depositary Bank shall (x) in the case of
a Default or an Event of Default, thereafter transfer and distribute cash from
the Accounts only upon the express written instructions of, and in accordance
with the priorities established by, the Collateral Agent in its sole discretion,
until notified in writing by the Collateral Agent that such Default or Event of
Default has been waived or cured or (y) in the case of a mandatory prepayment,
pay an amount equal to the amount of such mandatory prepayment to the
Administrative Agent for payment to the Lenders in accordance with the Credit
Agreement. Any notice provided under this Section 5.7 shall be provided to the
Borrower.

                                   ARTICLE VI.
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     SECTION 6.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEPOSITARY BANK.
The Depositary Bank represents and warrants to the Administrative Agent, the
Collateral Agent and the Borrower as follows:

          (a) Existence. The Depositary Bank is a New Jersey banking corporation
     duly organized, validly existing and in good standing under the laws of New
     Jersey.

                                      -13-

          (b) Power and Authorization; Enforceable Obligations.

               (i) The Depositary Bank has full power and authority and the
          legal right to conduct its business as now conducted and as proposed
          to be conducted by it, to execute, deliver and perform this Agreement
          and to take all actions necessary to complete the transactions
          contemplated by this Agreement. The Depositary Bank has taken all
          necessary action to authorize the transactions contemplated hereby on
          the terms and conditions of this Agreement and to authorize the
          execution, delivery and performance of this Agreement.

               (ii) This Agreement has been duly executed and delivered by the
          Depositary Bank and constitutes the legal, valid and binding
          obligation of the Depositary Bank, enforceable against the Depositary
          Bank in accordance with its terms, except as enforcement hereof may be
          limited by bankruptcy, insolvency, reorganization, moratorium or
          similar laws affecting the enforcement of creditors' rights generally
          or by limitation upon the availability of equitable remedies.

          (c) No Legal Bar. The execution, delivery and performance of this
     Agreement by the Depositary Bank will not, to the best of the Depositary
     Bank's knowledge, (i) violate any applicable law of the State of New York,
     the State of New Jersey or the United States of America governing the
     banking and trust powers of the Depositary Bank or (ii) result in a breach
     of any provision of any security issued by the Depositary Bank or of any
     indenture, mortgage, deed of trust, lease, contract, undertaking, agreement
     or instrument to which the Depositary Bank is a party or by which it or any
     of its property is bound or to which it or any of its property is subject.
     The execution, delivery and performance of this Agreement will not result
     in, or require the creation or imposition of any lien on any of the
     properties or revenues of the Depositary Bank pursuant to any applicable
     law or any indenture, mortgage, deed of trust, lease, contract,
     undertaking, agreement or instrument to which the Depositary Bank is a
     party or by which it or any of its property is bound or to which it or any
     of its property is subject. No approval or consent of any Person is
     required in connection with the execution, delivery and performance by the
     Depositary Bank of this Agreement, except such approvals or consents as
     have been duly obtained and are in full force and effect.

          (d) Government Approvals. To the best of the Depositary Bank's
     knowledge, no Government Approval of any Government Authority of the State
     of New York, the State of New Jersey or the United States of America
     governing

                                      -14-

     the banking and trust powers of the Depositary Bank, except for such
     Government Approvals as have been obtained and are in full force and effect
     and are not subject to appeal or judicial or other governmental review, are
     required to be obtained by the Depositary Bank in connection with the
     execution, delivery and performance of this Agreement or the taking of any
     action by any party contemplated hereby.

          (e) The Accounts are and will be maintained by the Depositary Bank as
     "securities accounts" (as defined in the Uniform Commercial Code) to the
     extent "financial assets" (as defined in the Uniform Commercial Code) are
     deposited in or credited to the Accounts. The Depositary Bank will treat
     each item of property (including cash and investment property) held by it
     in or credited to the Accounts as a "financial asset" to the extent such
     property can be treated as a "financial asset" under the Uniform Commercial
     Code. The Depositary Bank will treat and identify the Collateral Agent as
     the "entitlement holder" (as defined in the Uniform Commercial Code) with
     respect to the Accounts and all financial assets credited thereto. No
     financial asset deposited in or credited to the Accounts shall be
     registered in the name of, payable to the order of, or specially endorsed
     to any Person other than the Collateral Agent, unless endorsed to the
     Depositary Bank or in blank. The Collateral Agent, acting for the benefit
     of the Secured Parties, will have control of all security entitlements with
     respect to financial assets credited to the Accounts. The Depositary Bank
     will comply strictly with all "entitlement orders" (as defined in the
     Uniform Commercial Code) originated by the Collateral Agent in accordance
     with the terms of the Financing Documents without further consent by the
     Borrower or any other Person. The Depositary Bank will not comply or agree
     to comply with any entitlement order with respect to the Accounts or any
     financial assets credited thereto given by any Person other than the
     Collateral Agent. The Depositary Bank is a "securities intermediary" (as
     defined in the Uniform Commercial Code) and will act in such capacity. The
     Depositary Bank is not a "clearing corporation" (as defined in the Uniform
     Commercial Code).

          (f) In the event that the Accounts are not considered "securities
     accounts" (as defined in the Uniform Commercial Code) under applicable law,
     the Accounts shall be deemed to be "deposit accounts" (as defined in the
     Uniform Commercial Code) to the extent a security interest can be granted
     and perfected under the Uniform Commercial Code in the Accounts as deposit
     accounts, which the Collateral Agent shall maintain with the Depositary
     Bank acting not as a securities intermediary but as a "bank" (as defined
     in the Uniform Commercial Code). The Collateral Agent, acting on behalf of
     the Secured Parties, shall be

                                      -15-

     deemed the customer of the Depositary Bank for purposes of the Accounts and
     as such shall be entitled to all the rights that customers of banks have
     under applicable law with respect to deposit accounts, including the right
     to withdraw funds from, or close, the Accounts (which rights shall be
     exercised in accordance with the terms of the Financing Documents). The
     Depositary Bank shall not have title to the funds on deposit in the
     Accounts and shall credit the Accounts with all receipts of interest,
     dividends, and other income received on the property held in the Accounts.
     The Depositary Bank shall administer and manage the Accounts in strict
     compliance with all the terms applicable to the Accounts pursuant to the
     terms of this Agreement, and shall be subject to and comply with all the
     obligations that the Depositary Bank owes to the Collateral Agent and the
     Secured Parties with respect to the Accounts, including all subordination
     obligations, pursuant to the terms of this Agreement.

          (g) In the event that the Accounts are not considered "securities
     accounts" or "deposit accounts" (each as defined in the Uniform Commercial
     Code) under applicable law or a security interest cannot be granted and
     perfected in the Accounts under the Uniform Commercial Code, then the
     Accounts and all property deposited therein shall be deemed to be under the
     exclusive dominion and control of the Secured Parties, which the Secured
     Parties maintain through the Collateral Agent and the Depositary Bank, as
     their agents for such purpose, and the Collateral Agent and the Depositary
     Bank will act and will be deemed to be acting as the Secured Parties'
     agents in respect of the Accounts for the purpose of maintaining such
     exclusive dominion and control for the purpose of the creation and
     perfection of security interests in favor of the Secured Parties.

          (h) Except for the claims and interest of the Collateral Agent, the
     Secured Parties and the Borrower in the Accounts, no officer of the
     Depositary Bank with direct responsibility for administering this Agreement
     has actual knowledge of any claim to, or interest in, the Accounts or any
     monies or any other property deposited therein or credited thereto. If an
     officer of the Depositary Bank with direct responsibility for administering
     this Agreement obtains actual knowledge that any Person has asserted any
     lien, encumbrance or adverse claim against the Accounts or in any monies or
     any other property deposited therein or credited thereto, the Depositary
     Bank will promptly notify the Collateral Agent and the Borrower thereof.

                                      -16-

                                  ARTICLE VII.
                            DEPOSITARY BANK GENERALLY

     SECTION 7.1. ACCEPTANCE. The acceptance by the Depositary Bank of its
duties hereunder is subject to the following terms and conditions, which the
parties to this Agreement agree shall govern and control with respect to the
rights, duties, liabilities and immunities of the Depositary Bank:

          (a) the Depositary Bank will not be responsible or liable in any
     manner whatsoever for the sufficiency, correctness, genuineness or validity
     of the amounts deposited with or held by it;

          (b) the Depositary Bank will not be liable for any error of judgment
     or for any act done or step taken or omitted except in the case of its
     gross negligence, willful misconduct or bad faith;

          (c) the Depositary Bank may consult with and obtain advice from
     counsel and other skilled Persons (at the reasonable expense of the
     Borrower) in the event of any dispute or question as to the construction of
     any provision hereof and shall be fully protected in taking or not taking
     any action in good faith in reliance on such advice;

          (d) the Depositary Bank will not be charged with knowledge of any
     agreement other than this Agreement and Schedule I to the Credit Agreement,
     and shall have no duties as Depositary Bank except those expressly set
     forth herein and in any modification or amendment hereof; provided, that no
     such modification or amendment will affect its duties unless it has given
     its written consent thereto;

          (e) the Depositary Bank may engage or be interested in any financial
     or other transaction with any party hereto and may act on, or as
     depository, trustee or agent for, any committee or body of holders of
     obligations of such persons as freely as if it were not Depositary Bank;

          (f) the Depositary Bank is not obligated to take any action that in
     its reasonable judgment would involve it in expense or liability unless it
     has been furnished with reasonable indemnity (it being understood and
     agreed that the general indemnity of the Collateral Agent will constitute a
     reasonable indemnity);

          (g) the Depositary Bank will not take instructions from any Person
     except those given in accordance with this Agreement; and

                                      -17-

          (h) the Depositary Bank will be protected in acting upon any written
     notice, certificate, instruction, request or other paper or document as to
     the due execution thereof and the validity and effectiveness of the
     provisions thereof and as to the truth of any information therein
     contained, which Depositary Bank, in good faith, reasonably believes to be
     genuine.

     SECTION 7.2. FEES OF DEPOSITARY BANK. The Borrower shall pay the Depositary
Bank the following fees (and no others):

          (a) An annual fee of $4,500 payable on the Closing Date and on each
     anniversary of the Closing Date occurring on or prior to the Termination
     Date. In the event the Termination Date should occur prior to an
     anniversary of the Closing Date, the annual fee for the final year shall be
     refunded to the Borrower on a per-quarter basis, with any portion of a
     quarter counted as a full quarter.

          (b) A termination fee in the amount of $1,500 payable upon notice of
     the Depositary Bank's termination as Depositary Bank prior to the
     Termination Date.

          (c) The services to be provided by the Depositary Bank including the
     sweeping of interest and dividends daily, and the provision of mutual funds
     for trust accounts; the mutual fund provider may reimburse the Depositary
     Bank or United up to one-quarter of one percent (0.25%) of the funds
     invested in consideration of it performing administrative services,
     provided that the Borrower shall not incur any expense or fee as a result
     of the foregoing.

     SECTION 7.3. REPLACEMENT OR RESIGNATION OF DEPOSITARY BANK.

          (a) The Depositary Bank may at any time resign by giving notice to
     each other party to this Agreement, such resignation to be effective upon
     the appointment of a successor Depositary Bank as hereinafter provided. If
     a successor Depositary Bank is not appointed within thirty (30) days after
     the giving of written notice of such resignation, the Depositary Bank may
     apply to any court of competent jurisdiction to appoint a successor
     Depositary Bank to act until such time, if any, as a successor is appointed
     as herein provided.

          (b) The Collateral Agent may remove the Depositary Bank at any time by
     giving notice to each other party to this Agreement, such removal to be
     effective upon the appointment of a successor Depositary Bank as
     hereinafter provided.

                                      -18-

          (c) In the event of any resignation or removal of the Depositary Bank,
     a successor Depositary Bank, which shall be a bank or trust company
     organized under the laws of the United States of America or of any state
     thereof, shall be appointed by the Collateral Agent and be reasonably
     acceptable to the Borrower and the Depositary Bank shall return all
     unearned prepaid compensation. Any such successor Depositary Bank shall
     deliver to each party to this Agreement a written instrument accepting such
     appointment hereunder and thereupon such successor Depositary Bank shall
     succeed to all the rights and duties of the Depositary Bank hereunder and
     shall be entitled to receive the Accounts from the predecessor Depositary
     Bank.

          (d) Any Person into which the Depositary Bank may be merged or
     converted or with which it may be consolidated, or any Person resulting
     from any merger, conversion or consolidation to which the Depositary Bank
     shall be a party, or any Person to which substantially all of the corporate
     trust business of the Depositary Bank may be transferred, shall be the
     Depositary Bank under this Agreement without further act.

     SECTION 7.4. INDEMNITY. Whether or not the transactions contemplated hereby
are consummated, the Borrower shall, subject to the provisions of this Section
7.4, indemnify, pay and hold the Depositary Bank and the officers, directors,
employees, agents, affiliates, and attorneys of the Depositary Bank
(collectively, the "INDEMNITEES") harmless from and against any and all
out-of-pocket liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including without limitation reasonable attorneys' fees and
costs of the Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not the Indemnitees are
designated a party thereto) that are imposed on, incurred by or asserted against
any Indemnitee, in any manner relating to or arising out of this Agreement or
the other Financing Documents or the exercise of any right or remedy hereunder
or under any other Financing Document (collectively, the "INDEMNIFIED
LIABILITIES"); provided, that the Borrower shall not have any obligation to any
Indemnitee if a court of competent jurisdiction renders a judgment, final and
not subject to appeal or review, that such Indemnified Liabilities arise from
the gross negligence or willful misconduct of such Indemnitee. The Borrower
shall pay or reimburse each Indemnitee for all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees and
expenses) incurred by such Indemnitee in the defense of any claim arising out of
any Indemnified Liability at the time such costs and expenses are incurred and
such Indemnitee has given the Borrower written notice thereof. The foregoing
indemnity will remain operative and in full force and effect regardless of the
termination of this

                                      -19-

Agreement, the consummation of the transactions contemplated by the Financing
Documents, the repayment of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Financing Document, or the content or accuracy of any representation or warranty
made by the Borrower in any Financing Document. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this Section 7.4
may be unenforceable because it violates any law or public policy, the Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.

                                  ARTICLE VIII.
                            DISPUTES; DETERMINATIONS

     SECTION 8.1. DISPUTES. In the event of any dispute as to any amount to be
transferred or paid pursuant to this Agreement, the Depositary Bank is
authorized and directed to retain in its possession, without liability to any
Person, the disputed amount until such dispute has been settled by agreement of
the other parties hereto or by legal proceedings, but the Depositary Bank is
under no duty whatsoever to institute or defend any such proceeding; provided,
that the Depositary Bank has no right to retain any amount necessary to pay when
due principal, fees or interest payable to the Collateral Agent or any Secured
Party in accordance with this Agreement (under the circumstances contemplated by
Section 4.1(b) or otherwise). The Depositary Bank has the right to interplead
the parties to a dispute in any court of competent jurisdiction and to ask such
court to determine the respective rights of such parties with respect to this
Agreement.

     SECTION 8.2. CASH AVAILABLE. In determining the amount of funds on deposit
in an Account at any time, the Depositary Bank will treat as cash available the
net amount that the Depositary Bank would receive on such day if it liquidated
all the securities then on deposit in such Account (at then-prevailing market
prices and assuming normal sales expenses). The Depositary Bank will use its
best efforts to sell securities without a loss in order that actual cash is
available on each date on which a transfer or payment is to be made pursuant to
this Agreement.

                                   ARTICLE IX.
                                  MISCELLANEOUS

     SECTION 9.1. NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of any
party hereto or any of such Person's agents to exercise, and no delay in
exercising, and no course of dealing with respect to, any right, power or remedy
hereunder shall operate as a waiver thereof. No single or partial exercise by
any party hereto or any of such Person's agents of any right, power or remedy
hereunder shall preclude any other or further

                                      -20-

exercise thereof or the exercise of any other right, power or remedy. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which any party hereto would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any other party hereto to
any other or further action in any circumstances without notice or demand,
except to the extent notice is expressly required by this Agreement or any other
Financing Document.

     SECTION 9.2. NOTICES. All notices, requests and other communications
provided for herein (including any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including by telecopy)
delivered to the intended recipient at the address set forth below 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 with confirmation of receipt received or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid; provided, however, that if such transmission or delivery does not
occur by 4:00 p.m. recipient's time, then such transmission or delivery shall be
deemed to occur on the next Business Day.

                              For Borrower:

                              Ormesa LLC
                              980 Greg Street
                              Sparks, Nevada 89431
                              Attention: President
                              Telephone: (775) 356-9029
                              Facsimile: (775) 356-9039

                              For Administrative Agent and Collateral Agent:

                              United Capital,
                              a division of Hudson United Bank
                              87 Post Road East
                              Westport, Connecticut 06880
                              Attention: Mr. Jerome P. Peters, Jr.
                              Telephone: (203) 291-6600
                              Facsimile: (203) 291-6632

                                      -21-

                        For Depositary Bank:

                        Wealth Management, a division of
                        Hudson United Bank
                        90 Post Road East
                        Westport, CT 06880
                        Attention: James N. Donaldson, Senior Vice
                        President
                        Telephone: (203) 291-6705
                        Facsimile: (203) 291-6709

     SECTION 9.3. AMENDMENTS, ETC. This Agreement may be amended, supplemented,
modified or waived only by an instrument in writing duly executed by each of the
parties hereto. Any such amendment, supplement, modification or waiver shall be
binding upon the Depositary Bank, the Collateral Agent, each Secured Party, each
holder of any of the Secured Obligations and the Borrower. Any waiver shall be
effective only in the specific instance and for the specified purpose for which
it was given.

     SECTION 9.4. SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in
full force and effect until the termination hereof pursuant to Section 9.14; and
(b) be binding upon and inure to the benefit of the respective successors and
permitted assigns of the parties hereto; provided, however, that the Borrower
shall not assign or transfer its rights hereunder without the prior written
consent of the Collateral Agent.

     SECTION 9.5. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, all of which when taken together shall constitute
one and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof. This
Agreement shall become effective at such time as the Collateral Agent shall have
received counterparts hereof signed by all of the intended parties hereto.

     SECTION 9.6. SEVERABILITY. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
applicable law: (a) the other provisions hereof shall remain in full force and
effect in such jurisdiction in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (b) the invalidity

                                      -22-

or unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.

     SECTION 9.7. HEADINGS. Headings appearing herein are used solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.

     SECTION 9.8. NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES
HERETO ARE SOLELY FOR THE BENEFIT OF THE BORROWER, THE DEPOSITARY BANK, THE
COLLATERAL AGENT AND THE OTHER SECURED PARTIES, AND NO PERSON (OTHER THAN THE
PARTIES HERETO, THE OTHER SECURED PARTIES AND THEIR SUCCESSORS AND ASSIGNS
PERMITTED HEREUNDER) SHALL HAVE ANY RIGHTS HEREUNDER.

     SECTION 9.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     Notwithstanding anything to the contrary herein, the State of New York is
and shall continue to be for so long as this Agreement shall be in effect the
Depositary Bank's jurisdiction (within the meaning of Section 8-110(e) of the
Uniform Commercial Code) in its capacity as the "securities intermediary" with
respect to all securities accounts and (within the meaning of Section 9-304 of
the Uniform Commercial Code) in its capacity as the "bank" with respect to all
deposit accounts established and maintained by the Depositary Bank in the name
of the Collateral Agent.

     SECTION 9.10. SUBMISSION TO JURISDICTION, ETC. EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK COUNTY (INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT
IN THE STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY 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 A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                      -23-

     SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     SECTION 9.12. SERVICE OF PROCESS. Nothing herein shall in any way be deemed
to limit the ability of any party hereto to serve any writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over any other party hereto in such jurisdiction, and in such
manner, as may be permitted by applicable law.

     SECTION 9.13. LIMITATION OF RECOURSE. The obligations of the Borrower under
this Agreement shall be obligations of the Borrower only and none of the
Depositary Bank, the Collateral Agent or any Secured Party shall have any claim
against or recourse to (whether by operation of law or otherwise) any
Non-Recourse Person (other than claims against and recourse to the Sponsor with
respect to its obligations under the Borrower Equity Interest Pledge) in respect
of such obligations of the Borrower. Notwithstanding the foregoing, nothing in
this Section 9.13 shall impair or in any way limit any liabilities or
obligations of (a) the Sponsor under or pursuant to its obligations as set forth
in the Borrower Equity Pledge, or (b) any Non-Recourse Party for fraud or
willful misconduct.

     SECTION 9.14. TERMINATION. This Agreement and the lien granted pursuant to
Section 7.2 will automatically terminate upon the Termination Date.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS WHEREOF, this Agreement has been duly executed on the date and
year first above written.

                                        UNITED CAPITAL,
                                        a division of Hudson United Bank,
                                        as Administrative Agent and Collateral
                                        Agent

                                        By
                                           -------------------------------------
                                           Name: Jerome P. Peters, Jr.
                                           Title: Senior Vice President

                                        ORMESA LLC, as Borrower

                                        BY ORMAT FUNDING CORP.,
                                        its Sole Member and Control Manager

                                        BY
                                           -------------------------------------
                                           Name:
                                           Title:

                                        WEALTH MANAGEMENT,
                                        a division of Hudson United Bank,
                                        as Depositary Bank

                                        By
                                           -------------------------------------
                                           Name:
                                                 -------------------------------
                                           Title:
                                                  ------------------------------

                                                                       Exhibit D
                                                             to Credit Agreement

                           FORM OF NOTICE OF BORROWING

United Capital,
 a division of Hudson United Bank
87 Post Road East
Westport, CT 06880

     Re: Notice of Borrowing

Ladies and Gentlemen:

     Reference is hereby made to Section [6.01(v)/6.02(i)] of the Credit
Agreement, dated as of December 31, 2002 (the "CREDIT AGREEMENT"), among Ormesa
LLC (the "BORROWER"), the several banks and other financial institutions party
thereto from time to time and United Capital, a division of Hudson United Bank,
not in its individual capacity, but solely as administrative agent and
collateral agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to them in the Credit Agreement.

     The Borrower hereby requests that an [Initial Term/Additional Term] Loan be
made in an aggregate principal amount equal to [$20,000,000.00][$7,500,000.00]
on ___________, 200__ (the "BORROWING DATE").+ Such Loan will be a [Prime Rate
Loan/Eurodollar Loan].

     The undersigned hereby certifies that all conditions contained in Section
[6.01/6.02] of the Credit Agreement have been or will be satisfied or waived on
the Borrowing Date.

     The undersigned hereby further certifies as follows:

          (a) Immediately before and after giving effect to the borrowing
     requested hereby, the representations of the Borrower and the Sponsor
     contained in the Financing Documents shall be true and correct on and as of
     the Borrowing Date in all material respects as if made on and as of such
     date except for any such representations and warranties that were initially
     stated to have been made solely as of an earlier date, in which case such
     representations shall have been true and correct in all material respects
     as of such earlier date.

          (b) Immediately before and after giving effect to the borrowing
     requested hereby, no Default or Event of Default shall have occurred and be
     continuing and no Default will result therefrom.

          (c) Immediately before and after giving effect to the borrowing
     requested hereby, no Material Adverse Effect shall have occurred and be
     continuing or will result therefrom.

----------
+    In connection with the Additional Term Loan only, this Notice must be
     delivered to the Administrative Agent by 11:00 a.m., New York time, at
     least 3 (with respect to Eurodollar Loans) or 1 (with respect to Prime Rate
     Loans) Business Day(s) prior to the proposed Borrowing Date.

                                       -2-

          (d) All Government Approvals that are necessary for each Project as of
     the Borrowing Date shall have been obtained and shall be in full force and
     effect and not subject to appeal.

     The Borrower agrees that if prior to the time of the borrowing requested
hereby any matter certified to herein by the Borrower is not true and correct at
such time as if then made, the Borrower will immediately so notify the
Administrative Agent. Except to the extent, if any, that prior to the time of
the borrowing requested hereby the Administrative Agent shall receive written
notice to the contrary from the Borrower, each matter certified to herein shall
be deemed once again to be certified as true and correct at the Borrowing Date
as if then made.

     Please wire transfer the proceeds of the Loan requested hereby in
accordance with the payment instructions attached as Schedule A hereto.

Borrowing Certificate

                                      -3-

     The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized signatory this ___ day of ____________, 200_.

                                        ORMESA LLC

                                        By: ORMAT FUNDING CORP.,
                                            its Sole Member and Control Manager

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

Borrowing Certificate

                                   SCHEDULE A

     Please remit funds to:

          Amount: $ ___________
          Institution:
          Account Name:
          Account No.:
          ABA No.:

          Amount: $ ___________
          Institution:
          Account Name:
          Account No.:
          ABA No.:

          Amount: $ ___________
          Institution:
          Account Name:
          Account No.:
          ABA No.:

                                                                       Exhibit E
                                                             to Credit Agreement

                        FORM OF DISTRIBUTION CERTIFICATE

United Capital
   a division of Hudson United Bank
87 Post Road East
Westport, Connecticut 06680

Wealth Management
   a division of Hudson United Bank
87 Post Road East
Westport, Connecticut 06680

     Re: Distribution Certificate

Ladies and Gentlemen:

     Reference is hereby made to Section 8.13(vi) of the Credit Agreement dated
as of December 31, 2002 (the "CREDIT AGREEMENT"), among Ormesa LLC (the
"BORROWER"), the several banks and other financial institutions party thereto
from time to time and United Capital, a division of Hudson United Bank, not in
its individual capacity, but solely as administrative agent (the "ADMINISTRATIVE
AGENT") and collateral agent (the "COLLATERAL AGENT"), and to Section 4.1 of the
Depositary Agreement dated as of December 31, 2002 (the "DEPOSITARY AGREEMENT")
among the Borrower, the Administrative Agent, the Collateral Agent and Wealth
Management, a division of Hudson United Bank, as depositary bank (the
"DEPOSITARY BANK"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to them in the Credit Agreement.

     The Borrower hereby requests that the transfers from the Accounts described
in the attached Distribution Request be made by the Depositary Bank on
______________, 20___ (the "PAYMENT DATE")*, other than the transfers described
on lines 4.00, .5.00, 6.00, 11.00 and 12.00, which are requested to be made on
_____________, 20__.+

     The undersigned hereby certifies that immediately before and after giving
effect to the payments requested hereby, no Default (other than any Default that
(i) provides a cure period therefor of not less than 30 days, (ii) is reasonably
capable of being remedied during such 30-day period and (iii) as to which the
Borrower is diligently prosecuting or pursuing such remedy, and

----------

     * This Certificate must be delivered to the Administrative Agent and the
Depositary Bank at least 10 days prior to the proposed Payment Date for any
request that contemplates a Restricted Payment or at least 3 Business Days prior
to the proposed Payment Date for any request that does not contemplate a
Restricted Payment.

     + Such date shall not be more than 10 days after the Monthly Date or
Quarterly Date to which this Distribution Certificate relates.

                                       -2-

(iv) following the occurrence of which not more than 30 days have elapsed) or an
Event of Default shall have occurred and be continuing or would result
therefrom.

          [In connection with a Restricted Payment (including, without
 limitation, a payment pursuant to 4.1(b) SEVENTH of the Depositary Agreement),
 the undersigned hereby further certifies as follows: +

          (a) [The Payment Date is within 30 days after a Quarterly Date/The
     Borrower was unable to make a Restricted Payment within 30 days after a
     Quarterly Date because Section 8.13(ii) of the Credit Agreement was
     unsatisfied; the provisions of Section 8.13(ii), as well as the other
     provisions of Section 8.13 of the Credit Agreement, are satisfied and the
     Payment Date is within 10 days after such conditions of Section 8.13 of the
     Credit Agreement were first satisfied];

          (b) Immediately before and after giving effect to such Restricted
     Payment, for any corresponding Quarterly Date on or prior to March 31,
     2004, the Projected Debt Service Coverage Ratio shall be at least 1.20:1,
     and for any corresponding Quarterly Date thereafter, the Debt Service
     Coverage Ratio for the relevant Historical Computation Period is at least
     1.20:1;

          (c) Immediately before and after giving effect to such Restricted
     Payment, the balance on deposit in the Debt Service Reserve Account is at
     least equal to the Debt Service Reserve Required Amount; and

          (d) the Restricted Payment is only made from and to the extent of
     Distributable Cash (as defined in the Depositary Agreement).]

              [the remainder of this page intentionally left blank]

----------
     + These certifications are only necessary with respect to Restricted
Payments (including, without limitation, payments pursuant to Section 4.1(b)
SEVENTH of the Depositary Agreement).

                                       -3-

     The Borrower has caused this Distribution Certificate to be executed and
delivered by its duly authorized signatory this _____ day of ________, 20 __.

                                        ORMESA LLC

                                        By ORMAT FUNDING CORP.,
                                           its Sole Member and Control Manager

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       -4-

                                   ORMESA LLC
                          FORM OF DISTRIBUTION REQUEST
                                     [DATE]

                                                                REVENUE          DEBT SERVICE RESERVE
                                                                ACCOUNT                 ACCOUNT
                                                         --------------------   ----------------------

BALANCE PRIOR TO THIS REQUEST                            ____________________   ______________________
   1.00    Power sales                                   ____________________   ______________________
   2.00    Interest income                               ____________________   ______________________
   3.00    Other income                                  ____________________   ______________________

MONTHLY DISTRIBUTIONS:
Section 4.1(a) FIRST
   4.00    Operation and Maintenance Expenses            ____________________   ______________________

Section 4.1(a) SECOND
   5.00    Capital Expenditures                          ____________________   ______________________

QUARTERLY DISTRIBUTIONS:
Section 4.1(b) FIRST
   6.00    Operation and Maintenance Expenses            ____________________   ______________________
Section 4.1(b) SECOND                                    ____________________   ______________________
   7.00    Fees and Expenses for Administrative Agent,   ____________________   ______________________
           Collateral Agent and Depositary Bank          ____________________   ______________________
Section 4.1(b) THIRD
   8.00    Lender Interest and Fees                      ____________________   ______________________
Section 4.1(b) FOURTH
   9.00    Lender Principal and Additional Principal     ____________________   ______________________
Section 4.1(b) FIFTH
   10.00   Debt Service Reserve Account                  ____________________   ______________________
Section 4.1(b) SIXTH
   11.00   Capital Expenditures
Section 4.1(b) SEVENTH
   12.00   Distributable Cash                            ____________________   ______________________

TOTAL TRANSFERS IN/(OUT)                                 ____________________   ______________________

BALANCE SUBSEQUENT TO THIS REQUEST
                                                         ====================   ======================

WIRE TO UNITED                                                  [7,8,9]

WIRE TO OPERATOR                                              [4,5,6,11]

WIRE TO DEBT SERVICE RESERVE ACCOUNT                             [10]

WIRE TO BORROWER, SPONSOR, OR OTHER SUCH
   PERSON                                                        [12]

      SUBMITTED BY: ________________________   APPROVED BY: ____________________

      DATE OF SUBMISSION ___________________   DATE OF APPROVAL ________________

                                                                       Exhibit F
                                                             to Credit Agreement

                     FORM OF CONVERSION/CONTINUATION NOTICE

                                                                          , 200
                                                             -------- ----     -

United Capital,
a division of Hudson United Bank
87 Post Road East
Westport, CT 06880

     Re: Notice of Conversion/Continuation

Gentlemen and Ladies:

     This [Conversion/Continuation] Notice (this "NOTICE") is delivered to you
pursuant to Section 4.05 of the Credit Agreement dated as of December 31, 2002
(the "CREDIT AGREEMENT"), among Ormesa LLC (the "BORROWER"), the several banks
and other financial institutions party thereto from time to time and United
Capital, a division of Hudson United Bank, not in its individual capacity, but
solely as administrative agent and collateral agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings given to them in
the Credit Agreement.

     The Borrower hereby requests that on____________________, 20___, the
outstanding principal amount identified below of the Loans issued under the
Credit Agreement;

          (1) which are [Initial Term Loans/Additional Term Loans] and

          (2) which are presently [Eurodollar Loans/Prime Rate Loans] with an
     Interest Period ending on____________________, 200_,

          (3) be [converted/continued] as,

          (4) [Eurodollar Loans/Prime Rate Loans] having an Interest Period of
     [__________].

     The principal amount to be so [converted/continued] is $_______________

     [The undersigned hereby certifies that the requirements of Section 2.01(c)
have been satisfied with respect to this conversion.]

                                      -2-

          The Borrower has caused this Notice to be executed and delivered by
its duly authorized signatory this___day of______________, 20__.

                                        ORMESA LLC

                                        By: ORMAT FUNDING CORP.,
                                            its Sole Member and Control Manager

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:Exhibit 10.1.5

         This CREDIT AGREEMENT, dated as of December 18, 2003 (this
"Agreement"), is entered into among ORCAL GEOTHERMAL INC., a corporation
organized under the laws of the State of Delaware, as borrower ("Borrower"), THE
FINANCIAL INSTITUTIONS LISTED ON EXHIBIT H OR WHO LATER BECOME A PARTY HERETO,
as banks (the financial institutions party to this Agreement being collectively
referred to as the "Banks") and BEAL BANK, S.S.B., as administrative agent for
the Banks (in such capacity, "Administrative Agent").

                                    RECITALS

         A. Borrower intends to acquire directly or indirectly certain Persons
which directly or indirectly own, lease, use and operate the Projects referred
to herein, consisting of (a) an approximately 52 MW geothermal electric power
project located in Heber, California and owned by HGC, (b) a geothermal fluid
facility located in Heber, California and owned by HFC, (c) an approximately 40
MW geothermal electric power project (comprised of three geothermal plants)
located near Mammoth Lakes, California and owned by Mammoth Lakes and (d) an
approximately 48 MW geothermal electric power project located in Heber,
California and leased by SIGC pursuant to the GE Lease, and, in connection
therewith, Borrower has requested that the Banks provide a portion of the
financing for the Acquisition; and

         B. The Banks are willing to provide such financing upon the terms and
subject to the conditions set forth herein and in the other Credit Documents.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the agreements herein and in the
other Credit Documents and in reliance upon the representations and warranties
set forth herein and therein, the parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     1.1 DEFINITIONS. Except as otherwise expressly provided, capitalized terms
used in this Agreement (including its exhibits and schedules) shall have the
meanings given to such terms in Exhibit A.

     1.2 RULES OF INTERPRETATION. Except as otherwise expressly provided, the
rules of interpretation set forth in Exhibit A shall apply to this Agreement and
the other Credit Documents.

                                    ARTICLE 2
                              THE CREDIT FACILITIES

     2.1 LOAN FACILITIES.

         2.1.1 Senior Credit Facility.

         (a) Availability. Subject to the terms and conditions set forth in this
Agreement and in reliance upon the representations and warranties of Borrower
set forth herein, each Bank severally agrees to advance to Borrower on the
Closing Date such loans as Borrower may request pursuant to this Section 2.1.1
(individually, a "Loan" and, collectively, the "Loans"), in an aggregate
principal amount which does not exceed such Bank's Senior Loan Commitment.
Nothing in this clause (a) shall in any respect impair Beal Bank, S.S.B.'s
obligations under Section 9.12.

         (b) Notice of Borrowing. Borrower shall request Loans by delivering to
Administrative Agent a written notice in the form of Exhibit C-1, appropriately
completed (a "Notice of Borrowing"), which contains or specifies, among other
things:

              (i) the portion of the requested Loan which shall bear interest as
provided in (A) Section 2.1.1(c)(i) (individually, a "Base Rate Loan" and,
collectively, the "Base Rate Loans") or (B) Section 2.1.1(c)(ii) (individually,
a "LIBOR Loan" and, collectively, the "LIBOR Loans");

              (ii) the aggregate principal amount of the requested Loan, which
shall be in the minimum amount of $1,000,000 or an integral multiple of $100,000
in excess thereof;

              (iii) the proposed date of the requested Loan (which shall be a
Banking Day and the Closing Date);

              (iv) in the case of any requested Loan to be made as a LIBOR Loan,
the initial Interest Period requested therefor (which shall, subject to Section
2.1.2(a), be twelve months); and

              (v) a certification by Borrower that, as of the date such
requested Loan is proposed to be made, the Loan proposed to be made on such date
does not exceed $154,500,000.

         Borrower shall give the Notice of Borrowing to Administrative Agent so
as to provide not less than the Minimum Notice Period applicable to Loans of the
Type requested. Any Notice of Borrowing may be modified or revoked by Borrower
through the Banking Day immediately prior to the Closing Date, and shall
thereafter be irrevocable.

         Each Notice of Borrowing shall be delivered in any manner permitted by
Section 10.1 to Administrative Agent at the office, to the facsimile number or
to the electronic mail address and during the hours specified in Section 10.1.

                                       2

         (c) Interest. Subject to Section 2.4.3, Borrower shall pay interest on
the unpaid principal amount of each Loan from the date of Borrowing of such Loan
until the maturity or prepayment thereof at the following rates per annum:

              (i) With respect to the principal portion of such Loan which is,
and during such periods as such Loan is, a Base Rate Loan, at a rate per annum
equal to the Base Rate (such rate to change from time to time as the Base Rate
shall change) plus 4.375%; provided that such 4.375% interest rate margin shall
be increased by 0.50% on the eighth anniversary of the Closing Date.

              (ii) With respect to the principal portion of such Loan which is,
and during such periods as such Loan is, a LIBOR Loan, at a rate per annum, at
all times during each Interest Period for such LIBOR Loan, equal to the greater
of (A) the Adjusted LIBO Rate for such Interest Period and (B) 2.00%, in each
case plus 5.125%; provided that such 5.125% interest rate margin shall be
increased by 0.50% on the eighth anniversary of the Closing Date.

         (d) Principal Payments. Borrower shall repay to Administrative Agent,
for the account of each Bank, the aggregate unpaid principal amount of the Loan
made by such Bank in installments payable on each Principal Repayment Date in
accordance with the repayment schedule set forth on Exhibit I, with any
remaining unpaid principal, interest, fees and costs due and payable on the
Maturity Date. Borrower may not re-borrow the principal amount of any Loan so
repaid.

         2.1.2 Interest Provisions Relating to All Loans.

         (a) Applicable Interest Rate. Subject to Section 2.4.3, the applicable
basis for determining the rate of interest with respect to any Loan shall be
selected by Borrower initially at the time a Notice of Borrowing is given
pursuant to Section 2.1.1. The basis for determining the interest rate with
respect to any Loan may be changed from time to time as specified in a Notice of
Conversion of Loan Type delivered pursuant to Section 2.1.5. If on any day a
Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
such Loan shall bear interest determined by reference to the Base Rate. Upon the
occurrence and during the continuation of any Event of Default, the Banks shall
not be obligated to make any LIBOR Loans with an Interest Period greater than
one month.

         (b) Interest Payment Dates. Borrower shall pay accrued interest on the
unpaid principal amount of each Loan (i) in the case of each Base Rate Loan, on
the last Banking Day of each calendar quarter, (ii) in the case of each LIBOR
Loan, on the last Banking Day of the calendar month in which the three-month
anniversary of the first day of the applicable Interest Period in which such
LIBOR Loan is outstanding occurs, and (iii) in all cases, upon repayment or
prepayment (to the extent thereof and including any optional prepayments or
Mandatory Prepayments), upon conversion from one Type of Loan to another Type of
Loan and at maturity (whether by acceleration or otherwise); provided, however,
that Borrower's first scheduled interest payment hereunder shall occur on March
31, 2004.

                                       3

         (c) LIBOR Loan Interest Periods.
             ---------------------------

              (i) Subject to Section 2.1.2(a), each Interest Period for LIBOR
Loans shall be twelve months. Notwithstanding anything to the contrary in the
preceding sentence, (A) any Interest Period which would otherwise end on a day
which is not a Banking Day shall be extended to the next succeeding Banking Day
unless such next Banking Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding Banking Day; (B) any
Interest Period which begins on the last Banking Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Banking Day of a
calendar month; and (C) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.

              (ii) Borrower may contact Administrative Agent at any time prior
to the end of an Interest Period for a quotation of Interest Rates in effect at
such time for given Interest Periods and Administrative Agent shall promptly
provide such quotation. Borrower may select an Interest Period telephonically or
by electronic mail within the time periods specified in Section 2.1.5, which
selection shall be irrevocable on and after commencement of the applicable
Minimum Notice Period. Borrower shall confirm such telephonic or electronic mail
notice to Administrative Agent by facsimile on the day such notice is given by
delivery to Administrative Agent of a written notice in substantially the form
of Exhibit C-2, appropriately completed (a "Confirmation of Interest Period
Selection"). If Borrower fails to notify Administrative Agent of the next
Interest Period for any LIBOR Loans in accordance with this Section 2.1.2(c)(ii)
then, subject to Section 2.1.2(a), such Loans shall automatically be renewed as
LIBOR Loans with an Interest Period of twelve months on the last day of the
current Interest Period therefor. Administrative Agent shall as soon as
practicable (and, in any case, within two Banking Days after delivery of the
Confirmation of Interest Period Selection) notify Borrower of each determination
of the Interest Rate applicable to each Loan.

         (d) Interest Computations. All computations of interest on Base Rate
Loans shall be based upon a year of 365 days or, in the case of a leap year, 366
days, shall be payable for the actual days elapsed (including the first day but
excluding the last day), and shall be adjusted in accordance with any changes in
the Base Rate to take effect on the beginning of the day of such change in the
Base Rate. All computations of interest on LIBOR Loans shall be based upon a
year of 360 days and shall be payable for the actual days elapsed (including the
first day but excluding the last day). Borrower agrees that all computations by
Administrative Agent of interest shall be conclusive and binding in the absence
of manifest error.

         2.1.3 Promissory Notes. The obligation of Borrower to repay the Loans
made by a Bank and to pay interest thereon at the rates provided herein shall,
upon the written request of such Bank, be evidenced by promissory notes in the
form of Exhibit B-1 (individually, a "Note" and, collectively, the "Notes")
payable to the order of such requesting Bank and in the principal amount of such
Bank's Senior Loan Commitment or outstanding Loan balance, as the case may be.
Borrower authorizes each such requesting Bank to record on the schedule annexed
to such Bank's Note or Notes, the date and amount of each Loan made by such
requesting Bank, and each payment or prepayment of principal thereunder and
agrees that all such notations shall

                                       4

constitute prima facie evidence of the matters noted; provided that in the event
of any inconsistency between the records or books of Administrative Agent and
any Bank's records or Notes, the records of Administrative Agent shall be
conclusive and binding in the absence of manifest error. Borrower further
authorizes each such requesting Bank to attach to and make a part of such
requesting Bank's Note or Notes continuations of the schedule attached thereto
as necessary. No failure to make any such notations, nor any errors in making
any such notations, shall affect the validity of Borrower's obligations to repay
the full unpaid principal amount of the Loans or the duties of Borrower
hereunder or thereunder. Upon the payment in full in cash of the aggregate
principal amount of, and all accrued and unpaid interest on, the Loans, and upon
the request of Borrower, the Banks holding such Notes shall promptly mark the
applicable Notes cancelled and return such cancelled Notes to Borrower.

         2.1.4 Loan Funding.

         (a) Notice. Each Notice of Borrowing and Notice of Conversion of Loan
Type shall be delivered to Administrative Agent in accordance with Sections
2.1.1(b) and 2.1.5, respectively. Administrative Agent shall promptly notify
each Bank of the contents of each Notice of Borrowing and Notice of Conversion
of Loan Type.

         (b) Pro Rata Loans. All Loans shall be made on a pro rata basis by the
Banks in accordance with their respective Proportionate Shares of such Loans,
with each Borrowing to consist of a Loan by each Bank equal to such Bank's
Proportionate Share of such Loans.

         (c) Bank Funding. Each Bank shall, before noon (12:00 p.m.) on the date
of each Borrowing, make available to Administrative Agent by wire transfer of
immediately available funds in Dollars to the account of Administrative Agent
most recently designated by it for such purpose, such Bank's Proportionate Share
of the Loan to be made on such date. The failure of any Bank to make the Loan to
be made by it as part of any Borrowing shall not relieve any other Bank of its
obligation hereunder to make its Loan on the date of such Loan. Except as
provided in Section 9.12, no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.

         (d) Failure of Bank to Fund. Without limiting the obligations of Beal
Bank, S.S.B. under Section 9.12, unless Administrative Agent shall have been
notified by any Bank prior to the applicable date of a Borrowing that such Bank
does not intend to make available to Administrative Agent the amount of such
Bank's Proportionate Share of the Loan requested on such date, Administrative
Agent may assume that such Bank has made such amount available to Administrative
Agent on such date in accordance with the prior paragraph and Administrative
Agent may, in its sole discretion and in reliance upon such assumption, make
available to Borrower a corresponding amount on such date. If such amount is not
in fact made available to Administrative Agent by such Bank, Administrative
Agent shall be entitled to recover such amount on demand (and, in any event,
within two Banking Days from the applicable date of such Borrowing) from such
Bank together with interest thereon, for each day from the applicable date of
such Borrowing until the date such amount is paid to Administrative Agent, at
the Federal Funds Rate for the first two Banking Days after such date. If such
Bank pays such amount to Administrative Agent, then such amount shall constitute
such Bank's Proportionate Share of

                                       5

such Loan included in such Loan. Nothing in this Section 2.1.4(d) shall be
deemed to relieve any Bank from its obligation to fulfill its obligations
hereunder or to prejudice any rights that Borrower may have against any Bank as
a result of any default by such Bank hereunder.

         (e) Funding Account. No later than noon (12:00 p.m.) on the date
specified in the Notice of Borrowing, if the applicable conditions precedent
listed in Section 3.1 have been satisfied or waived in accordance with the terms
thereof and, subject to Section 2.1.4(d), to the extent Administrative Agent
shall have received the appropriate funds from the Banks, Administrative Agent
shall make available to Borrower the Loans requested in such Notice of Borrowing
in Dollars and in immediately available funds, at Administrative Agent's New
York Branch, and shall deposit or cause to be deposited the proceeds of such
Loans into the Funding Account.

         2.1.5 Conversion of Loans. Borrower may convert Loans (or portions
thereof) from one Type of Loans to another Type of Loans; provided, however,
that (i) any conversion of LIBOR Loans into Base Rate Loans shall be made on,
and only on, the first day after the last day of an Interest Period for such
LIBOR Loans and (ii) Loans shall be converted only in amounts of $1,000,000 and
increments of $500,000 in excess thereof. Borrower shall request such a
conversion by delivering to Administrative Agent a written notice in the form of
Exhibit C-3, appropriately completed (a "Notice of Conversion of Loan Type"),
which contains or specifies, among other things:

         (a) the Loans, or portions thereof, which are to be converted;

         (b) the Type of Loans into which such Loans, or portions thereof, are
to be converted;

         (c) if such Loans are to be converted into LIBOR Loans, the initial
Interest Period selected by Borrower for such Loans (which Interest Period,
subject to Section 2.1.2(a), shall be twelve months as provided in Section
2.1.2(c));

         (d) the proposed date of the requested conversion (which shall be a
Banking Day and otherwise in accordance with this Section 2.1.5); and

         (e) a certification by Borrower that no Event of Default has occurred
and is continuing.

Borrower shall so deliver each Notice of Conversion of Loan Type so as to
provide at least the applicable Minimum Notice Period. Any Notice of Conversion
of Loan Type may be modified or revoked by Borrower through the Banking Day
immediately prior to the Minimum Notice Period, and shall thereafter be
irrevocable. Each Notice of Conversion of Loan Type shall be delivered in any
manner permitted by Section 10.1 to Administrative Agent at the office, to the
facsimile number or to the electronic mail address and as otherwise specified in
Section 10.1. Administrative Agent shall promptly notify each Bank of the
contents of each Notice of Conversion of Loan Type.

                                       6

         2.1.6 Prepayments.

         (a) Terms of All Prepayments.
             ------------------------

              (i) Upon the prepayment of any Loan (whether such prepayment is an
optional prepayment under Section 2.1.6(b) or a Mandatory Prepayment), Borrower
shall pay to Administrative Agent for the account of the Bank which made such
Loan, (A) all accrued interest to the date of such prepayment on the amount of
such Loan prepaid, (B) all accrued fees to the date of such prepayment relating
to the amount of such Loan being prepaid, (C) any applicable Make-Whole
Premiums, and (D) if such prepayment is the prepayment of a LIBOR Loan on a day
other than the last day of an Interest Period for such LIBOR Loan, all
Liquidation Costs incurred by such Bank as a result of such prepayment (pursuant
to the terms of Section 2.6).

              (ii) Notwithstanding the foregoing, but only in respect of any
Mandatory Prepayment, Borrower shall have the right, by giving five Banking
Days' notice to Administrative Agent, in lieu of prepaying a LIBOR Loan on a day
other than the last day of an Interest Period for such LIBOR Loan, to deposit or
cause Administrative Agent to deposit into an account to be held by Depositary
Agent (which account shall be subjected to the Lien of the Collateral Documents
in a manner reasonably satisfactory to Administrative Agent) an amount equal to
the LIBOR Loans to be prepaid. Such funds shall be held in such account until
the expiration of the Interest Period applicable to the LIBOR Loan to be prepaid
at which time the amount deposited in such account shall be used to prepay such
LIBOR Loan and any interest accrued on such amount shall be deposited into the
Revenue Account. The deposit of amounts into such account shall not constitute a
prepayment of Loans and all Loans to be prepaid using the proceeds from such
account shall continue to accrue interest at the then applicable interest rate
for such Loans until actually prepaid. All amounts in such account shall only be
invested in Permitted Investments as directed by and at the expense and risk of
Borrower.

              (iii) Except as otherwise specifically set forth herein, all
prepayments of Loans shall be applied to reduce the remaining payments required
under Section 2.1.1(d) in inverse order of maturity. Borrower may not re-borrow
the principal amount of any Loan which is prepaid.

         (b) Optional Prepayments.
             --------------------

              (i) On or before the third anniversary of the Closing Date,
Borrower may not prepay all or any part of the outstanding Loans.

              (ii) After the third anniversary of the Closing Date, Borrower may
prepay all or any part of the outstanding Loans, at any time, on giving at least
30-Banking Days' notice to Administrative Agent, provided that, (A) each such
prepayment equals or exceeds $1,000,000 or integral multiples of $100,000 in
excess thereof and, (B) each such prepayment shall be made at a prepayment
premium (the "Make-Whole Premium") equal to (I) after the third anniversary of
the Closing Date and on or prior to the fourth anniversary of the Closing Date,
103% of the amount of such outstanding Loans, (II) after the fourth anniversary
of the Closing

                                       7

Date and on or prior to the fifth anniversary of the Closing Date, 102.5% of the
amount of such outstanding Loans, (III) after the fifth anniversary of the
Closing Date and on or prior to the sixth anniversary of the Closing Date, 102%
of the amount of such outstanding Loans, (IV) after the sixth anniversary of the
Closing Date and on or prior to the seventh anniversary of the Closing Date,
101.5% of the amount of such outstanding Loans, (V) after the seventh
anniversary of the Closing Date and on or prior to the eighth anniversary of the
Closing Date, 101% of the amount of such outstanding Loans, (VI) after the
eighth anniversary of the Closing Date and on or prior to the ninth anniversary
of the Closing Date, 100.5% of the amount of such outstanding Loans, and (VII)
thereafter, 100% of the amount of such outstanding Loans.

              (iii) Notwithstanding the foregoing Sections 2.1.6(b)(i) and (ii),
if the Banks do not provide the Lease Financing for reasons other than that
Borrower is not in full compliance with the provisions of Section 5 of the Fee
Letter, then Borrower may prepay, without premium or penalty, all (but not part)
of the outstanding Loans, at any time, on giving at least 30-Banking Days'
notice to Administrative Agent (provided that if Borrower shall have delivered
the Release Notice pursuant to Section 3.3, the Borrower shall not have any such
right to prepay such Loans under this clause (iii)).

         (c) Mandatory Prepayments. Borrower shall prepay (or cause to be
prepaid) Loans (i) to the extent required by Sections 3.7.4(b) and (c) of the
Depositary Agreement, Section 7.2 of this Agreement or any other provision of
this Agreement or any other Credit Document which requires such prepayment or
(ii) to the extent of (A) 100% of the cash proceeds of the issuance of any new
equity securities of Borrower or any of its Subsidiaries (other than any equity
securities issued by Borrower pursuant to Section 2.2 of the Sponsor Guaranty),
(B) 100% of any debt (other than Permitted Debt) issued by Borrower or any of
its Subsidiaries and (C) 100% of proceeds of asset sales of Borrower or any of
its Subsidiaries (other than sales permitted by Section 6.3 and exclusive of
sales of electrical energy and renewable energy credits in accordance with the
terms of the Credit Documents) (any such prepayment pursuant to this Section
2.1.6(c), a "Mandatory Prepayment"). If the Loans are accelerated (whether
voluntarily, involuntarily or by operation of law) upon the occurrence or during
the continuation of any Event of Default occurring under Section 7.1.1, 7.1.2,
7.1.9 or 7.1.11 or otherwise as a result of a willful breach by Borrower of any
of its obligations under Section 5.2, 5.17, 5.18, 6.1, 6.3 or 6.8 that results
in an Event of Default, Borrower shall repay all of the outstanding Loans at a
price equal to (I) on or before the third anniversary of the Closing Date, 105%
of the amount of such outstanding Loans and (II) after the third anniversary of
the Closing Date, the applicable Make-Whole Premium.

         2.1.7 Register. Administrative Agent shall maintain, at its address
referred to in Section 10.1, a register for the recordation of the names and
addresses of the Banks and the Commitments and Loans of each Bank from time to
time (the "Register"). The Register shall be available for inspection by
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent shall record in the Register (i)
the Commitments and the Loans from time to time of each Bank, (ii) the interest
rates applicable to all Loans and the effective dates of all changes thereto,
(iii) the Interest Period for each LIBOR Loan, (iv) the date and amount of any
principal or interest due and payable or to become due and

                                       8

payable from Borrower to each Bank hereunder, (v) each repayment or prepayment
in respect of the principal amount of the Loans of each Bank, (vi) the amount of
any sum received by Administrative Agent hereunder for the account of the Banks
and each Bank's share thereof, and (vii) such other information as
Administrative Agent may determine is necessary or appropriate for the
administering of the Loans and this Agreement. Any such recording shall be
conclusive and binding in the absence of manifest error; provided that neither
the failure to make any such recordation, nor any error in such recordation,
shall affect any Bank's Commitment or Borrower's Obligations in respect of any
applicable Loans or otherwise; and provided further that in the event of any
inconsistency between the Register and any Bank's records, the Register shall
govern absent manifest error.

     2.2 TOTAL SENIOR LOAN COMMITMENTS. Notwithstanding anything that may be
construed to the contrary in this Agreement, the aggregate principal amount of
all Loans made by the Banks shall not exceed $154,500,000 (such amount, the
"Total Senior Loan Commitment").

     2.3 FEES. Borrower shall pay to Administrative Agent solely for
Administrative Agent's account the fees and other amounts described in the Fee
Letter.

     2.4 OTHER PAYMENT TERMS.

         2.4.1 Place and Manner. Except as otherwise expressly provided in the
Fee Letter or any other provision contained in any of the Credit Documents,
Borrower shall make all payments due to any Bank or Administrative Agent
hereunder to Administrative Agent, for the account of such Bank or
Administrative Agent (as the case may be), to the account in the name of OrCal
Geothermal Inc., Account No. 01-20016024, at Federal Home Loan Bank of Dallas,
ABA No. 111040195, or such other account as Administrative Agent shall notify
Borrower in writing from time to time, in Dollars and in immediately available
funds not later than 12:00 noon on the date on which such payment is due. Any
payment made after such time on any day shall be deemed received on the Banking
Day immediately after the date such payment is received. Administrative Agent
shall disburse to each Bank each such payment received by Administrative Agent
for such Bank, such disbursement to occur on the day such payment is received if
received by 12:00 noon or if otherwise reasonably possible, or otherwise on the
next Banking Day.

         2.4.2 Date. Whenever any payment due hereunder shall fall due on a day
other than a Banking Day, such payment shall be made on the next succeeding
Banking Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be, without duplication of any interest or
fees so paid in the next subsequent calculation of interest or fees payable.

         2.4.3 Default Interest. Notwithstanding anything to the contrary
herein, upon the occurrence and during the continuation of any Event of Default
under Section 7.1.1, the outstanding principal amount of all Loans and, to the
extent permitted by applicable Legal Requirements, any accrued but unpaid
interest payments thereon and any accrued but unpaid fees and other amounts
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under applicable Bankruptcy Laws) payable upon demand at a rate
that is (a) 2% per annum in excess of the interest rate then otherwise payable
under this Agreement with respect to the applicable Loans or (b) in the case of
any such fees and other amounts, at a rate that is 2% per

                                       9

annum in excess of the interest rate then otherwise payable under this Agreement
for Base Rate Loans (the "Default Rate"); provided that, in the case of LIBOR
Loans, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective, such LIBOR Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
that is 2% per annum in excess of the interest rate then otherwise payable under
this Agreement for Base Rate Loans.

         2.4.4 Net of Taxes, Etc.

         (a) Taxes. Subject to each Bank's compliance with Section 2.4.6, any
and all payments to or for the benefit of Administrative Agent or any Bank by
Borrower hereunder or under any other Credit Document shall be made free and
clear of and without deduction, setoff or counterclaim of any kind whatsoever
and in such amounts as may be necessary in order that all such payments, after
deduction for or on account of any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
(excluding income and franchise taxes, which include taxes imposed on or
measured by the net income, net profits or capital of Administrative Agent or
such Bank by any jurisdiction or any political subdivision or taxing authority
thereof or therein as a result of a connection between such Bank and such
jurisdiction or political subdivision, unless such connection results solely
from such Bank's executing, delivering or performing its obligations or
receiving a payment under, or enforcing, this Agreement or any Note) (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"), shall be equal to the
amounts otherwise specified to be paid under this Agreement and the other Credit
Documents. If Borrower shall be required by applicable Legal Requirements to
withhold or deduct any Taxes from or in respect of any sum payable hereunder or
under any other Credit Document to Administrative Agent or any Bank, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.4.4), Administrative Agent or such Bank receives an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions and (iii) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Legal Requirements. In addition, Borrower agrees to pay any
present or future stamp, recording or documentary taxes and any other excise or
property taxes, charges or similar levies (not including income or franchise
taxes) that arise under the laws of the United States of America, the State of
New York or the State of California from any payment made hereunder or under any
other Credit Document or from the execution or delivery or otherwise with
respect to this Agreement or any other Credit Document (hereinafter referred to
as "Other Taxes").

         (b) Tax Indemnity. Borrower shall indemnify each Bank for and hold it
harmless against the full amount of Taxes and Other Taxes (including any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.4.4) paid by any Bank, or any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted; provided that

                                       10

Borrower shall not be obligated to indemnify any Bank for any penalties,
interest or expenses relating to Taxes or Other Taxes arising from such Bank's
gross negligence or willful misconduct. Each Bank agrees to give written notice
to Borrower of the assertion of any claim against such Bank relating to such
Taxes or Other Taxes as promptly as is practicable after being notified of such
assertion, and in no event later than 90 days after the principal officer of
such Bank responsible for administering this Agreement obtains knowledge
thereof; provided that any Bank's failure to notify Borrower of such assertion
within such 90 day period shall not relieve Borrower of its obligation under
this Section 2.4.4 with respect to Taxes or Other Taxes, penalties, interest or
expenses arising prior to the end of such period, but shall relieve Borrower of
its obligations under this Section 2.4.4 with respect to Taxes or Other Taxes,
penalties, interest or expenses between the end of such period and such time as
Borrower receives notice from such Bank as provided herein. Payments by Borrower
pursuant to this indemnification shall be made within 30 days from the date such
Bank makes written demand therefor (submitted through Administrative Agent),
which demand shall be accompanied by a certificate describing in reasonable
detail the basis thereof.

         (c) Notice. Within 30 days after the date of any payment of Taxes by
Borrower, Borrower shall furnish to Administrative Agent, at its address
referred to in Section 10.1, the original or a certified copy of a receipt
evidencing payment thereof or, if such receipt is not obtainable, other evidence
of such payment by Borrower reasonably satisfactory to Administrative Agent.
Borrower shall compensate each Bank for all reasonable losses and expenses
sustained by such Bank as a result of any failure by Borrower to so furnish such
copy of such receipt.

         (d) Conduit Financing. Notwithstanding anything to the contrary
contained in this Section 2.4.4, if a Bank is a conduit entity participating in
a conduit financing arrangement (as defined in Section 7701(l) of the Code and
the Treasury Regulations issued thereunder) with respect to any payments made by
Borrower under this Agreement and under any Credit Document, Borrower shall not
be obligated to pay additional amounts to such Bank pursuant to this Section
2.4.4 to the extent that the amount of taxes in the United States exceeds the
amount that would have otherwise been payable were such Bank not a conduit
entity participating in a conduit financing arrangement.

         (e) Reimbursement by Banks. If any Bank receives an indemnification
payment pursuant to Section 2.4.4(b) and if such Bank is able, in its sole
opinion, to apply or otherwise take advantage of any refund or tax credit
arising out of or in conjunction with any Taxes or Other Taxes which give rise
to such indemnification, such Bank shall, to the extent that in its sole opinion
it can do so without prejudice to the retention of the amount of such refund or
credit and without any other adverse tax consequences for such Bank, reimburse
to Borrower at such time as such tax refund or credit shall have actually been
received or utilized by such Bank such amount as the Bank shall, in its sole
opinion, have determined to be attributable to the relevant Taxes or Other Taxes
and as will leave such Bank in no better or worse position than it would have
been in if the payment of such Taxes or Other Taxes had not been required.
Nothing in this Section 2.4.4(e) shall oblige any Bank to disclose to Borrower
or any other person any information regarding its tax affairs or tax
computations, or shall interfere with Bank's absolute

                                       11

discretion to arrange its tax affairs in whatever manner it thinks fit. In
particular, no Bank shall be under any obligation to claim relief from its
corporate profits or similar tax liability in credits or deductions available to
it and, if it does claim, the extent, order and manner in which it does so shall
be at its absolute discretion.

         (f) Survival of Obligations. The obligations of Borrower under this
Section 2.4.4 shall survive the termination of this Agreement and the repayment
of the Obligations.

         2.4.5 Application of Payments. Except as otherwise expressly provided
herein or in the other Credit Documents, payments made under this Agreement or
the other Credit Documents and other amounts received by Administrative Agent,
Depositary Agent or the Banks under this Agreement or the other Credit Documents
shall first be applied to any fees, costs, charges or expenses payable to
Administrative Agent, Depositary Agent or the Banks, next to any accrued but
unpaid interest then due and owing, and then to outstanding principal then due
and owing or otherwise to be prepaid, in each case hereunder or under the other
Credit Documents (in each case, such application to be made on a pro rata basis
among such applicable Persons).

         2.4.6 Withholding Exemption Certificates. Each Bank upon becoming a
Bank and each Person to which any Bank grants a participation (or otherwise
transfers its interest in this Agreement) upon the granting of such
participation (or the occurrence of such other transfer) will deliver to
Administrative Agent and Borrower either (a) if such Bank or Person is a
corporation established under the laws of the United States or any political
subdivision thereof, an executed copy of a United States Internal Revenue
Service Form W-9, or (b) if such Bank or Person is not a corporation established
under the laws of the United States or any political subdivision thereof, a duly
completed and executed non-bank certificate in the form of Exhibit J hereto, if
applicable, and two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI or successor applicable form, as the case may be
(certifying therein an entitlement to a reduction in, or an exemption from,
United States withholding taxes). Each Bank or Person which delivers to Borrower
and Administrative Agent a Form W-8BEN or W-8ECI pursuant to the preceding
sentence shall deliver to Borrower and Administrative Agent two copies of each
Form W-8BEN or W-8ECI, or successor applicable forms, or other manner of
certification or procedure, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms previously delivered by it to
Borrower, and such extensions or renewals thereof as may reasonably be requested
by Borrower, certifying in the case of a Form W-8BEN or W-8ECI that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding (or at a reduced rate of withholding under any applicable tax
treaty) of any United States federal income taxes, unless in any such cases an
event (including any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent a Bank from duly completing
and delivering any such form with respect to it and such Bank advises Borrower
that it is not capable of receiving payments without any deduction or
withholding (or at a reduced rate of withholding) of United States federal
income tax, and in the case of Form W-8BEN or W-

                                       12

8ECI, establishing an exemption from United States backup withholding tax.
Borrower shall not be obligated, however, to pay any additional amounts in
respect of United States federal income tax pursuant to Section 2.4.4 (or make
an indemnification payment pursuant to Section 2.4.4) to any Bank (including any
entity to which any Bank sells, assigns, grants a participation in, or otherwise
transfers its rights under this Agreement, any Note or any other Credit
Document) if the obligation to pay such additional amounts (or such
indemnification) would not have arisen but for a failure of such Bank to comply
with its obligations under this Section 2.4.6.

         2.5 PRO RATA TREATMENT.

         2.5.1 Borrowings, Etc. Except as otherwise provided herein, (a) each
Borrowing consisting of Loans shall be made or allocated among the Banks pro
rata according to their respective Proportionate Shares of such Loans and (b)
each payment of principal of and interest on Loans shall be made or shared among
the Banks holding such Loans pro rata according to the respective unpaid
principal amounts of such Loans held by such Banks.

         2.5.2 Sharing of Payments, Etc. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of Loans owed to it, in excess of its Proportionate Share
of payments on account of such Loans obtained by all Banks entitled to such
payments, such Bank shall forthwith purchase from the other Banks such
participation in the Loans, as the case may be, as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from such Bank
shall be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price to the extent of such recovery together with an amount equal to
such other Bank's Proportionate Share (according to the proportion of (a) the
amount of such other Bank's required repayment to (b) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 2.5.2 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Bank were the direct creditor of
Borrower in the amount of such participation.

    2.6 CHANGE OF CIRCUMSTANCES.

         2.6.1 Inability to Determine Rates. If, on or before the first day of
any Interest Period for any LIBOR Loans, (a) Administrative Agent determines
that the Adjusted LIBO Rate for such Interest Period cannot be adequately and
reasonably determined due to the unavailability of funds in or other
circumstances affecting the London interbank market, or (b) Banks holding
aggregate Proportionate Shares of 33-1/3% or more of the Loans shall advise
Administrative Agent that (i) the rates of interest for such LIBOR Loans do not
adequately and fairly reflect the cost to such Banks of making or maintaining
such Loans or (ii) deposits in Dollars in the London interbank market are not
available to such Banks (as conclusively certified by each such Bank in good
faith in writing to Administrative Agent and to Borrower) in the ordinary course
of business in sufficient amounts to make and/or maintain their LIBOR Loans,
then Administrative Agent shall immediately give notice of such condition to
Borrower. After

                                       13

the giving of any such notice and until Administrative Agent shall otherwise
notify Borrower that the circumstances giving rise to such condition no longer
exist (which Administrative Agent shall deliver to Borrower promptly, and in any
event within 2 Banking Days, after the cessation of such circumstances),
Borrower's right to request from the applicable affected Banks the making of or
conversion to, and the applicable affected Banks' obligations to make or convert
to, LIBOR Loans shall be suspended; provided, however, that Borrower shall have
the right in such event to request the making of or conversion to, and the
applicable affected Banks shall be obligated to make or convert to, LIBOR Loans
with an Interest Period that is 1, 3, 6 or 9 months (as selected by such Banks)
if the circumstances giving rise to the conditions described in this Section
2.6.1 are not applicable to LIBOR Loans with such shorter Interest Period. Any
LIBOR Loans outstanding at the commencement of any such suspension shall be
converted at the end of the then current Interest Period for such Loans into
Base Rate Loans unless such suspension has then ended.

         2.6.2 Illegality. If, after the date of this Agreement, the adoption of
any Governmental Rule, any change in any Governmental Rule or the application or
requirements thereof (whether such change occurs in accordance with the terms of
such Governmental Rule as enacted, as a result of amendment, or otherwise), any
change in the interpretation or administration of any Governmental Rule by any
Governmental Instrumentality, or compliance by any Bank or Borrower with any
request or directive (whether or not having the force of law, but if not having
the force of law, being of a type with which a Bank customarily complies) of any
Governmental Instrumentality (a "Change of Law") shall make it unlawful or
impossible for any Bank to make or maintain any LIBOR Loan, then such Bank shall
immediately notify Administrative Agent and Borrower of such Change of Law. Upon
receipt of such notice, (a) Borrower's right to request the making of or
conversion to, and such Bank's obligations to make or convert to, LIBOR Loans
shall be suspended for so long as such condition shall exist, and (b) Borrower
shall, at the request of such Bank, at Borrower's option either (i) pursuant to
Section 2.1.5, convert any then outstanding LIBOR Loans into Base Rate Loans at
the end of the current Interest Periods for such Loans, or (ii) immediately
repay pursuant to Section 2.1.6 or convert LIBOR Loans of the affected Type into
Base Rate Loans if such Bank shall notify Borrower that such Bank may not
lawfully continue to fund and maintain such Loans. Any conversion or prepayment
of LIBOR Loans made pursuant to the preceding sentence prior to the last day of
an Interest Period for such Loans shall be deemed a prepayment thereof for
purposes of Section 2.7 (but not for purposes of Section 2.1.6(b)).

         2.6.3 Increased Costs. If, after the date of this Agreement, any Change
of Law:

         (a) shall subject any Bank to any tax, duty or other charge with
respect to any LIBOR Loan or Commitment in respect thereof, or shall change the
basis of taxation of payments by Borrower to any Bank on such a Loan or with
respect to any such Commitment (except for Taxes, Other Taxes or changes in the
rate of taxation on the overall net income of any Bank); or

         (b) shall impose, modify or hold applicable any reserve, special
deposit or similar requirement (without duplication of any reserve requirement
included within the applicable Interest Rate through the definition of "Reserve
Requirement") against assets held by,

                                       14

deposits or other liabilities in or for the account of, advances or loans by, or
any other acquisition of funds by any Bank for any LIBOR Loan; or

         (c) shall impose on any Bank any other condition directly related to
any LIBOR Loan or Commitment in respect thereof;

and the effect of any of the foregoing is to increase the cost to such Bank of
making, issuing, creating, renewing, participating in (subject to the
limitations in Section 9.13) or maintaining any such LIBOR Loan or Commitment in
respect thereof or to reduce any amount receivable by such Bank hereunder, then
Borrower shall from time to time, within thirty days after demand by such Bank,
pay to such Bank additional amounts sufficient to reimburse such Bank for such
increased costs or to compensate such Bank for such reduced amounts. A
certificate setting forth in reasonable detail the amount of such increased
costs or reduced amounts and the basis for determination of such amount,
submitted by such Bank to Borrower, shall, in the absence of manifest error, be
conclusive and binding on Borrower for purposes of this Agreement.

         2.6.4 Capital Requirements. If any Bank determines that (a) any Change
of Law after the date of this Agreement increases the amount of capital required
or expected to be maintained by such Bank, or the Lending Office of such Bank or
any Person controlling such Bank (a "Capital Adequacy Requirement"), and (b) the
amount of capital maintained by such Bank or such Person which is attributable
to or based upon the Loans, the Commitments or this Agreement must be increased
as a result of such Capital Adequacy Requirement (taking into account such
Bank's or such Person's policies with respect to capital adequacy), then
Borrower shall pay to such Bank or such Person, within thirty days after
delivery of demand by such Bank or such Person, such amounts as such Bank or
such Person shall reasonably determine are necessary to compensate such Bank or
such Person for the increased costs to such Bank or such Person of such
increased capital. A certificate of such Bank or such Person, setting forth in
reasonable detail the computation of any such increased costs, delivered to
Borrower by such Bank or such Person shall, in the absence of manifest error, be
conclusive and binding on Borrower for purposes of this Agreement.

         2.6.5 Notice; Participating Banks' Rights. Each Bank shall notify
Borrower of any event occurring after the date of this Agreement that will
entitle such Bank to compensation pursuant to this Section 2.6, as promptly as
practicable, and in no event later than 90 days after the principal officer of
such Bank responsible for administering this Agreement obtains knowledge
thereof; provided that any Bank's failure to notify Borrower within such 90 day
period shall not relieve Borrower of its obligation under this Section 2.6 with
respect to claims arising prior to the end of such period, but shall relieve
Borrower of its obligations under this Section 2.6 with respect to the time
between the end of such period and such time as Borrower receives notice from
the indemnitee as provided herein. No Person purchasing from a Bank a
participation in any Loan (as opposed to an assignment) shall be entitled to any
payment from or on behalf of Borrower pursuant to Section 2.4.4, Section 2.6.3
or Section 2.6.4 which would be in excess of the applicable proportionate amount
(based on the portion of the Loan in which such Person is participating) which
would then be payable to such Bank if such Bank had not sold a participation in
that portion of the Loan.

                                       15

         2.7 FUNDING LOSSES. If Borrower shall (a) repay or prepay any LIBOR
Loans on any day other than the last day of an Interest Period for such Loans
(whether an optional prepayment or a Mandatory Prepayment), (b) fail to borrow
any LIBOR Loans in accordance with a Notice of Borrowing delivered to
Administrative Agent (whether as a result of the failure to satisfy any
applicable conditions or otherwise) after such Notice of Loan Borrowing has
become irrevocable, (c) fail to convert any Loans into LIBOR Loans in accordance
with a Notice of Conversion of Loan Type delivered to Administrative Agent
(whether as a result of the failure to satisfy any applicable conditions or
otherwise) after such Notice of Conversion of Loan Type has become irrevocable,
(d) fail to continue a LIBOR Loan in accordance with a Confirmation of Interest
Period Selection delivered to Administrative Agent, or (e) fail to make any
prepayment in accordance with any notice of prepayment delivered to
Administrative Agent, then Borrower shall, within ten Banking Days after demand
by any Bank, reimburse such Bank for all reasonable costs and losses incurred by
such Bank as a result of such repayment, prepayment or failure ("Liquidation
Costs"). Borrower understands that such costs and losses may include losses
incurred by a Bank as a result of funding and other contracts entered into by
such Bank to fund LIBOR Loans (other than non-receipt of the margin applicable
to such LIBOR Loans). Each Bank demanding payment under this Section 2.7 shall
deliver to Borrower a certificate setting forth in reasonable detail the basis
for and the amount of costs and losses for which demand is made. Such a
certificate so delivered to Borrower shall, in the absence of manifest error, be
conclusive and binding as to the amount of such loss for purposes of this
Agreement.

    2.8 ALTERNATE OFFICE.

         2.8.1 To the extent reasonably possible, each Bank shall designate an
alternative Lending Office with respect to its LIBOR Loans and otherwise take
any reasonable actions to reduce any liability of Borrower to any Bank under
Section 2.4.4, 2.6.3, 2.6.4 or 2.7, or to avoid the unavailability of any Type
of Loans under Section 2.6.1 or 2.6.2 so long as (in the case of the designation
of an alternative Lending Office) such Bank, in its sole discretion, determines
that (a) such designation is not disadvantageous to such Bank and (b) such
actions would eliminate or reduce liability to such Bank. Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Bank in connection with
any such designation or actions within ten Banking Days of demand thereof to
Borrower.

         2.8.2 Upon written notice to Administrative Agent, any Bank may
designate a Lending Office other than the Lending Office most recently
designated to Administrative Agent and may assign all of its interests under the
Credit Documents and its Notes (if any) to such Lending Office; provided that
such designation and assignment do not at the time of such designation and
assignment increase the reasonably foreseeable liability of Borrower under
Section 2.4.4, 2.6.3 or 2.6.4 or make an Interest Rate option unavailable
pursuant to Section 2.6.1 or 2.6.2.

    2.9 REPLACEMENT OF BANK IN RESPECT OF INCREASED COSTS.

         2.9.1 Within fifteen days after receipt by Borrower of (a) written
notice and demand from any Bank (an "Affected Bank") for payment of additional
amounts or increased costs as provided in Section 2.4.4, 2.6.3 or 2.6.4, (b)
notice that such Bank is suspending its

                                       16

obligation to make or convert to LIBOR Loans with an Interest Period of twelve
months as provided in Section 2.6.1, or (c) notice that it is unlawful for such
Bank to make LIBOR Loans as provided in Section 2.6.2, Borrower may, at its
option, notify Administrative Agent and such Affected Bank of its intention to
replace the Affected Bank. So long as no Event of Default shall have occurred
and be continuing, Borrower may obtain, at Borrower's expense, one or more
replacement Banks (each, a "Replacement Bank") for the Affected Bank, which
Replacement Banks shall be reasonably satisfactory to Administrative Agent. If
Borrower obtains a Replacement Bank within 90 days following notice of its
intention to do so, the Affected Bank must sell and assign its Loans to such
Replacement Banks for an aggregate amount equal to the principal balance of all
Loans held by the Affected Bank and all accrued interest and fees with respect
thereto through the date of such sale; provided, however, that Borrower shall
have reimbursed such Affected Bank for the additional amounts, increased costs,
and any other amounts that it is entitled to receive under this Agreement
through the date of such sale and assignment.

         2.9.2 Notwithstanding the foregoing, Borrower shall not have the right
to obtain a Replacement Bank if the Affected Bank rescinds its demand for
increased costs or additional amounts within fifteen days following its receipt
of Borrower's notice of intention to replace such Affected Bank. If Borrower
gives a notice of intention to replace and does not so replace such Affected
Bank within 90 days thereafter, Borrower's rights relating to any previously
incurred increased costs or additional amounts under this Section 2.9 shall
terminate and Borrower shall promptly pay all increased costs or additional
amounts previously demanded by such Affected Bank pursuant to Sections 2.4.4,
2.6.1, 2.6.3 or 2.6.4.

                                    ARTICLE 3
                              CONDITIONS PRECEDENT

     3.1 CONDITIONS PRECEDENT TO THE CLOSING DATE. The obligation of each Bank
to make the Loans under this Agreement is subject to the prior satisfaction of
each of the following conditions (unless waived in writing by Administrative
Agent with the consent of the Banks) on or before December 31, 2003 (the date
such conditions precedent are so satisfied or waived being referred to as the
"Closing Date"):

         3.1.1 Resolutions. Delivery to Administrative Agent of a copy of one or
more resolutions or other authorizations, in form and substance reasonably
satisfactory to Administrative Agent, of Ormat Technologies, Sponsor, Borrower,
OrHeber 1, ORNI and OrMammoth certified by a Responsible Officer of each such
Loan Party as being in full force and effect on the Closing Date, authorizing,
as applicable and among other things, the Loans, the granting of the Liens under
the Collateral Documents, the contribution (in the case of Sponsor) of Equity
Funds and/or Subordinated Loans to Borrower, and the execution, delivery and
performance (in the case of OrHeber 1 and OrMammoth) of the Acquisition
Agreement and (in the case of all such Loan Parties) the relevant Credit
Documents to which each such Loan Party is a party.

         3.1.2 Incumbency. Delivery to Administrative Agent of a certificate
from Sponsor, Borrower, OrHeber 1, ORNI and OrMammoth signed by the appropriate
authorized

                                       17

officer of such Loan Party and dated as of the Closing Date, as to the
incumbency of the natural Persons authorized to execute and deliver the Credit
Documents to which such Loan Party is a party.

         3.1.3 Formation Documents. Delivery to Administrative Agent of (a)
copies of the certificate of incorporation of Sponsor, Borrower, OrHeber 1,
OrHeber 2, OrHeber 3, ORNI and OrMammoth, certified by the Secretary of State of
Delaware, and (b) copies of the bylaws of each such Loan Party, certified by an
officer of such Loan Party as being true, correct and complete on the Closing
Date.

         3.1.4 Good Standing Certificates. Delivery to Administrative Agent of
certificates issued by (a) the Secretary of State of Delaware, for each of Ormat
Technologies, Sponsor, Borrower, OrHeber 1, OrHeber 2, OrHeber 3, ORNI and
OrMammoth, and (b) the Secretary of the State of California, for Borrower, in
each case (i) dated no more than ten days prior to the Closing Date and (ii)
certifying that the applicable party is in good standing and is qualified to do
business in, and has paid all franchise taxes or similar taxes due to, such
states.

         3.1.5 Third Party and Bankruptcy Court Approvals. Administrative Agent
shall have received copies of any approval or consents required from (a) any
Person under Section 7 of the Acquisition Agreement and (b) GECC in connection
with the acquisition by Borrower, OrHeber 1, ORNI, OrHeber 2 and OrHeber 3 of
their respective ownership interests in SIGC, HGC and HFC as such ownership
interests are set forth in Section 4.2.2, rather than as set forth in the
Acquisition Agreement, the Confirmation Plan or the Seller Plan of
Reorganization. The Bankruptcy Court shall have entered the Confirmation Order,
the Confirmation Order shall not have been amended, modified, vacated or stayed
in any manner and shall have become final and non-appealable. All of the
conditions precedent to the occurrence of the effective date under the Seller
Plan of Reorganization shall have occurred (provided that no condition to the
occurrence of such effective date shall have been waived without the consent of
the Banks), other than any condition related to the consummation of the
Acquisition.

         3.1.6 Credit Documents. Delivery to Administrative Agent of executed
originals of this Agreement, the Notes, the Depositary Agreement, the Security
Agreements referred to in clauses (a), (d) and (e) of the definition thereof,
the Pledge Agreements referred to in clauses (a), (b) (c) and (e) of the
definition thereof, the Escrow Agreement, the Fee Letter, the Subordination
Agreements, the Sponsor Guaranty, the Subsidiary Guaranties referred to in
clauses (c) and (d) of the definition thereof and the Ormat Industries Letter,
all of which shall have been duly authorized, executed and delivered by the
parties thereto.

         3.1.7 Certificates of Sponsor and Borrower. Delivery to Administrative
Agent of (a) a certificate, dated as of the Closing Date, duly executed by a
Responsible Officer of Borrower, in substantially the form of Exhibit F-1, which
certificate shall state that (i) all conditions precedent to the occurrence of
the Closing Date shall have been satisfied, (ii) all conditions (other than the
payment of the purchase price) to the consummation of the Acquisition in
accordance with the terms and provisions of the Acquisition Agreement have been
satisfied without waiver or amendment (unless agreed to by the Banks), (iii)
Borrower has complied with all of the terms and provisions of, and
representations and warranties contained in, the

                                       19

Commitment Letter, (iv) immediately prior to and after the Closing Date and the
consummation of the Acquisition, Borrower, OrHeber 1 and OrMammoth is and will
be Solvent, and (v) the Projections, the Initial Operating Budget and the
Initial Capital Expenditures Budget were prepared in good faith based on
reasonable assumptions and (b) a certificate, dated as of the Closing Date, duly
executed by a Responsible Officer of Sponsor, in substantially the form of
Exhibit F-2, which certificate shall state that all of the representations and
warranties set forth in the Sponsor Guaranty are true and correct.

         3.1.8 Legal Opinions. Delivery to Administrative Agent of opinions of
counsel to Ormat Technologies, Sponsor, Borrower, OrHeber 1, ORNI and OrMammoth,
in each case in form and substance reasonably satisfactory to the Banks.

         3.1.9 Insurance. Insurance complying with terms and conditions set
forth in Exhibit K shall be in full force and effect and Administrative Agent
shall have received (a) a certificate from Borrower's insurance broker(s), dated
as of a date which is no earlier than three days prior to the Closing Date, (i)
identifying underwriters, type of insurance, insurance limits and policy terms,
in each case substantially in the manner typically described in certificates of
this nature, (ii) describing the insurance obtained and (iii) stating that such
insurance is in full force and effect and that all premiums then due thereon
have been paid and that, in the opinion of such broker(s), such insurance
complies with the terms and conditions set forth in the Credit Documents, and
(b) certified copies of all policies evidencing such insurance (or a binder,
commitment or certificates signed by the insurer or a broker authorized to bind
the insurer), each in form and substance reasonably satisfactory to
Administrative Agent.

         3.1.10 Conditions under Acquisition Agreement. The transactions
described in the Acquisition Agreement (other than the payment of the purchase
price) which are to occur on or prior to the Closing Date shall have been
consummated without amendment or waiver (that have not been agreed to by the
Banks) in accordance with the terms and provisions of the Acquisition Agreement.

         3.1.11 Funding of Equity; Funds Flow. Sponsor shall have contributed
$27,425,603.92 in Equity Funds and/or Subordinated Loans to Borrower, and
Sponsor and Borrower shall have caused such contributions to be deposited in the
Funding Account. Administrative Agent, Sponsor and Borrower shall have entered
into the Funds Flow Memorandum, which shall provide, among other things, that
Administrative Agent will disburse all amounts on deposit in the Funding Account
(including such Equity Funds and/or Subordinated Loans and the Loan proceeds),
other than agreed-upon amounts reserved for the payment of certain fees and
expenses and working capital purposes, to the Sellers under the Acquisition
Agreement upon (a) the satisfaction of each of the conditions precedent set
forth in this Article 3 and (b) the consent of the Banks and Borrower.

         3.1.12 Permits. Each of the material discretionary Permits necessary
for the performance of Borrower's, OrHeber 1's, OrHeber 2's, OrHeber 3's, ORNI's
and OrMammoth's obligations under the Acquisition Agreement and the Credit
Documents as of the Closing Date (a) shall have been duly obtained, except for
such renewals, transfers, reissuance, or modifications of existing permits that
can reasonably be obtained in the normal course, (b) shall

                                       19

be in full force and effect, (c) shall not be subject to any current legal
proceeding, and (d) shall not be subject to any Unsatisfied Condition that could
reasonably be expected to result in material modification or revocation of such
Permit, and all applicable appeal periods with respect to such Permit shall have
expired. Each such Permit shall not be subject to any restriction, condition,
limitation or other provision which could reasonably be expected to have a
Material Adverse Effect or result in any of the Projects being operated in a
manner substantially inconsistent with the assumptions underlying the
Projections.

         3.1.13 Absence of Litigation. No action, suit, proceeding or
investigation shall have been instituted or threatened in writing against any
Loan Party (other than those described in Schedule 4.18 to the Acquisition
Agreement and actions, suits, proceedings or investigations against Ormat
Technologies) that (a) contests the Acquisition or any of the transactions under
the Credit Documents or (b) could reasonably be expected to have a Material
Adverse Effect. No action, suit, proceeding or investigation shall have been
instituted or threatened in writing against any other Major Project Participant
that could reasonably be expected to have a Material Adverse Effect.

         3.1.14 Payment of Fees. All taxes, fees and other costs payable in
connection with the execution, delivery, recordation and filing of the Credit
Documents shall have been paid in full or, as approved by Administrative Agent,
provided for. Administrative Agent shall have deducted out of the proceeds of
the Loans all outstanding amounts due, as of the Closing Date, and owing to (a)
the Banks or Administrative Agent under any fee letter or other agreement or
pursuant to Section 2.3, (b) the Banks' attorneys and consultants and the Title
Insurer for all services rendered and billed prior to the Closing Date and (c)
the Depositary Agent under the Depositary Agreement.

         3.1.15 UCC Reports. Delivery to Administrative Agent of a UCC report of
a date no less recent than five Banking Days before the Closing Date for each of
the jurisdictions in which the UCC-1 financing statements and the fixture
filings are intended to be filed in respect of the Collateral, showing that upon
due filing or recordation (assuming such filing or recordation occurred on the
date of such respective reports), as the case may be, and after giving effect to
the Acquisition, the Liens created under the Collateral Documents will be prior
to all other Liens on the Collateral (except for the GECC Liens, the mechanics'
liens referred to in item No. 7 to Schedule 4.10 of the Acquisition Agreement
and any Liens on the Uninsured Real Property Interests or the real property that
is subject thereto) which are perfected by filing or recording.

         3.1.16 No Material Adverse Change. Since November 14, 2003, no Material
Adverse Effect (under and as defined in the Acquisition Agreement) has occurred
and is continuing.

         3.1.17 Perfection of Liens. All actions necessary or desirable to
perfect the Liens of the Collateral Documents to which Sponsor, Borrower,
OrHeber 1, ORNI and OrMammoth are a party as of the Closing Date shall have been
taken (including (a) the delivery of certificated securities of Borrower,
OrHeber 1 and OrMammoth, together with executed,

                                       20

undated transfer documents and (b) the filing of UCC-1 financing statements
naming the applicable Loan Party as the debtor and Administrative Agent as the
secured party).

         3.1.18 Establishment of Accounts. The Operating Accounts and the
Accounts required to be established as of the Closing Date under the Depositary
Agreement shall have been established to the satisfaction of the Banks.

         3.1.19 Representations and Warranties. Each representation and warranty
of Sponsor, Borrower, OrHeber 1, ORNI and OrMammoth under the Credit Documents
shall be true and correct as of the Closing Date.

         3.1.20 No Default. No Event of Default or Potential Event of Default
shall have occurred and be continuing as of the Closing Date, or will result
from the Acquisition and the consummation of the transactions contemplated by
Section 3.2.

         3.1.21 BLM Notice. Delivery to Administrative Agent of a copy of one or
more notices from Borrower to the United States Bureau of Land Management and
any other applicable Persons with respect to the change in ownership of the
Project Companies and Borrower's intention to replace certain bonds described in
Schedule 4.10 to the Acquisition Agreement.

         3.1.22 Notice of Borrowing. Delivery to Administrative Agent of a
properly completed Notice of Borrowing.

         3.1.23 Process Agents. Delivery to Administrative Agent of evidence
that each of Sponsor, Borrower, OrHeber 1, ORNI and OrMammoth has appointed CT
Corporation System as its respective agent for service of process in the State
of New York.

         3.1.24 Escrow. Execution and delivery to Administrative Agent of an
Escrow Agreement (the "Escrow Agreement"), in substantially the form of Exhibit
C-4, among Sponsor, Borrower, Administrative Agent and Chicago Title Company.

    3.2 TRANSACTIONS TO OCCUR AT CLOSING. No later than 5:00 p.m. (New York
City time) on the Closing Date, Borrower shall cause each of the following to
occur (the satisfaction of each of the following being referred to as the "Close
of Escrow"):

         3.2.1 Acquisition. Consummation of the Acquisition in accordance with
the terms of (and without any waivers or amendments unless agreed to by the
Banks to) the Acquisition Agreement.

         3.2.2 Resolutions. Delivery to Administrative Agent of a copy of one or
more resolutions or other authorizations of each Loan Party (other than Ormat
Technologies, Sponsor, Borrower, OrHeber 1, OrHeber 2, OrHeber 3, ORNI,
OrMammoth, Mammoth Lakes and SIGC) certified by an officer of each such Loan
Party as being in full force and effect on the Closing Date, authorizing, as
applicable and among other things, the granting of the Liens under the

                                       21

Collateral Documents and the execution, delivery and performance of the Credit
Documents to which such Loan Party is a party.

         3.2.3 Incumbency. Delivery to Administrative Agent of a certificate
from each Loan Party (other than Ormat Technologies, Sponsor, Borrower, OrHeber
1, OrHeber 2, OrHeber 3, ORNI, OrMammoth, Mammoth Lakes and SIGC) signed by the
appropriate authorized officer of each such Loan Party and dated as of the
Closing Date, as to the incumbency of the natural Persons authorized to execute
and deliver the Credit Documents to which such Loan Party is a party.

         3.2.4 Formation Documents. Delivery to Administrative Agent of the
Governing Documents of each Loan Party (other than Ormat Technologies, Sponsor,
Borrower, OrHeber 1, OrHeber 2, OrHeber 3, ORNI and OrMammoth), certified by an
officer of such Loan Party as being true, correct and complete on the Closing
Date.

         3.2.5 Good Standing Certificates. Delivery to Administrative Agent of
certificates issued by the secretary of state of the state in which each Loan
Party (other than Ormat Technologies, Sponsor, Borrower, OrHeber 1, OrHeber 2,
OrHeber 3, ORNI and OrMammoth) is formed or incorporated, as applicable, (a)
dated no more than ten days prior to the Closing Date and (b) certifying that
such Loan Party is in good standing and is qualified to do business in, and has
paid all franchise taxes or similar taxes due to, such states.

         3.2.6 Credit Documents and Major Project Documents. Delivery to
Administrative Agent of (a) executed originals of each Credit Document to be
executed by any Loan Party on the Closing Date, other than (i) those Credit
Documents delivered under Section 3.1.6 above and (ii) Consents, and (b) a
certified list of, and true, correct and complete copies of, each Major Project
Document in effect as of the Closing Date, and, in each case, all of which shall
have been duly authorized, executed and delivered by the parties thereto.

         3.2.7 Certificate of Officer. Delivery to Administrative Agent of a
certificate, dated as of the Closing Date and in substantially the form of
Exhibit F-3, duly executed by a Responsible Officer of each Loan Party (other
than Ormat Technologies, Sponsor, Mammoth Lakes, OrHeber 2, OrHeber 3, ORNI and
SIGC) which certificate shall, among other things, state that (a) neither such
Loan Party nor, to such Loan Party's knowledge, any other party to any Major
Project Document is or, but for the passage of time or giving of notice or both
will be, in breach of any material obligation thereunder, (b) all conditions
precedent to the performance of such Loan Party, and, to such Loan Party's
knowledge, all conditions precedent to the performance of the other parties
under the Major Project Documents then required to have been performed shall
have been satisfied, (c) immediately prior to and at the Close of Escrow, each
of the Guarantors is Solvent and (d) all conditions precedent set forth in this
Section shall have been satisfied.

         3.2.8 Legal Opinions. Delivery to Administrative Agent of opinions of
counsel to the Loan Parties and Affiliates thereof (if any) (other than Ormat
Technologies, Sponsor and Borrower) which are parties to any Major Project
Document, in each case in form and substance reasonably satisfactory to the
Banks.

                                       22

         3.2.9 Utilities. All potable water, sewer, telephone, electric and all
other utility services necessary for the leasing, ownership and operation of the
Projects shall have been contracted for.

         3.2.10 Permits. Each of the material discretionary Permits necessary
for the performance of the applicable Loan Party's (other than Ormat
Technologies') or the applicable Major Project Participant's obligations under
the Credit Documents or the Major Project Documents as of the Closing Date (a)
shall have been duly obtained, except for such renewals, transfers, reissuance,
or modifications of existing permits that can reasonably be obtained in the
normal course, (b) shall be in full force and effect, (c) shall not be subject
to any current legal proceeding, and (d) shall not be subject to any Unsatisfied
Condition that could reasonably be expected to result in material modification
or revocation of such Permit, and all applicable appeal periods with respect to
such Permit shall have expired. Each such Permit shall not be subject to any
restriction, condition, limitation or other provision which could reasonably be
expected to have a Material Adverse Effect or result in any of the Projects
being operated in a manner substantially inconsistent with the assumptions
underlying the Projections.

         3.2.11 Perfection of Liens. All actions necessary or desirable to
perfect the Liens of the Collateral Documents to which OrHeber 1, OrMammoth, HFC
and HGC are a party as of the Closing Date shall have been taken (including the
filing of UCC-1 financing statements naming HFC and HGC (as the case may be) as
the debtor and Administrative Agent as the secured party).

         3.2.12 ALTA Title Policy.

         (a) Subject to clause (c) of this Section 3.2.12, delivery to
Administrative Agent of a lender's ALTA extended coverage policy of title
insurance, together with such endorsements thereto as are reasonably required by
the Banks (which shall include, but not be limited to, a tie-in endorsement for
all such policies), or the commitment of Title Insurer to issue such a policy,
dated as of the Closing Date, in the amount of $125,000,000, issued by Title
Insurer in form and substance substantially similar to the owner's ALTA policy
of title insurance provided to Borrower under the Acquisition Agreement,
insuring (or agreeing to insure) that:

              (i) each of HFC and HGC has a good, marketable and insurable
leasehold, easement and/or fee interest in the material real property interests
comprising the applicable Project, in each case free and clear of Liens,
encumbrances or other exceptions to title, other than the Title Exceptions; and

              (ii) each Deed of Trust creates (or will create when recorded) a
valid first-priority Lien on HFC's or HGC's (as the case may be) interest in the
applicable Mortgaged Property, free and clear of all Liens, encumbrances and
exceptions to title whatsoever, other than the Title Exceptions.

         (b) The Banks shall have determined that each title policy or title
commitment referred to in clause (a) above shall be in all material respects the
same as the title policies referred to in Schedule 7.9 to the Acquisition
Agreement; provided, however, that any additional

                                       23

exceptions to title contained in such Bank's policy or commitment shall be
permitted only if they do not violate the Real Property Standard.

         (c) The ALTA policy of title insurance set forth in Section 3.2.12(a)
shall (i) not provide coverage to Administrative Agent for any real property
interests located in Mono County, California, (ii) not contain an exception for
mechanics' or materialmen's liens, except for (A) the mechanic's liens described
in item No. 7 to Schedule 4.10 of the Acquisition Agreement, (B) any other
mechanics' and materialmen's liens that do not violate the Real Property
Standard and (C) the mechanics' and materialmen's lien exceptions and exclusions
set forth in the policy jacket and (iii) be permitted to contain one or more
exceptions for matters that would be shown by an ALTA survey.

         3.2.13 Real Estate Rights. Each Project Company shall have obtained and
shall hold all leasehold or other possessory rights in real estate, together
with necessary real property Permits and access rights necessary for (a)
performance in full of each such Project Company's obligations under the Credit
Documents and Major Project Documents to which such Project Company is a party,
and (b) the leasing, ownership and operation of the Projects in accordance with
the Projections; in each case except to the extent that any such missing leases,
possessory rights, real property Permits or access rights do not violate the
Real Property Standard.

         3.2.14 Request for Notice. Requests for Notice shall have been recorded
in favor of Administrative Agent with respect to any Major Project Documents
that are subject to recorded underlying Liens.

         3.2.15 Regulatory Status. (a) Each Project is, and has been since it
commenced commercial operation, (i) a QF, and (ii) exempt from all provisions of
the FPA except Sections 1-18, 202(c), 210-214, 305(c) and such provisions of
Part III of the FPA as may be necessary for FERC actions to enforce the
foregoing; and (b) each Project's FERC Form 556 most recently filed with FERC
contains current and accurate ownership and operating characteristics of the
Project.

         3.2.16 Representations and Warranties. Each representation and warranty
of each Loan Party under the Credit Documents shall be true and correct.

         3.2.17 No Default. No Event of Default or Potential Event of Default
shall have occurred and be continuing, or will result from the Acquisition and
the consummation of the transactions contemplated by this Section 3.2.

         3.2.18 Process Agents. Delivery to Administrative Agent of evidence
that each Loan Party (other than Ormat Technologies, Sponsor, Borrower, OrHeber
1, OrHeber 2, OrHeber 3, ORNI, OrMammoth, SIGC and Mammoth Lakes) has appointed
CT Corporation System as its respective agent for service of process in the
State of New York in respect of each Credit Document to which such Person is a
party which is governed by the laws of the State of New York.

                                       24

         3.2.19 Close of Escrow. Concurrently with the payment of the purchase
price with respect to the condition precedent set forth in Section 3.2.1, the
termination of the escrow under the Escrow Agreement shall occur and all
documents and closing deliverables contained in such escrow shall be released
from such escrow.

    3.3 MAMMOTH COLLATERAL RELEASE

         3.3.1 Upon the written request of Borrower, Administrative Agent, on
the behalf of Secured Parties, (a) shall return to Borrower all Pledged Equity
Interests (as defined in the Pledge Agreements described in clause (c) of the
definition thereof) of OrMammoth free and clear of the Liens imposed by the
applicable Pledge Agreements, (b) shall execute and deliver to Borrower and
OrMammoth such documents and instruments (including UCC-3 termination
statements), in each case as may be reasonably necessary to release the Liens
granted to Administrative Agent, for the benefit of Secured Parties, in respect
of the Collateral directly relating to OrMammoth and the Mammoth Project, and
(c) shall execute and deliver to Borrower and OrMammoth such documents and
instruments as may be reasonably necessary to release OrMammoth from its
obligations under the applicable Subsidiary Guaranty, the Depositary Agreement
and the other Credit Documents to which such Loan Party is a party, provided
that either the Mammoth Prepayment Conditions or the GE Buyout Conditions are
satisfied (the satisfaction of either the Mammoth Prepayment Conditions or the
GE Buyout Conditions and the related release of Collateral described in this
Section 3.3.1 being referred to as the "Mammoth Collateral Release").

         3.3.2 Upon the satisfaction of the Mammoth Prepayment Conditions, then
(a) Administrative Agent shall undertake each of the actions specified in
Section 3.3.1, and (b) the amounts on deposit in the Funding Account shall be
held in the Funding Account until the earlier to occur of (i) the satisfaction
of the GE Buyout Conditions and (ii) the date Borrower delivers a notice (the
"Release Notice") to Administrative Agent requesting that the funds on deposit
in the Funding Account be applied to the prepayment of the Loans pursuant to
this Section and Section 2.1.6(a)(i) (other than clauses (C) and (D) thereof)
(it being acknowledged and agreed that, from and after the date of the delivery
of the Release Notice (the "Release Date"), Beal Bank, S.S.B. shall be released
from all of its obligations under the Credit Documents (including the Fee
Letter) to provide any financing relating to the Lease Buyout or any other Lease
Solution). Subject to Section 3.3.3, if the satisfaction of the GE Buyout
Conditions occurs on or before the Release Date, then the amounts on deposit in
the Funding Account shall be transferred to Sponsor free and clear of the Liens
imposed by the Collateral Documents. Subject to Section 3.3.3, if the
satisfaction of the GE Buyout Conditions does not occur on or before the Release
Date, then the amounts on deposit in the Funding Account shall be transferred to
Administrative Agent and applied to the prepayment of the Loans pursuant to
Section 2.1.6(a)(i) (other than clauses (C) and (D) thereof).

         3.3.3 Each of the parties hereto acknowledges and agrees that (a) the
deposit of amounts into the Funding Account pursuant to Section 3.3.2 and
otherwise in connection with the Mammoth Collateral Release shall not constitute
a prepayment of Loans until such time (if ever) such amounts are transferred to
Administrative Agent and applied to the prepayment of the Loans pursuant to
Section 2.1.6(a)(i) (other than clauses (C) and (D) thereof), and (b) all Loans

                                       25

to be prepaid or transferred to Sponsor using amounts from the Funding Account
shall continue to accrue interest at the then-applicable interest rate for such
Loans until actually prepaid. Without limiting the foregoing, if such amounts
are transferred to Sponsor, then (i) the corresponding amount of Loans (i.e.,
$28,900,000) shall at all times (including during such times as such amounts are
on deposit in the Funding Account) be deemed to be outstanding under the Credit
Agreement and (ii) interest on such amounts shall be due and payable in
accordance with the provisions of Section 2.1.2.

         3.3.4 Each of the parties hereto acknowledges and agrees that, upon the
release of OrMammoth from its obligations under the applicable Subsidiary
Guaranty, the Depositary Agreement and the other Credit Documents to which such
Loan Party is a party and the release of the Collateral directly relating to
OrMammoth and the Mammoth Project pursuant to this Section 3.3 and
notwithstanding anything to the contrary contained in any of the Credit
Documents, (a) OrMammoth shall be deemed not to be a "Loan Party",
"Non-Guarantor" or "Guarantor", (b) the Mammoth Project shall be deemed not to
be a "Project", (c) each of OrMammoth and Mammoth Lakes shall be deemed to be a
"Nonrecourse Person", (d) Mammoth Lakes shall be deemed not to be a "Project
Company", (e) "Project Revenues" shall be deemed not to include any income,
cash, receipts or proceeds generated by OrMammoth, Mammoth Lakes or the Mammoth
Project, (f) each Project Document solely related to the Mammoth Project shall
be deemed not to be a "Project Document" or "Major Project Document", (g) each
of the Loan Parties shall be released from all of their respective obligations
under the Credit Documents with respect to OrMammoth, Mammoth Lakes and the
Mammoth Project (including any covenants or defaults directly related to
OrMammoth, Mammoth Lakes, the Mammoth Project or the Collateral being released
as part of the Mammoth Collateral Release), other than the Loan Parties'
(excluding OrMammoth) obligations under Sections 5.24, 7.1.5, 7.1.13 and 10.4 of
the Credit Agreement, and (h) on or before the second Banking Day following the
Mammoth Collateral Release, Borrower shall take all actions necessary to cause
OrMammoth and Mammoth Lakes not to be direct or indirect subsidiaries of
Borrower, any Guarantor or any Non-Guarantor.

         3.3.5 Concurrent with and as a condition to the Mammoth Collateral
Release, OrMammoth shall execute and deliver to Administrative Agent a release
(in form and substance reasonably satisfactory to Administrative Agent),
pursuant to which OrMammoth shall release each Secured Party from any and all
claims which OrMammoth may have against any of the Secured Parties arising from
the Operative Documents and the transactions contemplated thereby.

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

                  Borrower makes the following representations and warranties to
and in favor of Administrative Agent and the Banks (a) to the extent they relate
to any Loan Party (other than Ormat Technologies, the Non-Guarantors (other than
ORNI) and the Project Companies), as of the Closing Date (unless such
representation and warranty expressly relates solely to another time) both prior
to and immediately after the consummation of the Acquisition and (b) to the
extent they relate to any of each Non-Guarantor (other than ORNI) and each
Project Company,

                                       26

as of the Closing Date (unless such representation and warranty expressly
relates solely to another time) but immediately after giving effect to the
consummation of the Acquisition, all of which shall survive the Closing Date,
the Close of Escrow and the making of the Loans:

    4.1 EXISTENCE. Borrower, each Guarantor and each Non-Guarantor are
organized or formed and validly existing under the laws of the jurisdiction of
its incorporation or formation (as applicable) and are qualified to do business
in such jurisdiction and in each other jurisdiction in which the conduct of
their business requires such qualification (including, with respect to Borrower,
the State of California).

    4.2 OWNERSHIP OF THE LOAN PARTIES.

         4.2.1 The equity interests in Borrower, each Guarantor and each
Non-Guarantor are duly authorized, validly issued and fully paid and
nonassessable and, as of the Closing Date, none of such equity interests
consists of margin stock.

         4.2.2 The capital structure of the Loan Parties (other than Ormat
Technologies) is accurately set forth on Exhibit L, and each of the following is
true and correct:

         (a) Sponsor directly owns all of the equity interests in Borrower.

         (b) Borrower directly owns all of the equity interests in OrHeber 1,
all of the equity interests in OrMammoth, a 50% general partnership interest in
HFC and a 50% general partnership interest in HGC.

         (c) OrHeber 1 directly owns a 50% general partnership interest in HFC,
a 50% general partnership interest in HGC and all of the membership interests in
ORNI.

         (d) ORNI directly owns all of the equity interests in OrHeber 2 and all
of the equity interests in OrHeber 3.

         (e) OrHeber 2 directly owns a 99.998% general partnership interest in
SIGC.

         (f) OrHeber 3 directly owns a 0.002% limited partnership interest in
SIGC.

         (g) OrMammoth directly owns a 1% limited partnership interest in
Mammoth Lakes and a 49% general partnership interest in Mammoth Lakes.

         (h) There no options, warrants, convertible securities or other rights
to acquire any equity interests in Borrower, any Guarantor or any Non-Guarantor.

         (i) Borrower does not have any direct or indirect Subsidiaries, other
than the Guarantors and Non-Guarantors.

    4.3 POWER AND AUTHORIZATION. Each of Borrower, each Guarantor and each
Non-Guarantor has full power and authority to conduct its business as
contemplated by the Operative Documents. The Credit Documents and the Project
Documents to which Borrower, each

                                       27

Guarantor and each Non-Guarantor is a party have been duly authorized, executed
and delivered by each such Loan Party.

    4.4 NO CONFLICT. The execution, delivery and performance by each of
Borrower, each Guarantor and each Non-Guarantor of the Credit Documents and
Major Project Documents to which it is a party and the consummation of the
transactions contemplated by the Credit Documents and the Major Project
Documents do not and will not (a) violate any provision of (i) any Legal
Requirement applicable to Borrower, any of the Guarantors or any of the
Non-Guarantors, as the case may be, (ii) the Governing Documents of Borrower,
any of the Guarantors or any of the Non-Guarantors, as the case may be, or (iii)
any order, judgment or decree of any court or agency or Governmental
Instrumentality binding on Borrower, any of the Guarantors or any of the
Non-Guarantors, (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of Borrower, any of the Guarantors or any of the Non-Guarantors, (c)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Borrower, any of the Guarantors or any of the
Non-Guarantors (other than any Liens created under any of the Credit Documents
in favor of Administrative Agent on behalf of the Secured Parties), or (d)
require any approval of any Person, except for such approvals or consents which
will be obtained on or before the Closing Date and disclosed in writing to the
Banks.

    4.5 ENFORCEABLE OBLIGATIONS. Each Credit Document and Major Project Document
to which Borrower, any of the Guarantors or any of the Non-Guarantors is a party
constitutes a legal, valid and binding obligation of such Loan Party, as the
case may be, enforceable against such Loan Party in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights or by the effect of general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

    4.6 COMPLIANCE WITH LAW. None of Borrower, any of the Guarantors or any of
the Non-Guarantors (a) is in violation of any applicable Legal Requirements in
any material respect or (b) is subject to or in default in any material respect
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign.

    4.7 CONDUCT OF BUSINESS. The only business conducted by Borrower, OrHeber 1,
OrHeber 2, OrHeber 3, ORNI and OrMammoth is the ownership of those Loan Parties
which they directly own, as described in Section 4.2.2. To the knowledge of
Borrower, the only business conducted by any of the Guarantors or Non-Guarantors
is the business of directly or indirectly owning, operating, leasing,
maintaining and using the Projects. Neither Borrower nor any Project Company is
a party to or bound by any material contract other than the Credit Documents and
the Major Project Documents to which it is a party. The Guarantors and
Non-Guarantors (other than the Project Companies) are parties only to those
agreements set forth on Exhibit G-5.

                                       28

    4.8 INVESTMENT COMPANY ACT. None of Borrower, any of the Guarantors or any
of the Non-Guarantors is an "investment company" or a "company controlled by an
investment company", within the meaning of the Investment Company Act of 1940,
as amended.

    4.9 ERISA. There are no ERISA Plans for any Loan Party (other than Ormat
Technologies) or any ERISA Affiliate.

    4.10 HAZARDOUS SUBSTANCES.

         4.10.1 Except as set forth in Exhibit G-4: (a) with respect to each
Site, none of Borrower, any of the Guarantors or any of the Non-Guarantors is
or, to Borrower's, each Guarantor's and each Non-Guarantor's knowledge, has in
the past been in violation of any Hazardous Substance Law which violation could
reasonably be expected to result in a material liability to such Loan Party or
its properties and assets or in an inability of such Loan Party to perform its
obligations under the Operative Documents; (b) none of Borrower, any of the
Guarantors, or any of the Non-Guarantors nor, to Borrower's, each Guarantor's
and each Non-Guarantor's knowledge, any other Person has used, Released,
generated, manufactured, produced or stored in, on, under, or about any Site, or
Released or arranged for the disposal at any other location of any Hazardous
Substances in any form, circumstance or condition that could reasonably be
expected to subject any Secured Party to liability, or Borrower, any of the
Guarantors, or any of the Non-Guarantors to material liability, under any
Hazardous Substance Law; (c) to Borrower's, each Guarantor's and each
Non-Guarantor's knowledge, there are no underground tanks, whether operative or
temporarily or permanently closed, located on any Site that could reasonably be
expected to subject any Secured Party to liability, or Borrower, any of the
Guarantors, or any of the Non-Guarantors to material liability, under any
Hazardous Substance Law; (d) there are no Hazardous Substances used, stored or
present at or on any Site except in material compliance with Hazardous Substance
Laws and other Legal Requirements or as disclosed in the Environmental Reports;
(e) to Borrower's, each Guarantor's and each Non-Guarantor's knowledge, there
are no Hazardous Substances that could reasonably be expected to migrate onto
any Site that could reasonably be expected to impose on Borrower, any of the
Guarantors, or any of the Non-Guarantors a material liability, except as
disclosed in the Environmental Reports; and (f) to Borrower's, each Guarantor's
and each Non-Guarantor's knowledge there neither is nor has been any condition,
circumstance, action, activity or event that could reasonably be expected to be,
or result in, a material violation by Borrower of any Hazardous Substance Law,
or to result in liability of any Secured Party or material liability of
Borrower, any of the Guarantors, or any of the Non-Guarantors under any
Hazardous Substance Law.

         4.10.2 Except as set forth on Exhibit G-4, (a) as of the Closing Date,
there is no pending or, to Borrower's, each Guarantor's and each Non-Guarantor's
knowledge, threatened in writing, judicial or administrative action or
proceeding seeking to impose material liability against Borrower or any
Guarantor or Non-Guarantor by any Governmental Instrumentality (including the
California Public Utilities Commission, U.S. Army Corps of Engineers and U.S.
Environmental Protection Agency) or any other Person which is not a Governmental
Instrumentality with respect to the presence or Release of Hazardous Substances
in, on, from or to any Site and, (b) thereafter, there is no pending or, to
Borrower's, each Guarantor's and each

                                       29

Non-Guarantor's knowledge, threatened in writing, judicial or administrative
action or proceeding by any Governmental Instrumentality (including the
California Public Utilities Commission, U.S. Army Corps of Engineers and U.S.
Environmental Protection Agency) or any non-governmental third party with
respect to the presence or Release of Hazardous Substances in, on, from or to
any Site which could reasonably be expected to have a Material Adverse Effect.

         4.10.3 Except as set forth on Exhibit G-4 or in the Environmental
Reports, to Borrower's, each Guarantor's and each Non-Guarantor's knowledge,
there are no past violations that have not been finally resolved or existing
violations of any Hazardous Substances Laws with respect to any Site, which
violations could reasonably be expected to result in a material liability of
Borrower, any of the Guarantors, or any of the Non-Guarantors.

    4.11 LITIGATION.

         4.11.1 No action, suit, proceeding or investigation has been instituted
or, to Borrower's, each Guarantor's and each Non-Guarantor's knowledge,
threatened in writing against any Loan Party (other than Ormat Technologies),
other than (i) those described in Schedule 4.18 to the Acquisition Agreement or
(ii) those that could not reasonably be expected to have a Material Adverse
Effect.

         4.11.2 None of Borrower, any Guarantor or any Non-Guarantor has any
knowledge of (a) any action, suit, proceeding or investigation that has been
instituted or threatened in writing against any Major Project Participant, or by
which any of them or their properties are bound, which could reasonably be
expected to have a Material Adverse Effect, (b) any proceeding or investigation
that has been instituted by the FERC which could reasonably be expected to
result in the revocation of any Project's QF status or any other determination
that one or more of the Projects has failed to comply with FERC's regulations
relating to QFs, or (c) any order, judgment or decree has been issued or
proposed to be issued by any Governmental Instrumentality that, as a result of
the leasing, ownership or operation of any of the Projects, the sale of
electricity therefrom or the entering into of any Credit Document or Project
Document or any transaction contemplated thereby, could reasonably be expected
to cause or deem the Banks, Administrative Agent, Borrower or any Affiliate of
any of them to be subject to, or not exempted from, regulation under PUHCA or
the FPA, or subject to laws or regulations of the State of California respecting
the rates or the financial or organizational regulation of electric utilities.

         4.11.3 No action, suit or proceeding before or by any court, arbitrator
or other Governmental Instrumentality is pending to which any Loan Party is a
party or to which its business, assets or property is subject and, to
Borrower's, each Guarantor's and each Non-Guarantor's knowledge, no such action,
suit or proceeding is threatened to which any such Loan Party or its business,
assets or property would be subject that, in either case, questions the validity
of any of the Credit Documents.

         4.12 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
properties of any of the Project Companies or, to Borrower's, each Guarantor's
and each Non-Guarantor's knowledge, any Major Project Participant are currently
affected by any fire, explosion, accident,

                                       30

strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy, or other casualty (whether or not
covered by insurance), which could reasonably be expected to have a Material
Adverse Effect.

         4.13 DISCLOSURE. No information or documentation furnished by any of
the Loan Parties to Administrative Agent or the Banks or to any consultant
submitting a report to Administrative Agent or the Banks contained (at the time
of delivery thereof) any untrue statement of a material fact or omitted (at the
time of delivery thereof) to state a material fact necessary in order to make
the statements contained herein or therein not misleading under the
circumstances in which they were made at the time such statements were made
(other than (a) the Projections, (b) the Operating Budget, (c) the Capital
Expenditures Budget, (d) any information that was corrected or updated in
writing by Borrower to the Banks prior to the Closing Date, and (e) any
information which was provided by Borrower to any of the Banks' consultants
prior to the Closing Date and which contains "forward looking statements"). To
the knowledge of Borrower, no information which was provided by Borrower to any
of the Banks' consultants prior to the Closing Date and which contains "forward
looking statements" contained (at the time of delivery thereof) any untrue
statement of a material fact or omitted (at the time of delivery thereof) to
state a material fact necessary in order to make the statements contained herein
or therein not misleading under the circumstances in which they were made at the
time such statements were made. There is no fact known to Borrower, any
Guarantor or any Non-Guarantor which has had or could reasonably be expected to
have a Material Adverse Effect which has not been disclosed in writing to
Administrative Agent and the Banks by or on behalf of Borrower on or prior to
the Closing Date in connection with the transactions contemplated hereby.

    4.14 TAXES.

         4.14.1 Each of Borrower, each Guarantor and each Non-Guarantor has
timely filed all federal, state and local tax returns and reports that it is
required to file, and has paid all taxes, material assessments, utility charges,
fees and other governmental charges it is required to pay to the extent due
(other than those taxes that it is contesting in good faith and by appropriate
proceedings). None of Borrower, any Guarantor's or any Non-Guarantor has
received any written notice proposing tax assessment against any such Loan Party
which could reasonably be expected to have a Material Adverse Effect. To the
extent any taxes, assessments, charges and fees are being contested, the
applicable Loan Party (other than Ormat Technologies) has established reserves
that are adequate for the payment thereof in conformity with GAAP.

         4.14.2 To Borrower's, each Guarantor's and each Non-Guarantor's
knowledge, (a) at all times since its formation, each Project Company has been
an entity that is disregarded as separate from its owner for federal income tax
purposes and (b) no IRS Form 8832 has ever been filed with respect to any
Project Company to treat such Project Company as other than a disregarded
entity.

         4.14.3 None of Borrower, any Guarantor and any Non-Guarantor has any
liability for the taxes of any Person (other than itself) (i) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), (ii) as a transferee or

                                       31

successor, (iii) by contract, or (iv) otherwise, other than those liabilities
which are being assumed by (through indemnification of OrHeber 1, OrHeber 2,
OrHeber 3 and OrMammoth or otherwise) Covanta under the Acquisition Agreement.

         4.14.4 Borrower does not intend to treat the Loans (including the
incurrence thereof) as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4).

    4.15 OWNERSHIP OF PROPERTY; LIENS; MATERIAL REAL PROPERTY INTERESTS.
Borrower, each Guarantor and each Non-Guarantor have, as applicable, (a) good,
marketable and insurable easement, fee and/or leasehold interest in each of the
Material Real Property Interests, free and clear of all Liens (other than the
Title Exceptions) and (b) good, marketable and valid title to all other
Collateral, free and clear of all Liens (other than Permitted Liens). With
respect to each Project, the Title Exceptions do not, in the aggregate,
materially and adversely affect the value, operations or use of such Project.
Exhibit G-6 contains an accurate and complete list of all of the Project
Companies' material real property interests (including fee, leasehold and
easement interests).

    4.16 GOVERNMENTAL REGULATION. None of the Loan Parties, Administrative
Agent, or any Bank, nor any Affiliate of any of them will (solely as a result of
the ownership, leasing or operation of the Projects, the sale of electricity,
capacity or ancillary services therefrom or the entering into any Credit
Document or Project Document or any transaction contemplated thereby) be subject
to, or not exempt from, regulation under the FPA or PUHCA or under state laws
and regulations respecting the rates or the financial or organizational
regulation of electric utilities, except that each Project Company will be
subject to Sections 1-18, 21-30, 202(c), 210-214 and 305(c) of the FPA and such
provisions of Part III of the FPA as may be necessary for FERC actions to
enforce the foregoing. Except to the extent provided in the preceding clause,
none of Borrower, any Guarantor or any Non-Guarantor will be deemed by any
Governmental Instrumentality to be subject to financial, organizational or rate
regulation as an "electric utility", "electric corporation", "electrical
company", "public utility", or "public utility holding company" or any similar
Person under any applicable Governmental Rule.

    4.17 MARGIN STOCK. None of Borrower, any Guarantor or any Non-Guarantor is
engaged principally, or as one of its principal activities, in the business of
extending credit for the purpose of "buying", "carrying" or "purchasing" margin
stock (each as defined in Regulations T, U or X of the Federal Reserve Board),
and no part of the proceeds of the Loans will be used by any Loan Party for the
purpose of "buying", "carrying" or "purchasing" any such margin stock or for any
other purpose which violates the provisions of the regulations of the Federal
Reserve Board.

    4.18 BUDGETS; PROJECTIONS. Borrower has prepared the Capital Expenditures
Budget, the Operating Budget and the Projections and is responsible for
developing the assumptions on which such Capital Expenditures Budget, Operating
Budget and the Projections are based; and such Capital Expenditures Budget,
Operating Budget and the Projections (a) are based on reasonable assumptions
(including as to all legal and factual matters material to the estimates set
forth therein) and (b) are consistent in all material respects with the
provisions of

                                       32

the Major Project Documents in effect as of the Closing Date.

    4.19 FINANCIAL STATEMENTS. In the case of each financial statement of (a)
Ormat Technologies for the calendar year ending on December 31, 2002, (b)
Sponsor for the quarterly period ending on March 31, 2003 and (c) Sponsor for
the quarterly period ending on September 30, 2003, each such financial statement
and information has been prepared in conformity with GAAP and fairly presents,
in all material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of such Loan Party, described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of
such Loan Party, described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnote
disclosure.

    4.20 NO DEFAULT. None of Borrower, any Guarantor or any Non-Guarantor is in
default under any Major Project Document as of the Closing Date, except with
respect to defaults that may be claimed by any landowner set forth on Exhibit N
who (a) has submitted claims to the Bankruptcy Court relating to the SIGC
Project, the HFC Project or the HGC Project, and (b) has not entered into a
settlement agreement with respect to such claims (each such landowner, an
"Outstanding Non-Royalty Claimant"). No Potential Event of Default or Event of
Default has occurred and is continuing.

    4.21 ORGANIZATION ID NUMBER. The organizational identification numbers of
the Loan Parties (other than Ormat Technologies) set forth on Exhibit M are true
and correct.

    4.22 INTELLECTUAL PROPERTY. Borrower, each Guarantor and each Non-Guarantor
own or possess all Permits, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that are necessary for the operation of its
business, without known conflict with the rights of others.

    4.23 CERTAIN FEES. No broker's or finder's fee or commission will be payable
with respect to the transactions contemplated by the Credit Documents, other
than (a) fees payable to Administrative Agent, the Banks or any of their
respective Affiliates and (b) fees payable by Sponsor to Marathon Capital, LLC.

    4.24 COLLATERAL. The Liens granted to Administrative Agent (for the benefit
of the Secured Parties) pursuant to the Collateral Documents (a) constitute as
to personal property included in the Collateral a valid lien, subject, with
respect to any proceeds, to the limitations set forth in Section 9-315 of the
UCC and (b) constitute as to the Mortgaged Property included in the Collateral a
valid Lien on the Mortgaged Property; provided, however, that the Non-Material
Real Property Interests shall be subject to the Real Property Standard for
purposes of this Section 4.24(b). The security interest granted to
Administrative Agent (for the benefit of the Secured Parties) pursuant to the
Collateral Documents in the Collateral consisting of personal property (other
than the Operating Accounts and all amounts deposited therein or credited
thereto) will be perfected (i) with respect to any property that can be
perfected solely by filing, to the extent Article 9 of the UCC applies thereto,
upon the filing of financing statements in the filing offices identified in
Exhibit D-6, (ii) with respect to any property that can be perfected by

                                       33

control (subject to Section 6.14), upon execution of the Depositary Agreement,
and (iii) with respect to any property (if any) that can be perfected by
possession, upon Administrative Agent receiving possession thereof, and in each
case such security interest will be, as to Collateral perfected under the UCC or
otherwise as aforesaid, superior and prior to the rights of all third Persons
now existing or hereafter arising whether by way of mortgage, Lien, security
interests, encumbrance, assignment or otherwise, except (A) with respect to the
Collateral described in clause (i) of this Section 4.24, the Permitted Liens
described in clauses (a) and (e) of the definition of "Permitted Liens" and, to
the extent required by Governmental Rule, those matters described in clauses
(b), (c) and (g) of the definition of "Permitted Liens" and (B) with respect to
the Collateral described in clauses (ii) and (iii) of this Section 4.24, the
Permitted Liens described in clause (a) of the definition of "Permitted Liens"
and, to the extent required by Governmental Rule, those matters described in
clause (b) of the definition of "Permitted Liens". Except to the extent
possession of portions of the Collateral is required for perfection, all such
action as is necessary has been taken to establish and perfect Administrative
Agent's rights in and to the Collateral in existence on the Closing Date to the
extent Administrative Agent's security interest can be perfected by filing,
including any recording, filing, registration, giving of notice or other similar
action; provided, however, that the Non-Material Real Property Interests shall
be subject to the Real Property Standard for purposes of this sentence. Subject
to the requirements contained in the UCC with respect to the filing of
continuation statements, no filing, recordation, re-filing or re-recording other
than those listed on Exhibit D-6 hereto is necessary to perfect and maintain the
perfection of the interest, title or Liens of the Collateral Documents, and on
the Closing Date all such filings or recordings will have been made to the
extent Administrative Agent's security interest can be perfected by filing.
Borrower has properly delivered or caused to be delivered, or provided control,
to Administrative Agent or Depositary Agent all Collateral that permits
perfection of the Lien and security interest described above by possession or
control.

    4.25 SUFFICIENCY OF PROJECT DOCUMENTS. Other than those that can be
reasonably expected to be commercially available when and as required, the
services to be performed, the materials to be supplied and the real property
interests, the easements and other rights granted, or to be granted, pursuant to
the Major Project Documents in effect as of the Closing Date comprise all of the
material services, materials and property interests required to lease, own and
operate the Projects in accordance with the terms of the Credit Documents and
the Major Project Documents.

    4.26 UTILITY SERVICES. All utility services necessary for operation of each
Project for its intended purposes are available at such Project.

    4.27 REAL PROPERTY RIGHTS. Each Project Company possesses all necessary
easements, rights of way, licenses, agreements and other rights for (a) the
contiguous interconnection and utilization of all interconnection facilities
(including geothermal resource production and injection pipelines) and (b) the
operation of the Projects in accordance with the Projections.

    4.28 PROPER SUBDIVISION. Each Material Real Property Interest has been
subdivided or entitled to exception therefrom, and for all purposes each
Material Real Property Interest may

                                       34

be mortgaged, conveyed and otherwise dealt with as separate legal lots or
parcels.

    4.29 FLOOD ZONE DISCLOSURE. No material portion of the Collateral includes
improvements that are located in an area that has been identified by the Federal
Emergency Management Agency as an area having special flood or mudslide hazards
and in which flood insurance has been made available under the National Flood
Insurance Act of 1968, as amended.

    4.30 QF STATUS. Each Project is, and has been since it commenced commercial
operation, (a) a QF, and (b) exempt from all provisions of the FPA. Each
Project's FERC Form 556 most recently filed with FERC contains current and
accurate ownership and operating characteristics of such Project, except for
updated information that is to be included in the filings contemplated by
Section 5.19.1.

    4.31 ACQUISITION AGREEMENT. The representations and warranties of each
applicable Loan Party contained in the Acquisition Agreement are true and
correct in all material respects.

    4.32 SOLVENCY.(a) Borrower, each Guarantor and each Non-Guarantor is
Solvent.

    4.33 GEOTHERMAL RESOURCES. To the knowledge of Borrower, the geothermal
resources available to the Project Companies under the applicable Project
Documents are sufficient to operate each Project in accordance with the terms of
the Power Purchase Agreements and the Credit Documents and in a manner
consistent with the Projections.

    4.34 OPERATOR EXPERIENCE. Sponsor has substantial experience in the
operation and maintenance of comparable geothermal electric generating
facilities and geothermal fields (including associated equipment) and is fully
qualified to operate and maintain the Projects in accordance with the terms of
the Power Purchase Agreements and the Credit Documents and in a manner
consistent with the Projections.

                                    ARTICLE 5
                              AFFIRMATIVE COVENANTS

                  Borrower covenants and agrees that until the repayment in full
in cash of all Obligations (other than those contingent Obligations that are
intended to survive the termination of this Agreement or the other applicable
Credit Documents), Borrower shall, and shall cause each of the Guarantors and
the Non-Guarantors, as applicable, to:

    5.1 USE OF PROCEEDS. Use the proceeds of the Loans only (a) to fund the
Acquisition and (b) to pay related fees and expenses of Borrower, in each case
as provided in the Funds Flow Memorandum.

    5.2 PAYMENT OF OBLIGATIONS. Pay all of Borrower's, each Guarantor's and each
Non-Guarantor's respective obligations due under the Project Documents as and
when due and payable, except (a) such as may be contested in good faith or as to
which a bona fide dispute may exist (provided that adequate reserves have been
established in conformity with GAAP), and

                                       35

(b) Borrower's and the Project Companies' trade payables which shall be paid in
the ordinary course of business.

    5.3 WARRANTY OF TITLE. Maintain (a) good, marketable and insurable fee,
easement and/or leasehold interests in each Material Real Property Interest, as
applicable, and (b) good, legal and valid title to all of its other respective
material properties and assets (other than properties and assets disposed of in
the ordinary course of business or otherwise disposed of in accordance with
Section 6.3), in each case free and clear of all Liens (other than Permitted
Liens). Borrower, the Guarantors and the Non-Guarantors shall warrant and
defend, as applicable, title to and right of possession and use of each Project,
and the validity and priority of the Liens of the Secured Parties on the
Collateral.

    5.4 NOTICES; REPORTS. Promptly, upon acquiring notice or giving notice
(except as otherwise specified below), as the case may be, or obtaining
knowledge thereof, give written notice (with copies of any underlying notices,
papers, files or related documentation) to Administrative Agent of:

         5.4.1 any litigation pending or, to Borrower's, each Guarantor's and
each Non-Guarantor's knowledge, threatened in writing against Borrower, any
Guarantor or any Non-Guarantor involving claims against such Loan Party or a
Project in excess of $500,000 individually or $1,000,000 in the aggregate per
calendar year or involving any injunctive, declaratory or other equitable
relief, such notice to include, if requested in writing by Administrative Agent,
copies of all papers filed in such litigation and to be given monthly if any
such papers have been filed since the last notice given;

         5.4.2 any dispute or disputes for which written notice has been
received by Borrower, any Guarantor or any Non-Guarantor which may exist between
such Loan Party and any Governmental Instrumentality and which involve (a)
claims against Borrower, any Guarantor or any Non-Guarantor which exceed
$500,000 individually or $1,000,000 in the aggregate per calendar year, (b)
injunctive or declaratory relief, or (c) revocation, modification, failure to
renew or the like of any material discretionary Permits necessary for the
performance of any Loan Party's (other than Ormat Technologies') or Major
Project Participant's obligations under the Credit Documents or the Major
Project Documents;

         5.4.3 any Event of Default or Potential Event of Default;

         5.4.4 any casualty, damage or loss, whether or not insured, through
fire, theft, other hazard or casualty, or any act or omission of (a) Borrower,
any Guarantor, any Non-Guarantor, or any of their employees, agents,
contractors, consultants or representatives in excess of $500,000 for any one
casualty or loss or $1,000,000 in the aggregate in any calendar year, or (b) to
Borrower's, each Guarantor's and each Non-Guarantor's knowledge, any other
Person if such casualty, damage or loss could reasonably be expected to have a
Material Adverse Effect;

         5.4.5 any cancellation, suspension or material change in the terms,
coverage or amounts of any insurance described in Exhibit K;

                                       36

         5.4.6 any contractual obligations incurred by Borrower, any Guarantor
or any Non-Guarantor exceeding $500,000 per year in the aggregate for a Project,
not including any obligations incurred pursuant to the Operative Documents or
any obligation contemplated in the then-current Capital Expenditures Budget or
the then-current Operating Budget;

         5.4.7 any intentional withholding of compensation to, or any right to
withhold compensation claimed by, any Major Project Participant, other than
retention provided by the express terms of any such contracts;

         5.4.8 any (a) termination (other than expiration in accordance with its
terms and any applicable Consent) or material default of which Borrower, any
Guarantor or any Non-Guarantor has knowledge or written notice thereof under any
Major Project Document and (b) material Project Document Modification (with
copies of all such Project Document Modifications whether or not requiring
approval of Administrative Agent or the Required Banks pursuant to Section
6.12);

         5.4.9 any written claim of events of force majeure (including claims
therefor regardless of whether Borrower believes such claim has merit) and, to
the extent requested in writing by Administrative Agent, copies of invoices or
statements which are reasonably available to Borrower, any Guarantor or any
Non-Guarantor under any Major Project Document, certified by an authorized
representative of Borrower, together with a copy of any supporting
documentation, schedule, data or affidavit delivered under such Major Project
Document;

         5.4.10 any (a) material noncompliance with any Hazardous Substance Law
or any material Release of Hazardous Substances on or from each Site that has
resulted or could reasonably be expected to result in personal injury or
material property damage or to have a Material Adverse Effect, (b) pending or,
to Borrower's, each Guarantor's and each Non-Guarantor's knowledge, threatened
in writing, Environmental Claim against Borrower or, to Borrower's, each
Guarantor's and each Non-Guarantor's knowledge, any of its Affiliates,
contractors, lessees or any other Persons, arising in connection with their
occupying or conducting operations on or at any Project or any Site which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, or (c) underground tank, whether operative or temporarily or permanently
closed, located on any Site;

         5.4.11 promptly, but in no event later than 10 Banking Days prior to
any Lease Solution, notice thereof, which notice shall describe, in reasonable
detail, the nature of such Lease Solution;

         5.4.12 promptly, but in no event later than 10 Banking Days prior to
any change in or transfer of ownership interests in Borrower, any Guarantor, any
Non-Guarantor or any Project (including a Mammoth Ownership Event), notice
thereof, which notice shall identify any transferee of such ownership interest
and the nature of such transferee's interest or shall describe, in reasonable
detail, such other change or transfer; provided that Borrower shall not be
obligated to notify Administrative Agent of any change in the Constellation
Entities' interest in Mammoth Lakes or a transfer by the Constellation Entities
of any of their ownership interest in Mammoth

                                       37

Lakes if such changes or transfer was to an Affiliate of the Constellation
Entities, in each case until 30 days after it has knowledge of the occurrence of
such change or transfer.

         5.4.13 initiation of any condemnation proceedings involving any
Project, any Site or any material portion thereof;

         5.4.14 promptly, but in no event later than fifteen Banking Days after
Borrower has knowledge of the execution and delivery thereof, a copy of each
Additional Project Document;

         5.4.15 promptly, but in no event later than 30 days after the receipt
thereof by Borrower, copies of (a) any material discretionary Permits necessary
for the performance of the any Loan Party's (other than Ormat Technologies')
obligations under the Credit Documents or the Major Project Documents obtained
by such Loan Party after the Closing Date, (b) any amendment, supplement or
other modification to any material discretionary Permits necessary for the
performance of the any Loan Party's (other than Ormat Technologies') or Major
Project Participant's obligations under the Credit Documents or the Major
Project Documents after the Closing Date and (c) all material notices relating
to any Project received by Borrower, any Guarantor or any Non-Guarantor from, or
delivered by any such Loan Party to, any Governmental Instrumentality;

         5.4.16 promptly, but in no event later than five days after occurrence
thereof, notice of (a) the scheduling of any outage with an anticipated duration
in excess of ten days, (b) any outage (scheduled or otherwise) with a duration
in excess of ten days, and (c) any de-rating or change in the rating of any
Project; and

         5.4.17 (a) within ten days after the occurrence of a Reportable Event
with respect to any ERISA Plan; (b) promptly, but in no event later than fifteen
days, after the withdrawal of any Loan Party (other than Ormat Technologies) or
any ERISA Affiliate from a Multiemployer Plan; (c) promptly, but in no event
later than five days, after the PBGC institutes any proceedings to terminate any
ERISA Plan or takes action to appoint a trustee of any ERISA Plan under Section
4042 of ERISA; (d) promptly, but in no event later than ten days, after the
occurrence of any event which could give rise to a Lien in favor of the IRS or
the PBGC under any ERISA Plan; (e) promptly, but in no event later than 30 days,
after any Loan Party (other than Ormat Technologist) or any ERISA Affiliate has
knowledge that any ERISA Plan that is a Multiemployer Plan is in reorganization,
is insolvent or intends to terminate under Section 4041A of ERISA and (f)
promptly, but in no event later than ten days after, the date any Loan Party
(other than Ormat Technologies) or any ERISA Affiliate shall apply for a minimum
funding waiver under Section 412 of the Code with respect to an ERISA Plan, a
description thereof and copies of documents and materials related thereto.

    5.5 FINANCIAL STATEMENTS.

         5.5.1 Deliver or cause to be delivered to Administrative Agent, in form
and detail reasonably satisfactory to Administrative Agent (except where GAAP is
specifically required):

                                       38

         (a) as soon as practicable and in any event within 60 days after the
end of (i) each quarterly accounting period of each Guarantor's and each
Non-Guarantor's fiscal year and (ii) each of the first three quarterly
accounting periods of Borrower's fiscal year (in each case commencing with the
fiscal quarter ending March 31, 2004), unaudited quarterly financial statements
of Borrower, the Guarantors and the Non-Guarantors as of the last day of such
quarterly period and the related statements of income, cash flow, and
shareholders' or members' equity (as applicable) for such quarterly period and
(in the case of second and third quarterly periods) for the portion of the
fiscal year ending with the last day of such quarterly period, setting forth in
each case (but only with respect to periods occurring during or after the 2005
fiscal year) in comparative form corresponding unaudited figures from the
preceding fiscal year (it being acknowledged that such requirement may be
satisfied by the delivery of the appropriate report or Form 10-Q filed with the
United States Securities Exchange Commission), all prepared in accordance with
GAAP (subject to changes resulting from audit and normal year-end adjustments
and the absence of footnote disclosure); and

         (b) as soon as practicable and in any event within 120 days after the
close of each applicable fiscal year, audited consolidated financial statements
of Borrower (it being acknowledged that such requirement may be satisfied by the
delivery of the appropriate report or Form 10-K filed with the United States
Securities Exchange Commission). Such financial statements shall include a
balance sheet as of the close of such year, an income and expense statement,
reconciliation of capital accounts (where applicable) and a statement of cash
flow (it being acknowledged that such requirement may be satisfied by the
delivery of the appropriate report or Form 10-K filed with the United States
Securities Exchange Commission), all prepared in accordance with GAAP and
certified by an independent certified public accountant selected by the Person
whose financial statements are being prepared. Such certificate shall not be
qualified or limited because of restricted or limited examination by such
accountant of any material portion of the records of Borrower.

         5.5.2 Cause to be delivered, along with such financial statements of
Borrower, the Guarantors and the Non-Guarantors that are required to be provided
pursuant to Section 5.5.1, a certificate signed by a Responsible Officer of such
Loan Party certifying that (a) such Responsible Officer has made or caused to be
made a review of the transactions and financial condition of such Loan Party
during the relevant fiscal period and that such review has not, to such
Responsible Officer's knowledge, disclosed the existence of any event or
condition which constitutes an Event of Default or Potential Event of Default,
or if any such event or condition existed or exists, the nature thereof and the
corrective actions that such Loan Party has taken or proposes to take with
respect thereto, (b) such Loan Party is in compliance with all applicable
material provisions of each Credit Document to which such Loan Party is a party
or, if such is not the case, stating the nature of such non-compliance and the
corrective actions which such Loan Party has taken or proposes to take with
respect thereto, and (c) such financial statements are true and correct in all
material respects and that no material adverse change in the consolidated
assets, liabilities, operations, or financial condition of such Loan Party has
occurred since the date of the immediately preceding financial statements
provided to Administrative Agent or, if a material adverse change has occurred,
the nature of such change.

                                       39

    5.6 BOOKS, RECORDS, ACCESS.

         5.6.1 Maintain, or cause to be maintained, adequate books, accounts and
records with respect to Borrower and the Projects.

         5.6.2 Subject to requirements of Governmental Rules, safety
requirements and existing confidentiality restrictions imposed upon any Loan
Party (other than Ormat Technologies) by any other Person, permit employees or
agents of Administrative Agent and Independent Engineer at any reasonable times
and upon reasonable prior notice to inspect all of their respective properties,
to examine or audit all of their respective books, accounts and records and make
copies and memoranda thereof, and to communicate with their auditors outside
their presence (it being acknowledged that Administrative Agent shall endeavor
to notify Borrower of any such communications with auditors prior to such
communications).

    5.7 COMPLIANCE WITH LAW. Promptly comply, or cause compliance, in all
material respects with all Legal Requirements (including Legal Requirements and
applicable Permits relating to pollution control, environmental protection,
equal employment opportunity or employee benefit plans, ERISA Plans and employee
safety, with respect to any Project Company or any Project), and make such
alterations to the Projects and the Sites as may be required for such
compliance; provided, however, that nothing in this Section 5.7 shall prohibit
Borrower from challenging or defending any claim or proceeding asserting that
such noncompliance may exist.

    5.8 EXISTENCE; CONDUCT OF BUSINESS. Except as otherwise expressly permitted
under this Agreement, (a) maintain and preserve its existence and all material
rights, privileges and franchises necessary in the normal conduct of its
business, (b) subject to Section 5.2, perform (to the extent not excused by
force majeure events or the nonperformance of the other party and not subject to
a good faith dispute) all of its material contractual obligations under the
Major Project Documents to which it is party or by which it is bound, (c)
maintain all of its Permits and use reasonable efforts to cause all Major
Project Participants to maintain all of their respective Permits related to the
Projects, except to the extent that any such failure to maintain could not
reasonably be expected to have a Material Adverse Effect, and (d) obtain all
Permits necessary for the operation of the Projects in accordance with the Power
Purchase Agreements and the Credit Documents and in a manner consistent with the
Projections.

    5.9 EXEMPTION FROM REGULATION. Take or cause to be taken all necessary or
appropriate actions so that (a) each Project will be a QF and (b) each Loan
Party (other than Ormat Technologies) and each Project shall not be subject to,
or shall be exempt from, financial or organizational regulation as a "public
utility company" or "public utility holding company" under PUHCA, the FPA or
financial, organizational or rate regulation as a public utility under the laws
of the State of California.

    5.10 OPERATION OF THE PROJECTS.

                                       40

    5.10.1 Cause the Project Companies to keep each Project in good operating
condition consistent with the standard of care set forth in the Major Project
Documents and all applicable Permits, and make all repairs necessary to keep
each such Project in such condition.

    5.10.2 Cause the Project Companies to operate each Project in a manner
consistent with Prudent Utility Practices and in compliance with the terms of
the Power Purchase Agreements.

    5.10.3 At any time after June 30, 2004, if the Lease Buyout shall not have
occurred, at the request of Administrative Agent, (a) cause Sponsor to assign
the SIGC O&M Agreement to a wholly-owned Subsidiary of Borrower and an Affiliate
of OrHeber 1, (b) transfer or cause to be transferred all of the employees of
Sponsor who operate, administer and maintain the SIGC Project to such newly
formed wholly-owned Subsidiary of Borrower, (c) grant or cause to be granted to
Administrative Agent (for the benefit of the Secured Parties) a first-priority
perfected Lien on the ownership interests and assets of such newly formed
wholly-owned Subsidiary of Borrower, and (d) provide or cause to be provided to
Administrative Agent with respect to such transactions and such newly formed
wholly-owned Subsidiary of Borrower, to the satisfaction of Administrative
Agent, (i) assignment and transfer documents, (ii) Consents as described in
Section 5.13.2, (iii) each of the documents described in Sections 3.1.1, 3.1.3
and 3.1.4 and (iv) opinions of counsel as described in Section 3.1.8.

    5.11 BUDGETS.

         5.11.1 On or before 90 days prior to the beginning of each calendar
year (other than 2004), adopt an operating plan and a budget, detailed by month,
of anticipated Project Revenues, such budget to include scheduled debt service,
proposed dividend distributions, proposed Major Maintenance, proposed reserves
and all anticipated O&M Costs (including reasonable allowance for contingencies)
applicable to each Project for the ensuing calendar year (each such annual
operating plan and budget, including the Initial Operating Budget, an "Operating
Budget"). There shall be one Operating Budget for the Mammoth Project and, at
the election of Borrower, there shall be one or more Operating Budgets for the
SIGC Project, the HGC Project and the HFC Project. Each Operating Budget shall
be subject to the approval of Administrative Agent only if (a) the aggregate
amount of anticipated O&M Costs exceeds by 15% or is less by 20% of the amount
proposed to be expended by the applicable Loan Parties (other than Ormat
Technologies) for all such items during the applicable calendar year (as set
forth in the Projections), or (b) the aggregate amount of actual O&M Costs (i)
for the prior three-years (or, if applicable, partial years) exceeds by 10% or
(ii) for the prior three-years (or, if applicable, partial years) is less than
85%, in each case of the amount proposed (as set forth in the Projections) to be
expended by the applicable Loan Parties (other than Ormat Technologies) for all
such items during such prior years. Each Project Company shall operate and
maintain each Project within amounts for (A) any line-item set forth in the
Operating Budget not to exceed 120% (on a year-to-date basis) and (B) all
line-items set forth in the Operating Budget not to exceed (I) during the first
six months of the applicable calendar year, 115% (on a year-to-date basis) and
(II) during the last six months of the applicable calendar year, 110% (on a
year-to-date basis).

                                       41

         5.11.2 On or before 90 days prior to the beginning of each calendar
year (other than 2004), adopt a capital expenditures plan and a budget, detailed
by quarter, of anticipated capital expenditures (including reasonable allowance
for contingencies) applicable to each Project for the ensuing calendar year
(each such annual capital expenditures, including the Initial Capital
Expenditures Budget, a "Capital Expenditures Budget"). There shall be one
Capital Expenditures Budget for the Mammoth Project and, at the election of
Borrower, there shall be one or more Capital Expenditures Budgets for the SIGC
Project, the HGC Project and the HFC Project. Each Capital Expenditures Budget
shall be subject to the approval of Administrative Agent only if (a) the
aggregate amount of anticipated capital expenditures exceeds by 15% or is less
by 20% of the amount proposed to be expended by the applicable Loan Parties
(other than Ormat Technologies) for all such items during the applicable
calendar year (as set forth in the Projections), or (b) the aggregate amount of
actual capital expenditures (i) for the prior three-years (or, if applicable,
partial years) exceeds by 10% or (ii) for the prior three-years (or, if
applicable, partial years) is less than 85%, in each case of the amount proposed
(as set forth in the Projections) to be expended by the applicable Loan Parties
(other than Ormat Technologies) for all such items during such prior years. Each
Project Company shall perform capital expenditures for each Project within
amounts for (A) any line-item set forth in the Capital Expenditures Budget not
to exceed 120% (on a year-to-date basis) and (B) all line-items set forth in the
Capital Expenditures Budget not to exceed (I) during the first six months of the
applicable calendar year, 115% (on a year-to-date basis) and (II) during the
last six months of the applicable calendar year, 110% (on a year-to-date basis).

    5.12 PRESERVATION OF RIGHTS; FURTHER ASSURANCES.

         5.12.1 Maintain in full force and effect, perform (subject to Section
5.2) the obligations of Borrower, each Guarantor and each Non-Guarantor under,
preserve, protect and defend the material rights of Borrower, each Guarantor and
each Non-Guarantor under and take all reasonable action necessary to prevent
termination (except by expiration in accordance with its terms) of each and
every Major Project Document, including (where Borrower, a Guarantor or a
Non-Guarantor, as applicable, in the exercise of its business judgment deems it
proper) prosecution of suits to enforce any material right of such Loan Party
thereunder and enforcement of any material claims with respect thereto;
provided, however, that upon the occurrence and during the continuance of an
Event of Default if Administrative Agent requests that certain actions be taken
and the applicable Loan Party (other than Ormat Technologies) fails to take the
requested actions within five Banking Days, Administrative Agent may enforce in
its own name or in such Loan Party's name, such rights of such Loan Party in the
manner and to the extent provided in the Security Agreements and the other
Credit Documents.

         5.12.2 From time to time, execute, acknowledge, record, register,
deliver and/or file all such notices, statements, instruments and other
documents (including any memorandum of lease or other agreement, financing
statement, continuation statement, certificate of title or estoppel
certificate), relating to the Loans stating the interest and charges then due
and any known Events of Default or Potential Events of Default, and take such
other steps as may be necessary or advisable to render fully valid and
enforceable under all applicable laws the rights, liens and priorities of the
Secured Parties with respect to all Collateral and other security from

                                       42

time to time furnished under this Agreement and the other Credit Documents or
intended to be so furnished, in each case in such form and at such times as
shall be reasonably requested by Administrative Agent, and pay all reasonable
fees and expenses (including reasonable attorneys' fees) incident to compliance
with this Section 5.12.2.

         5.12.3 If Borrower, any Guarantor or any Non-Guarantor that previously
has executed and delivered a Deed of Trust shall at any time acquire any real
property or leasehold or other interest in real property not covered by any such
Deed of Trust, then promptly upon such acquisition, execute, deliver and record
a supplement to the applicable Deed of Trust, reasonably satisfactory in form
and substance to Administrative Agent, subjecting the real property or leasehold
or other interests to the Lien created by such Deed of Trust. If reasonably
requested by Administrative Agent, Borrower shall obtain an appropriate title
insurance policy endorsement or supplement, as applicable, insuring the Lien of
the Secured Parties in such additional property, subject only to Permitted Liens
and other exceptions to title approved by Administrative Agent.

         5.12.4 Upon the request of Administrative Agent, execute and deliver
all documents as shall be necessary or that Administrative Agent shall
reasonably request in connection with the rights and remedies of Administrative
Agent and the Banks under the Operative Documents, and perform, such other
reasonable acts as may be necessary to carry out the intent of this Agreement
and the other Credit Documents.

         5.12.5 Take such action, including the execution and filing of all such
documents and instruments, as may be necessary to effect and continue the
appointment of CT Corporation System as its agent for service of process in full
force and effect, or if necessary by reason of any fact or condition relating to
such agent, to replace such agent (but only after having given notice and
evidence thereof to Administrative Agent).

    5.13 POST-CLOSING CONSENTS.

         5.13.1 On or before the date which is 60 days after the Closing Date
or, in respect of Major Project Documents related to the SIGC Project, on or
before March 31, 2004, cause each applicable Project Company and each applicable
Major Project Participant in respect of the Major Project Documents described in
Exhibit E-2, respectively, to enter into (a) a Consent in substantially the form
of Exhibit E-1 or (b) in the case of the Major Project Documents to which Edison
or IID is a counterparty, a Consent substantially in the form customarily
provided by such Persons in substantially similar circumstances.

         5.13.2 With respect to any Additional Project Document entered into by
HGC, HFC, Mammoth Lakes (at any time after a Mammoth Ownership Event) or SIGC
(at any time after a Lease Buyout), cause the applicable counterparty to execute
and deliver to Administrative Agent (a) a Consent in substantially the form of
Exhibit E-1 or (b) in the case of any Additional Project Document to which
Edison or IID is a counterparty, a Consent substantially in the form customarily
provided by such Persons in substantially similar circumstances.

    5.14 INSURANCE. Maintain in effect at all times the types of insurance set
forth on Exhibit K, in the amounts and on the terms and conditions specified
therein, with insurance companies

                                       43

rated "A-" or better, with a minimum size rating of "IX", by Best's Insurance
Guide and Key Ratings (or an equivalent rating by another nationally recognized
insurance rating agency of similar standing if Best's Insurance Guide and Key
Ratings shall no longer be published).

    5.15 TAXES. Timely file all federal, state and local tax returns and reports
that it is required to file, and pay all taxes, material assessments, utility
charges, fees and other governmental charges it is required to pay to the extent
due. The applicable Loan Party may contest in good faith any such taxes,
assessments and other charges and, in such event, may permit the taxes,
assessments or other charges so contested to remain unpaid during any period,
including appeals, when such Loan Party is in good faith contesting the same, so
long as (a) reserves to the extent required by GAAP have been established in an
amount sufficient to pay any such taxes, assessments or other charges, accrued
interest thereon and potential penalties or other costs relating thereto, or
other adequate provision for the payment thereof shall have been made and
maintained at all times during such contest, (b) enforcement of the contested
tax, assessment or other charge is effectively stayed for the entire duration of
such contest, and (c) any tax, assessment or other charge determined to be due,
together with any interest or penalties thereon, is promptly paid after
resolution of such contest.

    5.16 EMINENT DOMAIN. If an event of eminent domain shall occur, (a)
diligently pursue all its rights to compensation against the relevant
Governmental Instrumentality, (b) not, without the written consent of the
Required Banks, compromise or settle any claim against such Governmental
Instrumentality, and (c) pay or apply all eminent domain proceeds in accordance
with the Depositary Agreement. Borrower, the Guarantors and the Non-Guarantors
consent to, and agree not to object to or otherwise impede or impair, the
participation of Administrative Agent in any eminent domain proceedings, and
such Loan Party shall from time to time deliver to Administrative Agent all
documents and instruments requested by it to permit such participation.

    5.17 GE LEASE SOLUTION. Use its best efforts to (a) extend the term of the
GE Lease until a date no earlier than the Maturity Date on terms and conditions
satisfactory to the Required Banks, in their respective reasonable business
judgment (it being acknowledged and agreed that the Required Banks may not
approve any such extension or terms if the annual rent or lease payment under
the GE Lease is an amount in excess of (i) 0.50 multiplied by (ii) the
difference between (A) the projected Project Revenues generated by SIGC and (B)
the projected amount of SIGC's O&M Costs (excluding any such rent or lease
payments); or (b) purchase the SIGC Project from GECC (a "Lease Buyout") on
terms and conditions reasonably acceptable to the Required Banks (it being
acknowledged and agreed that the Required Banks may not approve any such
purchase if the purchase price is to be paid by Borrower, any Guarantor or any
Non-Guarantor, unless the funds used to pay such purchase price are Equity Funds
and/or Subordinated Loans and are supplied to Borrower, the applicable Guarantor
or the applicable Non-Guarantor by Sponsor or are raised by the Loan Parties in
a financing contemplated by Section 5 of the Fee Letter). Upon any such Lease
Buyout, the Loan Parties (other than Ormat Technologies and Sponsor) shall
concurrently take all actions necessary to (i) grant Administrative Agent, for
the benefit of the Secured Parties, a first-priority perfected Lien on the

                                       44

assets of SIGC, ORNI, OrHeber 2 and OrHeber 3 (subject to any Permitted Liens),
pursuant to (A) a Deed of Trust, in substantially the form of Exhibit D-1 (with
respect to SIGC only) and (B) a Security Agreement, in substantially the form of
Exhibit D-2; (ii) pledge all of the ownership interests in SIGC, OrHeber 2 and
OrHeber 3 to Administrative Agent, for the benefit of the Secured Parties,
pursuant to a Pledge Agreement in substantially the form of Exhibit D-3, (iii)
provide a guaranty by SIGC, ORNI, OrHeber 2 and OrHeber 3 of the Obligations of
the other Loan Parties (other than Ormat Technologies and Sponsor) under the
Credit Documents, in substantially the form of Exhibit D-5, and (iv) provide to
Administrative Agent the following documents related to such Lease Buyout: (A)
executed copies of the purchase documents, (B) Consents as described in Section
5.13.2, (C) each of the documents described in Section 3.1.1 relevant to the
Lease Buyout, (D) opinions of counsel as described in Section 3.1.8 and (E)
title insurance policies (with a survey exception) and surveys (which surveys
shall be completed within the Applicable Post-Closing Period) substantially
similar to those described in Section 5.20. The successful consummation of a
transaction described in clause (a) or (b) above shall be referred to herein as
the "Lease Solution". If the Lease Solution is not implemented, then SIGC shall
properly exercise its initial three-year renewal option under the GE Lease on or
before September 30, 2004. No Loan Party shall exercise any other renewal option
or purchase option under the GE Lease. Administrative Agent, the Banks and
Borrower hereby acknowledge that the purchase of the SIGC Project from Owner
Participant pursuant to the terms of the Purchase Agreement, dated as of
November 14, 2003, by and between Ormat Technologies and Owner Participant
(without giving effect to any amendments or waivers thereto which have not been
approved in writing by Administrative Agent) shall be deemed to be, upon the
successful consummation of the acquisition contemplated thereby, a Lease Buyout
and a Lease Solution.

    5.18 MAMMOTH LAKES SECURITY. Upon any Mammoth Ownership Event, concurrently
take all actions necessary to (a) grant Administrative Agent, for the benefit of
the Secured Parties, a first-priority perfected Lien on the assets of Mammoth
Lakes (subject to any Permitted Liens), pursuant to (i) a Deed of Trust, in
substantially the form of Exhibit D-1 and (ii) a Security Agreement, in
substantially the form of Exhibit D-2, (b) pledge all of the ownership interests
in Mammoth Lakes to Administrative Agent, for the benefit of the Secured
Parties, pursuant to a Pledge Agreement in substantially the form of Exhibit
D-3, (c) provide a guaranty by Mammoth Lakes of the obligations of the other
Loan Parties (other than Ormat Technologies and Sponsor) under the Credit
Documents, in substantially the form of Exhibit D-5 and (d) provide to
Administrative Agent the following documents related to such Mammoth Ownership
Event: (A) executed copies of the purchase or transfer documents, (B) Consents
as described in Section 5.13.2, (C) each of the documents described in Sections
3.1.1 and 3.1.3 (including the partnership agreement of Mammoth Lakes), (D)
opinions of counsel as described in Section 3.1.8 and (E) title insurance
policies (with a survey exception) and surveys (which surveys shall be completed
within the Applicable Post-Closing Period) substantially similar to those
described in Section 5.20.

    5.19 FERC MATTERS.

         5.19.1 Cause each applicable Project Company to prepare and file with
FERC, within 20 Banking Days of the Closing Date, a self-certification using
FERC Form 556 updating

                                       45

the Project's prior certification or self-certification, as applicable, to
include any changes that have occurred as a result of the Acquisition. Each such
self-certification shall comply with all applicable FERC rules and regulations.

         5.19.2 Cause each applicable Project Company to receive all necessary
approvals under the law (including applicable FERC rules and regulations) before
selling any electrical energy to any Person other than Edison.

    5.20 POST-CLOSING REAL ESTATE MATTERS. Within the Applicable Post-Closing
Period, provide to Administrative Agent updated ALTA surveys and updated ALTA
lender's title insurance policies (reflecting such updated surveys) that cover
all of the real property interests held by the Project Companies (based on each
Project as it exists as of the Closing Date) (such provision by Borrower, the
"Post-Closing Title Work"); provided, that (a) no such surveys or title
insurance policies shall be provided with respect to those interests (and the
real property associated therewith) that Administrative Agent determines do not
require surveying and (b) no lender's title insurance policies shall be provided
for any real property interests located in Mono County, California. Such updated
surveys and title insurance policies shall demonstrate that the Project
Companies have all material real property interests necessary to operate the
Projects in accordance with the Projections, and shall not show any material
title exceptions or Liens that could reasonably be expected to have a Material
Adverse Effect (other than the Title Exceptions and the Liens created under the
Collateral Documents) which were not disclosed on the surveys delivered prior to
November 14, 2003 or the title policies or commitments delivered as of the
Closing Date.

    5.21 MINIMUM MWH. If any of the Projects fails to generate in any year 97%
or more of the anticipated megawatt-hours (determined by reference to the
Projections), at Borrower's cost, promptly deliver to Administrative Agent an
updated GeothermEx Report.

    5.22 CAPITAL EXPENDITURES. With respect to the capital expenditures
anticipated to be made during the 2004 and 2005 calendar years (as set forth in
the GeothermEx Report, the Independent Engineer's Report and the Projections),
cause each applicable Project Company to make all such capital expenditures and
in all material respects complete such capital expenditure projects in the
manner and in the time provided for in the GeothermEx Report, the Independent
Engineer's Report and the Projections; provided, however, that with respect to
the Mammoth Project, Mammoth Lakes shall not be obligated to undertake such
capital expenditures unless and to the extent that the Constellation Entities
shall have approved such capital expenditures as and to the extent required
under the Governing Documents of Mammoth Lakes. Borrower, OrMammoth and Mammoth
Lakes shall use their respective commercially reasonable efforts to cause the
Constellation Entities to grant all approvals necessary under the Governing
Documents of Mammoth Lakes to undertake and complete such capital expenditures.

    5.23 CALCULATIONS. In no event later than fifteen Banking Days after each
Principal Repayment Date, calculate and deliver to Administrative Agent (a) the
Average Debt Service Coverage Ratio for the twelve-month period immediately
preceding such Principal Repayment Date and, for each Principal Repayment Date
on or before December 31, 2004, the Blended Debt Service Coverage Ratio for such
Principal Repayment Date, (b) Borrower's then-current forecast

                                       46

of cash flow and (c) each Project's actual megawatt-hours for the applicable
prior quarter or year. The calculations hereunder shall be used in determining
(i) the application and distribution of funds pursuant to Section 6.19 of this
Agreement and Sections 3.1.2(b) and 3.6.2 of the Depositary Agreement and (ii)
compliance with Sections 5.21 and 7.1.17 of this Agreement.

    5.24 INDEMNIFICATION.

         5.24.1 Indemnify, defend and hold harmless Administrative Agent and
each Bank, and in their capacities as such, their respective officers,
directors, shareholders, controlling Persons, employees and agents
(collectively, the "Indemnitees") from and against and reimburse the Indemnitees
for:

         (a) any and all claims, obligations, liabilities, losses, damages,
injuries (to Person, property, or natural resources), penalties, actions, suits,
judgments, costs and expenses (including reasonable attorney's fees) of whatever
kind or nature, whether or not well founded, meritorious or unmeritorious,
demanded, asserted or claimed against any such Indemnitee (collectively,
"Subject Claims") in any way relating to, or arising out of or in connection
with this Agreement or the other Operative Documents to which it is a party,
except for claims by a Loan Party against an Indemnitee that are in whole or in
part successful;

         (b) any and all Subject Claims arising in connection with the Release
or presence of any Hazardous Substances at any Project, whether foreseeable or
unforeseeable, including all costs of removal, investigation, remediation and
disposal of such Hazardous Substances, all reasonable costs required to be
incurred in (i) determining whether any Project is in compliance and (ii)
causing any Project to be in compliance, with all applicable Legal Requirements,
all reasonable costs associated with claims for damages to Persons or property,
and reasonable attorneys' and consultants' fees and court costs; and

         (c) any and all Subject Claims in any way relating to, or arising out
of or in connection with any claims, suits or liabilities against any Loan Party
to the extent related to any of the Projects or the transactions contemplated by
the Operative Documents.

         5.24.2 The foregoing indemnities shall not apply with respect to an
Indemnitee to the extent arising as a result of the gross negligence or willful
misconduct of such Indemnitee, but shall continue to apply to other Indemnitees.

         5.24.3 The provisions of this Section 5.24 shall survive foreclosure of
the Collateral Documents and satisfaction or discharge of the Obligations, and
shall be in addition to any other rights and remedies of Administrative Agent
and any Bank.

         5.24.4 In case any action, suit or proceeding shall be brought against
any Indemnitee, such Indemnitee shall notify Borrower of the commencement
thereof, and Borrower shall be entitled, at Sponsor's expense, acting through
counsel reasonably acceptable to such Indemnitee, to participate in the defense
thereof.

                                       47

         5.24.5 Any Indemnitee shall be entitled to compromise or settle such
Subject Claim.

         5.24.6 Upon payment of any Subject Claim by Borrower pursuant to this
Section 5.24 or other similar indemnity provisions contained herein to or on
behalf of an Indemnitee, Borrower, without any further action, shall be
subrogated to any and all claims that such Indemnitee may have relating thereto,
and such Indemnitee shall cooperate with Borrower and Borrower's insurance
carrier and give such further assurances as are necessary or advisable to enable
Borrower vigorously to pursue such claims.

         5.24.7 Any amounts payable by Borrower pursuant to this Section 5.24
shall be regularly payable within 10 Banking Days after Borrower receives an
invoice for such amounts from any applicable Indemnitee, and if not paid within
such 10 Banking Day period shall bear interest at the lesser of (a) the Default
Rate and (b) the maximum rate payable under applicable Legal Requirements. The
obligations of Borrower under this Section 5.24 shall be deemed to be part of
the Obligations.

         5.24.8 Notwithstanding anything to the contrary set forth herein,
Borrower shall not, in connection with any one legal proceeding or claim, or
separate but related proceedings or claims arising out of the same general
allegations or circumstances, in which the interests of the Indemnitees do not
materially differ, be liable to the Indemnitees (or any of them) under any of
the provisions set forth in this Section 5.24 for the fees and expenses of more
than one separate firm of attorneys (which firm shall be selected by the
affected Indemnitees, or upon failure to so select, by Administrative Agent).

         5.24.9 If, for any reason whatsoever, the indemnification provided
under this Section 5.24 is unavailable to any Indemnitee or is insufficient to
hold it harmless to the extent provided in this Section 5.24, then provided such
payment is not prohibited by or contrary to any applicable Legal Requirement or
public policy, Borrower shall contribute to the amount paid or payable by such
Indemnitee as a result of the Subject Claim in such proportion as is appropriate
to reflect the relative economic interests of Borrower and its Affiliates on the
one hand, and such Indemnitee on the other hand, in the matters contemplated by
this Agreement as well as the relative fault of Borrower (and its Affiliates)
and such Indemnitee with respect to such Subject Claim, and any other relevant
equitable considerations.

         5.24.10 Nothing in this Section 5.24 shall constitute a release by
Borrower of any claims that it has as a result of a breach or a default by any
of the Secured Parties of their respective obligations under this Agreement or
any other Credit Document.

                                    ARTICLE 6
                               NEGATIVE COVENANTS

                  Borrower covenants and agrees that until the repayment in full
in cash of all Obligations (other than those contingent Obligations that are
intended to survive the termination of this Agreement and the other applicable
Credit Documents) Borrower shall not, and shall cause each Guarantor and
Non-Guarantor, as applicable, not to:

                                       48

    6.1 INDEBTEDNESS. Create, incur or suffer to exist any Debt of Borrower, the
Guarantors and the Non-Guarantors, other than Permitted Debt in an aggregate
amount (other than the Loans) not to exceed at any time 8% of the aggregate of
(a) the amount of the Total Senior Loan Commitment and (b) if applicable, the
Lease Financing.

    6.2 LIENS. Create, assume or suffer to exist any Lien, securing a charge or
obligation on any Project or on any of the Collateral or of any Loan Party
(other than Sponsor and Ormat Technologies), real or personal, whether now owned
or hereafter acquired, except Permitted Liens.

    6.3 SALE OR LEASE OF ASSETS. Sell, lease, assign, transfer or otherwise
dispose of assets, whether now owned or hereafter acquired, except (a) in the
ordinary course of its business and as contemplated by the Project Documents,
(b) to the extent that such asset is unnecessary, worn out or no longer useful
or usable in connection with the operation or maintenance of the applicable
Project, (c) any asset with a fair market value not in excess of $100,000, or,
in any one calendar year, assets with an aggregate fair market value not in
excess of $500,000, and, in each case, at fair market value; provided that, in
the case of clause (a), (b) or (c), no such sale, lease, assignment, transfer or
other disposition shall be permitted if such sale, lease, assignment, transfer
or other disposition could reasonably be expected to have a Material Adverse
Effect. Upon any such sale, lease, assignment, transfer or other disposition of
any such assets, all Liens in favor of any Secured Party, including the Liens
created pursuant to the Collateral Documents, relating to such asset shall be
released.

    6.4 CHANGE IN BUSINESS. Change the nature of its business or expand its
business beyond the business contemplated by the Operative Documents and the
Lease Financing. Borrower shall conduct no business, hold no assets and have no
liabilities, other than (a) its ownership interests in OrHeber 1, OrHeber 2,
OrHeber 3, ORNI, OrMammoth, SIGC, HGC and HFC and (b) its rights, liabilities
and obligations under its Governing Documents, the Lease Financing and the
Credit Documents to which it is a party. Each of OrHeber 1 OrHeber 2, OrHeber 3,
ORNI and OrMammoth shall conduct no business, hold no assets and have no
liabilities, other than (i) its ownership interests in the applicable Guarantor
or Non-Guarantor and (ii) its liabilities under its Governing Documents, the
Acquisition Agreement, the agreements set forth on Exhibit G-5, and the Credit
Documents to which it is a party. Each Project Company shall conduct no
business, hold no assets and have no liabilities, other than in connection with
the business of operating and using its applicable Project.

    6.5 CHANGE OF NAME. Change its name, principal place of business,
organizational identification number or jurisdiction of incorporation or
formation, as applicable, without giving Administrative Agent at least 45 days'
prior written notice.

    6.6 INVESTMENTS. Make any investments (whether by purchase of stocks, bonds,
notes or other securities, loan, extension of credit, advance or otherwise)
other than (a) Permitted Investments, (b) the Lease Buyout and (c) the Mammoth
Ownership Event; provided that, for purposes of this Section 6.6, capital
expenditures provided for in the then-current Capital Expenditures Budget shall
not constitute investments.

                                       49

    6.7 FORMATION OF SUBSIDIARIES. Create any new Subsidiary or become a joint
venturer in any joint venture.

    6.8 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, dissolve or wind up or terminate itself (other than
a Permitted Reorganization).

    6.9 TRANSACTIONS WITH AFFILIATES.

         6.9.1 Enter into any transaction or series of transactions relating to
any Project with or for the benefit of an Affiliate without the prior written
approval of the Required Banks, other than (a) the Project Documents in effect
on the Closing Date, and the transactions permitted thereby, (b) any employment,
noncompetition or confidentiality agreement entered into by such Loan Party with
any of its employees, officers or directors in the ordinary course of business,
(c) the Project Documents entered into by any Project Company and any such
Affiliate for the purpose of providing the applicable Project with electrical
energy to service its internal power requirements (provided that (i) the IID is
obligated to provide such power requirements in the event that such Affiliate
cannot serve such power requirements and (ii) such Project Document is
materially more favorable to such Project Company than any Project Document
which would be obtainable for a comparable transaction with the IID), (d)
transactions with a fair market value not in excess of $500,000 in any one
calendar year which are no less favorable to such Project Company than would be
obtainable for a comparable transaction in arms-length dealings with an
unrelated third party, and (e) as otherwise expressly permitted or contemplated
by the Credit Documents. Notwithstanding anything to the contrary contained in
this Section 6.9.1, the applicable Project Company may enter into any Project
Document with respect to the capital expenditures to be performed during the
2004 or 2005 calendar year in the manner described in the GeothermEx Report or
the Independent Engineer's Report without the consent of Administrative Agent or
any of the other Banks.

         6.9.2 Enter into any operation and maintenance agreements (including
any O&M Agreement) or engineering, procurement or construction contracts
relating to any Project pursuant to which such Project Company is obligated to
pay such Affiliate (including any Operator) any profits or bonuses.

    6.10 CERTAIN RESTRICTIONS ON CHANGES TO GOVERNING DOCUMENTS. Amend,
supplement, give any consent under or otherwise modify its Governing Documents
in a manner which is inconsistent with or violates the terms of, or could
reasonably be expected to prevent compliance with any of the terms of, any
Credit Document or any Major Project Document or could reasonably be expected to
result in a Material Adverse Effect.

    6.11 REGULATIONS. Directly or indirectly apply any part of the proceeds of
any Loan, any Equity Funds, and any Subordinated Loans received by Borrower or
other funds or revenues received by any Subsidiary thereof to the "buying",
"carrying" or "purchasing" of any margin stock within the meaning of Regulations
T, U or X of the Federal Reserve Board, or any regulations, interpretations or
rulings thereunder.

                                       50

    6.12 AMENDMENT OF PROJECT DOCUMENTS.

         6.12.1 Terminate (other than in accordance with its terms), amend,
supplement or otherwise modify (except for any amendments to the Material Real
Property Documents, to the extent that such amendments are in the form attached
as Exhibit B to that certain Settlement Agreement dated October 6, 2003, among
HGC, HFC, SIGC, Covanta and each of the other parties thereto), or grant any
waivers or consents under, or agree to any contract variation or discretionary
or other change that requires the consent or agreement of such Loan Party (each,
a "Project Document Modification") under any Major Project Documents, including
the GE Lease and the Power Purchase Agreements.

         6.12.2 Agree to any Project Document Modification under any Project
Document other than a Major Project Document unless such Project Document
Modification (a) could not reasonably be expected to have a Material Adverse
Effect, (b) is not reasonably likely to materially impair or reduce the maximum
capacity, value, efficiency, utility, output, performance, reliability,
durability or availability of the applicable Project, or materially increase O&M
Costs, or materially decrease Project Revenues, and (c) is not otherwise
prohibited under the Credit Documents.

    6.13 ASSIGNMENT.

         6.13.1 Assign its rights under any of the Credit Documents or under any
Major Project Document to any Person (other than in connection with a Permitted
Reorganization).

         6.13.2 Consent to the assignment of any obligations under any Major
Project Document by any counterparty thereto (other than any assignment made (a)
by GECC to SIGC in connection with the Lease Buyout, (b) by Sponsor of the SIGC
O&M Agreement pursuant to Section 5.10.3 or (c) by any counterparty to a
Material Real Property Document).

    6.14 ACCOUNTS. Maintain, establish or use any account other than the
Accounts; provided that (a) SIGC may maintain each account which it is required
to maintain under the GE Lease (provided, further, that, upon the termination of
the GE Lease, all amounts on deposit in the accounts maintained under the GE
Lease and which are released to SIGC shall be transferred to the Revenue
Account), (b) Mammoth Lakes may maintain each account which it is required to
maintain under its Governing Documents or that is existing on the Closing Date
(provided, further, that, upon any Mammoth Ownership Event, all amounts on
deposit in such accounts shall be transferred to the Revenue Account), and (c)
each of OrHeber, OrMammoth and Borrower may maintain a checking account (an
"Operating Account") with a maximum aggregate balance not to exceed $60,000.

    6.15 HAZARDOUS MATERIALS. Release into the environment any Hazardous
Substances in violation of any Hazardous Substance Laws, Legal Requirements or
the Project's Permits, except for (a) temporary unplanned exceedences not
allowed under any Project's Permits, which temporary unplanned exceedences could
not reasonably be expected to have a Material Adverse Effect and which a Loan
Party is diligently and in good faith attempting to correct and (b)
unintentional violations with respect to which (i) the Release is not continuing
or

                                       51

reasonably likely to re-occur and is not reasonably susceptible to prevention
or cure, (ii) there are no unsatisfied reporting and/or remediation requirements
under applicable Hazardous Substance Laws, Legal Requirements or applicable
Permits, (iii) no non-monetary penalties or sanctions have been imposed or are
reasonably likely to be imposed (except for the remediation of such violation)
under applicable Hazardous Substance Laws, Legal Requirements or applicable
Permits, and (iv) the Release could not reasonably be expected to materially
impair the value of any Site or any other Collateral, and could not otherwise
reasonably be expected to have a Material Adverse Effect.

    6.16 ADDITIONAL PROJECT DOCUMENTS. Enter into, or become a party to, any
Additional Project Document without the consent of Administrative Agent, which
consent shall not unreasonably be withheld, conditioned or delayed.
Notwithstanding anything to the contrary contained in this Section 6.16, the
applicable Project Company may enter into any Project Document with respect to
the capital expenditures to be performed during the 2004 or 2005 calendar year
in the manner described in the GeothermEx Report or the Independent Engineer's
Report without the consent of Administrative Agent or any of the other Banks.

    6.17 REAL PROPERTY ACQUISITIONS. Acquire or lease any real property or other
interest in real property (excluding the acquisition (but not the exercise) of
any options to acquire any such interests in real property) other than the real
property interests acquired prior to the Closing Date, unless Borrower shall
have delivered to Administrative Agent a "Phase I" environmental report with
respect to such real property and, if a "Phase II" environmental review is
warranted (as reasonably determined by Administrative Agent upon its review of
such "Phase I" environmental report), a "Phase II" environmental report, in each
case, along with a corresponding reliance letter from the consultant issuing
such report(s), confirming, in form and substance reasonably satisfactory to
Administrative Agent, either that no Hazardous Substances were found in, on or
under such real property of a nature or in concentrations that could reasonably
be expected to impose on the Loan Parties a material environmental liability
(other than Ormat Technologies or Sponsor).

    6.18 ERISA. Maintain, contribute to, or become obligated to contribute to,
or become subject to any liability under or relating to any ERISA Plan.

    6.19 DIVIDENDS. Declare or make any distribution or dividend, unless the
following conditions have been satisfied (the "Restricted Payments Conditions"):

         (a) such dividend or distribution is on a date occurring within 45 days
after the immediately preceding Principal Repayment Date;

         (b) no Event of Default or Potential Event of Default has occurred and
is continuing as of the date of such applicable dividend or distribution, and
such dividend or distribution would not cause an Event of Default or Potential
Event of Default;

         (c) with respect to each such dividend or distribution which is on a
date occurring prior to December 31, 2004, (i) the Blended Debt Service Coverage
Ratio is greater than or equal to 1.25 to 1, and (ii) the Average Debt Service
Coverage Ratio for each quarterly

                                       52

period immediately preceding or ending on the applicable Principal Repayment
Date (but after the Closing Date) is greater than or equal to the projected
Average Debt Service Coverage Ratio for each such quarterly period (as set forth
in the Projections);

         (d) with respect to each such dividend or distribution which is on a
date occurring on or after December 31, 2004, the Average Debt Service Coverage
Ratio for the four-quarter period immediately preceding the applicable Principal
Repayment Date is greater than or equal to 1.25 to 1; and

         (e) Borrower's forecast of cash flow, delivered to Administrative Agent
pursuant to Section 5.23 and approved by Administrative Agent in its sole
discretion, does not indicate an inability to amortize the Loans (due to
technical reasons and/or contractual issues).

         Notwithstanding the foregoing, nothing in this Section 6.19 shall
prohibit (i) distributions or dividends by the Guarantors or Non-Guarantors to
Borrower or (ii) distributions or dividends by Borrower to Sponsor pursuant to
Section 2.2 of the Sponsor Guaranty.

    6.20 POWER SALES.

         6.20.1 With respect to Borrower, any Guarantor or any Non-Guarantor
(other than the Project Companies), sell any electrical energy, capacity or
ancillary services to any Person other than sales of renewable energy credits.

         6.20.2 With respect to any Project Company, sell any electrical energy,
capacity or ancillary services to any Person, other than to Edison under the
Power Purchase Agreements and sales of renewable energy credits.

    6.21 CAPITAL EXPENDITURES; GEOTHERMAL RESOURCE DEVELOPMENT. Without the
prior written consent of the Required Banks (which consent may be withheld in
their respective sole discretion), cause any Loan Party to take any action
(including the making of capital expenditures) for the purpose of (a) expanding
any of the geothermal fields which currently service any of the Projects, (b)
developing new geothermal resources at or contiguous to any of the Sites
(including the Mammoth Lakes and HFC geothermal fields) or (c) drilling new
wells of any type at any of the Sites (including the Mammoth Lakes and HFC
geothermal fields); provided that no such consent shall be required for any such
actions related to the Projects which are to be performed during the 2004 or
2005 calendar year in the manner described in the GeothermEx Report and the
Independent Engineer's Report. The parties hereby acknowledge that no such
consent shall be required for geothermal field maintenance (including pumps,
well-workovers, replacement wells and make-up wells) unless such maintenance
could reasonably be expected to have a Material Adverse Effect.

    6.22 INTEREST RATE AGREEMENTS. Secure any of its obligations under any
Interest Rate Agreement with any portion of the Collateral.

                                    ARTICLE 7
                           EVENTS OF DEFAULT; REMEDIES

                                       53

    7.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an event of default (each, an "Event of Default") hereunder:

         7.1.1 Failure to Make Payments. Any Loan Party shall fail to perform in
accordance with the terms of this Agreement or any other Credit Document its
obligation (if any) to pay (a) any principal on any Loan on the date that such
sum is due, (b) any interest on any Loan within three days after the date such
sum is due, (c) any scheduled fee, cost, charge, Make-Whole Premium, or sum due
hereunder or under any other Credit Documents within three days of the date that
such sum is due, or (d) any other fee, cost, charge or other sum due under this
Agreement or the other Credit Documents within five days after written notice
that such sum is due.

         7.1.2 Bankruptcy; Insolvency. Any Loan Party (other than Ormat
Technologies) or any other Major Project Participant (so long as such Major
Project Participant shall have outstanding or unperformed obligations (other
than warranty obligations) under the Operative Document to which it is a party)
shall become subject to a Bankruptcy Event; provided that, solely with respect
to a Bankruptcy Event with respect to a Major Project Participant other than any
Loan Party (other than Ormat Technologies), no Event of Default shall occur as a
result of such Bankruptcy Event if Borrower is attempting to obtain a
Replacement Obligor for the affected party and does so within 30 days thereof.

         7.1.3 Defaults Under Other Indebtedness. Borrower, any Guarantor, any
Non-Guarantor or, prior to the termination of the Sponsor Guaranty pursuant to
the terms hereof and thereof, Sponsor shall default for a period beyond any
applicable grace period (a) in the payment of any principal, interest or other
amount due under any agreement involving Debt and the outstanding principal
amount or amounts payable under any such agreement equals or exceeds (i) in the
case of Borrower or any Project Company, $1,000,000 in the aggregate, (ii) in
the case of any Guarantor or Non-Guarantor that is not a Project Company,
$100,000 in the aggregate and (iii) in the case of Sponsor, $5,000,000 in the
aggregate, or (b) in the performance of any obligation due under any agreement
involving Debt if in the case of this clause (b), pursuant to such default, the
holder of the obligation concerned has the right to accelerate the maturity of
any Debt evidenced thereby which equals or exceeds (i) in the case of Borrower
or any Project Company, $1,000,000 in the aggregate, (ii) in the case of any
Guarantor or Non-Guarantor that is not a Project Company, $100,000 in the
aggregate and (iii) in the case of Sponsor, $5,000,000 in the aggregate.

         7.1.4 Judgments.

         (a) A final judgment or judgments shall be entered against (i) Sponsor,
at any time prior to the termination of the Sponsor Guaranty pursuant to the
terms hereof and thereof, in the amount of $5,000,000 or more individually or
(ii) Borrower, any Guarantor or any Non-Guarantor in the amount of $1,000,000 or
more individually or in the aggregate or involving injunctive relief requiring
suspension or abandonment of the operation of a Project (other than, in each
case, (A) a judgment which is fully covered by insurance, discharged, bonded
pending appeal or satisfied within 60 days after its entry, or (B) a judgment,
the execution of which is

                                       54

effectively stayed within 60 days after its entry but only for 60 days after the
date on which such stay is terminated or expires).

         (b) Any order, judgment or decree shall be entered against any Loan
Party (other than Ormat Technologies) decreeing the dissolution or split up of
such Person and such order shall remain undischarged or unstayed for a period in
excess of 30 days.

         7.1.5 ERISA. If any Loan Party (other than Ormat Technologies) or any
ERISA Affiliate should establish, maintain, contribute to or become obligated to
contribute to any ERISA Plan and (a) a Reportable Event shall have occurred with
respect to any ERISA Plan and, within 30 days after the reporting of such
Reportable Event to Administrative Agent by Borrower (or Administrative Agent
otherwise obtaining knowledge of such event) and the furnishing of such
information as Administrative Agent may reasonably request with respect thereto,
Administrative Agent shall have notified Borrower in writing that (i)
Administrative Agent or Majority Banks has made a determination that, on the
basis of such Reportable Event, there are reasonable grounds for the termination
of such ERISA Plan by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such ERISA Plan and (ii) as a
result thereof, an Event of Default exists hereunder; or (b) a trustee shall be
appointed by a United States District Court to administer any ERISA Plan; or (c)
the PBGC shall institute proceedings to terminate any ERISA Plan; or (d) a
complete or partial withdrawal by any Loan Party (other than Ormat Technologies)
or any ERISA Affiliate from any Multiemployer Plan shall have occurred and,
within 30 days after the reporting of any such occurrence to Administrative
Agent by Borrower (or Administrative Agent otherwise obtaining knowledge of such
event) and the furnishing of such information as Administrative Agent or
Majority Banks may reasonably request with respect thereto, Administrative Agent
shall have notified Borrower in writing that Administrative Agent has made a
determination that, on the basis of such occurrence, an Event of Default exists
hereunder; provided that before any event shall constitute an Event of Default
under this Section 7.1.5, the events described in this Section 7.1.5 must,
individually or together, result in total liability to Borrower, any applicable
Loan Party (other than Ormat Technologies) and all ERISA Affiliates in excess of
$5,000,000.

         7.1.6 Breach of Terms of Agreement.

         (a) Defaults Without Cure Periods. (i) Any Loan Party shall fail to
perform or observe any of the covenants set forth in Section 5.1, 5.8(a),
5.12.2, 5.14, 5.17 or 5.18 or Article 6 of this Agreement; or (ii) Sponsor shall
fail to perform or observe any of the covenants set forth in Article 2 or
Section 4.1 or 4.6 of the Sponsor Guaranty.

         (b) Defaults With Fifteen Day Cure Periods. Borrower shall fail to
perform or observe any of the covenants set forth in Section 5.6.2 of this
Agreement or Sponsor shall fail to perform or observe any of the covenants set
forth in Section 4.7 or 4.8 of the Sponsor Guaranty, and such failure shall
continue unremedied for a period of fifteen days after such Loan Party becomes
aware thereof or receives written notice thereof from Administrative Agent.

         (c) Other Defaults. Any Loan Party shall fail to perform or observe any
of the covenants set forth hereunder or any other Credit Document not otherwise
specifically provided

                                       55

for in Section 7.1.6(a), Section 7.1.6(b) or elsewhere in this Article 7, and
such failure shall otherwise continue unremedied for a period of 30 days after
such Loan Party becomes aware thereof or receives written notice thereof from
Administrative Agent; provided, however, that, if (i) such failure cannot be
cured within such 30 day period, (ii) such failure is capable of being cured,
(iii) such Loan Party is proceeding with diligence and in good faith to cure
such failure, (iv) the existence of such failure has not had and could not,
after considering the nature of the cure, be reasonably expected to have a
Material Adverse Effect, and (v) Administrative Agent shall have received an
officer's certificate signed by a Responsible Officer to the effect of clauses
(i), (ii), (iii) and (iv) above and stating what action such Loan Party is
taking to cure such failure, then such 30 day cure period shall be extended to
such date, not to exceed a total of 90 days, as shall be necessary for such Loan
Party diligently to cure such failure.

         7.1.7 Loss of Collateral. Any substantial portion of the Collateral is
damaged, seized or appropriated without appropriate insurance proceeds (subject
to the underlying deductible) or without fair value being paid therefor so as to
allow replacement of such Collateral and/or prepayment of Loans and to allow the
Loan Parties (other than Ormat Technologies) to continue satisfying their
respective obligations hereunder and under the other Operative Documents.

         7.1.8 Regulatory Status.

         (a) Any Loan Party (other than Ormat Technologies) shall suffer an
Adverse PUHCA Event or shall otherwise become subject to, or not exempt from
financial, organizational or rate regulation as a "holding company" or a
"subsidiary company" of a "holding company" under PUHCA, as a "public utility"
or "electric utility" under the FPA, or as a public utility under the laws of
the State of California.

         (b) Any of the Projects shall cease to be a QF.

         7.1.9 Abandonment. Any Project shall be abandoned or operation thereof
shall be suspended for a period of more than 30 consecutive days for any reason
(other than force majeure); provided that a forced outage or scheduled outage of
a Project shall not constitute abandonment or suspension of the Project, so long
as the applicable Project Company is diligently attempting to end such outage
and such outage does not result in a default under any Major Project Document.

         7.1.10 Unenforceability of Credit Documents.

         (a) Any material provision of any Credit Document shall cease to be in
full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms of the Credit Documents, the
satisfaction in full of the obligations of the Loan Parties under the Credit
Documents or any other termination of a Credit Document in accordance with the
terms thereof) or any Credit Document shall be declared null and void by a
Governmental Instrumentality.

                                       56

         (b) Subject to Section 3.3, Administrative Agent shall not have a valid
and perfected Lien in the Collateral. Subject to Section 3.3, Administrative
Agent shall not have a valid and perfected first priority Lien in the Collateral
(subject to (i) with respect to the Collateral described in Section 4.24(i), the
Permitted Liens described in clauses (a) and (e) of the definition of "Permitted
Liens" and, to the extent required by Governmental Rule, those matters described
in clauses (b), (c) and (g) of the definition of "Permitted Liens", (ii) with
respect to the Collateral described in Sections 4.24(ii) and 4.24(iii), the
Permitted Liens described in clause (a) of the definition of "Permitted Liens"
and, to the extent required by Governmental Rule, those matters described in
clause (b) of the definition of "Permitted Liens" and (iii) with respect to the
Uninsured Real Property Interests, those matters described in clause (j) of the
definition of "Permitted Liens").

         (c) Any Loan Party shall contest the validity or enforceability of any
Credit Document in writing or deny in writing that it has any further liability
prior to the payment in full of all obligations of the Loan Parties under the
Credit Documents.

         7.1.11 Change of Control.

         (a) Any of the following shall occur: (i) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of Borrower, any Guarantor or any
Non-Guarantor to any Person or group of related Persons, together with any
Affiliates thereof; (ii) the holders of the ownership interests of any Loan
Party (other than Ormat Technologies) shall approve any plan or proposal for the
liquidation or dissolution of any Loan Party (other than Ormat Technologies);
(iii) Sponsor shall cease to directly own 100% of the voting and economic
interests in Borrower; (iv) Borrower shall cease to directly own 100% of the
voting and economic interests in OrHeber 1, 100% of the voting and economic
interests in OrMammoth, 50% of the voting and economic interests in HFC and 50%
of the voting and economic interests in HGC; (v) OrHeber 1 shall cease to
directly own 50% of the voting and economic interests in HFC, 50% of the voting
and economic interests in HGC and 100% of the voting and economic interests in
ORNI; (vi) ORNI shall cease to directly own 100% of the voting and economic
interests in OrHeber 2 and 100% of the voting and economic interests in OrHeber
3; (vii) OrHeber 2 shall cease to directly own 99.998% of the voting and
economic interests in ORNI; (viii) OrHeber 3 shall cease to directly own 0.002%
of the voting and economic interests in SIGC; or (ix) OrMammoth shall cease to
directly own 100% of the voting and economic interests in Mammoth Lakes.

         (b) Notwithstanding the provisions of Section 7.1.11(a), (i) the Loan
Parties shall be permitted to undertake a Permitted Reorganization on or before
December 31, 2004, and (ii) Sponsor shall be permitted to undertake a Permitted
Sponsor Sale.

         7.1.12 Loss of or Failure to Obtain Necessary Permits.

         (a) Borrower, any Guarantor or any Non-Guarantor shall fail to obtain
any Permit necessary for the ownership, leasing, maintenance or operation of any
Project and such failure could reasonably be expected to have a Material Adverse
Effect.

                                       57

         (b) Any Permit necessary for ownership, leasing, maintenance or
operation of any Project shall be materially modified, revoked, canceled or not
renewed by a Governmental Instrumentality (or otherwise ceases to be in full
force and effect) and such modification, revocation, cancellation or non-renewal
could reasonably be expected to have a Material Adverse Effect.

         7.1.13 Misstatements; Omissions. Any representation or warranty made or
deemed made by any Loan Party in any Credit Document to which such Loan Party is
a party, shall be untrue or misleading in any material respect as of the time
made; provided that, in respect of unintentional misrepresentations which are
capable of being remedied and are made or deemed made after the Closing Date,
any such unintentional misrepresentation shall not be deemed to be an Event of
Default if such misrepresentation is corrected within 30 days of the occurrence
thereof.

         7.1.14 Project Document Defaults.

         (a) Any Project Document shall cease to be valid and binding and in
full force and effect; provided that any such event will not constitute an Event
of Default if the applicable Project Company is attempting to replace such
Project Document with the consent of the Required Banks and does so within 60
days of such event; provided, further, that an Event of Default shall occur
under this paragraph only if the failure of such Project Document to remain
valid and binding and in full force and effect could reasonably be expected to
have a Material Adverse Effect.

         (b) Any Project Document shall terminate or be terminated or canceled
prior to its stated expiration date or any Project Company shall be in default
(after the giving of any applicable notice and the expiration of any applicable
grace period) under any of the Project Documents; provided that a default under
or termination or cancellation of any Project Document shall constitute an Event
of Default only if (a) such default or termination could reasonably be expected
to have a Material Adverse Effect or (b) such default could result in a Major
Project Document being terminated by the applicable counterparty within five
Banking Days.

         (c) Any Major Project Participant shall be in default (after the giving
of any applicable notice and the expiration of any applicable grace period)
under any of the Major Project Documents; provided that a default under any
Project Document shall constitute an Event of Default only if such default or
termination could reasonably be expected to have a Material Adverse Effect.

         7.1.15 Failure to Close Escrow. The Close of Escrow shall not have
occurred on or before 5:00 p.m. (New York City time) on the Closing Date.

         7.1.16 Failure to Meet Minimum Debt Service Coverage Ratio. The Average
Debt Service Coverage Ratio for the twelve-month period immediately preceding
the applicable Principal Repayment Date is less than 1.00 to 1, and any funds on
deposit in the Debt Service

                                       58

Reserve Account shall have been applied to the payment of fees, interest or
principal on the Loans.

         7.1.17 Failure to Meet Projections.

         (a) (i) The Projects (taken as a whole) shall generate in any year less
than 90% of the anticipated megawatt-hours (as set forth in the Projections) for
such year, and (ii) the Projects (taken as a whole) shall have generated in the
preceding three years (on average) less than 95% of the anticipated
megawatt-hours (as set forth in the Projections) for such years.

         (b) The Projects (taken as a whole) shall generate in any year less
than 90% of the anticipated megawatt-hours (as set forth in the Projections) for
such year; provided that such failure shall not be an Event of Default if (i)
the Projects (taken as a whole) shall have generated in the preceding three
years (on average) at least 95% of the anticipated megawatt-hours (as set forth
in the Projections) for such years and (ii) within fifteen days of the end of
such year, Borrower shall have provided Administrative Agent with a report
describing (A) the actions Borrower and the applicable Project Companies are
taking and have taken to correct and remedy such operating performance
shortfalls, (B) the date by which such corrective actions will be completed
(which date shall be on or before June 30 of the year after the year in which
such failure arose), and (C) the causes of such operating performance shortfalls
(it being acknowledged and agreed that (I) Administrative Agent may consult with
consultants of its choosing, at the expense of Borrower, in respect of its
evaluation of such report and (II) Administrative Agent shall have no approval
rights with respect to such report); provided further that, if the Projects
(taken as a whole) shall fail to generate 95% or more of the anticipated
megawatt-hours (as set forth in the Projections) in each of the next two
quarters following the end of the earlier of (x) June 30 of the relevant year
and (y) the quarter during which such corrective actions have been fully
implemented, then an Event of Default shall be deemed to have occurred.

         7.1.18 Post-Closing Title Work. At the expiration of the Applicable
Post-Closing Period, (a) the Non-Material Real Property Interests shall not be
part of the Mortgaged Property or (b) the Liens granted to Administrative Agent
(for the benefit of the Secured Parties) pursuant to the Collateral Documents
shall not constitute as to the Non-Material Real Property Interests a valid and
perfected Lien on such Non-Material Real Property Interests.

    7.2 REMEDIES. Upon the occurrence and during the continuation of any Event
of Default, Administrative Agent and the Banks may, at the election of the
Majority Banks, without further notice of default, presentment or demand for
payment, protest or notice of non-payment or dishonor, or other notices or
demands of any kind, all such notices and demands (other than notices required
by the Credit Documents) being waived, exercise any or all of the following
rights and remedies, in any combination or order that the Majority Banks may
elect, in addition to such other rights or remedies as the Secured Parties may
have hereunder, under the Collateral Documents or at law or in equity:

         7.2.1 No Further Loans. Refuse, and Administrative Agent, and the Banks
shall not be obligated, to continue any Loans, make any additional Loans, or
make any payments, or

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permit the making of payments, from any Account or other funds held by
Administrative Agent under the Credit Documents or on behalf of any Loan Party
(other than Ormat Technologies).

         7.2.2 Cure by Agents. Without any obligation to do so, make
disbursements or Loans to or on behalf of any Loan Party (other than Ormat
Technologies) or disburse amounts from the Revenue Account to cure (a) any Event
of Default hereunder and (b) any default and render any performance under any
Project Document as the Majority Banks in their sole discretion may consider
necessary or appropriate, whether to preserve and protect the Collateral or the
Secured Parties' interests therein or for any other reason. All sums so
expended, together with interest on such total amount at the Default Rate (but
in no event shall the rate exceed the maximum lawful rate), shall be repaid by
Borrower to Administrative Agent, as the case may be, on demand and shall be
secured by the Credit Documents, notwithstanding that such expenditures may,
together with amounts advanced under this Agreement, exceed the aggregate amount
of the Total Senior Loan Commitment.

         7.2.3 Acceleration. Declare and make all or a portion of the sums of
accrued and outstanding principal and accrued but unpaid interest remaining
under this Agreement, together with all unpaid fees, costs (including
Liquidation Costs) and charges due hereunder or under any other Credit Document,
immediately due and payable and require Borrower immediately, without
presentment, demand, protest or other notice of any kind (other than notices
required by the Credit Documents or by applicable Legal Requirements), all of
which Borrower hereby expressly waives, to pay Administrative Agent or the
Secured Parties an amount in immediately available funds equal to the aggregate
amount of any outstanding Obligations; provided that, in the event of an Event
of Default occurring under Section 7.1.2 with respect to any Loan Party, all
such amounts shall become immediately due and payable without further act of
Administrative Agent or the Secured Parties.

         7.2.4 Cash Collateral. Apply or execute upon any amounts on deposit in
any Account or any moneys of any Loan Party (other than Ormat Technologies) on
deposit with Administrative Agent or any Secured Party in the manner provided in
the UCC and other relevant statutes and decisions and interpretations thereunder
with respect to cash collateral. Without limiting the foregoing, Administrative
Agent shall have all rights and powers with respect to the Accounts and the
contents of the Accounts as it has with respect to any other Collateral and may
apply, or cause the application of, such amounts to the payment of interest,
principal, fees, costs, charges or other amounts due or payable to
Administrative Agent, Depositary Agent or the Secured Parties with respect to
the Loans in such order as the Required Banks may elect in their sole
discretion. Until such time as the Majority Banks so elect to exercise such
rights and powers, amounts in the Revenue Account shall be applied as provided
in Section 2.2(b) of the Depositary Agreement. Borrower shall not have any
rights or powers with respect to such amounts except as expressly provided in
this Section 7.2.4.

    7.2.5 Possession of Projects. Enter into possession of any Project and
perform any and all work and labor necessary to operate and maintain any such
Projects, and all sums expended by Administrative Agent in so doing, together
with interest on such total amount at the Default Rate, shall be repaid by
Borrower to Administrative Agent upon demand and shall be secured by the Credit
Documents, notwithstanding that such expenditures may, together with

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amounts advanced under this Agreement, exceed the aggregate amount of the Total
Senior Loan Commitment.

         7.2.6 Remedies Under Credit Documents. Exercise, and direct
Administrative Agent to exercise, any and all rights and remedies available to
it under any of the Credit Documents, including judicial or non-judicial
foreclosure or public or private sale of any of the Collateral pursuant to the
Collateral Documents.

                                    ARTICLE 8
                               SCOPE OF LIABILITY

         Except as expressly set forth in this Article 8, notwithstanding
anything in this Agreement or the other Credit Documents to the contrary, the
Banks shall have no claims with respect to the transactions contemplated by the
Operative Documents against Sponsor or any of its Affiliates (other than
Borrower, the Guarantors and the Non-Guarantors), or any of Sponsor's or
Sponsor's Affiliates' shareholders (other than Borrower, the Guarantors and the
Non-Guarantors), partners (other than Borrower, the Guarantors and the
Non-Guarantors), members (other than Borrower, the Guarantors and the
Non-Guarantors), officers, agents, managers, directors or employees
(collectively, the "Nonrecourse Persons"). The Banks' recourse against the
Nonrecourse Persons shall be limited to the Collateral (including the Projects,
all Project Revenues, all Loan proceeds, Insurance Proceeds, Eminent Domain
Proceeds, and all income or revenues of the foregoing) as and to the extent
provided herein and in the Collateral Documents; provided that the foregoing
provision of this Article 8 shall not (a) constitute a waiver, release or
discharge of any of the indebtedness, or of any of the terms, covenants,
conditions, or provisions of this Agreement or any other Credit Document and the
same shall continue (but without personal liability to the Nonrecourse Persons)
until fully paid, discharged, observed, or performed; (b) limit or restrict the
right of Administrative Agent or any Secured Party (or any assignee, beneficiary
or successor to any of them) to name Borrower or any other Person as a defendant
in any action or suit for a judicial foreclosure or for the exercise of any
other remedy under or with respect to this Agreement or any other Collateral
Document or Credit Document, or for injunction or specific performance, so long
as no judgment in the nature of a deficiency judgment shall be enforced against
any Nonrecourse Person, except as set forth in this Article 8; (c) in any way
limit or restrict any right or remedy of Administrative Agent or any Secured
Party (or any assignee or beneficiary thereof or successor thereto) with respect
to, and each of the Nonrecourse Persons shall remain fully liable to the extent
that it would otherwise be liable for its own actions with respect to, any
fraud, willful breaches of covenants, willful misrepresentation, common law
waste or misappropriation of Project Revenues, Loan proceeds, Insurance
Proceeds, Eminent Domain Proceeds or any other earnings, revenues, rents,
issues, profits or proceeds from or of the Collateral, that should or would have
been paid as provided herein or paid or delivered to Administrative Agent or any
Secured Party (or any assignee or beneficiary thereof or successor thereto)
towards any payment required under this Agreement or any other Credit Document;
(d) affect or diminish or constitute a waiver, release or discharge of any
specific written obligation, covenant, or agreement in respect of the
transactions contemplated by the Operative Documents made by any of the
Nonrecourse Persons or any security granted by the Nonrecourse Persons in
support of the obligations of such Persons under

                                       61

any Collateral Document (or as security for the obligations of Borrower), any
Subsidiary Guaranty or the Sponsor Guaranty; and (e) limit the liability of any
Person who is a party to any Project Document or has issued any certificate or
other statement in connection therewith with respect to such liability as may
arise by reason of the terms and conditions of such Project Document,
certificate or statement (but subject to any limitation of liability in such
Project Document) under relating solely to such liability of such Person as may
arise under such referenced agreement, certificate or statement. The Banks shall
have full recourse against Borrower, the Guarantors and the Non-Guarantors for
all of their respective obligations under the Credit Documents. Notwithstanding
anything to the contrary contained in any of the Credit Documents, no employee,
officer, authorized representative, or director of any Loan Party (including
Ormat Technologies, Sponsor, Borrower, the Guarantors and the Non-Guarantors)
shall have any personal liability (as distinct from any corporate, partnership
or limited liability company liability that any Loan Party may have under any of
the Credit Documents as and to the extent that such liability is a result of
such Loan Party being a "Loan Party") arising under or in connection with this
Agreement, any other Credit Document or any transaction contemplated hereby or
thereby. The limitations on recourse set forth in this Article 8 shall survive
the termination of this Agreement and the indefeasible payment in full in cash
and performance in full of the Obligations hereunder and under the other
Operative Documents.

                                    ARTICLE 9
                              AGENTS; SUBSTITUTION

    9.1 APPOINTMENT, POWERS AND IMMUNITIES.

         9.1.1 Each Bank hereby appoints and authorizes Administrative Agent to
act as its agent and collateral agent hereunder and under the other Credit
Documents, in each case with such powers as are expressly delegated to
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Administrative Agent shall not have any duties or responsibilities except those
expressly set forth in this Agreement or in any other Credit Document, or be a
trustee or a fiduciary for any Secured Party. Notwithstanding anything to the
contrary contained herein, Administrative Agent shall not be required to take
any action which is contrary to this Agreement or any other Credit Documents or
any Legal Requirement or exposes Administrative Agent to any liability. Each of
Administrative Agent, the Banks and any of their respective Affiliates shall not
be responsible to any other Secured Party for (i) any recitals, statements,
representations or warranties made by Borrower or its Affiliates contained in
this Agreement, the other Credit Documents or in any certificate or other
document referred to or provided for in, or received by Administrative Agent or
any Secured Party under this Agreement or any other Credit Document, (ii) the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the other Credit Documents, any Notes or any other document
referred to or provided for herein, or (iii) any failure by Borrower or its
Affiliates to perform their respective obligations hereunder or thereunder.
Administrative Agent may employ agents and attorneys-in-fact, and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.

                                       62

         9.1.2 Administrative Agent and its directors, officers, employees or
agents shall not be responsible for any action taken or omitted to be taken by
it or them hereunder or under any other Credit Document or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, (a) Administrative
Agent may treat the payee of any Note as the holder thereof until Administrative
Agent receives written notice of the permitted assignment or transfer thereof in
accordance with the requirements of the Credit Documents, including Section 9.14
of this Agreement, signed by such payee and in form satisfactory to
Administrative Agent; (b) Administrative Agent may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c)
Administrative Agent does not make any warranty or representation to any Secured
Party for any statements, warranties or representations made in or in connection
with any Operative Document; (d) Administrative Agent shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Operative Document on the part of any party
thereto, to inspect the property (including the books and records) of Borrower
or any other Person or to ascertain or determine whether a Material Adverse
Effect exists or is continuing; and (e) Administrative Agent shall not be
responsible to any Secured Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Operative Document or
any other instrument or document furnished pursuant hereto. Except as otherwise
provided under this Agreement and the other Credit Documents, Administrative
Agent shall take such action with respect to the Credit Documents as shall be
directed by the Required Banks or Majority Banks, as applicable in accordance
with the terms of the Credit Documents.

    9.2 RELIANCE. Administrative Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile,
electronic mail or telex) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by it. As to any other matters not expressly provided for by
this Agreement, Administrative Agent shall not be required to take any action or
exercise any discretion, but shall be required to act or to refrain from acting
upon instructions of the Required Banks or, where expressly provided, the
Majority Banks or all Banks (except that Administrative Agent shall not be
required to take any action which exposes Administrative Agent to personal
liability or which is contrary to this Agreement, any other Credit Document or
any Legal Requirement). Administrative Agent shall in all cases (including when
any action by Administrative Agent alone is authorized hereunder, if
Administrative Agent elects in its sole discretion to obtain instructions from
the Required Banks) be fully protected in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Banks (or, where so expressly stated, the Majority Banks or all
Banks), and such instructions of the Required Banks (or Majority Banks or all
Banks, where applicable) and any action taken or failure to act pursuant thereto
shall be binding on all of the Secured Parties.

                                       63

    9.3 NON-RELIANCE. Each Bank represents that it has, independently and
without reliance on Administrative Agent, or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of the financial condition and affairs of the Loan Parties and its own decision
to enter into this Agreement and agrees that it will, independently and without
reliance upon Administrative Agent, or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own appraisals and decisions in taking or not taking action under this
Agreement. Each of Administrative Agent and any Bank shall not be required to
keep informed as to the performance or observance by any Loan Party or its
Affiliates under this Agreement or any other document referred to or provided
for herein or to make inquiry of, or to inspect the properties or books of any
Loan Party or its Affiliates.

    9.4 DEFAULTS; MATERIAL ADVERSE EFFECT. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Potential Event of
Default, Event of Default or Material Adverse Effect, unless such Person has
received a notice from a Bank or Borrower, referring to this Agreement,
describing such Potential Event of Default, Event of Default or Material Adverse
Effect and indicating that such notice is a notice of the occurrence of such
Potential Event of Default, Event of Default or Material Adverse Effect (as the
case may be). If Administrative Agent receives such a notice of the occurrence
of a Potential Event of Default, Event of Default or Material Adverse Effect,
Administrative Agent shall give notice thereof to the Banks. Administrative
Agent shall take such action with respect to such Potential Event of Default,
Event of Default or Material Adverse Effect as is provided in Article 3, Article
7 or the terms of the Credit Documents, or if not provided for in Article 3,
Article 7 or such Credit Documents, as Administrative Agent shall be reasonably
directed by the Majority Banks; provided, however, that unless and until
Administrative Agent shall have received such directions, Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Potential Event of Default, Event of Default
or Material Adverse Effect as it shall deem advisable in the best interest of
the Banks.

    9.5 INDEMNIFICATION. Without limiting the Obligations of Borrower hereunder,
each Bank agrees to indemnify Administrative Agent and its officers, directors,
shareholders, controlling Persons, employees, agents and servants, ratably in
accordance with their Proportionate Shares for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
be imposed on, incurred by or asserted against Administrative Agent or such
Person in any way relating to or arising out of this Agreement or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other documents (to the extent Borrower has not paid any
such amounts pursuant to Section 5.24); provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from Administrative
Agent's, or any such Person's gross negligence or willful misconduct.
Administrative Agent or any such Person shall be fully justified in refusing to
take or to continue to take any action hereunder or under any other Credit
Document unless it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without limitation of the
foregoing,

                                       64

each Bank agrees to reimburse Administrative Agent or any such Person promptly
upon demand for its Proportionate Share of any out-of-pocket expenses (including
counsel fees) incurred by Administrative Agent or any such Person in connection
with the preparation, execution, administration or enforcement of, or legal
advice in respect of rights or responsibilities under, the Operative Documents,
to the extent that Administrative Agent or any such Person is not reimbursed for
such expenses by Borrower.

    9.6 SUCCESSOR AGENT. Administrative Agent may resign at any time by giving
fifteen days' written notice thereof to the Secured Parties and Borrower, such
resignation to become effective in the manner and at the time set forth below.
Administrative Agent may be removed involuntarily at the request of Borrower or
the Banks only for a material breach of its duties and obligations hereunder and
under the other Credit Documents or for gross negligence or willful misconduct
in connection with the performance of its duties hereunder or under the other
Credit Documents and then only upon the affirmative vote of the Required Banks
(excluding Administrative Agent from such vote and Administrative Agent's
Proportionate Share (if any) of the Commitments from the amounts used to
determine the portion of the Commitments necessary to constitute the required
Proportionate Share of the remaining Banks). Upon any such resignation or
removal of Administrative Agent, the Required Banks shall have the right, with
the consent of Borrower (such consent not to be unreasonably withheld or
delayed) to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Banks' removal of
the retiring Administrative Agent, the retiring Administrative Agent may, on
behalf of the Secured Parties, with the consent of Borrower (such consent not to
be unreasonably withheld or delayed), appoint a successor Administrative Agent
hereunder, which shall be a Bank, if any Bank shall be willing to serve, and
otherwise shall be a commercial bank having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent under the Operative Documents by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations as Administrative Agent only under the Credit Documents. After
any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Operative Documents.

    9.7 AUTHORIZATION. Each Secured Party hereby constitutes and appoints
Administrative Agent, acting for and on behalf of itself and each of the Secured
Parties and each successor or assign of Administrative Agent and the Secured
Parties, the true and lawful attorney-in-fact of such Secured Party, with full
power and authority in the place and stead of such Secured Party and in the name
of such Secured Party, Administrative Agent or otherwise to (a) to execute,
deliver and perform each of the Credit Documents to which Administrative Agent
is or is intended to be a party, and each Bank agrees to be bound by all of the
agreements of Administrative Agent contained in the Credit Documents, and (b) to
release Liens on property that Borrower is permitted to sell or transfer
pursuant to the terms of this Agreement or the other

                                       65

Credit Documents and to enter into agreements supplemental hereto for the
purpose of curing any formal defect, inconsistency, omission or ambiguity in
this Agreement or any Credit Document to which it is a party.

    9.8 OTHER ROLES. With respect to its Commitment, the Loans made by it and
any Note issued to it, Administrative Agent in its individual capacity shall
have the same rights and powers under the Operative Documents as any other Bank
and may exercise the same as though it were not Administrative Agent. The term
"Bank" or "Banks" shall, unless otherwise expressly indicated, include
Administrative Agent in its individual capacity for so long as Administrative
Agent has Loans or Commitments outstanding. Administrative Agent and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with Borrower or any
other Person, without any duty to account therefor to the Banks. For the
avoidance of doubt Administrative Agent may act as Depositary Agent
notwithstanding any potential or actual conflict of interest presented by the
foregoing and Borrower. Each of the Banks hereby waives any claim against
Administrative Agent and any of its Affiliates based upon any conflict of
interest that such Person may have with regard to acting as an agent, arranger
or issuing bank hereunder and acting in such other roles.

    9.9 AMENDMENTS; WAIVERS. Subject to the provisions of this Section 9.9,
unless otherwise specified in this Agreement or another Credit Document, the
Required Banks (or Administrative Agent pursuant to Section 9.7, or otherwise
with the consent in writing of the Majority Banks or Required Banks, as the case
may be) and Borrower, Guarantors, Non-Guarantors or Sponsor may enter into
agreements, waivers or supplements hereto for the purpose of adding, modifying
or waiving any provisions to the Credit Documents or changing in any manner the
rights of the Banks, Borrower, Guarantors, Non-Guarantors or Sponsor hereunder
or thereunder or waiving any Potential Event of Default or Event of Default;
provided, however, that no such supplemental agreement shall, without the
consent of each Bank directly affected thereby:

         (a) modify, in any respect adverse to the Banks, Section 2.1.1(d), 2.5,
2.6, 2.7, 6.12 (with respect to the assignment of Borrower's or any Guarantors'
rights under any of the Credit Documents), 9.13, 9.14 or 10.21 hereof, Section
3.1.2(b) of the Depositary Agreement or Article 2 of the Sponsor Guaranty; or

         (b) reduce the percentage specified in the definition of "Majority
Banks" or "Required Banks"; or

         (c) amend this Section 9.9; or

         (d) release any Collateral (other than immaterial portions thereof)
from the Lien of any of the Collateral Documents or allow release of any funds
from any Account, in each case other than in accordance with Section 3.3 and any
other applicable terms of the Credit Documents (provided, however, that with the
consent of Administrative Agent, HFC may terminate or quitclaim any of the
Non-Material Real Property Interests); or

                                       66

         (e) extend the Maturity Date or reduce the principal amount of any
outstanding Loans or Notes or reduce the rate or change the time of payment of
interest due on any Loan; or

         (f) reduce the amount or extend the payment date for any amount due
under Article 2, whether principal, interest, fees or other amounts; or

         (g) reduce or change the time of payment of any fee due or payable
hereunder; or

         (h) release any Loan Party from any of its material obligations under
the Sponsor Guaranty or any Subsidiary Guaranty; or

         (i) increase the maximum duration of Interest Periods permitted
hereunder; or

         (j) subordinate the Loans to any other Debt.

         No amendment, modification, termination or waiver of any provision of
this Agreement affecting the rights or obligations of Administrative Agent or
any Loan Party shall be effective without the written consent of Administrative
Agent or such Loan Party, respectively. No amendment, modification, termination
or waiver of any provision of any Note (other than by way of amending a document
referred to therein) shall be effective without the written concurrence of the
Bank which is the holder of such Note. NO CREDIT DOCUMENT TO WHICH BEAL BANK,
S.S.B. IS A PARTY SHALL BE EFFECTIVE UNLESS TWO OFFICERS OF BEAL BANK, S.S.B.
SHALL HAVE EXECUTED SUCH CREDIT DOCUMENT.

    9.10 WITHHOLDING TAX. If the forms or other documentation required by
Section 2.4.6 are not delivered to Administrative Agent, then Administrative
Agent may withhold from any interest payment to any Bank not providing such
forms or other documentation, an amount equivalent to the applicable withholding
tax.

         9.10.1 If the Internal Revenue Service or any authority of the United
States or other jurisdiction asserts a claim that Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), then such Bank shall indemnify
Administrative Agent fully for all amounts paid, directly or indirectly, by
Administrative Agent as tax or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs, and any out of pocket expenses. Borrower shall not be responsible for any
amounts paid or required to be paid by a Bank under this Section 9.10.1.

         9.10.2 If any Bank sells, assigns, grants participation in, or
otherwise transfers its rights under this Agreement, the purchaser, assignee,
participant or transferee, as applicable, shall comply and be bound by the terms
of Section 2.4.6 and this Section 9.10 as though it were such Bank.

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    9.11 GENERAL PROVISIONS AS TO PAYMENTS. Administrative Agent shall promptly
distribute to each Bank, subject to the terms of any separate agreement between
Administrative Agent and such Bank, its pro rata share of each payment of
principal and interest payable to the Banks on the Loans and of fees hereunder
received by Administrative Agent for the account of the Banks and of any other
amounts owing under the Loans. The payments made for the account of each Bank
shall be made, and distributed to it, for the account of (a) its domestic
lending office in the case of payments of principal of, and interest on, its
Base Rate Loans, (b) its domestic or foreign lending office, as each Bank may
designate in writing to Administrative Agent, in the case of LIBOR Loans, and
(c) its domestic lending office, or such other lending office as it may
designate for the purpose from time to time, in the case of payments of fees and
other amounts payable hereunder. Subject to the requirement of Section 2.8.2,
Banks shall have the right to alter designated lending offices upon five Banking
Days prior written notice to Administrative Agent and Borrower. Administrative
Agent and each Bank acknowledge and agree that each payment made by or on behalf
of any Loan Party to Administrative Agent under any Credit Document for the
benefit of any Bank shall discharge the obligation of such Loan Party under such
Credit Document to make such payment to Administrative Agent or such Bank
irrespective of any designation made by such Bank, or any agreement or
arrangement between Administrative Agent and such Bank, contemplated by this
Section 9.11.

    9.12 SUBSTITUTION OF BANK. Notwithstanding anything in any Credit Document
to the contrary, should any Bank fail to make a Loan in violation of its
obligations under this Agreement (a "Non-Advancing Bank"), Beal Bank, S.S.B.
shall fund such Loan on the Closing Date and shall be deemed to have assumed
each of the Non-Advancing Bank's obligations under this Agreement (including the
obligation to make the Loan which the Non-Advancing Bank failed to make) and
such Person automatically shall be substituted for the Non-Advancing Bank
hereunder, and all interest and fees which would otherwise have been payable to
the Non-Advancing Bank shall thereafter be payable to such Person. Nothing in
(and no action taken pursuant to) this Section 9.12 shall relieve the
Non-Advancing Bank from any liability it might have to Borrower or to the other
Banks as a result of its failure to make any Loan.

    9.13 PARTICIPATION. Nothing herein provided shall prevent any Bank from
selling a participation in one or more of its Loans made hereunder; provided
that (a) no such sale of a participation shall alter such Bank's or Borrower's
obligations hereunder and (b) any agreement pursuant to which any Bank may grant
a participation in its rights with respect to its Loans made hereunder shall
provide that, with respect to such Loans, subject to the following proviso, such
Bank shall retain the sole right and responsibility to exercise the rights of
such Bank, including any rights it has to enforce the obligations of Borrower
relating to such Loans, to approve any amendment, modification or waiver of any
provision of this Agreement or any other Credit Document, and to take action to
have the Obligations (or any portion thereof) declared due and payable pursuant
to Article 7; provided, however, that such agreement may provide that the
participant may exercise any rights that such Bank may have to approve or
disapprove decreases in interest rates, lengthening of maturity of any Loans,
extend the payment date for any principal or interest payments, release of any
material portion of the Collateral (other than in accordance with the terms of
the Credit Documents) or release any Loan Party (other than in accordance with
the terms of the Credit Documents) from its obligations under the Sponsor
Guaranty or any

                                       68

Subsidiary Guaranty. Recipients of a participation in any Loans of any Bank
shall have rights under this Agreement with respect to increased costs or
reserve requirements under Section 2.4 or 2.6, if such recipient complies with
the requirements of Section 2.4.6, to the same extent as if they were Banks
(except that any such participant shall be entitled to claim any such amount
only to the extent that the Bank from which such participant acquired its
participation is entitled to, and such Bank makes such claim on its own behalf
because it would have otherwise incurred the same costs). For the avoidance of
doubt, Borrower shall not be responsible for increased costs arising out of any
sale of a participation of any Loans or Notes.

    9.14 TRANSFER OF COMMITMENT. Notwithstanding anything else herein to the
contrary, any Bank, after receiving Administrative Agent's prior written consent
(such consent not to be unreasonably withheld), may from time to time, without
the consent of Borrower or any other Person, at its option, sell, assign,
transfer, negotiate or otherwise dispose of a portion of one or more of its
Loans made hereunder (including the Bank's interest in this Agreement and the
other Credit Documents) to its Affiliate, any Bank or to one or more banks or
other Persons that constitute a "Bank"; provided, however, that no Bank
(including any assignee of any Bank) may assign any portion of its Loans in an
amount less than $1,000,000 (unless such lesser amount constitutes the assigning
Bank's entire share of the Loans); and provided, further, that at all times Beal
Bank, S.S.B. and its Affiliates shall collectively hold no less than 51% of the
aggregate amount of the Loans and the Commitments; and provided, further, that
Borrower shall not be responsible for increased costs arising out of any
assignment of any Loans or Notes. In the event of any such assignment, (a) the
assigning Bank's Proportionate Share shall be reduced and its obligations
hereunder released by the amount of the Proportionate Share assigned to the new
Bank, (b) the parties to such assignment shall execute and deliver an
appropriate agreement evidencing such sale, assignment, transfer or other
disposition, in form and substance reasonably satisfactory to Administrative
Agent and Borrower, (c) the parties to the sale, assignment, transfer or other
disposition, excluding Borrower, shall collectively pay to Administrative Agent
an administrative fee of $3,500, (d) at the assigning Bank's option, Borrower
shall execute and deliver to such assigning Bank a new Note in the form attached
hereto as Exhibit B-1, as requested, in a principal amount equal to such new
Bank's Commitment, but only if it shall also be executing and exchanging with
the assigning Bank a replacement note for any Note in an amount equal to the
Commitment retained by the assigning Bank, if any; provided that Borrower shall
have received for cancellation the existing Note held by such assigning Bank,
and (v) Administrative Agent shall amend Exhibit H attached hereto to reflect
the Proportionate Shares of the Banks following such assignment. Thereafter,
such new Bank shall be deemed to be a Bank and shall have all of the rights and
duties of a Bank (except as otherwise provided in this Article 9), in accordance
with its Proportionate Share, under each of the Credit Documents.

    9.15 LAWS. Notwithstanding the foregoing provisions of this Article 9, no
sale, assignment, transfer, negotiation or other disposition of the interests of
any Bank hereunder or under the other Credit Documents shall be allowed if it
would require registration under the federal Securities Act of 1933, as then
amended, any other federal securities laws or regulations or the securities laws
or regulations of any applicable jurisdiction. Borrower shall, from time to time
at the request and expense of Administrative Agent, execute and deliver to
Administrative Agent, or to such party or parties as Administrative Agent may
designate, any and all further

                                       69

instruments as may in the opinion of Administrative Agent be reasonably
necessary or advisable to give full force and effect to such sale, assignment,
transfer, negotiation or disposition which would not require any such
registration.

    9.16 ASSIGNABILITY AS COLLATERAL. Notwithstanding any other provision
contained in this Agreement or any other Credit Document to the contrary, any
Bank may assign all or any portion of the Loans or Note held by it to the
Federal Reserve Bank and the United States Treasury as collateral security;
provided that any payment in respect of such assigned Loans or Note made by
Borrower to or for the account of the assigning or pledging Bank in accordance
with the terms of this Agreement shall satisfy Borrower's obligations hereunder
in respect of such assigned Loans or Note to the extent of such payment. No such
assignment shall release the assigning Bank from its obligations hereunder.

                                   ARTICLE 10
                                  MISCELLANEOUS

    10.1 ADDRESSES. Any communications between the parties hereto or notices
provided herein to be given may be given to the following addresses:

         If to Administrative Agent:         Beal Bank, S.S.B.
                                             6000 Legacy Dr., 4E
                                             Plano, Texas  75024
                                             Attn:  William T. Saurenmann
                                             Tel: (469) 467-5510
                                             Fax: (469) 241-9568
                                             E-mail:  bsaurenmann@bealbank.com

         with a copy to:                     CSG Investments, Inc.
                                             6000 Legacy Dr., 4W
                                             Plano, Texas 75024
                                             Attn:  Steve Harvey
                                             Tel: (469) 467-5652
                                             Fax: (469) 241-9567
                                             E-mail:  sharvey@csginvestments.com

         If to Borrower:                     OrCal Geothermal Inc.
                                             980 Greg Street
                                             Sparks, NV 89431
                                             Attn:  President
                                             Tel:  (775) 356-9029
                                             Fax:  (775) 356-9039
                                             E-mail:  dbronicki@ormat.com

         All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent

                                       70

by overnight delivery service (including Federal Express, UPS and other similar
overnight delivery services), (c) if mailed by first class United States Mail,
postage prepaid, registered or certified with return receipt requested, (d) if
sent by facsimile or (e) if sent via other electronic means (including
electronic mail). Notice so given shall be effective upon receipt by the
addressee, except that communication or notice so transmitted by facsimile or
other direct written electronic means shall be deemed to have been validly and
effectively given on the day (if a Banking Day and, if not, on the next
following Banking Day) on which it is transmitted if transmitted before 4:00
p.m., recipient's time, and if transmitted after that time, on the next
following Banking Day; provided, however, that (i) if any notice is tendered to
an addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender, and (ii) with respect to any notice given
via facsimile or other electronic means, the sender of such message shall
promptly provide the addressee with an original copy of such notice by any of
the means specified in clause (a), (b) or (c) above. Any party shall have the
right to change its address for notice hereunder to any other location within
the continental United States by giving of 5 Banking Days' notice to the other
parties in the manner set forth above.

    10.2 ADDITIONAL SECURITY; RIGHT TO SET-OFF. Subject to Section 2.5.2,
regardless of the adequacy of any other Collateral, any Secured Party with the
prior written consent of Administrative Agent may execute or realize on its or
Administrative Agent's security interest in any such deposits or other sums
credited by or due from Banks to Borrower, and may apply any such deposits or
other sums to or set them off against Borrower's obligations to Banks under any
Notes and this Agreement at any time after the occurrence and during the
continuance of any Event of Default.

    10.3 DELAY AND WAIVER. No delay or omission to exercise any right, power or
remedy accruing to the Secured Parties upon the occurrence of any Event of
Default, Potential Event of Default, Material Adverse Effect or any breach or
default of Borrower or any other Loan Party or unsatisfied condition precedent
under this Agreement or any other Credit Document shall impair any such right,
power or remedy of the Secured Parties, nor shall it be construed to be a waiver
of any such breach or default or unsatisfied condition precedent, or an
acquiescence therein, or of or in any similar breach or default or unsatisfied
condition precedent thereafter occurring, nor shall any waiver of any single
Event of Default, Potential Event of Default, Material Adverse Effect or other
breach or default or unsatisfied condition precedent be deemed a waiver of any
other Event of Default, Potential Event of Default, Material Adverse Effect or
other breach or default or unsatisfied condition precedent theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Administrative Agent or the Secured Parties of any
Event of Default, Potential Event of Default, Material Adverse Effect or other
breach or default or unsatisfied condition precedent under this Agreement or any
other Credit Document, or any waiver on the part of Administrative Agent or the
Secured Parties of any provision or condition of this Agreement or any other
Credit Document, must be in writing and shall be effective only to the extent in
such writing specifically set forth. All remedies, either under this Agreement
or any other Credit Document or by law or otherwise afforded to Administrative
Agent and the Secured Parties, shall be cumulative and not alternative. If any
Event of Default has been waived by the Secured Parties in accordance with
Section 9.9 and this Section 10.3, then after such waiver becomes effective

                                       71

the applicable Event of Default shall for all purposes under the Credit
Documents be deemed to be no longer continuing.

    10.4 COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower will pay to
Administrative Agent all of its reasonable costs and expenses in connection with
the preparation, negotiation, closing and administering of this Agreement and
the Credit Documents (including the Post-Closing Title Work), including the
reasonable fees, expenses and disbursements of Jenkens & Gilchrist, a
Professional Corporation, and Latham & Watkins LLP; provided, however, that
Borrower shall not be required to pay the fees of the other Banks' attorneys;
provided, further, that (a) except as set forth in Sections 5.21 and 7.1.17, no
Loan Party shall be responsible for the payment of any fees and expenses related
to the Independent Consultants and (b) Borrower shall not be responsible for the
internal costs and internal expenses incurred in connection with the
administering of any of the Credit Documents. Borrower will reimburse (i)
Administrative Agent for all reasonable costs and expenses, including reasonable
attorneys' fees (it being acknowledged and agreed that (A) Borrower shall only
be responsible for the payment of one general counsel and one special counsel to
Administrative Agent and (B) Borrower shall not be responsible for any
attorneys' fees for any of the Banks, except as provided in the preceding clause
(A)), expended or incurred by Administrative Agent and the Banks for their
reasonable internal out-of-pocket expenses, in enforcing this Agreement or the
other Credit Documents in connection with an Event of Default or Potential Event
of Default, in actions for declaratory relief in any way related to this
Agreement or in collecting any sum which becomes due on the Notes or under the
Credit Documents and (ii) Administrative Agent and the Banks for their
reasonable out-of-pocket expenses, including reasonable attorney fees (it being
acknowledged and agreed that (A) Borrower shall only be responsible for the
payment of one general counsel and one special counsel to Administrative Agent
and (B) Borrower shall not be responsible for any attorneys' fees for any of the
Banks, except as provided in the preceding clause (A)) and reasonable expert,
consultant and advisor fees and expenses, in the case of a restructuring of the
Loans or otherwise relating to the occurrence of any Potential Event of Default
or Event of Default. Borrower shall not be responsible for any counsel fees of
Administrative Agent or the Banks other than as set forth above, in Section 5.24
or as otherwise set forth in a separate agreement.

    10.5 ENTIRE AGREEMENT. This Agreement and each of the Credit Documents
integrate all the terms and conditions mentioned herein or incidental hereto and
supersede all oral negotiations and prior writings in respect to the subject
matter hereof.

    10.6 GOVERNING LAW. THIS AGREEMENT AND ANY OTHER CREDIT DOCUMENT (UNLESS
OTHERWISE EXPRESSLY PROVIDED FOR THEREIN), SHALL BE GOVERNED BY, AND CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OF LAWS
(OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

    10.7 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

                                       72

    10.8 HEADINGS. Article, Section and Paragraph headings have been inserted in
this Agreement as a matter of convenience for reference only and it is agreed
that such headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.

    10.9 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and practices consistent with those
applied in the preparation of the financial statements submitted by Borrower to
Administrative Agent, and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles and practices.

    10.10 ADDITIONAL FINANCING. The parties hereto acknowledge that as of the
Closing Date the Banks have made no agreement or commitment to provide any
financing except as set forth herein.

    10.11 NO PARTNERSHIP, ETC. The Banks and Borrower intend that the
relationship between them shall be solely that of creditor and debtor. Nothing
contained in this Agreement, the Notes or in any of the other Credit Documents
shall be deemed or construed to create a partnership, tenancy-in-common, joint
tenancy, joint venture or co-ownership by or between the Banks and Borrower or
any other Person. None of Administrative Agent or the Banks shall be in any way
responsible or liable for the debts, losses, obligations or duties of Borrower
or any other Person with respect to the Projects or otherwise. All obligations
to pay real property or other taxes, assessments, insurance premiums, and all
other fees and charges arising from the ownership, operation or occupancy of the
Projects (if any) and to perform all obligations and other agreements and
contracts relating to the Projects shall be the sole responsibility of Borrower.

    10.12 DEED OF TRUST/COLLATERAL DOCUMENTS. The Loans are secured in part by
the Deeds of Trust encumbering certain properties in the State of California.
Reference is hereby made to the Deeds of Trust and the other Collateral
Documents for the provisions, among others, relating to the nature and extent of
the security provided thereunder, the rights, duties and obligations of Borrower
and the rights of Administrative Agent and the other Secured Parties with
respect to such security.

    10.13 LIMITATION ON LIABILITY. No claim shall be made by Borrower against
Administrative Agent, the Banks or any of their respective Affiliates,
directors, employees, attorneys or agents for any loss of profits, business or
anticipated savings, special or punitive damages or any indirect or
consequential loss whatsoever in respect of any breach or wrongful conduct
(whether or not the claim therefor is based on contract, tort or duty imposed by
law), in connection with, arising out of or in any way related to the
transactions contemplated by this Agreement or the other Operative Documents or
any act or omission or event occurring in connection therewith, and Borrower
hereby waives, releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

    10.14 WAIVER OF JURY TRIAL. ADMINISTRATIVE AGENT, THE BANKS AND

                                       73

BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF ADMINISTRATIVE AGENT, THE BANKS OR BORROWER.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR BORROWER, ADMINISTRATIVE AGENT AND
THE BANKS TO ENTER INTO THIS AGREEMENT.

    10.15 CONSENT TO JURISDICTION. Administrative Agent, the Banks and Borrower
agree that any legal action or proceeding by or against Borrower or with respect
to or arising out of this Agreement, the Notes, or any other Credit Document may
be brought in or removed to the courts of the State of New York, in and for the
Borough of Manhattan, or of the United States of America for the Southern
District of New York, as Administrative Agent may elect. By execution and
delivery of this Agreement, the Banks, Administrative Agent and Borrower accept,
for themselves and in respect of their property, generally and unconditionally,
the jurisdiction of the aforesaid courts. Administrative Agent, the Banks and
Borrower irrevocably consent to the service of process out of any of the
aforementioned courts in any manner permitted by law. Administrative Agent, the
Banks and Borrower further agree that the aforesaid courts of the State of New
York and of the United States of America shall have exclusive jurisdiction with
respect to any claim or counterclaim of Borrower based upon the assertion that
the rate of interest charged by the Banks on or under this Agreement, the Loans
or the other Credit Documents is usurious. Administrative Agent, the Banks and
Borrower hereby waive any right to stay or dismiss any action or proceeding
under or in connection with any or all of the Projects, this Agreement or any
other Credit Document brought before the foregoing courts on the basis of forum
non-conveniens. Nothing herein shall affect the right of Administrative Agent to
bring legal action or proceedings in any other competent jurisdiction, including
judicial or non-judicial foreclosure of the Deeds of Trust.

    10.16 KNOWLEDGE AND ATTRIBUTION. References in this Agreement and the other
Credit Documents to the "knowledge," "best knowledge" or facts and circumstances
"known to" Borrower or any other Loan Party, and all like references, mean facts
or circumstances of which a Responsible Officer of the applicable Loan Party has
actual knowledge (after due inquiry).

    10.17 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Borrower may not assign or otherwise transfer
any of its rights under this Agreement except as provided in Section 6.13, and
the Banks may not assign or otherwise transfer any of their rights under this
Agreement except as provided in Article 9.

    10.18 COUNTERPARTS. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in one or more
duplicate counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are

                                       74

physically attached to the same document.

    10.19 USURY. Nothing contained in this Agreement or the Notes shall be
deemed to require the payment of interest or other charges by Borrower or any
other Person in excess of the amount which the holders of the Notes may lawfully
charge under applicable usury laws. In the event that the Banks shall collect
moneys which are deemed to constitute interest which would increase the
effective interest rate to a rate in excess of that permitted to be charged by
applicable Legal Requirements, all such sums deemed to constitute interest in
excess of the legal rate shall, upon such determination, at the option of the
Banks, be returned to Borrower or credited against the principal balance then
outstanding.

    10.20 SURVIVAL. All representations, warranties, covenants and agreements
made herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement and the other Credit Documents shall be
considered to have been relied upon by the parties hereto and shall survive the
execution and delivery of this Agreement, the other Credit Documents and the
making of the Loans (it being acknowledged and agreed that, subject to the
following sentence and except as expressly provided in any such Credit Document,
all of the representations, warranties, covenants and agreements made in any
Credit Document by any Loan Party shall terminate upon the payment in full in
cash and the performance in full of the Obligations). Notwithstanding anything
in this Agreement or implied by law to the contrary, the agreements of Borrower
set forth in Sections 2.1.1(d), 2.1.6, 2.3, 2.4.4, 2.6.3, 2.6.4, 2.7, 5.24, 9.8
and 10.4 and the agreements of the Banks set forth in Sections 9.1, 9.5 and
9.10.1 shall survive the payment and performance of the Loans and the other
Obligations and the reimbursement of any amounts drawn hereunder, and the
termination of this Agreement.

    10.21 REFINANCING. Upon the written request of Administrative Agent at any
time prior to December 31, 2004, the Banks shall have the right to convert
(including by way of a refinancing) up to $100,000,000 of the Loans to senior
secured notes issued by Borrower pursuant to Section 4(2) of the Securities Act
of 1933. Borrower shall (and shall cause each other Loan Party (other than Ormat
Technologies) to, as applicable) execute, acknowledge, and/or deliver all
agreements, notices, statements, instruments and other documents (including a
note purchase agreement, notes, an intercreditor agreement and amendments to any
Credit Documents) necessary or advisable (as determined by Administrative Agent
in its sole discretion) to effectuate such conversion and the issuance of such
senior secured notes. Such note purchase agreement shall contain (a) identical
terms and conditions set forth in Articles 2 and 4 through 10 of this Agreement,
other than any changes necessarily resulting from such conversion, (b) customary
representations and warranties by Borrower, as issuer of such senior secured
notes, relating to securities law matters, (c) representations and warranties by
Borrower of the type described in Sections 4.1, 4.3, 4.4 and 4.5, (d) customary
representations and warranties by the purchasers of such senior secured notes,
relating to securities law matters and (e) provisions otherwise conforming in
substance to Model Form No. 2 of Note Purchase Agreement, including any changes
to Articles 2, 9 and 10 of this Agreement necessarily resulting from such
conversion. Without limiting the foregoing, Borrower shall (and shall cause each
other Loan Party (other than Ormat Technologies) to, as applicable) (i) provide
any information necessary or advisable in connection with the issuance of such
senior secured notes, (ii) deliver,

                                       75

to the satisfaction of Administrative Agent, each of the documents described in
Sections 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.1.7 and 3.1.8 (including, if requested by
S&P or Moody's, an opinion of counsel regarding non-consolidation of the Loan
Parties) with respect to any Loan Party, (iii) take any other action reasonably
requested by Administrative Agent in connection with such conversion, including
any steps as may be necessary or advisable to render fully valid and enforceable
under all applicable laws the rights of the initial purchasers and any other
holders of such senior secured notes, and (iv) pay all reasonable fees and
expenses (including reasonable attorneys' fees) of Administrative Agent and Beal
Bank, S.S.B. incident to such conversion; provided that Borrower shall not be
obligated to pay (A) any such attorneys' fees in excess of $25,000 or (B) any
fees, expenses or other amounts charged by S&P or Moody's in connection with
such conversion (whether on account of an initial rating or subsequent
surveillance ratings). For the avoidance of doubt, the terms of such senior
secured notes shall not provide for the payment of a "make-whole premium," as
that term customarily is utilized in connection with Model Form No. 2 of Note
Purchase Agreement, and shall not provide for interest rates (including default
interest rates), interest periods, interest calculations, interest payment
dates, principal amortization and repayment dates, optional and mandatory
principal prepayment rights and obligations, or fees that deviate in any respect
from such terms as set forth in this Agreement. In the event of any conversion
pursuant to and in accordance with this Section 10.21, Borrower shall not be
obligated to make any Make-Whole Premium or other prepayment premium that would
otherwise be required under Section 2.1.6 of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       76

                IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, intending to be legally bound, have caused this Credit Agreement to
be duly executed and delivered as of the day and year first above written.

                               ORCAL GEOTHERMAL INC.,
                               a Delaware corporation

                               By:   /s/ Indecipherable
                                     -------------------------------------------
                                     Name:
                                     Title:

                              BEAL BANK, S.S.B.,
                              as Administrative Agent and a Bank

                               By:   /s/ Molly Curl
                                     -------------------------------------------
                                     Name:    Molly Curl
                                     Title:   Sr. Vice President

                               By:   /s/ William T. Saurenmann
                                     -------------------------------------------
                                     Name:    William T. Saurenmann
                                     Title:   Sr. Vice President

                                       77

                                                                       EXHIBIT A
                                                             to Credit Agreement

                                   DEFINITIONS

          "Accounts" means the Revenue Account, the Distribution Suspense
Account, the O&M Account, the Capital Expenditures Payment Account, the Funding
Account, the Lease Suspense Account, the Debt Service Reserve Account, the Loss
Proceeds Account and each cash collateral account referred to in the Credit
Documents, including any sub-accounts within such accounts and excluding each of
the Operating Accounts.

          "Acquisition" means the sale, conveyance, transfer and delivery of
certain ownership interests in the Guarantors (other than OrHeber 1 and
OrMammoth) and the Non-Guarantors (other than OrHeber2, OrHeber3 and ORNI) from
the Sellers to Borrower, OrHeber 1, ORNI and OrMammoth, as applicable, pursuant
to the Acquisition Agreement.

          "Acquisition Agreement" means the Ownership Interest Purchase
Agreement, dated as of November 21, 2003, by and among Covanta, the Sellers,
OrHeber 1, OrMammoth and Borrower (as assignee in interest to OrHeber 2 and
OrHeber 3, as applicable, pursuant to that certain Assignment Agreement dated as
of December 17, 2003 among OrHeber 1, OrHeber 2, OrHeber 3, OrMammoth and
Borrower).

          "Additional Material Heber Real Property Interests" means,
collectively, the real property interests created by or memorialized in the
documents described under the heading "Additional Heber Material Real Property
Interests" in section F of Exhibit G-6 to the Credit Agreement.

          "Additional Mammoth Leases" means the Federal Geothermal Resources
Leases granted by the United States of America, as lessor, acting through the
Bureau of Land Management, Serial Files CACA 14404, CACA 14405, CACA 14406 and
CACA 14407.

          "Additional Project Documents" means any contracts or agreements
related to the leasing, maintenance, repair, operation or use of the Projects
entered into by any Project Company, or assigned to any Project Company,
subsequent to the Closing Date; provided that all such contracts and agreements
providing (a) for the payment by a Project Company of less than $500,000 per
annum individually, or the provision to a Project Company of less than $500,000
per annum individually in value of goods or services, or (b) for a scheduled
term of one year or less shall be deemed not to constitute an Additional Project
Document.

          "Adjusted LIBO Rate" means the simple average of the rates appearing
on the display referred to as the "LIBOR Page" on Reuters Monitor Money Rates
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London, England time, on the day
which is two Banking Days prior to the first day of the applicable Interest
Period, at the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then

                                        1

the "Adjusted LIBO Rate" for such Interest Period shall be the average rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
of $50,000,000 and for a maturity comparable to such Interest Period are offered
by leading banks in immediately available funds in the London interbank
eurocurrency market at approximately 11:00 a.m., London Time, on the day which
is two Banking Days prior to the first day of the applicable Interest Period.

          "Administrative Agent" means Beal Bank, S.S.B., acting in its capacity
as administrative agent for the Secured Parties under the Credit Documents.

          "Adverse PUHCA Event" means that Borrower or any of its "affiliates"
(within the meaning of Section 2(a)(11)(B) of PUHCA) becomes an "electric
utility company", "public utility company", "holding company" or a "subsidiary
company" of a "holding company" within the meaning of PUHCA subject to, and not
exempt from, regulation under PUHCA at a time at which applicable provisions of
PUHCA, or any successor statute thereof, and the rules and regulations
thereunder are in effect and such event or occurrence could reasonably be
expected to have a Material Adverse Effect or a material and adverse effect on
Administrative Agent or any of the Banks.

          "Affected Bank" has the meaning given in Section 2.9.1 of the Credit
Agreement.

          "Affiliate" of a specified Person means any other Person that (a)
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the Person specified, or (b) only
with respect to matters relating to PUHCA, owns or controls with the power to
vote 10% or more of the equity interest in the Person specified or 10% or more
of any class of voting securities of the Person specified. When used with
respect to Borrower, "Affiliate" shall include Sponsor, the Guarantors, the
Non-Guarantors, the Operators and any Affiliate thereof (other than Borrower).

          "Amor" means Amor 14 Corporation, a Delaware corporation.

          "Amortization Schedule" means the schedule for repayment of the
principal of the Loans as set forth on Exhibit I to the Credit Agreement.

          "Applicable Post-Closing Period" means (a) with respect to the updated
ALTA survey required to be provided for the SIGC Project pursuant to Section
5.20 of the Credit Agreement, the three-month period immediately following the
Closing Date (provided, that if Borrower is diligently proceeding to provide
such survey within such three-month period and is unable to do so, then Borrower
shall have an additional 30 days to provide such survey), (b) with respect to
the ALTA lender's title insurance policy (without a survey exception) required
to be provided for the SIGC Project pursuant to Section 5.20 of the Credit
Agreement, the four-month period immediately following the Closing Date, (c)
with respect to the updated ALTA surveys required to be provided for the HGC
Project and the HFC Project pursuant to Section 5.20 of the Credit Agreement,
the six-month period immediately following the Closing Date (provided, that if
Borrower is diligently proceeding to provide such survey within such six-month
period and is unable to do so, then Borrower shall have an additional 30 days to
provide such surveys), (d) with respect to the updated ALTA lender's title
insurance policies (without a survey exception) required to be provided for the
HGC Project and the HFC Project pursuant to Section 5.20 of the

                                        2

Credit Agreement, the twelve-month period immediately following the Closing
Date, and (e) with respect to the Mammoth Project, the nine-month period
immediately following the Closing Date.

          "Average Debt Service Coverage Ratio" means, with respect to any
period, the ratio of (a) Operating Cash Available for Debt Service during such
period to (b) principal and interest on the Loans due during such period.

          "Bank" or "Banks" means Beal Bank, S.S.B. and any other similar
financial institutions (including any insurance company or other financial
institution (whether a corporation, partnership, trust or other entity) that is
(a) engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of business, (b) reasonably experienced in finance
transactions similar to the financing contemplated by the Credit Documents, and
(c) capable of advancing Loans, and in each case having total assets in excess
of $100,000,000 that are or become parties to the Credit Agreement and their
successors and assigns, including each Bank.

          "Banking Day" means any day other than a Saturday, Sunday or other day
on which banks are or Administrative Agent is authorized or required to be
closed in the State of California, State of Nevada, State of New York or the
State of Texas and, where such term is used in any respect relating to a LIBOR
Loan, which is also a day on which dealings in Dollar deposits are carried out
in the London interbank market.

          "Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York with jurisdiction over the bankruptcy cases of
each of the Reorganizing Debtors.

          "Bankruptcy Event" shall be deemed to occur, with respect to any
Person, if that Person shall institute a voluntary case seeking liquidation or
reorganization under the Bankruptcy Law, or shall consent to the institution of
an involuntary case thereunder against it; or such Person shall file a petition
or consent or otherwise institute any similar proceeding under any other
applicable Federal or state law, or shall consent thereto; or such Person shall
apply for, or consent or acquiesce to, the appointment of, a receiver,
administrator, administrative receiver, liquidator, sequestrator, trustee or
other officer with similar powers for itself or any substantial part of its
assets; or such Person shall make a general assignment for the benefit of its
creditors; or such Person shall admit in writing its inability to pay its debts
generally as they become due; or if an involuntary case shall be commenced
seeking liquidation or reorganization of such Person under the Bankruptcy Law or
any similar proceedings shall be commenced against such Person under any other
applicable Federal or state law and (a) the petition commencing the involuntary
case is not timely controverted, (b) the petition commencing the involuntary
case is not dismissed within 90 days of its filing, (c) an interim trustee is
appointed to take possession of all or a portion of the property, and/or to
operate all or any part of the business of such Person and such appointment is
not vacated within 90 days, or (d) an order for relief shall have been issued or
entered therein; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, administrator, administrative
receiver, liquidator, sequestrator, trustee or other officer having similar
powers, over such Person or all or a part of its property

                                        3

shall have been entered; or any other similar relief shall be granted against
such Person under any applicable Bankruptcy Law.

          "Bankruptcy Law" means Title 11, United States Code, and any other
state or federal insolvency, reorganization, moratorium or similar law for the
relief of debtors, or any successor statute.

          "Base Rate" means the greater of (a) the prime lending rate published
from time to time in the eastern edition of the Wall Street Journal or (b) the
Federal Funds Rate plus 0.50%. The Base Rate may not necessarily be the highest
or lowest rate of interest charged by Administrative Agent to its commercial
borrowers.

          "Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate.

          "Blended Debt Service Coverage Ratio" means the ratio of (a) with
respect to each quarterly period preceding any applicable Principal Repayment
Date, the sum of (i) Operating Cash Available for Debt Service during such
period plus (ii) with respect to each quarterly period which is after the
applicable Principal Repayment Date but prior to January 1, 2005, projected
Operating Cash Available for Debt Service during such period (as set forth in
the Projections) to (b) the sum of (i) with respect to each quarterly period
preceding any applicable Principal Repayment Date, principal and interest on the
Loans due during such period plus (ii) with respect to each quarterly period
which is after the applicable Principal Repayment Date but prior to January 1,
2005, projected principal and interest on the Loans due during such period (as
set forth in the Projections).

          "Borrower" means OrCal Geothermal Inc., a Delaware corporation.

          "Borrowing" means a borrowing by Borrower of any Loan.

          "Calculation Date" means the date corresponding to a Principal
Repayment Date which is one Banking Day after the calculations, financial
statements or other materials (if any) as may be reasonably requested by
Administrative Agent to enable it to verify the relevant Average Debt Service
Coverage Ratio have been delivered to, and the calculation of the Average Debt
Service Coverage Ratio therein has been verified by, Administrative Agent.

          "Capital Adequacy Requirement" has the meaning given in Section 2.6.4
of the Credit Agreement.

          "Capital Expenditures Budget" has the meaning given in Section 5.11.2
of the Credit Agreement.

          "Capital Expenditures Payment Account" has the meaning given in
Section 1.1 of the Depositary Agreement.

          "Change of Law" has the meaning given in Section 2.6.2 of the Credit
Agreement.

                                        4

          "Close of Escrow" has the meaning given in Section 3.2 of the Credit
Agreement.

          "Closing Date" has the meaning given in Section 3.1 of the Credit
Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Collateral" has the meaning given in each of the Collateral
Documents.

          "Collateral Documents" means each Deed of Trust, each Pledge
Agreement, each Security Agreement, the Depositary Agreement, each Consent, and
any fixture filings, financing statements, or other similar documents filed,
recorded or delivered in connection with the foregoing.

          "Commitment Letter" means that certain Commitment Letter, dated as of
November 14, 2003 (as amended on November 20, 2003), by and among Beal Bank,
S.S.B., Sponsor and Borrower.

          "Commitments" means, with respect to each Bank, such Bank's Senior
Loan Commitment, and with respect to all Banks, the Total Senior Loan
Commitment.

          "Confirmation of Interest Period Selection" has the meaning given in
Section 2.1.2(c)(ii) of the Credit Agreement.

          "Confirmation Order" means that certain Findings of Fact, Conclusions
of Law and Order under 11 U.S.C. Section 1129 and Rule 3020 of the Federal Rules
of Bankruptcy Procedure (I) Confirming the Heber Debtors' Third Amended Joint
Plan of Reorganization under Chapter 11 of the Bankruptcy Code and (II)
Approving the Sale of Certain Interests to the Successful Bidder, dated November
21, 2003, entered by the United States Bankruptcy Court, Southern District of
New York.

          "Connection Agreements" means the SIGC Connection Agreement and the
HGC Connection Agreement.

          "Consents" means the consents specified on Exhibit E-2 to the Credit
Agreement and any other third party consents to the assignments contemplated by
the Credit Documents.

          "Constellation Entities" means CD Mammoth Lakes I, Inc. and CD Mammoth
Lakes II, Inc., or any successors or assigns of such parties (other than any
Loan Party or Affiliate thereof) in their capacity as, collectively, the direct
holders of 50% of the ownership interests of Mammoth Lakes.

          "Covanta" means Covanta Energy Corporation, a Delaware corporation.

          "Credit Agreement" means the Credit Agreement, dated as of December
18, 2003, by and among Borrower, Administrative Agent, and the Banks.

          "Credit Documents" means the Credit Agreement, the Notes, the
Collateral Documents, the DSR Letter of Credit (if any), the Escrow Agreement,
the Fee Letter, the

                                        5

Subordination Agreements, the Sponsor Guaranty, the Subsidiary Guaranties, the
Ormat Industries Letter and any other loan or security agreements or letter
agreement or similar agreement, entered into by Administrative Agent, Depositary
Agent or any Secured Party, on the one hand, and one or more Loan Parties, on
the other hand, in connection with the transactions contemplated by the Credit
Documents.

          "Debt" of any Person at any date means, without duplication, (a) all
obligations (including contingent obligations) of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
and other accrued expenses arising in the ordinary course of business which in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person, (d) all obligations of such Person under leases which are or
should be, in accordance with GAAP, recorded as capital leases in respect of
which such Person is liable, (e) all deferred obligations of such Person to
reimburse any bank or other Person in respect of amounts paid or advanced under
a letter of credit or other instrument, (f) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by such Person,
(g) all obligations under Interest Rate Agreements, and (h) all Debt of others
guaranteed directly or indirectly by such Person or as to which such Person has
an obligation substantially the economic equivalent of a guarantee.

          "Debt Service Reserve Account" has the meaning given in Section 1.1 of
the Depositary Agreement.

          "Deeds of Trust" means the following documents, each substantially in
the form of Exhibit D-l to the Credit Agreement: (a) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing, dated as of the
Closing Date, between HGC and Chicago Title Insurance Company, as trustee, for
the benefit of Administrative Agent, (b) the Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing, dated as of the Closing Date, between HFC
and Chicago Title Insurance Company, as trustee, for the benefit of
Administrative Agent, and (c) each Deed of Trust entered into after the Closing
Date pursuant to Section 5.17 or 5.18 of the Credit Agreement.

          "Default Rate" has the meaning given in Section 2.4.3 of the Credit
Agreement.

          "Depositary Agent" means Hudson United Bank, not in its individual
capacity but solely as depositary agent, bank and securities intermediary under
the Depositary Agreement.

          "Depositary Agreement" means the Depositary Agreement, dated as of the
Closing Date, among Borrower, each Guarantor, Administrative Agent and
Depositary Agent.

          "Distribution Suspense Account" has the meaning given in Section 1.1
of the Depositary Agreement.

          "Dollars" and "$" means United States dollars or such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts in the United States of America.

                                        6

          "DSR Letter of Credit" has the meaning given in Section 1.1. of the
Depositary Agreement.

          "DSR Minimum Balance" means, for any quarterly period, an amount equal
to all principal and interest in respect of the Loans due or to become due
within such period.

          "Edison" means Southern California Edison Company, a California
corporation.

          "Eminent Domain Proceeds" has the meaning given in Section 3.7.1 of
the Depositary Agreement.

          "Energy I" means Covanta SIGC Energy, Inc., a Delaware corporation.

          "Energy II" means Covanta SIGC Energy II, Inc., a California
corporation.

          "Environmental Claim" means any and all judicial proceedings or
administrative enforcement proceedings claiming or seeking to impose or recover
liabilities, losses, administrative, regulatory or judicial actions, suits,
demands, decrees, claims, Liens, judgments, warning notices, notices of
noncompliance or violation, investigations, proceedings, removal or remedial
actions or orders, or damages (foreseeable and unforeseeable, including
consequential and punitive damages), penalties, fees, out-of-pocket costs,
expenses, disbursements or attorneys' or consultants' fees, relating in any way
to (a) a violation or alleged violation of any Hazardous Substance Law or Permit
issued under any Hazardous Substance Law or (b) a Release or threatened Release
of Hazardous Substances.

          "Environmental Reports" means, collectively, (a) the Phase I
Environmental Site Assessment Update, Mammoth-Pacific, L.P., Properties (MPI,
MPII and PLESI), Mono County, California, prepared by Environmental Management
Associates, Inc. and dated November 2003, and (b) the Phase I Environmental Site
Assessment Update, Heber Geothermal Plant/SIGC Geothermal Plant and Associated
Geothermal Properties, Imperial County, California, prepared by Environmental
Management Associates, Inc. and dated November 2003.

          "Equity Funds" means any cash capital contribution provided or
required to be provided by Sponsor to Borrower.

          "Equity Selling Debtors" means Covanta Heber Field Energy, Inc., Heber
Field Energy II, Inc., ERC Energy, Inc., ERC Energy II, Inc., Heber Loan
Partners, and Covanta Energy Americas, Inc.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

          "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with Borrower, any
Guarantor or Non-Guarantor under Section 52 or 414 of the Code or Title IV of
ERISA.

          "ERISA Plan" means any employee benefit plan (including any
Multiemployer Plan) under Section 3(3) of ERISA (a) maintained by Borrower, any
Guarantor or Non-

                                        7

Guarantor or any ERISA Affiliate, or to which any of them contributes or is
obligated to contribute, or has contributed or been obligated to contribute, or
has any liability, and (b) covered by Title IV of ERISA or to which Section 302
of ERISA, Section 412 of the Code or Subtitle J of the Code applies.

          "Escrow Agreement" has the meaning given in Section 3.1.24 of the
Credit Agreement.

          "Event of Default" has the meaning given in Section 7.1 of the Credit
Agreement.

          "Event of Eminent Domain" means any compulsory transfer or taking by
condemnation, eminent domain or exercise of a similar power, or transfer under
threat of such compulsory transfer or taking, of any part of the Collateral, by
any agency, department, authority, commission, board, instrumentality or
political subdivision of the State of California, the United States or another
Governmental Instrumentality having jurisdiction.

          "Federal Funds Rate" means, for any day, the weighted average of the
per annum rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers as published by the
Federal Reserve Bank of New York for such day (or, if such rate is not so
published for any day, the average rate charged by Administrative Agent on such
day on such transactions as determined by Administrative Agent).

          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.

          "Fee Letter" means that certain letter agreement regarding fees, dated
as of November 14, 2003 (as amended on November 20, 2003), by and among Beal
Bank, S.S.B., Sponsor and Borrower.

          "FERC" means the Federal Energy Regulatory Commission and its
successors.

          "FPA" means the Federal Power Act, excluding Sections 1-18, 21-30,
202(c), 210-214, 305(c) and any necessary enforcement provision of Part III of
the Act with regard to the foregoing sections.

          "Funding Account" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "Funds Flow Memorandum" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "GAAP" means generally accepted accounting principles in the United
States of America.

          "GE Buyout Conditions" means (a) OrHeber 1 shall have acquired the
SIGC Project from Owner Participant pursuant to the terms of the Purchase
Agreement, dated as of November 14, 2003, by and between OrHeber 1 (as assignee
of Ormat Technologies) and Owner Participant (without giving effect to any
amendments or waivers thereto which have not been

                                        8

approved in writing by Administrative Agent), (b) each of the actions (including
all actions relating to the creation of a valid and perfected Lien in favor of
Administrative Agent on the assets so acquired by OrHeber 1) described in
Sections 5.17(i)-(iv) of the Credit Agreement shall have been completed to
Administrative Agent's satisfaction (other than the actions described in Section
5.17(iv)(E) of the Credit Agreement relating to surveys which shall be completed
during the Applicable Post-Closing Period), (c) the delivery by Standard &
Poor's Corporate Value Consulting of an appraisal report, in form and substance
reasonably satisfactory to Administrative Agent, which concludes that, after
giving effect to the satisfaction of the GE Buyout Conditions and the related
Mammoth Collateral Release, the aggregate fair market value of the SIGC Project,
HFC Project and HGC Project is equal to or greater than $206,000,000, and (d)
the delivery by Borrower to Administrative Agent of a certificate, in form and
substance reasonably satisfactory to Administrative Agent, certifying that (i)
no Potential Event of Default relating to the SIGC Project exists, (ii) no Event
of Default exists and (iii) each of the GE Buyout Conditions have been
satisfied.

          "GE Lease" means the Lease Agreement dated September 1, 1993 between
SIGC and Owner Trustee, and all related sale lease-back credit documents entered
into in connection therewith.

          "GECC" means General Electric Capital Corporation, a New York
corporation.

          "GECC Liens" means the Liens of GECC under the GE Lease.

          "GeothermEx Report" means the report of GeothermEx, Inc. dated
November 2003 and titled "An Assessment of Resources Supply for Power Projects
at Mammoth and Heber Geothermal Fields, California".

          "Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, bylaws, partnership agreement,
operating agreement or other organizational or governing documents of such
Person.

          "Governmental Instrumentality" means any national, state or local
government, any political subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory instrumentality, authority,
body, agency, bureau or entity, (including any zoning authority, FERC, the
Securities Exchange Commission, the Comptroller of the Currency or the Federal
Reserve Board, any central bank or any comparable authority) or any arbitrator
with authority to bind a party at law.

          "Governmental Rule" means any law, rule, regulation, ordinance, order,
code interpretation, treaty, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Instrumentality.

          "Guarantors" means HFC, HGC, OrHeber 1 and OrMammoth; provided that
(a) as of and after any Mammoth Ownership Event, the term "Guarantors" shall
include Mammoth Lakes and (b) as of and after any Lease Buyout, the term
"Guarantors" shall include SIGC, ORNI, OrHeber 2 and OrHeber 3.

                                        9

          "Hazardous Substances" means (statutory acronyms and abbreviations
having the meaning given them in the definition of "Hazardous Substances Laws")
substances defined as "hazardous substances," "pollutants" or "contaminants" in
Section 101 of the CERCLA; those substances defined as "hazardous waste,"
"hazardous materials" or "regulated substances" by the RCRA; those substances
designated as a "hazardous substance" pursuant to Section 311 of the CWA; those
substances defined as "hazardous materials" in Section 103 of the HMTA; those
substances regulated as a hazardous chemical substance or mixture or as an
imminently hazardous chemical substance or mixture pursuant to Section 6 or 7 of
the TSCA; those substances defined as "contaminants" by Section 1401 of the
SDWA, if present in excess of permissible levels; those substances regulated by
the Oil Pollution Act; those substances defined as a pesticide pursuant to
Section 2(u) of the FIFRA; those substances defined as a source, special nuclear
or by-product material by Section 11 of the AEA; those substances defined as
"residual radioactive material" by Section 101 of the UMTRCA; those substances
defined as "toxic materials" or "harmful physical agents" pursuant to Section 6
of the OSHA); those substances defined as hazardous wastes in 40 C.F.R. Part
261.3; those substances defined as hazardous waste constituents in 40 C.F.R.
Part 260.10, specifically including Appendix VII and VIII of Subpart D of 40
C.F.R. Part 261; those substances designated as hazardous substances in 40
C.F.R. Parts 116.4 and 302.4; those substances defined as hazardous substances
or hazardous materials in 49 C.F.R. Part 171.8; those substances regulated as
hazardous materials, hazardous substances, or toxic substances in 40 C.F.R. Part
1910; those substances regulated as hazardous materials, hazardous substances,
or toxic substances in any other Hazardous Substances Laws; and those substances
regulated as hazardous materials, hazardous substances, or toxic substances in
the regulations adopted and publications promulgated pursuant to said laws,
whether or not such regulations or publications are specifically referenced
herein.

          "Hazardous Substances Law" means any of:

          (i) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA");

          (ii) the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.) ("Clean Water Act" or "CWA"):

          (iii) the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.) ("RCRA");

          (iv) the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.)
("AEA");

          (v) the Clean Air Act (42 U.S.C. Section 7401 et seq.) ("CAA");

          (vi) the Emergency Planning and Community Right to Know Act (42 U.S.C.
Section 11001 et seq.) ("EPCRA");

          (vii) the Federal Insecticide, Fungicide, and Rodenticide Act (7
U.S.C. Section 136 et seq.) ("FIFRA");

          (viii) the Oil Pollution Act of 1990 (P.L. 101-380, 104 Stat. 486);

                                       10

          (ix) the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.)
("SDWA");

          (x) the Surface Mining Control and Reclamation Act of 1974 (30 U.S.C.
Section 1201 et seq.) ("SMCRA");

          (xi) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.)
("TSCA");

          (xii) the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.) ("HMTA");

          (xiii) the Uranium Mill Tailings Radiation Control Act of 1978 (42
U.S.C. Section 7901 et seq.) ("UMTRCA");

          (xiv) the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.) ("OSHA");

          (xv) the California Hazardous Waste Control Act, Cal. Health & Safety
Code Section 25100, et seq.;

          (xvi) the California Hazardous Substance Act, Cal. Health & Safety
Code Section 25100, et seq.;

          (xvii) the Porter-Cologne Water Quality Control Act, Cal. Water Code
Section 13000, et seq.;

          (xviii) California Public Resources Code Section 25500, et seq. (to
the extent relating to environmental review of power generating facilities and
sites);

          (xix) California Health & Safety Code Section 39000, et seq. (relating
to air pollution control of stationary sources);

          (xx) California Fish & Game Code Section 1600, et seq. (relating to
protection of stream beds);

          (xxi) California Endangered Species Act (Cal. Fish & Game Code Section
2050, et seq.);

          (xxii) California Health & Safety Code Section 25280, et seq.
(relating to underground storage tanks);

          (xxiii) California Health & Safety Code Section 25500, et seq.
(relating to hazardous materials response plans and inventory and Risk
Management Plans);

          (xxiv) California Integrated Waste Management Act of 1989 (Cal. Public
Resources Code Section 40000, et seq.);

          (xxv) California Environmental Quality Act (Cal. Public Resources Code
Section 21000, et seq.);

                                       11

          (xxvi) California Safe Drinking Water Act (Cal. Health & Safety Code
Section 116270, et seq.);

          (xxvii) Surface Mining and Reclamation Act of 1975 (Cal. Public
Resources Code Section 2710, et seq.);

          (xxviii) IID Governmental Rules; and

          (xxix) all other Federal, state and local Governmental Rules relating
to the protection of human health or the environment or which otherwise govern
Hazardous Substances, and the regulations adopted and publications promulgated
pursuant to all such foregoing laws.

          "Heber O&M Agreement" means the Operation and Maintenance Agreement,
dated as of the Closing Date, by and between OrHeber 1, HGC, HFC and Heber
Operator.

          "Heber Operator" means Sponsor.

          "HFC" means Heber Field Company, a California general partnership.

          "HFC Project" means the geothermal fluid facility located in Heber,
California and owned by HFC.

          "HGC" means Heber Geothermal Company, a California general
partnership.

          "HGC Connection Agreement" means the Plant Connection Agreement dated
July 31, 1985 between IID and HGC.

          "HGC Geothermal Sales Agreement" means the Geothermal Sales Agreement
dated December 18, 1991 between U.S. Trust Company and HGC, as amended by the
First Amendment to Geothermal Sales Agreement dated January 12, 1993 between
U.S. Trust Company and HGC and the Second Amendment to Geothermal Sales
Agreement dated September 4, 1996 between U.S. Trust Company and HGC, and as
assigned by U.S. Trust Company to HGC pursuant to the HFC Purchase and Sale
Agreement dated as of December 17, 1999 between HGC and GECC.

          "HGC Interconnection Agreement" means the Interconnection Agreement
dated August 12, 1985 between Edison and HGC.

          "HGC Power Purchase Agreement" means the Power Purchase and Sales
Agreement dated as of August 26, 1983 between Chevron U.S.A. Inc. and Edison, as
assigned by Chevron U.S.A. Inc. to HGC by the Assignment and Assumption
Agreement dated August 26, 1983, and as amended by the Amendment No. 1 to the
Power Purchase and Sales Agreement dated December 11, 1984 between HGC and
Edison, the Settlement Agreement and Amendment No. 2 to the Power Purchase
Contract dated August 7, 1995 between HGC and Edison, the Agreement Addressing
Renewable Energy Pricing and Payment Issues dated June 19, 2001 between HGC and
Edison, and the Amendment No. 1 to Agreement Addressing Renewable Energy Pricing
and Payment Issues dated November 30, 2001 between HGC and Edison.

                                       12

          "HGC Project" means the 52 MW geothermal electric power project
located in Heber, California and owned by HGC.

          "HGC Water Supply Agreement" means the Water Supply Agreement, dated
August 16, 1994, between IID and HGC.

          "IID" means Imperial Irrigation District, a California irrigation
district.

          "Independent Consultants" means, collectively, the Insurance
Consultant, Independent Engineer, GeothermEx, Inc., Pace Global Energy Services,
LLC, Environmental Management Associates and Standard & Poor's Corporate Value
Consulting.

          "Independent Engineer" means Stone & Webster Management Consultants,
Inc. or, at any time after the Closing Date, such other independent engineer or
engineering firm as may be appointed by Administrative Agent.

          "Independent Engineer's Report" means the report of the Independent
Engineer dated November 13, 2003 and titled "Independent Technical Evaluation of
Covanta Geothermal Assets".

          "Initial Capital Expenditures Budget" means the capital expenditures
plan and budget, detailed by quarter, of anticipated capital expenditures
(including reasonable allowance for contingencies) applicable to the relevant
Project for the 2004 and 2005 calendar years, attached as Exhibit G-l to the
Credit Agreement.

          "Initial Operating Budget" means the operating plan and budget,
detailed by month, of anticipated Project Revenues, such budget to include
scheduled debt service, proposed dividend distributions, proposed Major
Maintenance, proposed reserves and all anticipated O&M Costs (including
reasonable allowance for contingencies) applicable to the relevant Project for
the 2004 calendar year, attached as Exhibit G-2 to the Credit Agreement.

          "Insurance Consultant" means Marsh USA, Inc.

          "Insurance Proceeds" has the meaning given in Section 3.7.1 of the
Depositary Agreement.

          "Insured Heber Real Property Interests" means, collectively, the real
property interests created by or memorialized in the documents described under
the headings (a) "Insured Geothermal Leases" in section A of Exhibit G-6 to the
Credit Agreement, (b) "Insured Surface Leases" in section B of Exhibit G-6 to
the Credit Agreement, (c) "Insured Easements" in section C of Exhibit G-6 to the
Credit Agreement, (d) "Insured Heber Fee Title Interests" in section D of
Exhibit G-6 to the Credit Agreement and (e) "Insured SIGC Interests" in section
E of Exhibit G-6 to the Credit Agreement.

          "Insured Real Property Interests" means, collectively, (i) the Insured
Heber Real Property Interests, (ii) the Mammoth G-l and G-2 Geothermal Lease and
(iii) the Mammoth G-3 Geothermal Lease.

                                       13

          "Interconnection Agreements" means the HGC Interconnection Agreement,
the Mammoth G-2 Interconnection Agreement and the Mammoth G-3 Interconnection
Agreement.

          "Interest Period" means, with respect to any LIBOR Loan, the
twelve-month period which commences on the first day of such Loan, or the
effective date of any conversion (as the case may be) and ends on the last day
of such twelve-month period; provided that no single day shall be deemed to be a
part of two Interest Periods.

          "Interest Rate" means the Base Rate or the Adjusted LIBO Rate, as the
case may be.

          "Interest Rate Agreements" means one or more interest rate swap
agreements, caps, collars, or other master interest rate hedging mechanisms.

          "Lease Buyout" has the meaning given in Section 5.17 of the Credit
Agreement.

          "Lease Financing" means the provision of senior secured credit
facilities for the purpose of financing the Lease Buyout.

          "Lease Solution" has the meaning given in Section 5.17 of the Credit
Agreement.

          "Lease Suspense Account" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "Legal Requirements" means, as to any Person, any requirement under a
Permit and any Governmental Rule, in each case applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
property is subject.

          "Lending Office" means, with respect to any Bank, the office
designated in writing as such to Administrative Agent and Borrower from time to
time.

          "LIBOR Loan" has the meaning given in Section 2.1.1(b)(i) of the
Credit Agreement.

          "Lien" means, with respect to any property or asset, any mortgage,
deed of trust, lien, pledge, charge, security interest, or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected or effective under applicable law, as well as the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

          "Liquidation Costs" has the meaning given in Section 2.7 of the Credit
Agreement.

          "Loan Party" means Ormat Technologies, Sponsor, Borrower, each
Guarantor, each Non-Guarantor and any Affiliate of Sponsor (other than Ormat
Industries) which may become a party to any Credit Document.

          "Loans" has the meaning given in Section 2.1.1(a) of the Credit
Agreement.

                                       14

          "Loss Proceeds" has the meaning given in Section 3.7.1(b) of the
Depositary Agreement.

          "Loss Proceeds Account" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "Major Casualty Event" has the meaning given in Section 3.7.2(b) of
the Depositary Agreement.

          "Major Condemnation Casualty Event" has the meaning given in Section
3.7.2(b) of the Depositary Agreement.

          "Major Insurance Casualty Event" has the meaning given in Section
3.7.2(b) of the Depositary Agreement.

          "Major Maintenance" means labor, materials and other direct expenses
for any overhaul of, or major maintenance procedure for, any of the Projects
which requires significant disassembly or shutdown of such Project or any
material portion thereof, (a) in accordance with Prudent Utility Practices, (b)
pursuant to manufacturers' recommendations or (c) pursuant to any applicable
Legal Requirement.

          "Major Project Documents" means the Power Purchase Agreements, the O&M
Agreements, the Water Supply Agreements, the SIGC Transmission Service
Agreement, the Connection Agreements, the Interconnection Agreements, the HGC
Geothermal Sales Agreement, the SIGC Participation Agreement, the SIGC Escrow
Agreement, the GE Lease, the SIGC Sublease, the Material Real Property
Documents, the Acquisition Agreement, and, unless otherwise agreed by
Administrative Agent prior to its execution and delivery, each Additional
Project Document.

          "Major Project Participants" means, without duplication, the Project
Companies, the Operators, Edison, Covanta, IID, GECC (until the Lease Buyout),
Owner Trustee (until the Lease Buyout), Owner Participant (until the Lease
Buyout), First Trust of New York (until the Lease Buyout), and any counterparty
to any Additional Project Document which is a Major Project Document.

          "Majority Banks" means, at any time, Banks having Proportionate Shares
which in the aggregate exceed 51%.

          "Make-Whole Premium" has the meaning given in Section 2.1.6(b)(ii) of
the Credit Agreement.

          "Mammoth Collateral Release" shall have the meaning given in Section
3.3.1 of the Credit Agreement.

          "Mammoth G-l and G-2 Geothermal Lease" means the Lease dated August
31, 1983 between Magma Power Company, as successor in interest to Magma Energy,
Inc., and Holt Geothermal Company, as assigned by Holt Geothermal Company to
Mammoth-Pacific on August 31, 1983, and as amended by the First Amendment to
Geothermal Lease dated April 30,

                                       15

1987, as further amended by the Second Amendment to Geothermal Lease dated
January 1, 1990 and as further amended by the Third Amendment to Geothermal
Lease dated April 12, 1991.

          "Mammoth G-l Power Purchase Agreement" means the Amended and Restated
Power Purchase and Sales Agreement Between Mammoth-Pacific and Southern
California Edison Company dated as of December 2, 1986 between Mammoth-Pacific
and Edison, as amended by the Amendment No. 1 to the Amended and Restated Power
Purchase and Sales Agreement Between Mammoth Pacific and Southern California
Edison Company dated May 18, 1990 between Mammoth Pacific and Edison, and as
assigned by Mammoth Pacific to Mammoth Lakes, and as further amended by the
Agreement Addressing Renewable Energy Pricing and Payment Issues dated June 19,
2001 between Mammoth Lakes and Edison and the Amendment No. 1 to Agreement
Addressing Renewable Energy Pricing and Payment Issues dated November 30, 2001
between Mammoth Lakes and Edison, and the clarification letters by Edison re:
contract terms dated November 27, 2001 and November 29, 2001.

          "Mammoth G-2 Interconnection Agreement" means the Interconnection
Facilities Agreement ("Agreement") Seller Owned and Operated Facility dated
October 27, 1989 between Mammoth Pacific and Edison, attached as Appendix A to
the Mammoth G-2 Power Purchase Agreement, as assigned by Mammoth Pacific to
Mammoth Lakes.

          "Mammoth G-2 Power Purchase Agreement" means the Power Purchase
Contract Between Southern California Edison Company and Mammoth Pacific (Casa
Diablo Geothermal II) dated as of April 15, 1985 between Mammoth Pacific and
Edison, as amended by the Amendment No. 1 to the Power Purchase Contract Between
Southern California Edison Company and Mammoth Pacific (Mammoth Pacific II
Project) dated October 27, 1989 between Mammoth Pacific and Edison and the
Amendment No. 2 to the Power Purchase Contract Between Southern California
Edison Company and Mammoth Pacific dated December 20, 1989 between Mammoth
Pacific and Edison, and as assigned by Mammoth Pacific to Mammoth Lakes, and as
further amended by the Agreement Addressing Renewable Energy Pricing and Payment
Issues dated June 19, 2001 between Mammoth Lakes and Edison, the Amendment No. 1
to Agreement Addressing Renewable Energy Pricing and Payment Issues, dated
November 30, 2001 between Mammoth Lakes and Edison, and the clarification
letters by Edison re: contract terms, dated November 27, 2001 and November
29, 2001.

          "Mammoth G-3 Geothermal Lease" means, collectively, the Federal
Geothermal Resources Leases granted by the United States of America, as lessor
acting through the Bureau of Land Management, Serial Files CACA 14408 and CACA
11667.

          "Mammoth G-3 Interconnection Agreement" means the Interconnection
Facilities Agreement ("Agreement") Seller Owned and Operated Facility, dated
October 27, 1989, between Edison and Pacific Lighting Energy Systems, attached
as Appendix A to the Mammoth G-3 Power Purchase Agreement, as assigned by
Pacific Lighting Energy Systems to Mammoth Lakes.

          "Mammoth G-3 Power Purchase Agreement" means the Power Purchase
Contract Between Southern California Edison Company and Santa Fe Geothermal,
Inc. (Casa Diablo)

                                       16

dated as of April 16, 1985 between Edison and Santa Fe Geothermal, Inc., as
assigned by Santa Fe Geothermal, Inc. to Pacific Lighting Energy Systems, and as
amended by the Amendment No. 1 to Power Purchase Contract Between Southern
California Edison Company and Pacific Lighting Energy Systems (PLES I Project)
dated October 27, 1989 between Edison and Pacific Lighting Energy Systems and
the Amendment No. 2 Power Purchase Contract Between Southern California Edison
Company and Pacific Lighting Energy Systems dated December 20, 1989 between
Edison and Pacific Lighting Energy Systems, as further assigned by Pacific
Lighting Energy Systems to Mammoth Lakes, and as further amended by the
Agreement Addressing Renewable Energy Pricing and Payment Issues dated June 19,
2001 between Mammoth Lakes and Edison, the Amendment No. 1 to Agreement
Addressing Renewable Energy Pricing and Payment Issues dated November 30, 2001
between Mammoth Lakes and Edison, and the clarification letters by Edison re:
contract terms, dated November 27, 2001 and November 29, 2001.

          "Mammoth G-3 Site License" means that certain License for Electric
Power Plant Site Utilizing Geothermal Resources, Serial No. CACA 021918, dated
July 26, 1989, granted by the United States of America, as licensor acting
through the Department of the Interior Bureau of Land Management, and held by
Mammoth Lakes.

          "Mammoth Lakes" means Mammoth-Pacific, L.P., a California limited
partnership.

          "Mammoth O&M Agreement" means the Plant Operating Services Agreement
dated as of January 1, 1995 between Mammoth Lakes and Pacific Power Plant
Operations, as assigned by Pacific Power Plant Operations to Covanta Pacific
Power Plant Operations, Inc. and as further assigned by Covanta Pacific Power
Plant Operations, Inc. to Mammoth Operator.

          "Mammoth Operator" means Sponsor.

          "Mammoth Ownership Event" means an acquisition by OrMammoth of direct
ownership interests of Mammoth Lakes such that OrMammoth owns 100% of the direct
ownership interests of Mammoth Lakes.

          "Mammoth Prepayment Conditions" means (a) the delivery by Borrower to
Administrative Agent of a notice that it intends to effectuate the Mammoth
Collateral Release through the satisfaction of the Mammoth Prepayment
Conditions, (b) the delivery by Borrower of such notice at least three Banking
Days prior to the proposed Mammoth Collateral Release (and, in any event, on or
before February 15, 2004), (c) the deposit by Borrower into the Funding Account
of $28,900,000 (which amount represents the amount of the Loans attributable to
OrMammoth, the Mammoth Project and the related Collateral), (d) the payment by
Borrower to Administrative Agent, on behalf of Banks, of a non-refundable
release fee $1,445,000, and (e) the delivery by Borrower to Administrative Agent
of a certificate, in form and substance reasonably satisfactory to
Administrative Agent, certifying that (i) no Event of Default exists, (ii) since
the Closing Date, no Material Adverse Effect has occurred and is continuing,
(iii) the Collateral proposed to be released pursuant to the Mammoth Collateral
Release will be used to secure the payment of Ormat Technologies', Ormat
Nevada's or Ormat Funding Corp.'s (as the

                                       17

case may be) obligations under its capital markets financing, and (iv) each of
the Mammoth Prepayment Conditions have been satisfied.

          "Mammoth Project" means the 40 MW geothermal electric power project
(comprised of three geothermal plants) located near Mammoth Lakes, California
and owned by Mammoth Lakes.

          "Mandatory Prepayment" has the meaning given in Section 2.1.6(c) of
the Credit Agreement.

          "Material Adverse Effect" means (a) any event or occurrence of
whatever nature which could reasonably be expected to materially and adversely
affect Borrower's, any of the Project Companies' or any of the Major Project
Participants' ability to perform its obligations under a Project Document, where
such inability could reasonably be expected to have a material and adverse
affect on the leasing, operation or ownership of any of the Projects, (b) any
event or occurrence of whatever nature which could reasonably be expected to
materially and adversely affect any Loan Party's ability to perform its
obligations under the Credit Documents, and (c) any event or occurrence of
whatever nature which could reasonably be expected to materially and adversely
affect the validity or priority of the Secured Parties' security interests in
the Collateral (viewed on a collective basis for each Project).

          "Material Heber Real Property Interests" means, collectively, the
Insured Heber Real Property Interests and the Additional Material Heber Real
Property Interests.

          "Material Real Property Documents" means, collectively, the documents
that create or memorialize the Material Real Property Interests.

          "Material Real Property Interests" means, collectively, the Insured
Real Property Interests, the Additional Material Heber Real Property Interests
and the Mammoth G-3 Site License.

          "Maturity" or "maturity" means, with respect to any Loan, Borrowing,
interest, fee or other amount payable by Borrower under the Credit Agreement or
the other Credit Documents, the date such Loan, Borrowing, interest, fee or
other amount becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.

          "Maturity Date" means December 18, 2019.

          "Minimum Notice Period" means (a) at least three Banking Days before
the date of any Borrowing (except for the initial Borrowing, which shall be at
least one Banking Day before the date of such initial Borrowing), continuation
or conversion of a Type of Loan resulting in whole or in part in one or more
LIBOR Loans, and (b) at least one Banking Day before any Borrowing or conversion
of a Type of Loan resulting in whole or in part in one or more Base Rate Loans.

          "Monthly Date" means, for any month, the last Banking Day of such
month.

          "Moody's" means Moody's Investors Service, Inc.

                                       18

          "Mortgaged Property" means, with respect to each Deed of Trust, the
"Mortgaged Property" referred to in the granting clause of such Deed of Trust.

          "Multiemployer Plan" means any "Multiemployer Plan" (as such term is
defined in Section 3(37) or 4001(a)(3) of ERISA).

          "Net Worth Covenant" means the covenant set forth in Section 4.7 of
the Sponsor Guaranty.

          "Non-Advancing Bank" has the meaning given in Section 9.12 of the
Credit Agreement.

          "Non-Guarantors" means Mammoth Lakes, ORNI, OrHeber 2, OrHeber 3 and
SIGC; provided that (a) as of and after any Mammoth Ownership Event, the term
"Non-Guarantors" shall not include Mammoth Lakes and (b) as of and after any
Lease Buyout, the term "Non-Guarantors" shall not include SIGC, ORNI, OrHeber 2
and OrHeber 3.

          "Non-Major Casualty Event" has the meaning given in Section 3.7.2(a)
of the Depositary Agreement.

          "Non-Major Condemnation Casualty Event" has the meaning given in
Section 3.7.2(a) of the Depositary Agreement.

          "Non-Major Insurance Casualty Event" has the meaning given in Section
3.7.2(a) of the Depositary Agreement.

          "Non-Material Real Property Interests" means, collectively, any real
property interests held by a Project Company that are not a Material Real
Property Interest.

          "Nonrecourse Persons" has the meaning given in Article 8 of the Credit
Agreement.

          "Note" has the meaning given in Section 2.1.3 of the Credit Agreement.

          "Notice of Borrowing" has the meaning given in Section 2.1.1(b) of
the Credit Agreement.

          "Notice of Conversion of Loan Type" has the meaning given in Section
2.1.5 of the Credit Agreement.

          "O&M Account" has the meaning given in Section 1.1 of the Depositary
Agreement.

          "O&M Agreements" means the Heber O&M Agreement and the Mammoth O&M
Agreement.

          "O&M Costs" for any period, cash amounts incurred and paid by any of
the Project Companies for the operation and maintenance of any of the Projects
or any portion

                                       19

thereof, including (a) premiums for insurance policies, (b) costs of obtaining
any other materials, supplies, utilities or services for any of the Projects,
(c) costs of obtaining, maintaining, renewing and amending Permits, (d)
franchise, licensing, property, real estate, sales and excise taxes, (e) general
and administrative expenses, (f) employee salaries, wages and other
employment-related costs, (g) costs required to be paid by any of the Project
Companies under any Project Document or Credit Document (other than scheduled
debt service), (h) legal and other transaction costs and all other fees payable
to any of the Secured Parties (other than amounts constituting scheduled debt
service), (i) expenditures made in connection with Major Maintenance, and (j)
all other fees and expenses necessary for the continued operation and
maintenance of any of the Projects and the conduct of the business of any of the
Projects, but exclusive in all cases of non-cash charges, including depreciation
or obsolescence charges or reserves therefor, amortization of intangibles or
other bookkeeping entries of a similar nature, and also exclusive of all
interest charges and charges for the payment or amortization of principal of
Debt of any of the Loan Parties. O&M Costs shall not include (i) capital
expenditures (other than capital expenditures made in connection with Major
Maintenance), (ii) payments for restoration or repair of any of the Projects
from the Loss Proceeds Account or (iii) any of the investments described in
Section 6.6(b) of the Credit Agreement.

          "Obligations" means and includes, with respect to any Loan Party, all
loans, advances, debts, liabilities, and obligations, howsoever arising, owed by
such Person to Administrative Agent, Depositary Agent or the Banks of every kind
and description (whether or not evidenced by any note or instrument and whether
or not for the payment of money), direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, pursuant to the terms
of the Credit Agreement or any of the other Credit Documents, including all
interest, reasonable fees, reasonable charges, reasonable expenses, reasonable
attorneys' fees and consultant fees chargeable to such Person and payable by
such Person hereunder or thereunder.

          "Operating Account" has the meaning given in Section 6.14 of the
Credit Agreement.

          "Operating Budget" has the meaning given in Section 5.11.1 of the
Credit Agreement.

          "Operating Cash Available for Debt Service" means, for any period,
Project Revenues during such period minus O&M Costs during such period.

          "Operative Documents" means, collectively, the Credit Documents and
the Project Documents.

          "Operators" means SIGC Operator, Heber Operator and Mammoth Operator.

          "OrHeber 1" means OrHeber 1 Inc., a Delaware corporation and a
wholly-owned direct Subsidiary of Borrower.

          "OrHeber 2" means OrHeber 2 Inc., a Delaware corporation and a
wholly-owned direct Subsidiary of Borrower.

                                       20

          "OrHeber 3" means OrHeber 3 Inc., a Delaware corporation and a
wholly-owned direct Subsidiary of Borrower.

          "OrMammoth" means OrMammoth Inc., a Delaware corporation and a
wholly-owned direct Subsidiary of Borrower.

          "Ormat Industries" means Ormat Industries Ltd., a company registered
under the laws of Israel and the sole shareholder of Ormat Technologies.

          "Ormat Industries Letter" means the letter from Ormat Industries to
Administrative Agent, pursuant to which Ormat Industries shall (a) acknowledge
the transactions contemplated by the Ormat Technologies Subordination Agreement
and the Net Worth Covenant contained in the Sponsor Guaranty, (b) acknowledge
that the Banks are relying on the Ormat Technologies Subordination Agreement and
the Sponsor Guaranty (including the Net Worth Covenant) and (c) agree not to
take any action which could reasonably be expected to result in the violation of
the Ormat Technologies Subordination Agreement or the Net Worth Covenant.

          "Ormat Nevada Subordination Agreement" means the Subordination
Agreement, dated as of the Closing Date, among Sponsor, Borrower and
Administrative Agent, pursuant to which Sponsor shall subordinate its right to
receive payments under any Subordinated Loans.

          "Ormat Technologies" means Ormat Technologies, Inc., a Delaware
corporation, the sole shareholder of Sponsor.

          "Ormat Technologies Subordination Agreement" means the Subordination
Agreement, dated as of the Closing Date, among Sponsor, Ormat Technologies and
Administrative Agent, pursuant to which Ormat Technologies shall subordinate its
right to receive payments under the intercompany loans it has and will make to
Sponsor to the extent necessary for Sponsor to satisfy the Net Worth Covenant.

          "ORNI" means ORNI 10 LLC, a Delaware limited liability company.

          "Other Taxes" has the meaning given in Section 2.4.4(a) of the Credit
Agreement.

          "Outstanding Non-Royalty Claimant" has the meaning given in Section
4.20 of the Credit Agreement.

          "Owner Participant" means Aircraft Services Corporation, a Nevada
corporation.

          "Owner Trustee" means U.S. Trust Company of California, N.A.

          "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

          "Permit" means any action, approval, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from a
Governmental Instrumentality; provided, however, that the Mammoth G-3 Geothermal
Lease, the Mammoth G-3 Site License, the Additional Mammoth Leases and any other
lease or right-of-way issued by

                                       21

the Bureau of Land Management shall not be considered to be "Permits" and shall
be governed by the provisions of the Credit Documents that deal with real
property interests.

          "Permitted Debt" means (a) Debt incurred under the Credit Documents,
(b) Debt associated with the GE Lease, (c) the Subordinated Loans, (d) trade or
other similar Debt incurred in the ordinary course of business (but not for
borrowed money), either not more than 90 days past due or being contested in
good faith, (e) Debt pursuant to the terms of a Project Document (but not for
borrowed money), either not more than 90 days past due or being contested in
good faith, (f) contingent liabilities, to the extent otherwise constituting
Debt, including those relating to (i) the acquisition of goods, supplies or
merchandise in the normal course of business or normal trade credit, (ii) the
endorsement of negotiable instruments received in the normal course of its
business, and (iii) contingent liabilities incurred with respect to any
Operative Document or any Permit related to a Project, (g) obligations in
respect of surety bonds or similar instruments in an aggregate amount not
exceeding $1,500,000 at any one time outstanding and (h) Debt in respect of a
DSR Letter of Credit that is subordinated to the Obligations pursuant to the
subordination terms set forth in Exhibit D-4 to the Credit Agreement.

          "Permitted Investments" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having a maturity
not exceeding one year from the date of issuance, (b) time deposits and
certificates of deposit of any Bank or any domestic or foreign commercial bank
whose outstanding long-term debt is rated at least A-l or the equivalent thereof
by S&P or at least P-l or the equivalent thereof by Moody's having capital and
surplus in excess of $500,000,000 and, in each case, having a maturity not
exceeding 90 days from the date of acquisition, (c) commercial paper issued by
any domestic corporation rated at least A-l or the equivalent thereof by S&P or
at least P-l or the equivalent thereof by Moody's and, in each case, having a
maturity not exceeding 90 days from the date of acquisition, (d) fully secured
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into with any Bank
or bank meeting the qualifications established in clause (b) above, (e)
high-grade corporate bonds rated at least AA or the equivalent thereof by S&P or
at least Aa2 or the equivalent thereof by Moody's and, in each case, having a
maturity not exceeding 90 days from the date of acquisition, and (f) money
market mutual funds whose investment criteria are substantially similar to items
(a) through (e) of this definition.

          "Permitted Liens" means (a) the Liens, rights and interests of
Administrative Agent and any other Secured Party as provided in the Credit
Documents; (b) Liens for any tax, assessment or other governmental charge,
either secured by a bond or other security reasonably acceptable to
Administrative Agent or not yet due or being contested in good faith and by
appropriate proceedings, so long as (i) such proceedings shall not involve any
substantial danger of the sale, forfeiture or loss of any Project, any Site or
any easements, as the case may be, title thereto or any interest therein and
shall not interfere in any material respect with the use or disposition of any
Project, any Site or any easements, (ii) a bond or other security reasonably
acceptable to Administrative Agent has been posted or provided in such manner
and amount as to reasonably assure Administrative Agent that any taxes,
assessments or other charges determined to be due will be promptly paid in full
when such contest is determined, or

                                       22

(iii) adequate cash reserves have been provided therefor; (c) materialmen's,
mechanics', workers', repairmen's, employees' or other like Liens, arising in
the ordinary course of business or in connection with the improvement of any
Project after the Closing Date (or the mechanics' liens referred to in item No.
7 to Schedule 4.10 of the Acquisition Agreement), either for amounts not yet due
or for amounts being contested in good faith and by appropriate proceedings, so
long as (i) such proceedings shall not involve any substantial danger of the
sale, forfeiture or loss of any Project, any Site or any easements, as the case
may be, title thereto or any interest therein and shall not interfere in any
material respect with the use or disposition of any Project, any Site or any
easements, (ii) a bond or other security reasonably acceptable to Administrative
Agent has been posted or provided in such manner and amount as to assure
Administrative Agent that any amounts determined to be due will be promptly paid
in full when such contest is determined, or (iii) adequate cash reserves have
been provided therefor; (d) Liens arising out of judgments or awards so long as
an appeal or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves, bonds or other security reasonably
acceptable to Administrative Agent have been provided or are fully covered by
insurance (subject to a customary deductible); (e) Title Exceptions; (f) Liens,
deposits or pledges in connection with workers' compensation, unemployment
insurance, or other forms of governmental insurance or benefits, or to secure
statutory obligations or performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or for purposes of like general
nature in the ordinary course of its business, not to exceed $1,000,000 in the
aggregate at any time, and with any such Lien to be released as promptly as
practicable; (g) other Liens incident to the ordinary course of business that
are not incurred in connection with the obtaining of any loan, advance or credit
and that do not in the aggregate materially impair the use of the property or
assets of the applicable Loan Party (other than Ormat Technologies) or the value
of such property or assets for the purposes of such business; (h) involuntary
Liens (including a Lien of an attachment, judgment or execution) securing a
charge or obligation, on any of Borrower's property, either real or personal,
whether now or hereafter owned in the aggregate sum of less than $500,000; (i)
until the Lease Buyout, the GECC Liens; and (j) any Liens and encumbrances
(except those that could reasonably be expected to have a Material Adverse
Effect) against any of the lands that are the subject of the Uninsured Real
Property Interests.

          "Permitted Reorganization" means any transfer, assignment, merger,
consolidation or other similar transaction pursuant to which one or more of
ORNI, OrHeber 2 and OrHeber 3 cease to be a holding company formed for the
primary purpose of owning equity interests in or more of the Project Companies
or another Loan Party. Any such reorganization shall be permitted only if: (a)
after giving effect to such reorganization, Administrative Agent, for the
benefit of the Secured Parties, shall have a first-priority perfected Lien on
the ownership interests of the remaining Guarantors and Non-Guarantors (other
than (i) until a Mammoth Ownership Event, Mammoth Lakes and (ii) until the Lease
Buyout, ORNI, OrHeber 2, OrHeber 3 and SIGC); (b) the applicable security
agreements and pledge agreements shall have been amended in a manner
satisfactory to Administrative Agent to preserve, protect and maintain the
benefits of the Secured Parties' Liens on the Collateral; (c) each of Sponsor
and the Guarantors shall have reaffirmed their respective obligations under the
Sponsor Guaranty or the applicable Subsidiary Guaranty, as the case may be; (d)
the applicable reorganization documents (including any amendments to any Loan
Party's Governing Documents) shall be satisfactory to Administrative Agent; (e)
Administrative Agent shall have received, and be satisfied with, each

                                       23

of the documents described in Sections 3.1.1, 3.1.3 and 3.1.4 and the first
sentence of Section 3.1.5 of the Credit Agreement; (f) Administrative Agent
shall have received opinions of counsel to the Loan Parties involved with such
reorganization, which opinions shall be satisfactory to Administrative Agent and
shall cover or confirm, with respect to such reorganization, (i) the due
incorporation of each such Loan Party, (ii) the due authorization and
enforceability of each Major Project Document and Credit Document to which any
such Loan Party is a party as of the date of such reorganization, (iii)
regulatory matters (including preservation of QF status), (iv) the validity,
perfection and priority of the Liens under the Collateral Documents, (v)
Investment Company Act of 1940 matters, (vi) no violations of 1aw and no
conflicts with certain agreements, court orders and Governing Documents, and
(vii) receipt of all necessary consents and governmental approvals; (g) no
Potential Event of Default or Event of Default shall have occurred and be
continuing or would occur after giving effect to such reorganization; (h) with
respect to SIGC, ORNI, OrHeber 2 and OrHeber 3, no such reorganization shall be
permitted until the Lease Buyout occurs; and (i) the applicable surviving Loan
Parties shall have made representations and warranties with respect to each of
the matters described in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.9, 4.15,
4.16, 4.24 and 4.30 of the Credit Agreement.

          "Permitted Sponsor Sale" means any transfer, sale or other similar
disposition pursuant to which Sponsor disposes up to 49% of its economic (but
not voting) interests in Borrower to any Person. Any such disposition shall only
be permitted if: (a) such Person shall not have control over the management or
affairs of Borrower; (b) such Person shall be a corporation, limited liability
company or limited liability partnership formed in the United States; (c)
Sponsor shall have reaffirmed its obligations under the Sponsor Guaranty; (d)
after giving effect to such disposition, Administrative Agent, for the benefit
of the Secured Parties, shall have a first-priority perfected Lien on all of the
ownership interests of Borrower; (e) Administrative Agent shall have received
opinions of counsel to Sponsor and such Person, which opinions shall be
satisfactory to Administrative Agent and shall cover or confirm, with respect to
such disposition, (i) the due incorporation of Sponsor and such Person, (ii) the
due authorization and enforceability of each Major Project Document and Credit
Document to which any Sponsor or such Person is a party as of the date of such
disposition, (iii) regulatory matters (including preservation of QF status),
(iv) the validity, perfection and priority of the Liens under the applicable
pledge agreement, (v) Investment Company Act of 1940 matters, (vi) no violations
of law and no conflicts with certain agreements, court orders and Governing
Documents, and (vii) receipt of all necessary consents and governmental
approvals; (f) Administrative Agent shall have received from Sponsor and such
Person, and be satisfied with, each of the documents described in described in
Sections 3.1.1, 3.1.3 and 3.1.4 (with respect to such Person only) and the first
sentence of Section 3.1.5 of the Credit Agreement; and (g) no Potential Event of
Default or Event of Default shall have occurred and be continuing or would occur
after giving effect to such reorganization. "Person" means any natural person,
corporation, partnership, limited liability company, firm, association,
Governmental Instrumentality or any other entity whether acting in an
individual, fiduciary or other capacity.

          "Pledge Agreements" means the following agreements, each in
substantially the form of Exhibit D-3 to the Credit Agreement: (a) the Pledge
and Security Agreement, dated as of the Closing Date, among Sponsor, Borrower
and Administrative Agent, (b) the Pledge and Security Agreement, dated as of the
Closing Date, among Borrower, OrHeber 1 and Administrative Agent, (c) the Pledge
and Security Agreement, dated as of the Closing Date,

                                       24

among Borrower, OrMammoth and Administrative Agent, (d) the Pledge and Security
Agreement, dated as of the Closing Date, among Borrower, OrHeber 1, HFC, HGC and
Administrative Agent, (e) the Pledge and Security Agreement, dated as of the
Closing Date, among OrHeber 1, ORNI and Administrative Agent and (f) each Pledge
Agreement entered into after the Closing Date pursuant to Section 5.17 or 5.18
of the Credit Agreement.

          "Post-Closing Title Work" has the meaning given in Section 5.20 of the
Credit Agreement.

          "Potential Event of Default" means the occurrence of any of the events
specified in Section 7.1 of the Credit Agreement, whether or not any requirement
for the giving of notice, the lapse of time, or both, or any other condition,
has been satisfied.

          "Power Purchase Agreements" means the HGC Power Purchase Agreement,
the Mammoth G-l Power Purchase Agreement, the Mammoth G-2 Power Purchase
Agreement, the Mammoth G-3 Power Purchase Agreement and the SIGC Power Purchase
Agreement and any additional power purchase agreements entered into between
Edison and any of the Project Companies.

          "Principal Repayment Dates" means (a) each March 31, June 30,
September 30 and December 31, commencing on June 30, 2004 and (b) the Maturity
Date.

          "Project Companies" means HFC, HGC, Mammoth Lakes and SIGC.

          "Project Documents" means, without duplication, the Major Project
Documents and any other agreement or document relating to the development,
construction or operation of a Project to which any Project Company is a party.

          "Project Document Modification" has the meaning given in Section
6.12.1 of the Credit Agreement.

          "Project Revenues" means all income and cash receipts of Borrower, any
of the Guarantors and any of the Non-Guarantors derived from the ownership,
leasing or operation of any of the Projects, including payments received by any
of the Project Companies under the Power Purchase Agreements, proceeds of any
delay in start up or business interruption or liability insurance (to the extent
such liability insurance proceeds represent reimbursement of third party claims
previously paid by a Loan Party), income derived from the sale or use of
electric capacity or energy transmitted or distributed or ancillary services
produced by any of the Projects, income derived from the sale of "green credits"
or "green-tags", income derived from the production of renewable energy from any
Governmental Instrumentality (including, without limitation, the California
Energy Commission), income derived from the monetization of any credits earned
in connection with the production of renewable energy, investment income on
amounts in the Accounts (solely to the extent deposited in the applicable
Account), and any working capital acquired by Borrower, any of the Guarantors or
any of the Non-Guarantors under the Acquisition Agreement in excess of the
amount of any Sponsor Support Payments made by Sponsor to Borrower pursuant to
Section 2.2(b) of the Sponsor Guaranty, but excluding (a) proceeds of casualty
insurance, (b) the proceeds of any condemnation awards relating to the Project
and (c) proceeds from the Collateral Documents. With respect to Mammoth Lakes
and,

                                       25

until the termination of the GE Lease, OrHeber 2, OrHeber 3, ORNI and SIGC,
Project Revenues shall only include income, cash receipts and proceeds which
Mammoth Lakes, OrHeber 2, OrHeber 3, ORNI or SIGC, as the case may be, are
entitled to (and actually receive) under Mammoth Lakes' Governing Documents or
under the GE Lease, respectively.

          "Projections" means a projection of operating results for the Projects
over a period commencing on the Closing Date and ending on December 31, 2023,
which projection is attached as Exhibit G-3 to the Credit Agreement.

          "Projects" means the HFC Project, the HGC Project, the Mammoth Project
and the SIGC Project.

          "Proportionate Share" means, with respect to each Bank at any time, a
percentage equal to (a) with respect to any determination made prior to the
making of any Loans hereunder, the percentage interest of such Bank in the Total
Senior Loan Commitment, and (b) with respect to any determination made after the
making of any Loans hereunder, the percentage interest of such Bank in the
outstanding Loans.

          "Prudent Utility Practices" means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used by geothermal electric power projects in
the State of California of a type and size similar to the Project as good, safe
and prudent engineering practices in connection with the operation, maintenance,
repair and use of electrical and other equipment, facilities and improvements of
such power projects, that, in the exercise of reasonable judgment, based on the
facts known at the time, would have been expected to accomplish the desired
result in a manner consistent with the interest of safety, performance,
dependability, efficiency and economy. "Prudent Utility Practices" does not
necessarily mean one particular practice, method, equipment specification or
standard in all cases, but is instead intended to encompass a broad range of
acceptable practices, methods, equipment specifications and standards.

          "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.

          "PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended.

          "QF" means a "qualifying facility" as defined under the FPA, as
amended by PURPA and Subpart B of Part 292 of the FERC's regulations.

          "Real Property Standard" means, when applied to any real
property-related provision of the Credit Agreement, the fact that (a) the
particular matter could not reasonably be expected to have a Material Adverse
Effect (as determined by Administrative Agent) and (b) such matter can
reasonably be expected to be satisfactorily cured or remedied by the performance
of the Post-Closing Title Work (as determined by Administrative Agent).

          "Register" has the meaning given in Section 2.1.7 of the Credit
Agreement.

          "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System (or any successor).

                                       26

          "Regulatory Change" means any change after the Closing Date in Legal
Requirements, or the adoption or making after such date of any interpretations,
directives or requests of or under any Legal Requirements (whether or not having
the force of law) by any Governmental Instrumentality charged with the
interpretation or administration thereof.

          "Release" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, pumping, pouring, emitting, escaping, emptying, seeping,
placing or the like, into or upon any land or water or air, or otherwise
entering into the environment.

          "Release Date" has the meaning given in Section 3.3.2 of the Credit
Agreement.

          "Release Notice" has the meaning given in Section 3.3.2 of the Credit
Agreement.

          "Reorganizing Debtors" means each of the Guarantors (other than
OrHeber 1, ORNI and OrMammoth) and Non-Guarantors (other than Mammoth Lakes,
OrHeber 2 and OrHeber 3).

          "Replacement Bank" has the meaning given in Section 2.9.1 of the
Credit Agreement.

          "Replacement Obligor" means (a) with respect to any Person party to a
Major Project Document in effect on the Closing Date, any Person satisfactory to
Administrative Agent acting at the direction of the Majority Banks, or (b) with
respect to any Person party to an Additional Project Document, any Person
satisfactory to Administrative Agent and having credit, or acceptable credit
support, equal to or greater than that of the replaced Person (or otherwise
acceptable to Administrative Agent) on the date that the applicable Additional
Project Document was entered into who, pursuant to any definitive agreement,
definitive guarantee or definitive backup arrangement, in each case reasonably
satisfactory to Administrative Agent, assumes the obligation of providing the
services and products on terms and conditions no less favorable to Borrower than
those which such Person is obligated to provide pursuant to the applicable
Additional Project Document.

          "Reportable Event" means any of the events set forth in Section
4043(b) or (c) of ERISA for which notice to the PBGC has not been waived and, in
the case of any event subject to Section 4043(b) of ERISA, for purposes of
Section 5.4.17, the event shall be deemed to have occurred on the date by which
notice of such event is required to be provided to the PBGC with respect
thereto.

          "Request for Notice" means a request for notice or similar document
recorded pursuant to Section 2924B of the California Civil Code.

          "Required Banks" means, at any time, Banks having Proportionate Shares
which in the aggregate equal or exceed 66.67%.

          "Reserve Requirement" means, for LIBOR Loans, the maximum rate
(expressed as a percentage) at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period therefor under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000

                                       27

against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the Adjusted LIBO Rate or LIBOR Loans is
to be determined, (b) any category of liabilities or extensions of credit or
other assets which include LIBOR Loans or (c) any category of liabilities or
extensions of credit which are considered irrevocable commitments to lend.

          "Responsible Officer" means, as to any Person, its president, chief
executive officer, any vice president, treasurer, chief financial officer,
secretary or assistant secretary or any natural Person who is a managing general
partner or manager or managing member of a limited liability company (or any of
the preceding with regard to any such managing general partner, manager or
managing member).

          "Restricted Payments Conditions" has the meaning given in Section 6.19
of the Credit Agreement.

          "Revenue Account" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "S&P" means Standard & Poor's Corporation and its successors and
assigns.

          "Secured Parties" means Administrative Agent, each Bank and each of
their respective successors, permitted transferees and permitted assigns;
provided, that (a) no Affiliate of Sponsor and (b) no counterparty to an
Interest Rate Agreement entered into by Borrower, any Guarantor or any
Non-Guarantor shall be a "Secured Party" hereunder or under any other Credit
Document. Nothing in this definition shall limit any Loan Party's subrogation
rights provided for in the Credit Documents.

          "Security Agreements" means the following agreements, each in
substantially the form of Exhibit D-2 to the Credit Agreement: (a) the Security
Agreement, dated as of the Closing Date, between Administrative Agent and
Borrower, (b) the Security Agreement, dated as of the Closing Date, between
Administrative Agent and HFC, (c) the Security Agreement, dated as of the
Closing Date, between Administrative Agent and HGC, (d) the Security Agreement,
dated as of the Closing Date, between Administrative Agent and OrMammoth, (e)
the Security Agreement, dated as of the Closing Date, between Administrative
Agent and OrHeber 1, and (f) each Security Agreement entered into after the
Closing Date pursuant to Section 5.17 or 5.18 of the Credit Agreement.

          "Seller Plan of Reorganization" means that certain Heber Debtors'
Third Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy
Code, dated November 21, 2003, proposed and filed by Amor, Energy I, Energy II,
HFC, HGC and SIGC as debtors and debtors in possession under chapter 11 of the
Bankruptcy Law and as confirmed by the Confirmation Order.

          "Sellers" means Covanta Heber Field Energy, Inc., Heber Field Energy
II, Inc., ERC Energy, Inc., ERC Energy II, Inc., Heber Loan Partners, Covanta
Power Pacific, Inc.,

                                       28

Covanta Energy Americas, Inc., Pacific Geothermal Company, Mammoth Geothermal
Company, Amor, Energy I and Energy II.

          "Senior Loan Commitment" means, at any time with respect to each Bank,
such Bank's Proportionate Share of the Total Senior Loan Commitment at such
time.

          "SIGC" means Second Imperial Geothermal Company, L.P., a California
limited partnership.

          "SIGC Connection Agreement" means the Plant Connection Agreement dated
October 27, 1992 between IID and SIGC.

          "SIGC Escrow Agreement" means the First Amended and Restated Escrow
Agreement dated as of September 1, 1993 among SIGC, Owner Trustee, Owner
Participant, GECC and Morgan Guaranty Trust Company of New York, as amended by
the letter agreements dated as of September 8, 1997 and December 20, 2000 among
SIGC, GECC, Owner Participant, Owner Trustee and First Trust of New York, as
successor in interest to Morgan Guaranty Trust Company of New York.

          "SIGC O&M Agreement" means the Operation and Maintenance Agreement
dated as of November 24, 2002 between SIGC and Ogden SIGC Geothermal Operations,
Inc., as assigned by Ogden SIGC Geothermal Operations, Inc. to Covanta SIGC
Geothermal Operations, Inc., and as further assigned by Covanta SIGC Geothermal
Operations, Inc. to SIGC Operator.

          "SIGC Operator" means ORNI 8 LLC.

          "SIGC Participation Agreement" means the Participation Agreement dated
as of November 24, 1992 among SIGC, Amor, Energy I and Energy II as successors
to Second Imperial Continental, Inc., Ogden SIGC Geothermal Operations, Inc.,
Owner Trustee, Owner Participant, and GECC, as amended by the Amendment No. 1
dated as of September 1, 1993 among SIGC, Amor, Energy I and Energy II as
successors to Second Imperial Continental, Inc., Ogden SIGC Geothermal
Operations, Inc., Owner Trustee, Owner Participant, and GECC.

          "SIGC Power Purchase Agreement" means the Power Purchase Contract
dated as of April 16, 1985 between SIGC and Edison, as amended by the Amendment
No. 1 to the Power Purchase Contract dated October 23, 1987 between SIGC and
Edison, the Amendment No. 2 to the Power Purchase Contract dated July 27, 1990
between SIGC and Edison, the Amendment No. 3 to the Power Purchase Contract
dated November 24, 1992 between SIGC and Edison, the Agreement Addressing
Renewable Energy Pricing and Payment Issues dated June 19, 2001 between SIGC and
Edison, the Amendment No. 1 to Agreement Addressing Renewable Energy Pricing and
Payment Issues dated November 30, 2001 between SIGC and Edison, and the
clarification letter by Edison re: Contract Terms dated November 13, 1992.

          "SIGC Project" means the 48 MW geothermal electric power project
located in Heber, California and leased by SIGC pursuant to the GE Lease.

          "SIGC Sublease" means the Sublease and Geothermal Fluid Agreement
dated November 17, 1992 between SIGC, HFC and Owner Trustee, as amended by
Amendment No. 1

                                       29

dated December 20, 2000, Amendment No. 2 dated February 11, 2002 and Amendment
No. 3 dated August 31, 1993.

          "SIGC Transmission Service Agreement" means the IID-SIGC Transmission
Service Agreement for Alternative Resources dated October 27, 1992 between IDD
and SIGC.

          "SIGC Water Supply Agreement" means the Water Supply Agreement dated
October 27, 1992 between IID and SIGC.

          "Site" means, with respect to a Project, all real property interests
(viewed collectively) necessary to operate such Project in accordance with the
terms of the applicable Power Purchase Agreements and the Projections, including
the Material Real Property Interests.

          "Solvent" means, with respect to any Loan Party on a particular date,
that on such date: (a) such Loan Party will be able to pay its debts as they
mature in the ordinary course; (b) such Loan Party will have capital sufficient
to carry on its business and all businesses in which it presently intends to
engage; (c) such Loan Party will have assets which, at fair valuation and at
present fair salable value on a going concern basis, are greater than the amount
of its liabilities, whether direct or contingent, matured or unmatured; and (d)
such Loan Party is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Loan Party's property would
constitute an unreasonably small capital; provided, however, that in determining
whether any Loan Party is Solvent, such determination shall be made assuming
that the Obligations are joint and several Obligations of all the Loan Parties
other than Sponsor and Ormat Technologies, and that each of the Loan Parties
(other than Ormat Technologies), to the extent that each such Loan Party has the
financial resources to do so, will contribute to the maximum extent permitted
under the applicable Credit Documents, such Loan Party's portion of the
Obligations.

          "Sponsor" means Ormat Nevada Inc., a Delaware corporation, the sole
shareholder of Borrower and a wholly-owned direct Subsidiary of Ormat
Technologies.

          "Sponsor Guaranty" means that certain Sponsor Guaranty, dated as of
the Closing Date, by and among Sponsor, Borrower and Administrative Agent.

          "Subordinated Loans" means the Debt of Borrower to Sponsor, which Debt
shall (a) be subordinated to the Obligations pursuant to the terms of the Ormat
Nevada Subordination Agreement, (b) accrue at an interest rate equal to the
higher of (i) 5.00% per annum and (ii) the applicable federal rate (within the
meaning of Section 1274(d) of the Code), (c) be due and payable (inclusive of
principal and interest thereon) not earlier than the date that is 12 months
after the Maturity Date, and (d) documented pursuant to the Credit Facility Due
31 December 2020, dated as of the Closing Date, between Sponsor and Borrower.

          "Subordination Agreements" means the Ormat Technologies Subordination
Agreement and the Ormat Nevada Subordination Agreement.

          "Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which such Person: (a) owns 10% or
more of the shares of stock or other ownership interests having ordinary voting
power (other than stock or such other

                                       30

ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity and/or
(b) controls the management, directly or indirectly through one or more
intermediaries.

          "Subsidiary Guaranties" means the following agreements, each
substantially in the form of Exhibit D-5 to the Credit Agreement: (a) the
Subsidiary Guaranty, dated as of the Closing Date, between Administrative Agent
and HFC, (b) the Subsidiary Guaranty, dated as of the Closing Date, between
Administrative Agent and HGC, (c) the Subsidiary Guaranty, dated as of the
Closing Date, between Administrative Agent and OrMammoth, (d) the Subsidiary
Guaranty, dated as of the Closing Date, between Administrative Agent and OrHeber
1, and (e) each Subsidiary Guaranty entered into after the Closing Date pursuant
to Section 5.17 or 5.18 of the Credit Agreement.

          "Taxes" has the meaning, with respect to the Loans, given in Section
2.4.4(a) of the Credit Agreement.

          "Title Exceptions" means (a) the exceptions to title set forth in the
title policies, proformas and commitments referred to in Section 7.9 of the
Acquisition Agreement and (b) any other exceptions to title approved by the
Banks pursuant to Section 3.2.12(b) of the Credit Agreement.

          "Title Insurer" means Chicago Title Insurance Company or any other
title company that may from time to time be reasonably satisfactory to
Administrative Agent.

          "Total Senior Loan Commitment" has the meaning given in Section 2.2 of
the Credit Agreement.

          "Type" means the type of Loan, whether a Base Rate Loan or LIBOR Loan.

          "UCC" means 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 perfection or
priority of the security interest in any Collateral 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 of the Credit Agreement and of the
other Credit Documents relating to such perfection or priority and for purposes
of definitions related to such provisions.

          "Uninsured Heber Real Property Interests" means (a) those certain real
property interests that (i) are described in the exhibits to the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing, dated as of the
Closing Date, between HFC and Chicago Title Insurance Company, as trustee, for
the benefit of Administrative Agent and (ii) are not Insured Heber Real Property
Interests and (b) any other real property interests (other than the Insured
Heber Real Property Interests) that may be held by HFC, HGC or SIGC and that are
found to exist pursuant to the Post-Closing Title Work or otherwise.

                                       31

          "Uninsured Real Property Interests" means, collectively, the
Additional Mammoth Leases, the Mammoth G-3 Site License and the Uninsured Heber
Real Property Interests.

          "Unsatisfied Condition" means a condition in a Permit that has not
been satisfied and that either (a) must be satisfied before such Permit can
become effective, (b) must be satisfied as of the date on which a representation
is made or a condition precedent must be satisfied under the Credit Agreement,
or (c) must be satisfied as of a future date but with respect to which facts or
circumstances exist which, to Borrower's, any Guarantor's or any Non-Guarantor's
knowledge, could reasonably be expected to result in a failure to satisfy such
Permit condition.

          "Waterfall Level" has the meaning given in Section 1.1 of the
Depositary Agreement.

          "Water Supply Agreements" means the SIGC Water Supply Agreement and
the HGC Water Supply Agreement.

                                       32

                             RULES OF INTERPRETATION

          1. The singular includes the plural and the plural includes the
singular.

          2. "or" is not exclusive, unless the context otherwise indicates.

          3. A reference to a Governmental Rule includes any amendment or
modification to such Governmental Rule, and all regulations, rulings and other
Governmental Rules promulgated under such Governmental Rule.

          4. A reference to a Person includes its permitted successors,
permitted replacements and permitted assigns.

          5. Except as otherwise defined, accounting terms have the meanings
assigned to them by GAAP, as consistently applied by the accounting entity to
which they refer.

          6. The words "include", "includes" and "including" are not limiting.

          7. A reference in a document to an Article, Section, Exhibit,
Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex
or Appendix of such document unless otherwise indicated. Exhibits, Schedules,
Annexes or Appendices to any document shall be deemed incorporated by reference
in such document. In the event of any conflict between the provisions of the
Credit Agreement (exclusive of the Exhibits, Schedules, Annexes and Appendices
thereto) and any Exhibit, Schedule, Annex or Appendix thereto, the provisions of
the Credit Agreement shall control.

          8. References to any document, instrument or agreement (a) shall
include all exhibits, schedules and other attachments thereto, (b) shall include
all documents, instruments or agreements issued or executed in replacement
thereof, and (c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, amended and restated, modified
and supplemented from time to time and in effect at any given time.

          9. The words "hereof, "herein" and "hereunder" and words of similar
import when used in any document shall refer to such document as a whole and not
to any particular provision of such document.

          10. References to "days" shall mean calendar days, unless the term
"Banking Days" shall be used. References to a time of day shall mean such time
in Dallas, Texas, unless otherwise specified.

          11. If, at any time after the Closing Date, Moody's or S&P shall
change its respective system of classifications, then any Moody's or S&P
"rating" referred to herein shall be considered to be at or above a specified
level if it is at or above the new rating which most closely corresponds to the
specified level under the old rating system.

          12. The Credit Documents are the result of negotiations between, and
have been reviewed by Borrower, each Affiliate of Borrower party thereto,
Administrative Agent, each Bank and their respective counsel. Accordingly, the
Credit Documents shall be deemed to

                                       33

be the product of all parties thereto, and no ambiguity shall be construed in
favor of or against Borrower, any Affiliate of Borrower party thereto,
Administrative Agent or any Bank solely as a result of any such party having
drafted or proposed the ambiguous provision.

                                       34

                                                                     EXHIBIT B-1
                                                             to Credit Agreement

                                  FORM OF NOTE

$[             ]                                              New York, New York
  -------------
Note No. [    ]                                               [         ], [   ]
          ----                                                 ---------    ---

          For value received, the undersigned ORCAL GEOTHERMAL INC., a
corporation organized and existing under the laws of the State of Delaware
("Borrower"), unconditionally promises to pay to [INSERT NAME OF APPLICABLE
BANK] ("Bank"), at the office of Beal Bank, S.S.B., located at 6000 Legacy
Drive, Plano, Texas 75024 or such other office as shall be directed in writing
by Beal Bank, S.S.B. to Borrower, in lawful money of the United States of
America and in immediately available funds, the principal amount of [INSERT
APPLICABLE BANK'S COMMITMENT / LOAN AMOUNT] DOLLARS ($[______]), or if less, the
aggregate unpaid and outstanding principal amount of Loans advanced by Bank to
Borrower pursuant to that certain Credit Agreement, dated as of December ___,
2003 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among Borrower, the financial
institutions from time to time parties thereto (collectively, the "Banks"), and
each of the agents listed on the signature pages thereto, and all other amounts
owed by Borrower to Bank hereunder.

          This is one of the Notes referred to in the Credit Agreement and is
entitled to the benefits thereof and is subject to all terms, provisions and
conditions thereof. Capitalized terms used and not defined herein shall have the
meanings set forth in the Credit Agreement.

          This Note is made in connection with and is secured by, among other
instruments, the provisions of the Collateral Documents. Reference is hereby
made to the Credit Agreement and the Collateral Documents for the provisions,
among others, with respect to the custody and application of the Collateral, the
nature and extent of the security provided thereunder, the rights, duties and
obligations of Borrower and the rights of the holder of this Note.

          The principal amount hereof is payable in accordance with the Credit
Agreement, and Borrower has the right to prepay such principal amount solely in
accordance with the Credit Agreement.

          Borrower further agrees to pay, in lawful money of the United States
of America and in immediately available funds, interest from the date hereof on
the unpaid and outstanding principal amount hereof until such unpaid and
outstanding principal amount shall become due and payable (whether at stated
maturity, by acceleration or otherwise) at the rates of interest and at the
times set forth in the Credit Agreement, and Borrower agrees to pay all other
fees, prepayment premiums and costs owed to Bank under the Credit Agreement at
the times specified in, and otherwise in accordance with, the Credit Agreement.

          If any payment on this Note becomes due and payable on a date which is
not a Banking Day, such payment shall be made on the preceding or next
succeeding Banking Day, in either case in accordance with the terms of the
Credit Agreement.

          All Loans made by Bank pursuant to the Credit Agreement and the other
Credit Documents, and all payments and prepayments made on account of the
principal balance hereof, may be recorded by Bank on the grid attached hereto,
provided that failure to make such a notation shall not affect or diminish
Borrower's obligation to repay all amounts due on this Note, as and when due.

          Upon the occurrence and during the continuation of any one or more
Events of Default, all amounts then remaining unpaid on this Note may become or
be declared to be immediately due and payable as provided in the Credit
Agreement and the other Credit Documents. Borrower hereby expressly waives
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or notices or demands of any kind (other than such of
the foregoing as are expressly required by the terms of the Credit Documents and
applicable Legal Requirements).

          Recourse under this Note shall be limited as provided in Article 8 of
the Credit Agreement.

          Borrower agrees to pay costs and expenses of Bank, including
reasonable attorneys' fees, incurred in connection with the enforcement of this
Note, at the times specified in, and otherwise in accordance with, the Credit
Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                        2

          THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN AND SHALL BE CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

          IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
as of the date first written above.

                                        ORCAL GEOTHERMAL INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

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                                                                     EXHIBIT C-l
                                                             to Credit Agreement

                           FORM OF NOTICE OF BORROWING

                                                           Date:           ,
                                                                 ---------- ----

Beal Bank, S.S.B.
as Administrative Agent
6000 Legacy Dr., 4E
Plano, Texas 75024
Attn: William T. Saurenmann
Telephone No.: (469) 467-5510
Telecopy No.: (469) 241-9568

cc:  CSG Investments, Inc.
     6000 Legacy Dr., 4W
     Plano, Texas 75024
     Attn: Steve Harvey
     Telephone No.: (469) 467-5652
     Telecopy No.: (469) 241-9567
     E-mail: sharvey@csginvestments.com

           Re: OrCal Geothermal Inc. - Notice of Borrowing

Ladies and Gentlemen:

          This Notice of Borrowing is delivered to you pursuant to Section 2.1.1
(b) of the Credit Agreement, dated as of December____, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among OrCal Geothermal Inc., a corporation organized under the laws
of the State of Delaware ("Borrower"), the financial institutions from time to
time parties thereto (collectively, the "Banks"), and each of the agents listed
on the signature pages thereto. Unless otherwise defined herein, capitalized
terms used herein have the meanings provided in the Credit Agreement.

          Borrower hereby gives you notice in accordance with Section 2.1.1(b)
of the Credit Agreement that Borrower requests the Banks to advance to Borrower
certain Loans as described below (the "Proposed Borrowing"):

          1.   The requested date of the Proposed Borrowing is _____________,
               _____, which is a Banking Day.

          2.   The Proposed Borrowing shall consist of an aggregate principal
               amount of Loans equal to $_____________.(1)

          3.   The Proposed Borrowing shall consist of [BASE RATE LOANS] [LIBOR
               LOANS WITH AN INITIAL INTEREST PERIOD OF 12 MONTHS].

                            [SIGNATURE PAGE FOLLOWS]

----------
(1)  Such amount not to exceed $154,500,000.

                                       2

          IN WITNESS WHEREOF, Borrower has caused this Notice of Borrowing to be
duly executed and delivered by an authorized officer of Borrower as of the date
first above written.

                                        ORCAL GEOTHERMAL INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      S-1

                                                                     EXHIBIT C-2
                                                             to Credit Agreement

                FORM OF CONFIRMATION OF INTEREST PERIOD SELECTION

                                                       Date: __________ ___, ___

Beal Bank, S.S.B.
as Administrative Agent
6000 Legacy Dr., 4E
Plano, Texas 75024
Attn: William T. Saurenmann
Telephone No.: (469) 467-5510
Telecopy No.: (469) 241-9568

cc: CSG Investments, Inc.
    6000 Legacy Dr., 4W
    Plano, Texas 75024
    Attn: Steve Harvey
    Telephone No.: (469) 467-5652
    Telecopy No.: (469) 241-9567
    E-mail: sharvey@csginvestments.com

          Re: OrCal Geothermal Inc. - Confirmation of Interest Period Selection

Ladies and Gentlemen:

          This Confirmation of Interest Period Selection is delivered to you
pursuant to Section 2.1.2(c)(ii) of the Credit Agreement, dated as of December
___, 2003 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among OrCal Geothermal Inc., a
corporation organized under the laws of the State of Delaware ("Borrower"), the
financial institutions from time to time parties thereto (collectively, the
"Banks"), and each of the agents listed on the signature pages thereto. Unless
otherwise defined herein, capitalized terms used herein have the meanings
provided in the Credit Agreement.

          This Confirmation of Interest Period Selection confirms our telephonic
notice of even date herewith relating to $______________ of LIBOR Loans
initially funded on ________________ ____, ____, with a current Interest Period
ending on_________________ __, _____. This Confirmation of Interest Period
Selection constitutes a confirmation that effective __________ __, ____ (which
date is the last day of the applicable Interest Period), the requested Interest
Period for $___________ of such LIBOR Loans shall be 12 months.

                            [SIGNATURE PAGE FOLLOWS]

     IN WITNESS WHEREOF, Borrower has caused this Confirmation of Interest
Period Selection to be duly executed and delivered by an authorized officer of
Borrower as of the date first above written.

                                        ORCAL GEOTHERMAL INC.
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      S-1

                                                                     EXHIBIT C-3
                                                             to Credit Agreement

                    FORM OF NOTICE OF CONVERSION OF LOAN TYPE

                                                         Date:
                                                               ------ ----, ----

Beal Bank, S.S.B.
as Administrative Agent
6000 Legacy Dr., 4E
Plano, Texas 75024
Attn: William T. Saurenmann
Telephone No.: (469) 467-5510
Telecopy No.: (469) 241-9568

cc: CSG Investments, Inc.
    6000 Legacy Dr., 4W
    Plano, Texas 75024
    Attn: Steve Harvey
    Telephone No.: (469) 467-5652
    Telecopy No.: (469) 241-9567
    E-mail: sharvey@csginvestments.com

          Re: OrCal Geothermal Inc. - Notice of Conversion of Loan Type

Ladies and Gentlemen:

          This Notice of Conversion of Loan Type is delivered to you pursuant to
Section 2.1.5 of the Credit Agreement, dated as of December ____, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among OrCal Geothermal Inc., a corporation
organized under the laws of the State of Delaware ("Borrower"), the financial
institutions from time to time parties thereto (collectively, the "Banks"), and
each of the agents listed on the signature pages thereto. Unless otherwise
defined herein, capitalized terms used herein have the meanings provided in the
Credit Agreement.

          Borrower hereby requests in accordance with Section 2.1.5 of the
Credit Agreement that certain Loans be converted from one Type of Loan to
another Type of Loan, as more particularly described below (the "Proposed Loan
Conversion"):

     (a)  Borrower hereby requests that the Loans be converted from [BASE RATE
          LOANS] [LIBOR LOANS] to [BASE RATE LOANS] [LIBOR LOANS].

     (b)  [IF SUCH LOANS ARE TO BE CONVERTED FROM BASE RATE LOANS INTO LIBOR
          LOANS, THEN INSERT THE FOLLOWING; BORROWER HEREBY REQUESTS THAT SUCH
          BASE RATE

                                       1

          LOANS BE CONVERTED TO LIBOR LOANS WITH AN INITIAL INTEREST PERIOD OF
          12 MONTHS.]

     (c)  The proposed date of the Proposed Loan Conversion is ____________
          ____, _______ (which date is a Banking Day [IF CONVERTING FROM LIBOR
          LOANS INTO BASE RATE LOANS, THEN INSERT THE FOLLOWING: AND THE FIRST
          DAY AFTER THE LAST DAY OF THE THEN-CURRENT INTEREST PERIOD WITH
          RESPECT TO THE LIBOR LOANS TO BE CONVERTED]).

          Borrower hereby certifies to Administrative Agent and the Banks that
[NO][AN] Event of Default has occurred and is continuing under the Credit
Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       2

     IN WITNESS WHEREOF, Borrower has caused this Notice of Conversion of Loan
Type to be duly executed and delivered by an authorized officer of Borrower as
of the date first above written.

                                        ORCAL GEOTHERMAL INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       S-l
                      [Notice of Conversion of Loan Type]

                                                                     EXHIBIT C-4
                                                             to Credit Agreement

                                ESCROW AGREEMENT

Escrow No.:
Escrow Officer: Nicki Carr
Date: December 18, 2003

TO: CHICAGO TITLE COMPANY

          Re: OrCal Geothermal Inc. - Escrow Instructions

     This Escrow Agreement, dated as of the date first above written (this
"Escrow Agreement"), by and among Ormat Nevada Inc., a Delaware corporation
("Sponsor"), OrCal Geothermal Inc., a Delaware corporation ("Borrower"), Beal
Bank, S.S.B. ("Administrative Agent") and Chicago Title Company ("Escrow Agent"
or "you"), is being entered into in connection with the closing of the loan (the
"Loan") to Borrower in the principal amount of $154,500,000.00, pursuant to the
terms of that certain Credit Agreement, dated as of the date first above written
(the "Credit Agreement"), among Borrower, Administrative Agent and the other
financial institutions from time to time party thereto.

     Borrower and Sponsor hereby acknowledge that (1) they have delivered or
caused to be delivered to you in escrow each of the documents and instruments
set forth on Schedule 1 hereto (such documents collectively referred to as the
"Deliverables") and (2) each of the conditions set forth in Section 3.2 of the
Credit Agreement to which the Deliverables relate has been satisfied or waived
in accordance with the terms of the Credit Agreement.

     Copies (or, to the extent provided under the Credit Agreement, original
executed copies) of the Deliverables are hereby delivered to you for handling
solely in accordance with the instructions herein contained. If Administrative
Agent and Borrower at any time jointly determine that the closing of the Loan
will not occur and jointly inform you in writing of such determination, you are
to return the Deliverables in accordance with further instructions which you
will receive jointly from Borrower and Administrative Agent. Acceptance by you
of the Deliverables and the duties set forth in this Escrow Agreement shall
constitute a contractual obligation on the part of Escrow Agent with each of the
other parties hereto to satisfy the terms and conditions hereof.

     You are authorized to handle the Deliverables in the manner described below
when and only when you have received an Escrow Closing Letter (the "Escrow
Closing Letter"), in substantially the form set forth on Attachment A hereto,
executed by each of Borrower, Sponsor and Administrative Agent, (i) providing
notice to you that (A) the purchase price to be paid pursuant to the Acquisition
Agreement (as defined in the Credit Agreement) shall have been paid to the
applicable parties and (B) the other fees and expenses to be paid in connection
with the Credit Agreement shall have been paid in accordance with the terms of
the Funds Flow Memorandum (as defined in the Credit Agreement) and (ii)
instructing you to release the Deliverables from escrow.

     Upon receipt of the Escrow Closing Letter, you are authorized and
instructed to deliver to Administrative Agent copies (or, as applicable,
original executed copies) of the Deliverables.

     Any escrow charges payable to Escrow Agent with respect to this Escrow
Agreement shall be paid by Borrower. This Escrow Agreement is in addition to,
and shall have no effect on, any agreements you may have in connection with the
Credit Agreement or the Acquisition Agreement in your capacity as title company
or title insurer.

     The parties to this Escrow Agreement hereby acknowledge and agree that
nothing provided herein shall limit the obligation of the Borrower and Sponsor
or any of their affiliates under the Credit Documents (as defined in the Credit
Agreement) with respect to their obligations to take all actions necessary or
desirable to perfect liens in the collateral as described in such Credit
Documents.

     This Escrow Agreement shall be governed by and construed in accordance with
the laws of the State of New York. To the fullest extent permitted by applicable
law, you hereby irrevocably submit to the non-exclusive jurisdiction of any New
York State court or federal court sitting in the Borough of Manhattan in respect
of any suit, action or proceeding arising out of or relating to the provisions
of this Escrow Agreement and irrevocably agree that all claims in respect of any
such suit, action or proceeding may be heard and determined in any such court.
The parties hereto hereby waive, to the fullest extent permitted by applicable
law, any objection that they may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in any such court, and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. The parties hereto hereby waive, to the
fullest extent permitted by applicable law, any right to trial by jury with
respect to any action or proceeding arising out of or relating to this Escrow
Agreement.

     Kindly acknowledge receipt and acceptance by Chicago Title Company of these
instructions and the documents and instruments enclosed herein by executing a
copy of this Escrow Agreement and delivering it to the attention of Jeffrey
Greenberg of Latham & Watkins LLP, as counsel to Administrative Agent, with a
copy to Noam Ayali of Chadbourne & Parke LLP, as counsel to Sponsor and
Borrower, at Chadbourne & Parke's New York offices.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       2

          IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, intending to be legally bound, have caused this Escrow Agreement to
be duly executed and delivered as of the day and year first above written.

                                        ORMAT NEVADA INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        ORCAL GEOTHERMAL INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        BEAL BANK, S.S.B.,
                                        as Administrative Agent and a Bank

                                        By:
                                            ------------------------------------
                                            Name: Molly Curl
                                            Title: Sr. Vice President

                                        By:
                                            ------------------------------------
                                            Name: William T. Saurenmann
                                            Title: Sr. Vice President

Chicago Title Company, as Escrow Agent, hereby acknowledges, accepts and agrees
to abide by the foregoing instructions.

CHICAGO TITLE COMPANY

By:
    ----------------------------------
    Name:
    Title:

                                       S-l

                                                                      SCHEDULE 1
                                                             to Escrow Agreement

                                   SCHEDULE 1

                             Documents Delivered(1)

1.   Secretary's certificate from HGC attaching a partnership agreement, an
     incumbency certificate and resolutions

2.   Secretary's certificate from HFC attaching a partnership agreement, an
     incumbency certificate and resolutions

3.   Secretary's certificate from a general partner of Mammoth Lakes attaching a
     certificate of partnership and partnership agreement

4.   Secretary's certificate from the general partners of SIGC attaching a
     certificate of partnership and partnership agreement

5.   Pledge and Security Agreement, dated as of the Closing Date, among
     Borrower, OrHeber 1, HFC, HGC and Administrative Agent

6.   Security Agreement, dated as of the Closing Date, between Administrative
     Agent and HFC

7.   Security Agreement, dated as of the Closing Date, between Administrative
     Agent and HGC

8.   Subsidiary Guaranty, dated as of the Closing Date, between Administrative
     Agent and HFC

9.   Subsidiary Guaranty, dated as of the Closing Date, between Administrative
     Agent and HGC

10.  Joinder Agreement, dated as of the Closing Date, executed between
     Administrative Agent and HGC

11.  Joinder Agreement, dated as of the Closing Date, executed between
     Administrative Agent and HFC

12.  Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing,
     dated as of the Closing Date, between HGC and Chicago Title Insurance
     Company, as trustee

13.  Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing,
     dated as of the Closing Date, between HFC and Chicago Title Insurance
     Company, as trustee

----------
(1) Capitalized terms in this Schedule 1 shall have the meanings given in the
Credit Agreement.

                                        1
                        [SCHEDULE I TO ESCROW AGREEMENT]

                                                                      SCHEDULE 1
                                                             to Escrow Agreement

14.  Consent and Agreement, dated as of the Closing Date, among HFC, HGC,
     OrHeber 1, Sponsor and Administrative Agent

15.  Consent and Agreement, dated as of the Closing Date, among OrMammoth,
     Sponsor and Administrative Agent

16.  UCC-1 financing statement naming OrHeber 1 as debtor and Administrative
     Agent as the secured party, against the Pledged Equity Interests of OrHeber
     1 in each of HGC and HFC

17.  UCC-1 financing statement naming Borrower as debtor and Administrative
     Agent as the secured party, against the Pledged Equity Interests of
     Borrower in each of HGC and HFC

18.  UCC-1 financing statement naming HGC as debtor and Administrative Agent as
     the secured party (for each of California and Nevada)

19.  UCC-1 financing statement naming HFC as debtor and Administrative Agent as
     the secured party (for each of California and Nevada)

20.  UCC-1 fixture filings related to each Deed of Trust, naming each of HGC and
     HFC as debtor and Administrative Agent as the secured party

21.  Certified list and copy of each Major Project Document

22.  Closing certificates dated the Closing Date from each of HFC, HGC, OrHeber
     1 and OrMammoth

23.  Legal opinion from Chadbourne & Parke LLP, as finance counsel to certain
     Loan Parties

24.  Legal opinion of David E. Chanover Esq., as real estate counsel to HFC and
     HGC

25.  Legal opinion of Perkins Coie, as California counsel to certain Loan
     Parties

26.  Legal opinion of Morris, Nichols, Arsht & Tunnel, as Delaware counsel to
     certain Loan Parties

27.  Lender's ALTA extended coverage policy of title insurance, together with
     such endorsements thereto as are reasonably required by the Banks (which
     shall include, but not be limited to, a tie-in endorsement for all such
     policies), or the commitment of Title Insurer to issue such a policy, dated
     as of the Closing Date, in the amount of $125,000,000, issued by Title
     Insurer in form and substance substantially similar to the owner's ALTA
     policy of title insurance provided to Borrower under the Acquisition
     Agreement, with respect to each of HGC and HFC, as more particularly
     described in Section 3.2.12 of the Credit Agreement

28.  Requests for Notice

                                        2
                        [SCHEDULE I TO ESCROW AGREEMENT]

                                                                      SCHEDULE 1
                                                             to Escrow Agreement

29.  Letter from CT Corporation System evidencing acceptance of acting as agent
     for service of process in the State of New York for each of HGC and HFC, in
     respect of each Credit Document to which each is a party

30.  All of the other deliverables set forth on the "closing table" in the New
     York offices of Chadbourne & Parke LLP which have not been delivered
     pursuant to Section 3.1 of the Credit Agreement.

                                        3
                        [SCHEDULE 1 TO ESCROW AGREEMENT]

                                                                    ATTACHMENT A
                                                             to Escrow Agreement

                              ESCROW CLOSING LETTER

Escrow No.:
Escrow Officer: Nicki Carr
Date: December 18, 2003

TO: CHICAGO TITLE COMPANY

          Re: OrCal Geothermal Inc. - Escrow Instructions

     This Escrow Closing Letter, dated as of the date first above written (this
"Escrow Closing Letter") is being sent to you in connection with (i) that
certain Escrow Agreement, dated as of December 18, 2003 (the "Escrow Agreement")
by and among Ormat Nevada Inc., a Delaware corporation ("Sponsor"). OrCal
Geothermal Inc., a Delaware corporation ("Borrower"), Beal Bank, S.S.B.
("Administrative Agent") and Chicago Title Company ("Escrow Agent" or "you");
and (ii) that certain Credit Agreement, dated as of December 18, 2003 (the
"Credit Agreement"), among Borrower, Administrative Agent and the other
financial institutions from time to time party thereto.

     The signatories to this Escrow Closing Letter hereby provide notice to you
that (a) the purchase price to be paid pursuant to the Acquisition Agreement (as
defined in the Credit Agreement) has been paid to the applicable parties and (b)
the other fees and expenses to be paid in connection with the Loans have been
paid in accordance with the terms of the Funds Flow Memorandum (as defined in
the Credit Agreement). In the case of each of the preceding clauses (a) and (b),
the signatories to this Escrow Closing Letter acknowledge and agree that such
funds have been wired to the applicable parties as evidenced by either (i)
federal reference numbers with respect to the wire to each applicable party or
(ii) written confirmation of receipt from each such party (including Covanta
Energy Corporation).

     Accordingly, the signatories to this Escrow Closing Letter hereby instruct
you to release the Deliverables from escrow under the Escrow Agreement and
terminate such escrow.

     The parties to this Escrow Closing Letter hereby acknowledge and agree that
nothing provided herein shall limit the obligation of the Borrower and Sponsor
or any of their affiliates under the Credit Documents (as defined in the Credit
Agreement) with respect to their obligations to take all actions necessary or
desirable to perfect liens in the collateral as described in such Credit
Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       A-l
                         [EXHIBIT A TO ESCROW AGREEMENT]

          IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, intending to be legally bound, have caused this Escrow Closing
Letter to be duly executed and delivered as of the day and year first above
written.

                                             ORMAT NEVADA INC.,
                                             a Delaware corporation

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             ORCAL GEOTHERMAL INC.,
                                             a Delaware corporation

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             BEAL BANK, S.S.B.,
                                             as Administrative Agent and a Bank

                                             By:
                                                 -------------------------------
                                                 Name: Molly Curl
                                                 Title: Sr. Vice President

                                             By:
                                                 -------------------------------
                                                 Name: William T. Saurenmann
                                                 Title: Sr. Vice President

Chicago Title Company, as Escrow Agent, hereby acknowledges, accepts and agrees
to abide by the foregoing instructions.

                                        CHICAGO TITLE COMPANY

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                       A-2
                         [EXHIBIT A TO ESCROW AGREEMENT]

                                                                     Exhibit D-1
                                                             to Credit Agreement

RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:

Ann H. Miller
Latham & Watkins LLP
650 Town Center Drive, Suite 2000
Costa Mesa, California 92626

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

                             FORM OF DEED OF TRUST,
                    ASSIGNMENT OF RENTS, SECURITY AGREEMENT
                               AND FIXTURE FILING

                    DATED AS OF                      , 20
                                ---------------------    ---

                                       BY

                           --------------------------,
                                   AS TRUSTOR

                                       TO

                             CHICAGO TITLE COMPANY,
                                   AS TRUSTEE

                               FOR THE BENEFIT OF

                                BEAL BANK,S.S.B.,
                                 AS BENEFICIARY

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

ATTENTION: OFFICE OF THE COUNTY RECORDER OR REGISTRAR OF DEEDS -- THIS
INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY
DESCRIBED HEREIN AND THIS INSTRUMENT IS TO BE FILED OF RECORD IN THE RECORDS
WHERE MORTGAGES OR DEEDS OF TRUST ON REAL ESTATE ARE RECORDED. IN ADDITION, THIS
INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A DEED OF TRUST, BUT
ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE TO BECOME FIXTURES ON THE
REAL PROPERTY DESCRIBED HEREIN. THE NAME AND THE MAILING ADDRESS OF THE
BENEFICIARY (SECURED PARTY) AND TRUSTOR (DEBTOR) ARE SET FORTH IN THE FIRST
PARAGRAPH BELOW.

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE 1. DEFINITIONS.........................................................4

   1.1    Defined Terms........................................................4
   1.2    Accounting Terms.....................................................5
   1.3    The Rules of Interpretation..........................................5

ARTICLE 2. GENERAL COVENANTS AND PROVISIONS....................................5

   2.1    Trustor Performance of Credit Documents..............................5
   2.2    General Representations, Covenants and Warranties....................5
   2.3    Insurance; Application of Insurance Proceeds; Application of
             Eminent Domain Proceeds...........................................6
   2.4    Assignment of Rents..................................................6
   2.5    [Rejection of Surface and Geothermal Leases by Lessor................7
   2.6    Indemnification......................................................7
   2.7    Beneficiary Assumes No Secured Obligations...........................7
   2.8    Further Assurances...................................................8
   2.9    Acts of Trustor......................................................8
   2.10   After-Acquired Property..............................................8
   2.11   Mortgaged Property...................................................9
   2.12   Power of Attorney...................................................12
   2.13   Covenant to Pay.....................................................12
   2.14   Security Agreement..................................................12

ARTICLE 3. REMEDIES...........................................................13

   3.1    Acceleration of Maturity............................................13
   3.2    Due-On Clause.......................................................13
   3.3    Protective Advances.................................................14
   3.4    Institution of Equity Proceedings...................................14
   3.5    Beneficiary's Power of Enforcement..................................14
   3.6    Beneficiary's Right to Enter and Take Possession, Operate and
             Apply Income.....................................................15
   3.7    Separate Sales......................................................16
   3.8    Waiver of Appraisement, Moratorium, Valuation, Stay, Extension
             and Redemption Laws..............................................16
   3.9    Receiver............................................................17
   3.10   Suits to Protect the Mortgaged Property.............................17
   3.11   Proofs of Claim.....................................................17
   3.12   Trustor to Pay Amounts Secured Hereby on Any Default in Payment;
             Application of Monies by Beneficiary.............................18
   3.13   Delay or Omission; No Waiver........................................18
   3.14   No Waiver of One Default to Affect Another..........................18
   3.15   Discontinuance of Proceedings; Position of Parties Restored.........19

                                       i

   3.16   Remedies Cumulative.................................................19
   3.17   Interest After Event of Default.....................................19
   3.18   Foreclosure; Expenses of Litigation.................................19
   3.19   Deficiency Judgments................................................20
   3.20   WAIVER OF JURY TRIAL................................................20
   3.21   Exculpation of Beneficiary..........................................20

 ARTICLE 4. RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
            OTHER PROVISIONS RELATING TO TRUSTEE..............................21

   4.1    Exercise of Remedies by Trustee.....................................21
   4.2    Rights and Privileges of Trustee....................................21
   4.3    Resignation or Replacement of Trustee...............................21
   4.4    Authority of Beneficiary............................................22
   4.5    Effect of Appointment of Successor Trustee..........................22
   4.6    Confirmation of Transfer and Succession.............................22
   4.7    Exculpation.........................................................22
   4.8    Endorsement and Execution of Documents..............................23
   4.9    Multiple Trustees...................................................23
   4.10   No Required Action..................................................23
   4.11   Terms of Trustee's Acceptance.......................................23

ARTICLE 5. GENERAL............................................................23

   5.1    Discharge...........................................................23
   5.2    No Waiver...........................................................24
   5.3    Extension, Rearrangement or Renewal of Secured Obligations..........24
   5.4    Forcible Detainer...................................................24
   5.5    Waiver of Stay or Extension.........................................24
   5.6    Notices.............................................................25
   5.7    Severability........................................................25
   5.8    Application of Payments.............................................25
   5.9    Governing Law.......................................................25
   5.10   Entire Agreement....................................................25
   5.11   Amendments..........................................................26
   5.12   Successors and Assigns..............................................26
   5.13   Renewal, Etc........................................................26
   5.14   Liability...........................................................26
   5.15   Severability........................................................26
   5.16   Waiver..............................................................26
   5.17   Additional Waivers..................................................27
   5.18   Release of Collateral...............................................27
   5.19   Credit Agreement Controls...........................................28
   5.20   Time of the Essence.................................................28
   5.21   Counterpart Execution...............................................28

                                       ii

                                                                     Exhibit D-1
                                                             to Credit Agreement

                       DEED OF TRUST, ASSIGNMENT OF RENTS,
                     SECURITY AGREEMENT AND FIXTURE FILING

     THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING, dated as of ______________, 20__ (this "Deed of Trust") is executed by
_____________________________________ ("Trustor"), whose address is
_____________________________, to CHICAGO TITLE COMPANY, as trustee ("Trustee"),
whose address is 388 Market Street, Suite 1300, San Francisco, California 94111,
Attn: Rod Pasion, for the benefit of BEAL BANK, S.S.B., in its capacity as
administrative agent and bank (together with its successors and assigns,
"Beneficiary"), whose address is 6000 Legacy Drive, Plano, Texas 75024, Attn:
William T. Saurenmann.

                                    Recitals

     A. OrCal Geothermal, Inc., a Delaware corporation ("Borrower"), Beneficiary
and Banks (as defined in the Credit Agreement) have entered into that certain
Credit Agreement dated of December 18, 2003 (the "Credit Agreement"), pursuant
to which Banks have agreed to provide certain financing to Borrower, subject to
the terms and conditions set forth therein.

     B. This Deed of Trust is given pursuant to the Credit Agreement, and
payment, fulfillment, and performance by Borrower of its obligations thereunder
and under the other Credit Documents are secured hereby, and each and every term
and provision of the Credit Agreement and the Note, including the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties therein, are hereby incorporated
by reference herein as though set forth in full and shall be considered a part
of this Deed of Trust.

                                    Agreement

     NOW, THEREFORE, to secure the prompt and complete payment and performance
when due, by acceleration or otherwise, of all Obligations of the Loan Parties
(including Trustor) to Beneficiary and the other Secured Parties pursuant to the
Credit Documents (collectively, the "Secured Obligations"), Trustor, intending
to be legally bound, does hereby grant, bargain, sell, convey, warrant, assign,
transfer, mortgage, pledge, set over and confirm unto Trustee in trust for
Beneficiary as set forth in this Deed of Trust, with power of sale and right of
entry and possession, for the benefit of Beneficiary and the other Secured
Parties, all of Trustor's estate, right, title, interest, property, claim and
demand, now or hereafter arising, in and to the following property and rights
(collectively, the "Mortgaged Property"):

          (a) [For fee interests: all of that real property located in the
     County of Imperial, State of California, described on Exhibit A[-1] hereto
     (collectively, the "Site")] [For leasehold interests: Trustor's interest
     under each of the Leases listed on Exhibit A[-2] hereto (collectively, as
     modified, supplemented or amended from time to time, the "Surface and
     Geothermal Leases") and the leasehold estate created thereby in and to the
     lands and premises more particularly described therein (collectively, the
     "Site")];

          (b) any and all easements, leases, licenses, option rights,
     rights-of-way and other rights used in connection with the Site or as a
     means of access thereto [(including all rights of Trustor to exercise any
     election or option, to make any determination or to give any notice,
     consent, waiver or approval, or to take any other action under the Surface
     and Geothermal Leases)], all easements for ingress and egress and easements
     for water, transmission lines, telephone lines, natural gas and sewage
     pipelines, and all other such rights running in favor of Trustor, or
     appurtenant to the Site [or arising under the Surface and Geothermal
     Leases], and any and all sidewalks, alleys, strips and gores of land
     adjacent thereto or used in connection therewith, together with all and
     singular the tenements, hereditaments and appurtenances thereto, and with
     any land lying within the right-of-way of any streets, open or proposed,
     adjoining the same (including the easements, leases, licenses and other
     instruments described in Exhibit B hereto) (collectively, the "Easements";
     and the Site and the Easements collectively referred to herein as the "Real
     Property");

          (c) all buildings, structures, fixtures and other improvements now or
     hereafter erected on the Real Property, including the Project
     (collectively, the "Improvements");

          (d) all machinery, apparatus, equipment, fittings, fixtures, boilers,
     turbines and other articles of personal property, including all goods and
     all goods which become fixtures, now owned or hereafter acquired by Trustor
     and now or hereafter located on, attached to or used in the operation of or
     in connection with the Real Property or the Improvements, and all
     replacements thereof, additions thereto and substitutions therefor, to the
     fullest extent permitted by applicable law (all of the foregoing being
     hereinafter collectively called the "Equipment");

          (e) all inventory, raw materials, work in process and other materials
     used or consumed in the construction, operation or maintenance of, or now
     or hereafter located on or used in connection with, the Real Property, the
     Improvements or the Equipment, (including fuel and fuel deposits, now or
     hereafter located on the Real Property or elsewhere or otherwise owned by
     Trustor) (the above items, together with the Equipment, being hereinafter
     collectively called the "Tangible Collateral");

          (f) all rights, powers, privileges and other benefits of Trustor (to
     the extent assignable) now or hereafter obtained by Trustor [under the
     Surface and Geothermal Leases or] from any Governmental Instrumentality,
     including Permits issued in the name of Trustor and governmental actions
     relating to (i) the ownership, operation, management and use of the Real
     Property, Improvements, Equipment or Tangible Collateral, (ii) the
     development and financing of the Project, the Improvements and the
     Equipment, and (iii) any improvements, modifications or additions thereto;

          (g) [any right of Trustor to elect to terminate the Surface and
     Geothermal Leases or remain in possession of the Real Property pursuant to
     11 U.S.C. section 365(h) or any similar provision of applicable law and any
     possessory rights of Trustor in the Real Property pursuant to 11 U.S.C.
     section 365(h) or any other similar provision of applicable law;]

                                       2

          (h) all the lands and interests in lands, tenements and hereditaments
     hereafter acquired by Trustor in connection with or appurtenant to the Real
     Property or any other property or rights subject to the lien hereof,
     including all interests of Trustor, whether as lessor or lessee, in any
     leases of land hereafter made and all rights of Trustor thereunder;

          (i) any and all other property in any way associated or used in
     connection with or appurtenant to the Real Property, Improvements,
     Equipment or Tangible Collateral that may from time to time, by delivery or
     by writing of any kind, be subjected to the lien hereof by Trustor or by
     anyone on its behalf or with its consent, or which may come into the
     possession or be subject to the control of Trustee or Beneficiary pursuant
     to this Deed of Trust, being hereby assigned to Beneficiary and subjected
     or added to the lien or estate created by this Deed of Trust forthwith upon
     the acquisition thereof by Trustor, as fully as if such property were now
     owned by Trustor and were specifically described in this Deed of Trust and
     subjected to the lien and security interest hereof; and each of Trustee and
     Beneficiary is hereby authorized to receive any and all such property as
     and for additional security hereunder;

          (j) any and all contract rights, general intangibles, chattel paper,
     instruments, notes, letters of credit, insurance policies, insurance and
     condemnation awards and proceeds (including title insurance proceeds),
     warranties, trademarks, trade names, improvement plans and specifications
     (in each case whether existing now or in the future), relating to or
     otherwise arising in connection with the Mortgaged Property; and

          (k) all the remainder or remainders, reversion or reversions, rents,
     revenues, issues, profits, royalties, income and other benefits derived
     from any of the foregoing, all of which are hereby assigned to Beneficiary,
     who is hereby authorized to collect and receive the same, to give proper
     receipts and acquittances therefor and to apply the same in accordance with
     the provisions of this Deed of Trust.

     TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held
or hereafter acquired, unto Beneficiary, its successors and assigns, pursuant to
the provisions of this Deed of Trust.

     IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security
interest or estate created by this Deed of Trust to secure the payment of the
Secured Obligations, both present and future, shall be first, prior and superior
to any Lien, security interest, reservation of title or other interest
heretofore, contemporaneously or subsequently suffered or granted by Trustor,
its legal representatives, successors or assigns, except only those, if any,
expressly hereinafter referred to and that the Mortgaged Property is to be held,
dealt with and disposed of by Beneficiary, upon and subject to the terms,
covenants, conditions, uses and agreements set forth in this Deed of Trust. If,
notwithstanding any provisions in this Deed of Trust to the contrary,
enforcement of the liability of Trustor hereunder for the full amount of the
Secured Obligations would be an unlawful or voidable transfer under any
applicable fraudulent conveyance or fraudulent transfer law or any comparable
law, then the liability of Trustor hereunder shall be reduced to the highest
amount for which such liability may then be enforced without giving rise to an
unlawful or voidable transfer under any such law.

                                       3

     PROVIDED ALWAYS, that upon payment in full of the Secured Obligations in
accordance with the terms and provisions hereof and of the other Credit
Documents and the observance and performance by Trustor of its covenants and
agreements set forth herein and therein, then this Deed of Trust and the estate
hereby and therein granted shall cease and be void and shall be reconveyed as
provided herein below.

                                   ARTICLE 1.
                                   DEFINITIONS

     1.1 Defined Terms. Capitalized terms used in this Deed of Trust and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement. Any term defined by reference to an agreement, instrument or other
document shall have the meaning so assigned to it whether or not such document
is in effect. In addition, for purposes of this Deed of Trust, the following
definitions shall apply:

     "Credit Agreement" has the meaning ascribed to it in the Recitals.

     "Counterparty" has the meaning ascribed to it in Section 5.17 below.

     "Easements" has the meaning ascribed to it in the Granting Clauses.

     "Equipment" has the meaning ascribed to it in the Granting Clauses.

     "Improvements" has the meaning ascribed to it in the Granting Clauses.

     "Leases" has the meaning ascribed to it in Section 2.4 below.

     "Mortgaged Property" has the meaning ascribed to it in the Granting
Clauses.

     "Proceeds" has the meaning assigned to it under the UCC (as defined in
Section 2.14.1 below) and, in any event, shall include, (i) any and all proceeds
of any insurance (including, property casualty and title insurance), indemnity,
warranty or guaranty payable from time to time with respect to any of the
Mortgaged Property; (ii) any and all proceeds in the form of accounts (as such
term is defined in the UCC), security deposits, tax escrows (if any), down
payments (to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, letters of credit, chattel
paper, liens and security instruments, guaranties or general intangibles
relating in whole or in part to the Mortgaged Property and all rights and
remedies of whatever kind or nature Trustor may hold or acquire for the purpose
of securing or enforcing any obligation due Trustor thereunder.

     "Project" means [For HGC: an approximately 52 MW geothermal electric power
project located in Heber, California and owned by Trustor] [For HFC: a
geothermal fluid facility located in Heber, California and owned by Trustor]
[For SIGC: an approximately 48 MW geothermal electric power project located in
Heber, California and owned by Trustor] [For Mammoth Lakes: an approximately 40
MW geothermal electric power project (comprised of three geothermal plants)
located near Mammoth Lakes, California and owned by Trustor].

     "Real Property" has the meaning ascribed to it in the Granting Clauses.

                                       4

     "Rents" has the meaning ascribed to it in Section 2.4 below.

     "Secured Obligations" has the meaning ascribed to it in the Granting
Clauses.

     "Site" has the meaning ascribed to it in the Granting Clauses.

     ["Surface and Geothermal Leases" has the meaning ascribed to it in the
Granting Clauses.]

     "Tangible Collateral" has the meaning ascribed to it in the Granting
Clauses.

     "UCC Collateral" has the meaning given ascribed in Section 2.14.1 below.

     1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the respective meanings given to them under GAAP.

     1.3 The Rules of Interpretation. The rules of interpretation as set forth
in the Credit Agreement shall govern the terms, conditions and provisions
hereof. In the event of any conflict between those set forth in this Deed of
Trust and the Credit Agreement, the latter shall be deemed controlling and shall
preempt the former.

                                   ARTICLE 2.
                        GENERAL COVENANTS AND PROVISIONS

     2.1 Trustor Performance of Credit Documents. Trustor shall perform, observe
and comply with each and every provision hereof, and with each and every
provision contained in the Credit Documents, and shall promptly pay to
Beneficiary, when payment shall become due under the Credit Agreement, the
principal with interest thereon and all other sums required to be paid by
Trustor under this Deed of Trust and the other Credit Documents at the time and
in the manner provided in the Credit Documents. If enforcement of the liability
of Trustor under this Deed of Trust for the full amount of the Secured
Obligations would be an unlawful or voidable transfer under any fraudulent
conveyance or fraudulent transfer law or any comparable law, then the liability
of Trustor hereunder shall be reduced to the highest amount for which such
liability may then be enforced without giving rise to an unlawful or voidable
transfer under any such law.

     2.2 General Representations, Covenants and Warranties. Trustor represents,
covenants and warrants that as of the date hereof: (a) Trustor has good,
marketable, valid and legal (i) [fee simple title to the Site and the
Improvements] [leasehold interest in the Site and Improvements] and (ii)
interest in the rights granted pursuant to the Easements, in each case free and
clear of all Liens except for the Title Exceptions or Permitted Liens (as
applicable under Section 4.15 under the Credit Agreement); (b) good, marketable,
valid and legal title to all other Mortgaged Property, free and clear of all
Liens other than Permitted Liens; (c) Trustor has the full power and authority
to encumber the Mortgaged Property in the manner set forth herein; (d) the Title
Exceptions relating to the Mortgaged Property do not, in the aggregate,
materially and adversely affect the value, operations or use of the Project; and
(e) the Mortgaged Property includes all of Trustor's material real property
interests (including fee, leasehold and easement interests).

                                       5

     2.3 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds.

          2.3.1 Trustor shall at its sole expense obtain for, deliver to, assign
and maintain for the benefit of Beneficiary, during the term of this Deed of
Trust, insurance policies insuring the Mortgaged Property (to the extent
insurable) and liability insurance policies, all in accordance with the
requirements of Section 5.14 of the Credit Agreement. Trustor shall pay promptly
when due any premiums on such insurance policies and on any renewals thereof. In
the event of the foreclosure of this Deed of Trust or any other transfer of the
Mortgaged Property in extinguishment of the indebtedness and other sums secured
hereby, all right, title and interest of Trustor in and to all casualty
insurance policies, and renewals thereof then in force, shall pass to the
purchaser or grantee in connection therewith.

          2.3.2 All Insurance Proceeds and Eminent Domain Proceeds shall be paid
or shall be applied in accordance with the provisions of the Credit Documents.

     2.4 Assignment of Rents. Trustor unconditionally and absolutely assigns to
Beneficiary all of Trustor's right, title and interest in and to: all leases,
subleases, occupancy agreements, licenses, rental contracts and other similar
agreements now or hereafter existing relating to the use or occupancy of the
Mortgaged Property, together with all guarantees, modifications, extensions and
renewals thereof (the "Leases"); and all rents, issues, profits, income and
proceeds due or to become due from tenants of the Mortgaged Property, including
rentals and all other payments of any kind under any leases now existing or
hereafter entered into, together with all deposits (including security deposits)
of tenants thereunder ("Rents"). This is an absolute assignment to Beneficiary
and not an assignment as security for the performance of the obligations under
the Credit Documents, or any other indebtedness. Subject to the provisions
herein below, Beneficiary shall have the right, power and authority to: notify
any person that the Leases have been assigned to Beneficiary and that all Rents
and other obligations are to be paid directly to Beneficiary, whether or not
Beneficiary has commenced or completed foreclosure or taken possession of the
Mortgaged Property; settle compromise, release, extend the time of payment of,
and make allowances, adjustments and discounts of any Rents or other obligations
under the Leases; enforce payment of Rents and other rights under the Leases,
prosecute any action or proceeding, and defend against any claim with respect to
Rents and Leases; enter upon, take possession of and operate the Mortgaged
Property; lease all or any part of the Mortgaged Property; perform any and all
obligations of Trustor under the Leases and exercise any and all rights of
Trustor therein contained to the full extent of Trustor's rights and obligations
thereunder, with or without the bringing of any action or the appointment of a
receiver; or while any Event of Default exists, exercise any or all remedies
provided in Article 3 hereof, including the right to have a receiver appointed
and any other rights and remedies under California Civil Code Section 2938;
provided, however, that this assignment shall not impose upon Beneficiary any
duty to produce Rents, nor shall it cause Beneficiary to be (i) a "mortgagee in
possession" for any purpose; (ii) responsible for performing any obligations of
the lessor, licensor or other counterparty under any Lease; or (iii) be
responsible for waste committed by lessees or any other parties, for any
dangerous or defective condition in the Mortgaged Property, or for any
negligence in the management, upkeep, repair or control of the Mortgaged
Property. At Beneficiary's request, Trustor shall deliver a copy of this Deed of
Trust to each tenant under a Lease. Trustor irrevocably directs any tenant,
without any requirement for notice to or consent by Trustor, to comply with all
demands of Beneficiary under this Section 2.4 and to turn over to

                                       6

Beneficiary on demand all Rents which it owes under a Lease. Beneficiary shall
have the right, but not the obligation, to use and apply all Rents received
hereunder in such order and such manner as Beneficiary may determine in
accordance with the Credit Agreement. Notwithstanding that this is an absolute
assignment of the Rents and Leases and not merely the collateral assignment of,
or the grant of a lien or security interest in the Rents and Leases, Beneficiary
grants to Trustor a revocable license to collect and receive the Rents and to
retain, use and enjoy such Rents. Such license may be revoked by Beneficiary
only upon the occurrence of any Event of Default, in which case Trustor shall
immediately, without any further act or request on part of Beneficiary, turn
over to Beneficiary all Rents which it receives. Trustor shall apply any Rents
which it receives to the payment due under the Secured Obligations, taxes,
assessments, water charges, sewer rents and other governmental charges levied,
assessed or imposed against the Mortgaged Property, insurance premiums, and
other obligations of lessor under the Leases before using such proceeds for any
other purpose.

     2.5 [Rejection of Surface and Geothermal Leases by Lessor. If the lessor
under a Surface and Geothermal Lease rejects or disaffirms such Surface and
Geothermal Lease or purports or seeks to disaffirm the Surface and Geothermal
Lease pursuant to any Bankruptcy Law, then:

          2.5.1 To the extent permitted by law or Governmental Rule, Trustor
shall remain in possession of the Real Property demised under such Surface and
Geothermal Lease and shall perform all acts reasonably necessary for Trustor to
remain in such possession for the unexpired term of such Surface and Geothermal
Lease (including all renewals), whether the then existing terms and provisions
of such Surface and Geothermal Lease require such acts or otherwise; and

          2.5.2 All the terms and provisions of this Deed of Trust and the lien
created by this Deed of Trust shall remain in full force and effect and shall
extend automatically to all of Trustor's rights and remedies arising at any time
under, or pursuant to, Section 365(h) of the Bankruptcy Law, including all of
Trustor's rights to remain in possession of the Real Property.]

     2.6 Indemnification. Trustor hereby indemnifies Beneficiary against, and
holds harmless Beneficiary from, all losses, damages, liabilities, claims,
causes of action, judgments, court costs, attorneys' fees and other legal
expenses, costs of inspection and other expenses that either may suffer or
incur: (i) by reason of this Deed of Trust; (ii) by reason of the execution of
this trust or in performance of any act required or permitted hereunder or by a
Governmental Rule, including the disclosure or non-disclosure of any facts
relating to the Mortgaged Property, or any part thereof, incidental to a
judicial or non-judicial sale; or (iii) as a result of any failure of Trustor to
perform its obligations. The above obligation of Trustor to indemnify and hold
harmless Beneficiary shall survive the release and cancellation of the Secured
Obligations and the release and reconveyance or partial release and reconveyance
of this Deed of Trust.

     2.7 Beneficiary Assumes No Secured Obligations. It is expressly agreed
that, anything herein contained to the contrary notwithstanding, except as may
otherwise be provided in the Credit Documents, Trustor shall remain obligated
under all agreements which are included in the definition of "Mortgaged
Property" and shall perform all of its obligations thereunder in accordance with
the provisions thereof, and neither Beneficiary nor any of the Banks shall have
any obligation or liability with respect to such obligations of Trustor, nor
shall Beneficiary or any of the Banks be

                                       7

required or obligated in any manner to perform or fulfill any obligations or
duties of Trustor under such agreements, or to make any payment or to make any
inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or take any action to collect or enforce the payment
of any amounts which have been assigned to Beneficiary hereunder or to which
Beneficiary or the Banks may be entitled at any time or times.

     2.8 Further Assurances. Trustor shall, from time to time, at its expense,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or that Trustee or Beneficiary may
reasonably request, in order to perfect, continue and protect the lien and
security interest granted or purported to be granted hereby and to enable
Beneficiary to obtain the full benefits of the lien and security interest
granted or intended to be granted hereby. Trustor shall keep the Mortgaged
Property free and clear of all Liens, other than Permitted Liens. Without
limiting the generality of the foregoing, Trustor shall execute and record or
file this Deed of Trust and each amendment hereto, and such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be necessary, or as Beneficiary or Trustee may
reasonably request, in order to perfect and preserve the lien and security
interest granted or purported to be granted hereby. Trustor hereby authorizes
Beneficiary to file one or more financing statements or continuation statements,
and amendments thereto, relative to all or any part of the Mortgaged Property
necessary to preserve or protect the lien and security interest granted hereby
without the signature of Trustor where permitted by law.

     2.9 Acts of Trustor. Except as provided in or permitted by the Credit
Documents, Trustor hereby represents and warrants that it has not mortgaged,
hypothecated, assigned or pledged and hereby covenants that it will not
mortgage, hypothecate, assign or pledge, so long as this Deed of Trust shall
remain in effect, any of its right, title or interest in and to the Mortgaged
Property or any part thereof, to anyone other than Beneficiary.

     2.10 After-Acquired Property. Any and all of the Mortgaged Property which
is hereafter acquired shall immediately, without any further conveyance,
assignment or act on the part of Trustor or Beneficiary, become and be subject
to the lien and security interest of this Deed of Trust as fully and completely
as though specifically described herein, but nothing contained in this Section
2.10 shall be deemed to modify or change the obligations of Trustor under
Section 2.8 hereof. If and whenever from time to time Trustor shall hereafter
acquire any real property or interest therein which constitutes or is intended
to constitute part of the Mortgaged Property hereunder, Trustor shall promptly
give notice thereof to Beneficiary and Trustor shall forthwith execute,
acknowledge and deliver to Beneficiary a supplement to this Deed of Trust in
form and substance reasonably satisfactory to Beneficiary subjecting the
property so acquired to the lien of this Deed of Trust. At the same time, if
Beneficiary so requests, Trustor shall deliver to Beneficiary either (i) an
endorsement to the lender's policy of title insurance issued to Beneficiary
insuring the lien of this Deed of Trust, or (ii) a new lender's title policy
(which shall include tie in coverage relating to the lender's policy described
in (i), above), in each case which shall insure to Beneficiary in form and
substance reasonably satisfactory to Beneficiary that the lien of this Deed of
Trust as insured under such title insurance policy or policies encumbers such
later acquired property and that Trustor's title to such property meets all of
the applicable requirements of the Credit Documents with respect to title to
Trustor's real property interests.

                                       8

     2.11 Mortgaged Property.

          2.11.1 [Trustor shall pay or cause to be paid all rent and other
charges required under the Surface and Geothermal Leases as and when the same
are due and shall promptly and faithfully perform or cause to be performed all
other material terms, obligations, covenants, conditions, agreements,
indemnities and liabilities of Trustor under the Surface and Geothermal Leases.]
Trustor shall observe all applicable covenants, easements and other restrictions
of record with respect to the Site, the Easements or to any other part of the
Mortgaged Property, in all material respects.

          2.11.2 [Trustor shall maintain in full force and effect, perform its
obligations under, preserve, protect and defend the material rights of Trustor
under and take all reasonable action necessary to prevent termination (except by
expiration in accordance with its terms) of each and every Surface and
Geothermal Lease, including prosecution of suits to enforce any material rights
of Trustor thereunder and enforcement of any material claims with respect
thereto. Trustor does hereby authorize and irrevocably appoint and constitute
Beneficiary as its true and lawful attorney-in-fact, which appointment is
coupled with an interest, in its name, place and stead, to take any and all
actions deemed necessary or desirable by Beneficiary to perform and comply with
all the obligations of Trustor under the Surface and Geothermal Leases, and to
do and take upon the occurrence and during continuation of an Event of Default,
but without any obligation so to do or take, any action which Beneficiary deems
reasonably necessary to prevent or cure any default by Trustor under the Surface
and Geothermal Leases, to enter into and upon the Real Property and Improvements
or any part thereof as provided in the Credit Documents in order to prevent or
cure any default of Trustor pursuant thereto, to the end that the rights of
Trustor in and to the leasehold estates created by the Surface and Geothermal
Leases shall be kept free from default.]

          2.11.3 [Trustor shall not surrender its leasehold estates and
interests under the Surface and Geothermal Leases or modify, change, supplement,
alter or amend the Surface and Geothermal Leases or affirmatively waive any
provisions thereof, either orally or in writing, except as permitted in the
Credit Documents, and any attempt on the part of Trustor to do any of the
foregoing without the written consent of Beneficiary shall be null and void.]

          2.11.4 If any action or proceeding shall be instituted to evict
Trustor or to recover possession of the Mortgaged Property or any part thereof
or interest therein from Trustor or any action or proceeding otherwise affecting
the Mortgaged Property or this Deed of Trust shall be instituted, then Trustor
shall, immediately after receipt, deliver to Beneficiary a true and complete
copy of each petition, summons, complaint, notice of motion, order to show cause
and all other pleadings and papers, however designated, served in any such
action or proceeding.

          2.11.5 [Trustor covenants and agrees that the fee title to the Real
Property and Improvements and the leasehold estates created under the Surface
and Geothermal Leases shall not merge but shall always remain separate and
distinct, notwithstanding the union of said estates either in Trustor or a third
party by purchase or otherwise and, in case Trustor acquires the fee title or
any other estate, title or interest in and to the Real Property and
Improvements, the lien of this Deed of Trust shall, without further conveyance,
simultaneously with such acquisition, be

                                       9

spread to cover and attach to such acquired estate and as so spread and attached
shall be prior to the lien of any mortgage placed on the acquired estate after
the date of this Deed of Trust.]

          2.11.6 [No release or forbearance of any of Trustor's obligations
under the Surface and Geothermal Leases by the lessor thereunder, shall release
Trustor from any of its obligations under this Deed of Trust.]

          2.11.7 [Trustor shall, within ten (10) days after written demand from
Beneficiary, deliver to Beneficiary proof of payment of all items that are
required to be paid by Trustor under the Surface and Geothermal Leases,
including rent, taxes, operating expenses and other charges.]

          2.11.8 The lien of this Deed of Trust shall attach to all of Trustor's
rights and remedies at any time arising under or pursuant to section 365(h) of
the Bankruptcy Law, including all of Trustor's rights to remain in possession of
the Mortgaged Property. [Trustor shall not elect to treat any of the Surface and
Geothermal Leases as terminated under section 365(h)(l) of the Bankruptcy Law,
and any such election shall be void.]

          2.11.8.1 [If pursuant to section 365(h) of the Bankruptcy Law, Trustor
shall seek to offset against the rent reserved in any of the Surface and
Geothermal Leases the amount of any damages caused by the nonperformance by the
lessor or any other party of any of their respective obligations thereunder
after the rejection by the lessor or such other party of such Surface and
Geothermal Lease under the Bankruptcy Law, then Trustor shall, prior to
effecting such offset, notify Beneficiary of its intent to do so, setting forth
the amount proposed to be so offset and the basis therefor. Beneficiary shall
have the right to object to all or any part of such offset that, in the
reasonable judgment of Beneficiary, would constitute a breach of such Surface
and Geothermal Lease, and in the event of such objection, Trustor shall not
effect any offset of the amounts found objectionable by Beneficiary. Neither
Beneficiary's failure to object as aforesaid nor any objection relating to such
offset shall constitute an approval of any such offset by Beneficiary.]

          2.11.8.2 [If any action, proceeding, motion or notice shall be
commenced or filed in respect of the lessor under any of the Surface and
Geothermal Leases or any other party or in respect of such Surface and
Geothermal Leases in connection with any case under the Bankruptcy Law, then
Beneficiary shall have the option to intervene in any such litigation with
counsel of Beneficiary's choice. Beneficiary may proceed in its own name in
connection with any such litigation, and Trustor agrees to execute any and all
powers, authorizations, consents or other documents required by Beneficiary in
connection therewith.]

          2.11.8.3 Trustor shall, after obtaining knowledge thereof, promptly
notify Beneficiary of any filing by or against the lessor or other party with an
interest in the Mortgaged Property of a petition under the Bankruptcy Law.
Trustor shall promptly deliver to Beneficiary, following receipt, copies of any
and all notices, summonses, pleadings, applications and other documents received
by Trustor in connection with any such petition and any proceedings relating
thereto.

          2.11.8.4 [If there shall be filed by or against Trustor a petition
under the Bankruptcy Law, and Trustor, as lessee under the Surface and
Geothermal Leases, shall

                                       10

determine to reject any of the Surface and Geothermal Leases pursuant to section
365(a) of the Bankruptcy Law, then Trustor shall give Beneficiary a notice of
the date on which Trustor shall apply to the bankruptcy court for authority to
reject such Surface and Geothermal Lease (such notice to be no later than twenty
(20) days prior to such date). Beneficiary shall have the right, but not the
obligation, to serve upon Trustor at any time prior to the date on which Trustor
shall so apply to the bankruptcy court a notice stating that Beneficiary demands
that Trustor assume and assign such Surface and Geothermal Lease to Beneficiary
pursuant to section 365 of the Bankruptcy Law. If Beneficiary shall serve upon
Trustor the notice described in the preceding sentence, to the extent permitted
by law or Governmental Rule Trustor shall not seek to reject such Surface and
Geothermal Lease and shall comply with the demand provided for in the preceding
sentence. In addition, effective upon the entry of an order for relief with
respect to Trustor under the Bankruptcy Law, Trustor hereby assigns and
transfers to Beneficiary a non-exclusive right to apply to the bankruptcy court
under section 365(d)(4) of the Bankruptcy Law for an order extending the period
during which such Surface and Geothermal Lease may be rejected or assumed; and
shall (a) promptly notify Beneficiary of any default by Trustor in the
performance or observance of any of the terms, covenants or conditions on the
part of Trustor to be performed or observed under such Surface and Geothermal
Lease and of the giving of any written notice by the lessor thereunder to
Trustor of any such default, and (b) promptly cause a copy of each written
notice given to Trustor by the lessor under such Surface and Geothermal Lease to
be delivered to Beneficiary. Beneficiary may rely on any notice received by it
from any such lessor of any default by Trustor under such Surface and Geothermal
Lease and may take such action as may be permitted by law or Governmental Rule
to cure such default even though the existence of such default or the nature
thereof shall be questioned or denied by Trustor or by any Person on its
behalf.]

          2.11.9 Trustor shall cause the Mortgaged Property to be maintained in
accordance with Prudent Utility Practices and will not commit or suffer to be
committed any waste of the Mortgaged Property. Except in accordance with the
Credit Documents, the Real Property shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment), without the
consent of Beneficiary. Trustor will not, without obtaining the prior consent of
Beneficiary, initiate, join in or consent to any private restrictive covenant,
zoning ordinance, or other public or private restrictions, limiting or affecting
the uses which may be made of the Mortgaged Property or any part thereof.

          2.11.10 No part of the Mortgaged Property shall in any manner be
further encumbered (other than with Permitted Liens), sold, transferred,
assigned or conveyed, or permitted to be further encumbered, sold, transferred,
assigned or conveyed, except in accordance with the terms of the Credit
Agreement, without the prior consent of Beneficiary, which consent in any and
all circumstances may be withheld in the sole and absolute discretion of
Beneficiary. The provisions of the foregoing sentence of this paragraph shall
apply to each and every such further encumbrance, sale, transfer, assignment or
conveyance, regardless of whether or not Beneficiary has consented to, or waived
by its action or inaction its rights hereunder with respect to, any such
previous further encumbrance, sale, transfer, assignment or conveyance, and,
irrespective of whether such further encumbrance, sale, transfer, assignment or
conveyance is voluntary, by reason of operation of law or is otherwise made.

                                       11

     2.12 Power of Attorney. Trustor does hereby irrevocably constitute and
appoint Beneficiary, its true and lawful attorney (which appointment is coupled
with an interest), with full power of substitution, for Trustor and in the name,
place and stead of Trustor or in Beneficiary's own name, for so long as any of
the Secured Obligations are outstanding, to ask, demand, collect, receive,
receipt for and sue for any and all rents, income and other sums which are
assigned hereunder with full power to endorse the name of Trustor on all
instruments given in payment or in part payment thereof, to settle, adjust or
compromise any claims thereunder as fully as Trustor itself could do and in its
discretion file any claim or take any action or proceeding, either in its own
name or in the name of Trustor or otherwise, which Beneficiary may deem
necessary or appropriate to protect and preserve the right, title and interest
of Beneficiary in and to such rents, income and other sums and the security
intended to be afforded hereby; provided that Beneficiary shall not exercise
such rights unless an Event of Default has occurred and is continuing.

     2.13 Covenant to Pay. If an Event of Default has occurred and is continuing
and such Event of Default could reasonably be expected to materially and
adversely affect Beneficiary's interest hereunder in the Mortgaged Property or
result in personal injury, then Beneficiary, among its other rights and
remedies, shall have the right, but not the obligation, to pay, observe or
perform the same, in whole or in part, and with such modifications as
Beneficiary reasonably shall deem advisable. To the extent provided in the
Credit Documents, all sums, including reasonable attorneys' fees, so expended or
incurred by Beneficiary by reason of the default of Trustor, or by reason of the
bankruptcy or insolvency of Trustor, as well as, without limitation, sums
expended or incurred to sustain the lien or estate of this Deed of Trust or its
priority, or to protect or enforce any rights of Beneficiary hereunder, or to
recover any of the Secured Obligations, or to complete construction of the
Project for which the Credit Documents are intended as financing, or for
repairs, maintenance, alterations, replacements or improvements thereto or for
the protection thereof, or for real estate taxes or other governmental
assessments or charges against any part of the Mortgaged Property, or premiums
for insurance of the Mortgaged Property, shall be entitled to the benefit of the
lien on the Mortgaged Property as of the date of the recording of this Deed of
Trust, shall be deemed to be added to and be part of the Secured Obligations
secured hereby, and shall be repaid by Trustor as provided in the Credit
Documents.

     2.14 Security Agreement.

          2.14.1 This Deed of Trust shall also be a security agreement between
Trustor and Beneficiary covering the Mortgaged Property constituting personal
property or fixtures (hereinafter collectively called "UCC Collateral") governed
by the California Uniform Commercial Code ("UCC") as the same may be more
specifically set forth in any financing statement delivered in connection with
this Deed of Trust, and as further security for the payment and performance of
the Secured Obligations, Trustor hereby grants to Beneficiary a security
interest in such portion of the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the UCC. In addition to Beneficiary's other
rights hereunder, Beneficiary shall have all rights of a secured party under the
UCC. Trustor shall execute and deliver to Beneficiary all financing statements
and such further assurances that may be reasonably required by Beneficiary to
establish, create, perfect (to the extent the same can be achieved by the filing
of a financing statement) and maintain the validity and priority of
Beneficiary's security interests, and Trustor shall bear all reasonable costs
thereof, including all UCC searches. Except as otherwise provided in the Credit
Documents, if Beneficiary should dispose of any of the

                                       12

Mortgaged Property comprising the UCC Collateral pursuant to the UCC, ten (10)
days' prior written notice by Beneficiary to Trustor shall be deemed to be
reasonable notice; provided, however, Beneficiary may dispose of such property
in accordance with the foreclosure procedures of this Deed of Trust in lieu of
proceeding under the UCC. Beneficiary may from time to time execute and deliver
at Trustor's expense, all continuation statements, termination statements,
amendments, partial releases, or other instruments relating to all financing
statements by and between Trustor and Beneficiary. Except as otherwise provided
in the Credit Documents, if an Event of Default shall occur and is continuing,
(a) Beneficiary, in addition to any other rights and remedies which it may
have, may exercise immediately and without demand to the extent permitted by
law, any and all rights and remedies granted to a secured party under the UCC
including the right to take possession of the UCC Collateral or any part
thereof, and to take such other measures as Beneficiary may deem necessary for
the care, protection and preservation of such collateral and (b) upon request or
demand of Beneficiary, Trustor shall at its expense, assemble the UCC Collateral
and make it available to Beneficiary at a convenient place acceptable to
Beneficiary. Trustor shall pay to Beneficiary on demand, any and all expenses,
including reasonable attorneys' fees and disbursements incurred or paid by
Beneficiary in protecting the interest in the UCC Collateral and in enforcing
the rights hereunder with respect to such UCC Collateral.

          2.14.2 Trustor and the Beneficiary agree, to the extent permitted by
law, that: (i) this Deed of Trust upon recording or registration in the real
estate records of the proper office shall constitute a financing statement filed
as a "fixture filing" within the meaning of Sections 9334 and 9502 of the UCC;
(ii) all or a part of the Mortgaged Property are or are to become fixtures; and
(iii) the addresses of Trustor and Beneficiary are as set forth in the preamble
of this Deed of Trust.

                                   ARTICLE 3.
                                    REMEDIES

     3.1 Acceleration of Maturity. If an Event of Default occurs and is
continuing, Beneficiary may, at the election of the Majority Banks (except that
such acceleration shall be automatic if the Event of Default is occuring under
Section 7.1.2 of the Credit Agreement), declare the Secured Obligations to be
due and payable immediately, and upon such declaration such principal and
interest and other sums shall immediately become due and payable without demand,
presentment, notice or other requirements of any kind (all of which Trustor
waives).

     3.2 Due-On Clause. If (a) the Mortgaged Property is assigned in violation
of Section 6.3 of the Credit Agreement, or (b) there is a change of control in
violation of Section 7.1.11 of the Credit Agreement, then Beneficiary may, at
the election of the Majority Banks, declare the Secured Obligations to be due
and payable immediately, and upon such declaration such principal and interest
and other sums shall immediately become due and payable without demand,
presentment, notice or other requirements of any kind (all of which Trustor
waives). Beneficiary's consent to any assignment or change of control shall not
be deemed to be a waiver of Beneficiary's right to require its consent to any
future assignment or change of control in accordance with the terms of the
Credit Agreement.

                                       13

     3.3 Protective Advances. If an Event of Default shall have occurred and is
continuing, then without thereby limiting Beneficiary's other rights or
remedies, waiving or releasing any of Trustor's obligations, or imposing any
obligation on Beneficiary, Beneficiary may, at the election of the Majority
Banks, either advance any amount owing or perform any or all actions that
Beneficiary considers necessary or appropriate to cure such default. No sums
advanced or performance rendered by Beneficiary shall cure, or be deemed a
waiver of any Event of Default.

     3.4 Institution of Equity Proceedings. If an Event of Default occurs and is
continuing, Beneficiary may, at the election of the Majority Banks, institute an
action, suit or proceeding in equity for specific performance of this Deed of
Trust, the Credit Agreement or any other Credit Document, all of which shall be
specifically enforceable by injunction or other equitable remedy.

     3.5 Beneficiary's Power of Enforcement.

          3.5.1 If an Event of Default occurs and is continuing, Beneficiary, at
the election of the Majority Banks, shall be entitled to prepare and record on
its own behalf, or to deliver to Trustee for recording, if appropriate, written
declaration of default and demand for sale and written notice of breach and
election to sell (or other statutory notice) to cause the Mortgaged Property to
be sold to satisfy the obligations hereof, and in the case of delivery to
Trustee, Trustee shall cause said notice to be filed for record.

          3.5.2 After the lapse of such time as may then be required by law
following the recordation of said notice of breach and election to sell, and
notice of sale having been given as then required by law, Trustee without demand
on Trustor, may sell the Mortgaged Property or any portion thereof at the time
and place fixed by it in said notice, either as a whole or in separate parcels,
and in such order as it may determine, at public auction to the highest bidder,
of cash in lawful money of the United States payable at the time of sale.
Trustee may, for any cause it deems expedient, postpone the sale of all or any
portion of said property until it shall be completed and, in every case, notice
of postponement shall be given by public announcement thereof at the time and
place last appointed for the sale and from time to time thereafter Trustee may
postpone such sale by public announcement at the time fixed by the preceding
postponement; provided that Trustee shall give Trustor notice of such
postponement to the extent required by law. Trustee shall execute and deliver to
the purchaser its deed, bill of sale, or other instrument conveying said
property so sold, but without any covenant or warranty, express or implied. The
recitals in such instrument of conveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Beneficiary,
may bid at the sale.

          3.5.3 If any Event of Default occurs and is continuing, Beneficiary
may, at the election of the Majority Banks, to the extent permitted by law,
either with or without entry or taking possession of the Mortgaged Property, and
without regard to whether or not the indebtedness and other sums secured hereby
shall be due and without prejudice to the right of Beneficiary thereafter to
bring an action or proceeding to foreclose or any other action for any other
Event of Default existing at the time such earlier action was commenced, proceed
by any appropriate action or proceeding: (1) to enforce payment of the Secured
Obligations, to the extent permitted by law, or the performance of any term
hereof or any other right; (2) to foreclose this Deed of Trust in any manner
provided by law for the foreclosure of mortgages or

                                       14

deeds of trust on real property and to sell, as an entirety or in separate lots
or parcels, the Mortgaged Property or any portion thereof pursuant to the laws
of the State of California or under the judgment or decree of a court or courts
of competent jurisdiction, and Beneficiary shall be entitled to recover in any
such proceeding all costs and expenses incident thereto, including reasonable
attorneys' fees in such amount as shall be awarded by the court; (3) to exercise
any or all of the rights and remedies available to it under the Credit
Documents; and (4) to pursue any other remedy available to it. Beneficiary shall
take action either by such proceedings or by the exercise of its powers with
respect to entry or taking possession, or both, as Beneficiary may determine.

          3.5.4 The remedies described in this Section 3.5 may be exercised with
respect to all or any portion of the UCC Collateral, either simultaneously with
the sale of any real property encumbered hereby or independent thereof.
Beneficiary shall at any time be permitted to proceed with respect to all or any
portion of the UCC Collateral in any manner permitted by the UCC. Trustor agrees
that Beneficiary's inclusion of all or any portion of the UCC Collateral in a
sale or other remedy exercised with respect to the real property encumbered
hereby, as permitted by the UCC, is a commercially reasonable disposition of
such property.

          3.5.5 Where the Mortgaged Property consists of real property and
personal property, any reinstatement of the Secured Obligations, following the
occurrence of an Event of Default and an election by the Beneficiary, at the
direction of the Required Banks, to accelerate the maturity of the Secured
Obligations, which is made by Trustor or any other person or entity permitted to
exercise the right of reinstatement under Section 2924c of the California Civil
Code or any successor statute, shall, in accordance with the terms of UCC
Section 9604, not prohibit the Beneficiary from conducting a sale or other
disposition of any personal property or from otherwise proceeding against
or continuing to proceed against any personal property in any manner permitted
by the UCC; nor shall any such reinstatement invalidate, rescind or otherwise
affect any sale, disposition or other proceeding held, conducted or instituted
with respect to any personal property prior to such reinstatement. Any sums paid
to Beneficiary, in effecting any reinstatement pursuant to Section 2924c of the
California Civil Code shall be applied to the Secured Obligations and to
Beneficiary's and Trustee's reasonable costs and expenses in the manner required
by Section 2924c.

     3.6 Beneficiary's Right to Enter and Take Possession, Operate and Apply
Income.

          3.6.1 If an Event of Default occurs and is continuing, Trustor, upon
demand of Beneficiary, at the election of the Majority Banks, shall forthwith
surrender to Beneficiary the actual possession and, if and to the extent
permitted by law, Beneficiary itself, or by such officers or agents as it may
appoint, may enter and take possession of all of the Mortgaged Property,
including the Tangible Collateral, without liability for trespass, damages or
otherwise, and may exclude Trustor and its agents and employees wholly therefrom
and may have joint access with Trustor to the books, papers and accounts of
Trustor.

          3.6.2 If an Event of Default has occurred and is continuing and
Trustor shall for any reason fail to surrender or deliver the Mortgaged Property
or any part thereof after Beneficiary's demand, Beneficiary may obtain a
judgment or decree conferring on Beneficiary or Trustee the right to immediate
possession or requiring Trustor to deliver immediate possession

                                       15

of all or part of such property to Beneficiary or Trustee and Trustor hereby
specifically consents to the entry of such judgment or decree. Trustor shall pay
to Beneficiary or Trustee, upon demand, all costs and expenses of obtaining such
judgment or decree and reasonable compensation to Beneficiary or Trustee, their
attorneys and agents, and all such costs, expenses and compensation shall, until
paid, be secured by the lien of this Deed of Trust.

          3.6.3 Upon every such entering upon or taking of possession,
Beneficiary or Trustee may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to time in
its sole and absolute discretion and without being under any duty to so act:

               3.6.3.1 make all necessary and proper maintenance, repairs,
renewals and replacements thereto and thereon, and all necessary additions,
betterments and improvements thereto and thereon and purchase or otherwise
acquire fixtures, personalty and other property in connection therewith;

               3.6.3.2 insure or keep the Mortgaged Property insured;

               3.6.3.3 manage and operate the Mortgaged Property and exercise
all the rights and powers of Trustor in their name or otherwise with respect to
the same;

               3.6.3.4 enter into agreements with others to exercise the powers
herein granted Beneficiary or Trustee, all as Beneficiary or Trustee from time
to time may determine; and shall apply the monies so received by Beneficiary or
Trustee in such priority as provided by the Credit Documents to (i) the payment
of interest and principal due and payable to the Beneficiary, (ii) the deposits
for taxes and assessments and insurance premiums due, (iii) the cost of
insurance, taxes, assessments and other proper charges upon the Mortgaged
Property or any part thereof, (iv) the compensation, expenses and disbursements
of the agents, attorneys and other representatives of Beneficiary or Trustee as
allowed under this Deed of Trust, and (v) any other charges or costs required to
be paid by Trustor under the terms of the Credit Documents; or

               3.6.3.5 rent or sublet the Mortgaged Property or any portion
thereof for any purpose permitted by this Deed of Trust.

     Beneficiary or Trustee shall surrender possession of the Mortgaged Property
to Trustor (x) as may be required by law or court order, or (y) when all amounts
under any of the terms of the Credit Documents, including this Deed of Trust,
shall have been paid current and all Events of Default have been cured or
waived. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur and be continuing.

     3.7 Separate Sales. To the extent permitted by law or Governmental Rule,
the Mortgaged Property may be sold in one or more parcels and in such manner and
order as Trustee, in his sole discretion, may elect, it being expressly
understood and agreed that the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.

     3.8 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws. Trustor agrees to the full extent permitted by law that if an
Event of Default occurs and is continuing, neither Trustor nor anyone claiming
through or under it shall or will set

                                       16

up, claim or seek to take advantage of any appraisement, moratorium, valuation,
stay, extension or redemption laws now or hereafter in force, in order to
prevent or hinder the enforcement or foreclosure of this Deed of Trust or the
absolute sale of the Mortgaged Property or any portion thereof or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchasers thereof, and Trustor for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien
hereof and agrees that Trustee or any court having jurisdiction to foreclose
such lien may sell the Mortgaged Property in part or as an entirety.

     3.9 Receiver. If an Event of Default occurs and is continuing, Beneficiary,
to the extent permitted by law, and without regard to the value, adequacy or
occupancy of the security for the indebtedness and other sums secured hereby,
shall be entitled as a matter of right if it so elects to the appointment of a
receiver to enter upon and take possession of the Mortgaged Property and to
collect all earnings, revenues and receipts and apply the same as the court may
direct, and such receiver may be appointed by any court of competent
jurisdiction upon application by Beneficiary. To the extent permitted by law or
Governmental Rule, Beneficiary may have a receiver appointed without notice to
Trustor or any third party, and Beneficiary may waive any requirement that the
receiver post a bond. To the extent permitted by law or Governmental Rule,
Beneficiary shall have the power to designate and select the Person who shall
serve as the receiver and to negotiate all terms and conditions under which such
receiver shall serve. To the extent permitted by law or Governmental Rule, any
receiver appointed on Beneficiary's behalf may be an Affiliate of Beneficiary.
The reasonable expenses, including receiver's fees, reasonable attorneys' fees,
costs and agents' compensation, incurred pursuant to the powers herein contained
shall be secured by this Deed of Trust. The right to enter and take possession
of and to manage and operate the Mortgaged Property and to collect all earnings,
revenues and receipts, whether by a receiver or otherwise, shall be cumulative
to any other right or remedy available to Beneficiary under this Deed of Trust,
the other Credit Documents or otherwise available to Beneficiary and may be
exercised concurrently therewith or independently thereof, but such rights shall
be exercised in a manner which is otherwise in accordance with and consistent
with the Credit Documents. Beneficiary shall be liable to account only for such
earnings, revenues and receipts (including security deposits) actually received
by Beneficiary, whether received pursuant to this section or any other provision
hereof. Notwithstanding the appointment of any receiver or other custodian,
Beneficiary shall be entitled as pledgee to the possession and control of any
cash, deposits, or instruments at the time held by, or payable or deliverable
under the terms of this Deed of Trust to, Beneficiary.

     3.10 Suits to Protect the Mortgaged Property. Beneficiary shall have the
power and authority to institute and maintain any suits and proceedings as
Beneficiary, in its sole and absolute discretion, may deem advisable (a) to
prevent any impairment of the Mortgaged Property by any acts which may be
unlawful or in violation of this Deed of Trust, (b) to preserve or protect its
interest in the Mortgaged Property, or (c) to restrain the enforcement of or
compliance with any legislation or other Legal Requirement that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order might impair the security hereunder or be
prejudicial to Beneficiary's interest.

     3.11 Proofs of Claim. In the case of any receivership, insolvency,
Bankruptcy Event, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting

                                       17

Trustor, any Affiliate or any guarantor, co-maker or endorser of any of
Trustor's obligations, its creditors or its property, Beneficiary, to the extent
permitted by law, shall be entitled to file such proofs of claim or other
documents as it may deem be necessary or advisable in order to have its claims
allowed in such proceedings for the entire amount due and payable by Trustor
under the Credit Documents, at the date of the institution of such proceedings,
and for any additional amounts which may become due and payable by Trustor after
such date.

     3.12 Trustor to Pay Amounts Secured Hereby on Any Default in Payment;
          Application of Monies by Beneficiary.

          3.12.1 In case of a foreclosure sale of all or any part of the
Mortgaged Property and of the application of the proceeds of sale to the payment
of the sums secured hereby, to the extent permitted by law, Beneficiary shall be
entitled to enforce payment from Trustor of any additional amounts then
remaining due and unpaid and to recover judgment against Trustor for any portion
thereof remaining unpaid, with interest at the interest rate on the Notes. The
sale of a part of the Subject Property shall not exhaust the power of sale, but
sales may be made from time to time until the Secured Obligations are paid and
performed in full.

          3.12.2 Trustor hereby agrees to the extent permitted by law, that no
recovery of any such judgment by Beneficiary or other action by Beneficiary and
no attachment or levy of any execution upon any of the Mortgaged Property or any
other property shall in any way affect the Lien and security interest of this
Deed of Trust upon the Mortgaged Property or any part thereof or any Lien,
rights, powers or remedies of Beneficiary hereunder, but such Lien, rights,
powers and remedies shall continue unimpaired as before.

          3.12.3 The provisions of this Section 3.12 shall not be deemed to
limit or otherwise modify the provisions of any guaranty of the Secured
Obligations.

     3.13 Delay or Omission; No Waiver. No delay or omission of Beneficiary or
the Banks to exercise any right, power or remedy upon any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to waive
any such Event of Default or to constitute acquiescence therein. Every right,
power and remedy given to Beneficiary whether contained herein or in the other
Credit Documents or otherwise available to Beneficiary may be exercised from
time to time and as often as may be deemed expedient by Beneficiary.

     3.14 No Waiver of One Default to Affect Another. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon. If Beneficiary (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for
the payment thereof; (c) waives or does not exercise any right granted in this
Deed of Trust or any other Credit Document; (d) releases any part of the
Mortgaged Property from the lien or security interest of this Deed of Trust or
any other instrument securing the Secured Obligations; (e) consents to the
filing of any map, plat or replat of the Real Property or any part thereof;
(f) consents to the granting of any easement on the Real Property; or (g) makes
or consents to any agreement changing the terms of this Deed of Trust or any
other Credit Document subordinating the lien or any charge hereof, no such act
or omission shall release, discharge, modify, change or affect the liability
under this Deed of Trust or any other Credit Document or otherwise of Trustor,
or any

                                       18

subsequent purchaser of the Mortgaged Property or any part thereof or any maker,
co-signer, surety or guarantor with respect to any other matters not addressed
by such act or omission. No such act or omission shall preclude Beneficiary from
exercising any right, power or privilege herein granted or intended to be
granted in case of any Event of Default then existing or of any subsequent Event
of Default, nor, except as otherwise expressly provided in an instrument or
instruments executed by Beneficiary, shall the lien or security interest of this
Deed of Trust be altered thereby, except to the extent expressly provided in
such acts or omissions. In the event of the sale or transfer by operation of law
or otherwise of all or any part of the Mortgaged Property, Beneficiary, without
notice to any person, firm or corporation, is hereby authorized and empowered to
deal with any such vendee or transferee with reference to the Mortgaged Property
or the indebtedness secured hereby, or with reference to any of the terms or
conditions hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any of
the liabilities or undertakings hereunder, or waiving its right to declare such
sale or transfer an Event of Default as provided herein. Notwithstanding
anything to the contrary contained in this Deed of Trust or any other Credit
Document, (i) in the case of any non-monetary Event of Default, Beneficiary may
continue to accept payments due hereunder without thereby waiving the existence
of such or any other Event of Default and (ii) in the case of any monetary Event
of Default, Beneficiary may accept partial payments of any sums due hereunder
without thereby waiving the existence of such Event of Default if the partial
payment is not sufficient to completely cure such Event of Default.

     3.15 Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary shall have proceeded to enforce any right or remedy under this Deed
of Trust by foreclosure, entry of judgment or otherwise and such proceedings
shall have been discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to Beneficiary, then and in
every such case Trustor and Beneficiary shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of
Beneficiary shall continue as if no such proceedings had occurred or had been
taken.

     3.16 Remedies Cumulative. Subject to the provisions of Section 5.14 hereof,
no right, power or remedy, including remedies with respect to any security for
the Secured Obligations, conferred upon or reserved to Beneficiary by this Deed
of Trust or any other Credit Document is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
hereunder or under any other Credit Document, now or hereafter existing at law,
in equity or by statute, and Beneficiary shall be entitled to resort to such
rights, powers, remedies or security as Beneficiary shall in its sole and
absolute discretion deem advisable.

     3.17 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under the Credit
Documents, including this Deed of Trust, shall, at Beneficiary's option, bear
interest at the interest rate on the Note until such Event of Default has been
cured. Trustor's obligation to pay such interest shall be secured by this Deed
of Trust.

     3.18 Foreclosure; Expenses of Litigation. If Trustee forecloses, reasonable
attorneys' fees for services in the supervision of said foreclosure proceeding
shall be allowed to the Trustee and Beneficiary as part of the foreclosure
costs. In the event of foreclosure of the lien hereof, there shall be allowed
and included as additional indebtedness all reasonable expenditures and expenses

                                       19

which may be paid or incurred by or on behalf of Beneficiary for attorneys'
fees, appraisers' fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after foreclosure sale or entry of the decree) of
procuring all such abstracts of title, title searches and examinations, title
insurance policies and guarantees, and similar data and assurances with respect
to title as Beneficiary may deem reasonably necessary either to prosecute such
suit or to evidence to a bidder at any sale which may be had pursuant to such
decree the true condition of the title to or the value of the Mortgaged Property
or any portion thereof. All expenditures and expenses of the nature in this
section mentioned, and such expenses and fees as may be incurred in the
protection of the Mortgaged Property and the maintenance of the lien and
security interest of this Deed of Trust, including the reasonable fees of any
attorney employed by Beneficiary in any litigation or proceeding affecting this
Deed of Trust or any other Credit Document, the Mortgaged Property or any
portion thereof, including civil, probate, appellate and bankruptcy proceedings,
or in preparation for the commencement or defense of any proceeding or
threatened suit or proceeding, shall be immediately due and payable by Trustor,
with interest thereon at the interest rate on the Note, and shall be secured by
this Deed of Trust. Trustee waives its right to any statutory fee in connection
with any judicial or nonjudicial foreclosure of the lien hereof and agrees to
accept a reasonable fee for such services.

     3.19 Deficiency Judgments. Subject to Article 8 of the Credit Agreement, if
after foreclosure of this Deed of Trust or Trustee's sale hereunder, there shall
remain any deficiency with respect to any amounts payable under the Credit
Documents, including hereunder, or any amounts secured hereby, and Beneficiary
shall institute any proceedings to recover such deficiency or deficiencies, all
such amounts shall continue to bear interest at the interest rate on the Notes.
Subject to Article 8 of the Credit Agreement, Trustor waives any defense to
Beneficiary's recovery against Trustor of any deficiency after any foreclosure
sale of the Mortgaged Property. Subject to Article 8 of the Credit Agreement, to
the extent permitted by law, Trustor expressly waives any defense or benefits
that may be derived from any statute granting Trustor any defense to any such
recovery by Beneficiary. Subject to Article 8 of the Credit Agreement, in
addition, Beneficiary and Trustee shall be entitled to recovery of all of their
reasonable costs and expenditures (including any court imposed costs) in
connection with such proceedings, including their reasonable attorneys' fees,
appraisal fees and the other costs, fees and expenditures referred to in Section
3.18 above. This provision shall survive any foreclosure or sale of the
Mortgaged Property, any portion thereof or the extinguishment of the lien
hereof.

     3.20 WAIVER OF JURY TRIAL. BENEFICIARY AND TRUSTOR EACH WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS DEED OF TRUST,
THE CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT. ANY SUCH DISPUTES SHALL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

     3.21 Exculpation of Beneficiary. The acceptance by Beneficiary of the
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Mortgaged Property by Beneficiary, be deemed or construed to make
Beneficiary a "mortgagee in possession"; nor thereafter or at any time or in any

                                       20

event obligate Beneficiary to appear in or defend any action or proceeding
relating to the Mortgaged Property, nor shall Beneficiary, prior to such entry
and taking, be liable in any way for any injury or damage to person or property
sustained by any Person in or about the Mortgaged Property.

                                   ARTICLE 4.
                     RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
                      OTHER PROVISIONS RELATING TO TRUSTEE

     Notwithstanding anything to the contrary in this Deed of Trust, Trustor and
Beneficiary agree as follows:

     4.1 Exercise of Remedies by Trustee. To the extent that this Deed of Trust
and applicable law authorizes or empowers Beneficiary to exercise any remedies
set forth in Article 3 hereof or otherwise, or perform any acts in connection
therewith, Trustee (but not to the exclusion of Beneficiary unless so required
under the law of the State of California) shall have the power to exercise any
or all such remedies, and to perform any acts provided for in this Deed of Trust
in connection therewith, all for the benefit of Beneficiary and on Beneficiary's
behalf in accordance with applicable law of the State of California. In
connection therewith, Trustee: (a) shall not exercise, or waive the exercise of,
any Beneficiary's remedies (other than any rights of Trustee to any indemnity or
reimbursement), except at Beneficiary's request, and (b) shall exercise, or
waive the exercise of, any or all of Beneficiary's remedies at Beneficiary's
request, and in accordance with Beneficiary's directions as to the manner of
such exercise or waiver. Trustee may, however, decline to follow Beneficiary's
request or direction if Trustee shall be advised by counsel that the action or
proceeding, or manner thereof, so directed may not lawfully be taken or waived.

     4.2 Rights and Privileges of Trustee. To the extent that this Deed of Trust
requires Trustor to indemnify Beneficiary or reimburse Beneficiary for any
expenditures Beneficiary may incur, Trustee shall be entitled to the same
indemnity and the same rights to reimbursement of expenses as Beneficiary,
subject to such limitations and conditions as would apply in the case of
Beneficiary. To the extent that this Deed of Trust negates or limits
Beneficiary's liability as to any matter, Trustee shall be entitled to the same
negation or limitation of liability. To the extent that Trustor, pursuant to
this Deed of Trust, appoints Beneficiary as Trustor's attorney in fact for any
purpose, Beneficiary or (when so instructed by Beneficiary) Trustee shall be
entitled to act on Trustor's behalf without joinder or confirmation by the
other.

     4.3 Resignation or Replacement of Trustee. Trustee may resign by an
instrument in writing addressed to Beneficiary, and Trustee may be removed at
any time with or without cause (i.e., in Beneficiary's sole and absolute
discretion) by an instrument in writing executed by Beneficiary. In case of the
death, resignation, removal or disqualification of Trustee or if for any reason
Beneficiary shall deem it desirable to appoint a substitute, successor or
replacement Trustee to act instead of Trustee originally named (or in place of
any substitute, successor or replacement Trustee), then Beneficiary shall have
the right and is hereby authorized and empowered to appoint a successor,
substitute or replacement Trustee, and, if preferred, several substitute
trustees in succession, without any formality other than appointment and
designation in writing executed by Beneficiary, which instrument shall be
recorded if required by the law of the State of California. The law of the State
of California shall govern the qualifications of any Trustee. The authority
conferred upon Trustee by this Deed of Trust shall automatically extend to any
and all other

                                       21

successor, substitute and replacement Trustee(s) successively until the Secured
Obligations have been paid in full or the Mortgaged Property has been sold
hereunder or released in accordance with the provisions of the Credit Documents.
Beneficiary's written appointment and designation of any Trustee shall be full
evidence of Beneficiary's right and authority to make the same and of all facts
therein recited. No confirmation, authorization, approval or other action by
Trustor shall be required in connection with any resignation or other
replacement of Trustee.

     4.4 Authority of Beneficiary. If Beneficiary is a banking corporation,
state banking corporation or a national banking association and the instrument
of appointment of any successor or replacement Trustee is executed on
Beneficiary's behalf by an officer of such corporation, state banking
corporation or national banking association, then such appointment may be
executed by any authorized officer or agent of Beneficiary and such appointment
shall be conclusively presumed to be executed with authority and shall be valid
and sufficient without proof of any action by the board of directors or any
superior officer of Beneficiary.

     4.5 Effect of Appointment of Successor Trustee. Upon the appointment and
designation of any successor, substitute or replacement Trustee, Trustee's
entire estate and title in the Mortgaged Property shall vest in the designated
successor, substitute or replacement Trustee. Such successor, substitute or
replacement Trustee shall thereupon succeed to and shall hold, possess and
execute all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee. All references herein to Trustee shall be deemed to
refer to Trustee (including any successor or substitute appointed and designated
as herein provided) from time to time acting hereunder.

     4.6 Confirmation of Transfer and Succession. Any new Trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed or
conveyance, become vested with all the estates, properties, rights, powers and
trusts of his predecessor in the rights hereunder with like effect as if
originally named as Trustee herein; but nevertheless, upon the written request
of Beneficiary or of any successor, substitute or replacement Trustee, any
former Trustee ceasing to act shall execute and deliver an instrument
transferring to such successor, substitute or replacement Trustee all of the
right, title, estate and interest in the Mortgaged Property of Trustee so
ceasing to act, together with all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee, and shall duly assign, transfer and
deliver all properties and monies held by said Trustee hereunder to said
successor, substitute or replacement Trustee.

     4.7 Exculpation. Trustee shall not be liable for any error of judgment or
act done by Trustee in good faith, or otherwise be responsible or accountable
under any circumstances whatsoever, except for Trustee's gross negligence,
willful misconduct or knowing violation of law. Trustee shall not be personally
liable in case of entry by it, or anyone entering by virtue of the powers herein
granted it, upon the Mortgaged Property for debts contracted or liability or
damages incurred in the management or operation of the Mortgaged Property.
Trustee shall have the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken by it
hereunder, believed by it in good faith to be genuine. All monies received by
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated in any
manner from any other monies (except to the extent required by law). Trustee
shall be under no liability for interest on any monies received by it hereunder.

                                       22

     4.8 Endorsement and Execution of Documents. Upon Beneficiary's written
request, Trustee shall, without liability or notice to Trustor, execute, consent
to, or join in any instrument or agreement in connection with or necessary to
effectuate the purposes of the Credit Documents. Trustor hereby irrevocably
designates Trustee as its attorney in fact to execute, acknowledge and deliver,
on Trustor's behalf and in Trustor's name, all instruments or agreements
necessary to implement any provision(s) of this Deed of Trust or to further
perfect the lien created by this Deed of Trust on the Mortgaged Property. This
power of attorney shall be deemed to be coupled with an interest and shall
survive any disability of Trustor.

     4.9 Multiple Trustees. If Beneficiary appoints multiple trustees, then any
Trustee, individually, may exercise all powers granted to Trustee under this
instrument, without the need for action by any other Trustee(s).

     4.10 No Required Action. Trustee shall not be required to take any action
under this Deed of Trust or to institute, appear in or defend any action, suit
or other proceeding in connection therewith where in its opinion such action
will be likely to involve it in expense or liability, unless requested so to do
by a written instrument signed by Beneficiary and, if Trustee so requests,
unless Trustee is tendered security and indemnity satisfactory to it against any
and all costs, expense and liabilities arising therefrom. Trustee shall not be
responsible for the execution, acknowledgment or validity of the Credit
Documents, or for the proper authorization thereof, or for the sufficiency of
the lien and security interest purported to be created hereby, and makes no
representation in respect thereof or in respect of the rights, remedies and
recourses of Beneficiary.

     4.11 Terms of Trustee's Acceptance. Trustee accepts the trust created by
this Deed of Trust upon the following terms and conditions:

          (a) Trustee may exercise any of its powers through appointment of
attorney(s) in fact or agents.

          (b) Trustee shall be under no obligation to take any action upon any
Event of Default unless furnished security or indemnity, in form satisfactory to
Trustee, against costs, expenses, and liabilities that Trustee may incur.

          (c) Trustor shall reimburse Trustee, as part of the Secured
Obligations secured hereunder, for all reasonable disbursements and expenses
(including reasonable legal fees and expenses) incurred by reason of or arising
from an Event of Default and as provided for in this Deed of Trust, including
any of the foregoing incurred in Trustee's administering and executing the trust
created by this Deed of Trust and performing Trustee's duties and exercising
Trustee's powers under this Deed of Trust.

                                   ARTICLE 5.
                                     GENERAL

     5.1 Discharge. When all of the Secured Obligations shall have been
indefeasibly paid in full in cash, then this Deed of Trust and the lien and
security interest created hereby shall be of no further force and effect,
Trustor shall be released from the covenants, agreements and obligations of
Trustor contained in this Deed of Trust and a11 right, title and interest in and
to the Mortgaged Property shall revert to Trustor. Beneficiary and Trustee, at
the request and the expense of Trustor,

                                       23

shall promptly execute a deed of reconveyance and such other documents as may be
reasonably requested by Trustor to evidence the discharge and satisfaction of
this Deed of Trust and the release of Trustor from its obligations hereunder.

     5.2 No Waiver. The exercise of the privileges granted in this Deed of Trust
or in any other agreement to perform Trustor's obligations under the agreements
which constitute the Mortgaged Property shall in no event be considered or
constitute a waiver of any right which Beneficiary may have at any time, after
an Event of Default shall have occurred and be continuing, to declare the
Secured Obligations to be immediately due and payable. No delay or omission to
exercise any right, remedy or power accruing upon any default shall impair any
such right, remedy or power or shall be construed to be a waiver of any such
default or acquiescence therein; and every such right, remedy and power may be
exercised from time to time and as often as may be deemed expedient.

     5.3 Extension, Rearrangement or Renewal of Secured Obligations. It is
expressly agreed that any of the Secured Obligations at any time secured hereby
may be from time to time extended for any period, or with the consent of Trustor
rearranged or renewed, and that any part of the security herein described, or
any other security for the Secured Obligations, may be waived or released,
without altering, varying or diminishing the force, effect or lien or security
interest of this Deed of Trust; and the lien and security interest granted by
this Deed of Trust shall continue as a prior lien and security interest on all
of the Mortgaged Property not expressly so released, until the Secured
Obligations are fully paid and this Deed of Trust is terminated in accordance
with the provisions hereof; and no other security now existing or hereafter
taken to secure the payment of the Secured Obligations or any part thereof or
the performance of any obligation or liability of Trustor whatever shall in any
manner impair or affect the security given by this Deed of Trust; and all
security for the payment of the Secured Obligations or any part thereof and the
performance of any obligation or liability shall be taken, considered and held
as cumulative.

     5.4 Forcible Detainer. Trustor agrees for itself and all Persons claiming
by, through or under it, that subsequent to foreclosure hereunder in accordance
with this Deed of Trust and applicable law if Trustor shall hold possession of
the Mortgaged Property or any part thereof, Trustor or the Persons so holding
possession shall be guilty of trespass; and any such Person (including Trustor)
failing or refusing to surrender possession upon demand shall be guilty of
forcible detainer and shall be liable to Beneficiary or any purchaser in
foreclosure, as applicable, for reasonable rental on said premises, and shall be
subject to eviction and removal in accordance with law.

     5.5 Waiver of Stay or Extension. To the extent permitted to be waived by
law, Trustor shall not at any time insist upon or plead or in any manner
whatever claim the benefit or advantage of any stay, extension or moratorium law
now or at any time hereafter in force in any locality where the Mortgaged
Property or any part thereof may or shall be situated, nor shall Trustor claim
any benefit or advantage from any law now or hereafter in force providing for
the valuation or appraisement of the Mortgaged Property or any part thereof
prior to any sale thereof to be made pursuant to any provision of this Deed of
Trust or to a decree of any court of competent jurisdiction, nor after any such
sale shall Trustor claim or exercise any right conferred by any law now or at
any time hereafter in force to redeem the Mortgaged Property so sold or any part
thereof; and Trustor hereby expressly waives all benefit or advantage of any
such law or laws and the appraisement of

                                       24

the Mortgaged Property or any part thereof, and covenants that Trustor shall not
hinder or delay the execution of any power herein granted and delegated to
Beneficiary but that Trustor shall permit the execution of every such power as
though no such law had been made.

     5.6 Notices. Except where certified or registered mail notice is required
by applicable law, any notice to Trustor or Beneficiary required or permitted
hereunder shall be deemed to be given when given in the manner prescribed in
Section 10.1 of the Credit Agreement. All notices to Trustee required or
permitted hereunder shall be deemed given when given in the manner prescribed in
Section 10.1 of the Credit Agreement to the following address:

               Chicago Title Company
               388 Market Street, Suite 1300
               San Francisco, California 94111
               Attn: Rod Pasion
               Facsimile No.: (415) 781-4185

     5.7 Severability. A11 rights, powers and remedies provided herein may be
exercised only to the extent that the exercise thereof does not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Deed of Trust invalid, unenforceable or not entitled
to be recorded, registered or filed under any applicable law. In the event any
term or provision contained in this Deed of Trust is in conflict, or may
hereafter be held to be in conflict, with the laws of the State of California or
of the United States of America, this Deed of Trust shall be affected only as to
such particular term or provision, and shall in all other respects remain in
full force and effect.

     5.8 Application of Payments. In the event that any part of the Secured
Obligations cannot lawfully be secured hereby, or in the event that the lien and
security interest hereof cannot be lawfully enforced to pay any part of the
Secured Obligations, or in the event that the lien or security interest created
by this Deed of Trust shall be invalid or unenforceable as to any part of the
Secured Obligations, then all payments on the Secured Obligations shall be
deemed to have been first applied to the complete payment and liquidation of
that part of the Secured Obligations which is not secured by this Deed of Trust
and the unsecured portion of the Secured Obligations shall be completely paid
and liquidated prior to the payment and liquidation of the remaining secured
portion of the Secured Obligations.

     5.9 Governing Law. THIS DEED OF TRUST IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

     5.10 Entire Agreement. THIS WRITTEN AGREEMENT, THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                                       25

AS OF THE DATE HEREOF, THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

     ----------------------------       ----------------------------
     TRUSTOR                            BENEFICIARY

     5.11 Amendments. This Deed of Trust may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Trustor and
Beneficiary.

     5.12 Successors and Assigns. All terms of this Deed of Trust shall run with
the land and bind each of Trustor and Beneficiary and their respective
successors and assigns, and all Persons claiming under or through Trustor or
Beneficiary, as the case may be, or any such successor or assign, and shall
inure to the benefit of Beneficiary and Trustor, and their respective successors
and assigns.

     5.13 Renewal, Etc. Beneficiary may at any time and from time to time renew
or extend this Deed of Trust, or alter or modify the same in any way, or waive
any of the terms, covenants or conditions hereof in whole or in part and may
release any portion of the Mortgaged Property or any other security, and grant
such extensions and indulgences in relation to the Secured Obligations as
Beneficiary may determine, without the consent of any junior lienor or
encumbrancer and without any obligation to give notice of any kind thereto and
without in any manner affecting the priority of the lien and security interest
hereof on any part of the Mortgaged Property; provided that nothing in this
Section 5.13 shall grant Beneficiary the right to alter or modify the Deed of
Trust without the consent of the Trustor unless otherwise specifically permitted
in this Deed of Trust.

     5.14 Liability. Notwithstanding any provision in this Deed of Trust to the
contrary, recourse against the Trustor and its Affiliates, stockholders,
officers, members, directors and employees under this Deed of Trust shall be
limited to the extent provided in Article 8 of the Credit Agreement.

     5.15 Severability. The Credit Documents are intended to be performed in
accordance with, and only to the extent permitted by, all applicable
Governmental Rules and Legal Requirements. If any provision of any of the Credit
Documents or the application thereof to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, neither the remainder
of the instrument in which such provision is contained, nor the application of
such provision to other persons or circumstances, nor the other instruments
referred to hereinabove, shall be affected thereby, but rather shall be
enforceable to the greatest extent permitted by law.

     5.16 Waiver. To the extent permitted by law, Trustor waives and releases
any rights or defenses which Trustor might otherwise have (i) under California
Code of Civil Procedure Sections 726, 725a, 580a, 580b, 580c and 580d and
California Civil Code Section 2889, which statutes might otherwise limit or
condition Beneficiary's exercise of certain of Beneficiary's rights and remedies
in connection with the enforcement of obligations secured by a lien on real
property or (ii) under any laws now existing or hereafter enacted providing for
any appraisal before sale of a portion of the Mortgaged Property and (iii) to
all rights of redemption, valuation, appraisal, stay of execution, notice of
election to mature or to declare due the Secured Obligations and marshalling in
the event

                                       26

of the foreclosure of the liens created under this Deed of Trust or the exercise
of the power of sale granted hereunder. To the extent, if any, which such laws
may be applicable and to the extent permitted by law, Trustor waives and
releases any right or defense which Trustor might otherwise have under such
provisions and under any other law of any applicable jurisdiction which might
limit or restrict the effectiveness or scope of any of Trustor's waivers or
releases hereunder.

     5.17 Additional Waivers. To the extent that Trustor is considered the
guarantor of any obligations of any party under the Credit Documents (other than
Trustor) or its successors and assigns (the "Counterparty"), then Trustor, to
the extent permitted under applicable law, hereby waives the following:

          (a) any and all benefits, rights and defenses it may have to
subrogation, reimbursement, indemnification, and contribution and any other
rights and defenses that are or may become available to Trustor by reason of
California Civil Code Sections 2787 to 2855, inclusive;

          (b) any and all benefits, rights and defenses it may have because the
Counterparty's debt may be secured by real property. This means, among other
things: (i) Beneficiary may collect from Trustor without first foreclosing on
any real or personal property collateral pledged by the Counterparty, (ii) if
Beneficiary forecloses on any real property collateral pledged by the
Counterparty, then (A) the amount of the debt may be reduced only by the price
for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (B) Beneficiary may collect
from Trustor even if Beneficiary, by foreclosing on the real property
collateral, has destroyed any right Trustor may have to collect from the
Counterparty. This is an unconditional and irrevocable waiver of any rights and
defenses Trustor may have because the Counterparty's debt is secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code
of Civil Procedure; and

          (c) any and all benefits, rights and defenses it may have arising out
of an election of remedies by Beneficiary, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Trustor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure or otherwise.

     5.18 Release of Collateral.

          5.18.1 Notwithstanding any provision herein to the contrary, the
Mortgaged Property or any part thereof shall be released from the security
interest created by this Deed of Trust at any time or from time to time upon the
request of each of Beneficiary and Trustor; provided that the requirements of
the Credit Documents have been satisfied. Upon satisfaction of such
requirements, a Responsible Officer of Beneficiary shall instruct the Trustee to
promptly execute, deliver and acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Mortgaged
Property permitted to be released pursuant to this Deed of Trust.

                                       27

          5.18.2 Beneficiary may instruct the Trustee to release Mortgaged
Property from the security interest created hereunder upon the sale or
disposition of such Mortgaged Property pursuant to Beneficiary's powers, rights
and duties with respect to remedies provided herein.

     5.19 Credit Agreement Controls. In the event of any conflict between any
terms and provisions set forth in this Deed of Trust and those set forth in the
Credit Agreement, the terms and provisions of the Credit Agreement shall
supersede and control the terms and provisions of this Deed of Trust.

     5.20 Time of the Essence. Trustor acknowledges that time is of the essence
in performing all of Trustor's obligations set forth herein.

     5.21 Counterpart Execution. This Deed of Trust may be executed by the
parties hereto in any number of counterparts (and be each of the parties hereof
on separate counterparts), each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       28

     IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be duly
executed and delivered as of the day and year first above written.

                                        [Signature Block for Applicable Trustor]

                                       29

                                                                     Exhibit D-1
                                                             to Credit Agreement

STATE OF CALIFORNIA )
                    ) ss
COUNTY OF _________ )

     On _________________, before me, ______________________, Notary Public,
personally appeared _______________________________ and _______________, [_]
personally known to me OR [_] proved to me on the basis of satisfactory evidence
to be the persons whose names are subscribed to the within instrument and
acknowledged to me that they executed the same in their authorized capacities,
and that by their signatures on the instrument the persons, or the entity upon
behalf of which the persons acted, executed the instrument.

     WITNESS my hand and official seal.

                                                       -------------------------
                                                       Signature of Notary

                                                                     Exhibit D-1
                                                             to Credit Agreement

                                    EXHIBIT A

                               DESCRIPTION OF SITE

                                                                     Exhibit D-l
                                                             to Credit Agreement

                                    EXHIBIT B

                            DESCRIPTION OF EASEMENTS

                                                                     EXHIBIT D-2
                                                             to Credit Agreement

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

                           FORM OF SECURITY AGREEMENT

                                     between

                         [INSERT NAME OF ORMAT ENTITY],
                            a
                              -----------------------
                                    (Grantor)

                                       and

                                BEAL BANK, S.S.B.
                             (Administrative Agent)

                         DATED AS OF
                                     -----------, ---

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

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE I. DEFINITIONS........................................................2
    1.1   Defined Terms.......................................................2
    1.2   Credit Agreement and UCC Definitions................................3
    1.3   Rules of Interpretation.............................................3

ARTICLE II. PLEDGE AND GRANT OF SECURITY INTEREST.............................3
    2.1   Granting Clause.....................................................3
    2.2   Delivery of and Performance under Assigned Agreements...............5
    2.3   Continuing Liability under Assigned Agreements and Permits..........6
    2.4   Defaults under Assigned Agreements..................................6
    2.5   Destruction of Collateral...........................................6

ARTICLE III. OBLIGATIONS SECURED..............................................6

ARTICLE IV. EVENTS OF DEFAULT; REPRESENTATIONS AND WARRANTIES.................7

ARTICLE V. REMEDIES UPON AN EVENT OF DEFAULT..................................9
    5.1   Remedies Upon Event of Default......................................9
    5.2   Minimum Notice Period..............................................11
    5.3   Sale of Collateral.................................................11
    5.4   Sales of Private Securities........................................12
    5.5   Registration of Securities.........................................12
    5.6   Actions Taken by Administrative Agent..............................13
    5.7   Private Sales......................................................13
    5.8   Waiver of Rights and Remedies Under Applicable Legal
             Requirements....................................................13
    5.9   Compliance With Limitations and Restrictions.......................13
    5.10  No Impairment of Remedies..........................................14

ARTICLE VI. MISCELLANEOUS....................................................14
    6.1   Remedies Cumulative; Delay Not Waiver..............................14
    6.2   Attorney-In-Fact...................................................14
    6.3   Perfection; Further Assurances; Certain Waivers....................15

                                       i

6.4    Continuing Assignment and Security Interest; Transfer of Notes........ 16
6.5    Termination of Security Interest...................................... 16
6.6    Limitation on Duty of Administrative Agent with Respect to the
          Collateral......................................................... 17
6.7    Liability............................................................. 17
6.8    Amendments; Waivers; Consents......................................... 17
6.9    Notices............................................................... 17
6.10   Reinstatement......................................................... 17
6.11   Application of Proceeds............................................... 17
6.12   Administrative Agent May Perform...................................... 18
6.13   Expenses; Interest.................................................... 18
6.14   Severability.......................................................... 18
6.15   Survival of Provisions................................................ 18
6.16   Successions or Assignments............................................ 18
6.17   Headings Descriptive.................................................. 18
6.18   Entire Agreement...................................................... 19
6.19   Time.................................................................. 19
6.20   Counterparts.......................................................... 19
6.21   Governing Law......................................................... 19
6.22   WAIVER OF JURY TRIAL.................................................. 19
6.23   Submission to Jurisdiction............................................ 19
6.24   Third Party Rights.................................................... 20

                                       ii

                               SECURITY AGREEMENT

          THIS SECURITY AGREEMENT, dated as of [________] [___], [_____] (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement"), is entered into by and between [INSERT NAME OF ORMAT
ENTITY], A. [____________________] [ORGANIZED] [FORMED] and existing under the
laws of the State of [______________] ("Grantor"), and BEAL BANK, S.S.B., in its
capacity as administrative agent (together with its successors, designees and
assigns in such capacity, "Administrative Agent") for the Secured Parties.

                                    RECITALS

          A. [ORCAL GEOTHERMAL INC., A CORPORATION ORGANIZED AND EXISTING UNDER
THE LAWS OF THE STATE OF DELAWARE ("BORROWER")] [GRANTOR] directly or indirectly
[INTENDS TO ACQUIRE] [HAS ACQUIRED] (the "Acquisition") certain Persons which
directly or indirectly own, lease, use and operate certain geothermal power
plants and geothermal fluid facilities located in the State of California, known
as the Heber Project, the Mammoth Lakes Project and the SIGC Project (the
"Projects").

          B. In order to partially finance the Acquisition, [BORROWER] [GRANTOR]
has entered into that certain Credit Agreement, dated as of December 18, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among [BORROWER] [GRANTOR], the financial
institutions from time to time parties thereto (collectively, "Lenders"), and
each of the agents listed on the signature pages thereto, pursuant to which,
among other things, Lenders have [MADE] [EXTENDED COMMITMENTS TO MAKE] loans to,
and for the benefit of, [BORROWER] [GRANTOR].

          [C.] [GRANTOR IS A WHOLLY-OWNED [DIRECT] [INDIRECT] SUBSIDIARY OF
BORROWER, AND GRANTOR [HAS AND] WILL RECEIVE SUBSTANTIAL BENEFITS FROM THE
MAKING OF SUCH LOANS TO BORROWER. GRANTOR HAS GUARANTEED THE OBLIGATIONS OF
BORROWER UNDER THE CREDIT AGREEMENT PURSUANT TO THAT CERTAIN SUBSIDIARY
GUARANTY, DATED AS OF THE DATE HEREOF (AS AMENDED, AMENDED AND RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "SUBSIDIARY
GUARANTY"), AND THE LIENS CREATED HEREBY SECURE, AMONG OTHER THINGS, GRANTOR'S
OBLIGATIONS THEREUNDER.]

          [C.] [D.] [IT IS A CONDITION PRECEDENT TO THE EFFECTIVENESS OF THE
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AND THE MAKING OF THE ADVANCES
OF CREDIT CONTEMPLATED THEREBY, THAT GRANTOR SHALL HAVE EXECUTED THIS
AGREEMENT.] [IT IS A REQUIREMENT UNDER THE CREDIT AGREEMENT THAT GRANTOR EXECUTE
AND DELIVER THIS AGREEMENT.]

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the promises contained herein, and
to induce Lenders to enter into the Credit Agreement and to make the loans
contemplated thereby, and for other good and valuable consideration, the receipt
and adequacy of which are hereby

acknowledged, Grantor hereby agrees with Administrative Agent, for the benefit
of the Secured Parties, as follows:

                                   ARTICLE I.
                                  DEFINITIONS

     1.1 Defined Terms. The following terms (whether or not underscored) when
used in this Agreement, including its preamble and recitals, shall have the
following meanings:

          "Acquisition" has the meaning given in the recitals to this Agreement.

          "Administrative Agent" has the meaning given in the preamble to this
Agreement.

          "Assigned Agreement" and "Assigned Agreements" have the meaning given
in Section 2.1(a).

          ["BORROWER" HAS THE MEANING GIVEN IN THE RECITALS TO THIS AGREEMENT.]

          "Collateral" has the meaning given in Section 2.1.

          "Credit Agreement" has the meaning given in the recitals to this
Agreement.

          "Grantor" has the meaning given in the preamble to this Agreement.

          "Lenders" has the meaning given in the recitals to this Agreement.

          "Obligations" means and includes all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by [BORROWER,] Grantor or
any Affiliate thereof to Administrative Agent or any Lender of every kind and
description (whether or not evidenced by any note or instrument and whether or
not for the payment of money), direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, pursuant to the terms of
the Credit Agreement or any of the other Credit Documents [(INCLUDING THE
SUBSIDIARY GUARANTY)], including all interest, reasonable fees, reasonable
charges, reasonable expenses, reasonable attorneys' fees and consultant fees
chargeable to [BORROWER,] Grantor or any Affiliate thereof and payable by
[BORROWER,] Grantor or any Affiliate thereof hereunder or thereunder.

          "Projects" has the meaning given in the recitals to this Agreement.

          "Securities Laws" has the meaning given in Section 5.4.

          ["SUBSIDIARY GUARANTY" HAS THE MEANING GIVEN IN THE RECITALS TO THIS
AGREEMENT.]

          "UCC" means 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 perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than

                                       2

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 perfection or priority and for purposes of definitions related
to such provisions.

     1.2 Credit Agreement and UCC Definitions. Unless otherwise defined herein
or unless the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in Exhibit A to
the Credit Agreement or, if not defined therein, the UCC.

     1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Credit Agreement shall apply to
this Agreement, including its preamble and recitals.

                                   ARTICLE II.
                      PLEDGE AND GRANT OF SECURITY INTEREST

     2.1 Granting Clause. To secure the timely payment in full in cash and
performance in full of the Obligations, Grantor does hereby collaterally assign,
grant and pledge to, and subject to a continuing security interest in favor of,
Administrative Agent, for the benefit of Administrative Agent and each other
Secured Party, all the estate, right, title and interest of Grantor in, to and
under all assets of Grantor, whether now owned or hereafter existing or
acquired, including all the estate, right, title and interest of Grantor in, to
and under the following (collectively, the "Collateral"):

               (a) all contracts, agreements and documents (individually, an
"Assigned Agreement" and collectively, the "Assigned Agreements"), including the
following contracts, agreements and documents, as amended, amended and restated,
supplemented or otherwise modified from time to time, and all of Grantor's
rights thereunder:

                    (i) the Project Documents listed on Exhibit A hereto;

                    (ii) all other Project Documents not listed on Exhibit A
hereto to which the Grantor is a party;

                    (iii) all other agreements, including vendor warranties and
guaranties, running to Grantor or assigned to Grantor, relating to the leasing,
use, maintenance, improvement, operation or acquisition of a Project or any part
thereof, or transport of material, equipment and other parts of a Project or any
part thereof;

                    (iv) any lease or sublease agreements or easement agreements
relating to a Project or any part thereof or any ancillary facilities, to which
Grantor may be or become a party; and

                    (v) each Additional Project Document to which Grantor is or
may become a party, and any other agreements to which Grantor may be or become a
party relating to the leasing, use, maintenance, improvement or operation of a
Project or any part thereof.

                                        3

               (b) to the extent permitted by Legal Requirements and the terms
of Grantor's Permits, all of Grantor's Permits;

               (c) the insurance policies maintained by Grantor, including any
such policies insuring against loss of revenues by reason of interruption of the
operation of a Project and all proceeds and other amounts payable to Grantor
thereunder, and all eminent domain proceeds;

               (d) all rents, profits, income, royalties and revenues derived in
any other manner by Grantor as a result of its leasing or ownership of a Project
or any part thereof and the use or operation of a Project or any part thereof,
including all Project Revenues;

               (e) all other personal property and fixtures, wherever located
and whenever acquired, whether or not of a type which may be subject to a
security interest under the UCC, including all machinery, tools, engines,
appliances, mechanical and electrical systems, geothermal fluid facilities,
wells, elevators, lighting, alarm systems, fire control systems, furnishings,
furniture, service equipment, motor vehicles, building or maintenance equipment,
building or maintenance materials, supplies, goods and property covered by any
warehouse receipts or bills of lading or other such documents, spare parts,
maps, plans, specifications, architectural, engineering, construction or shop
drawings, manuals or similar documents, copyrights, patents, trademarks, trade
names and other intellectual property of any kind, and any replacements,
renewals or substitutions for any of the foregoing or additional tangible or
intangible personal property hereafter acquired by Grantor;

               (f) all goods (including inventory, equipment and any accessions
thereto), money, instruments (including promissory notes), securities and all
other investment property, security entitlements, financial assets, accounts
(including health-care-insurance receivables), contract rights, documents,
deposit accounts, chattel paper (whether tangible or electronic),
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims and supporting obligations;

               (g) all general intangibles, including, to the extent assignable,
all construction, service, engineering, consulting, architectural and other
similar contracts concerning the design, construction, operation, occupancy,
maintenance and/or use of a Project, all architectural drawings, plans,
specifications, soil tests, appraisals, route surveys, engineering reports and
similar materials relating to all or any portion of a Project and all payment
and performance bonds or warranties or guarantees relating to a Project, all
rights under and in patents, patent licenses, rights in intellectual property,
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade secrets, service marks, logos,
other source and business identifiers, trademark registrations and applications
for registration used exclusively at or relating exclusively to any part of
Grantor's business, all renewals, extensions and continuations-in-part of the
items referred to above, any written agreements granting to Grantor any right to
use any trademark or trademark registration at or in connection with Grantor's
business, and the right of Grantor to sue for past, present and future
infringements of the foregoing, and the right in the name and on behalf of
Grantor to appear in and defend any action or proceeding brought with respect to
any part of Grantor's real or

                                        4

personal property and to commence any action or proceeding to protect the
interest of Grantor in such Collateral;

               (h) all books, records, writings, design documents, computer
programs, printouts and other computer materials and records, data bases,
software, information and other property relating to, used or useful in
connection with, Grantor's business;

               (i) all Accounts, including any sub-accounts within such
Accounts; and

               (j) the proceeds of all of the foregoing collateral, whether cash
or non-cash, including (i) all rights of Grantor to receive moneys due and to
become due under or pursuant to the Collateral, (ii) all rights of Grantor to
receive return of any premiums for or proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Collateral or to receive condemnation
proceeds, (iii) all claims of Grantor for damages arising out of or for breach
of or default under the Assigned Agreements or any other Collateral, (iv) all
rights of Grantor to terminate, amend, supplement, modify or waive performance
under the Assigned Agreements, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder, (v) all rights of Grantor under
each such contract or agreement to make determinations, to exercise any election
(including the election of remedies) or option or to give or receive any notice,
consent, waiver, or approval, together with full power and authority with
respect to any contract or agreement to demand, receive, enforce, collect or
provide receipt for any of the foregoing rights or any property the subject of
any of the contracts or agreements, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action which may be
necessary or advisable in connection with any of the foregoing, (vi) all rights
of Grantor to payment for goods or other property sold or leased or services
performed by Grantor, (vii) to the extent not included in the foregoing, all
proceeds receivable or received when any and all of the foregoing Collateral is
sold, collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily, and (viii) any and all additions and accessions to the
Collateral, and all proceeds thereof, including proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, including all awards, all insurance proceeds, including any unearned
premiums or refunds of premiums on any insurance policies covering all or any
part of the Collateral and the right to receive and apply the proceeds of any
insurance, or of any judgments or settlements made in lieu thereof for damage to
or diminution of the Collateral; provided, however, that "Collateral" shall not
include (A) any distributions or dividends to [INSERT NAME OF GRANTOR'S
OWNER(S)] expressly permitted pursuant to the terms of the Credit Agreement or
any other Credit Document or (B) any property which has been sold or disposed of
in accordance with Section 6.3 of the Credit Agreement.

     2.2 Delivery of and Performance under Assigned Agreements. In order to
effectuate the foregoing, Grantor has heretofore delivered or concurrently with
the delivery hereof is delivering to Administrative Agent, a copy of each of the
Assigned Agreements listed on Exhibit A hereto and a copy of each of its
material Permits in effect as of the date hereof. Grantor shall likewise deliver
to Administrative Agent an executed counterpart of each Additional Project
Document and any amendments and supplements to the foregoing, as they are
entered into by Grantor promptly upon the execution thereof. Unless an Event of
Default has occurred and is

                                        5

continuing, Grantor may exercise all rights, interests and benefits under the
Assigned Agreements in any manner consistent with the terms of the Credit
Documents.

     2.3 Continuing Liability under Assigned Agreements and Permits.
Notwithstanding anything to the contrary under any of the Credit Documents and
except as permitted under the Credit Documents, Grantor shall remain liable
under each of the Assigned Agreements and its Permits, to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and Administrative Agent shall have no
obligation or liability under any of such Assigned Agreements or Permits by
reason of or arising out of this Agreement or any other document related thereto
(except as expressly provided for in any applicable Consent), nor shall
Administrative Agent be required or obligated in any manner to perform or
fulfill any obligations of Grantor thereunder or to make any payment, or to make
any inquiry as to the nature or sufficiency of any payment received by it, or
present or file any claim, or take any action to collect or enforce the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

     2.4 Defaults under Assigned Agreements. If any default by Grantor under any
of the Assigned Agreements shall occur and be continuing, Administrative Agent
may, at its option (but shall not be obligated to), remedy any such default by
giving written notice of such intent to Grantor and to the parties to each
Assigned Agreement in default. Any curing by Administrative Agent of Grantor's
default under any of the Assigned Agreements shall not be construed as an
assumption by Administrative Agent or any other Secured Party of any
obligations, covenants or agreements of Grantor under such Assigned Agreements,
and Administrative Agent shall not incur any liability to Grantor or any other
Person as a result of any actions undertaken by Administrative Agent in curing
or attempting to cure any such default. This Agreement shall not be deemed to
release or to affect in any way the obligations of Grantor under the Assigned
Agreements.

     2.5 Destruction of Collateral. No injury to, or loss or destruction of, the
Collateral or any part thereof shall relieve Grantor of any of its obligations
hereunder or any of the Obligations under the Credit Agreement or any other
Credit Document.

                                  ARTICLE III.
                               OBLIGATIONS SECURED

          Without limiting the generality of the foregoing, this Agreement and
all of the Collateral secure the payment and performance when due of all
Obligations. If, notwithstanding the representation and warranty set forth in
Section 4(b)(ix)-(x) or anything to the contrary herein, enforcement of the
liability of Grantor under this Agreement for the full amount of the Obligations
would be an unlawful or voidable transfer under any applicable fraudulent
conveyance or fraudulent transfer law or any comparable law, then the liability
of Grantor hereunder shall be reduced to the highest amount for which such
liability may then be enforced without giving rise to an unlawful or voidable
transfer under any such law.

                                       6

                                   ARTICLE IV.
               EVENTS OF DEFAULT; REPRESENTATIONS AND WARRANTIES

          (a) The occurrence of an Event of Default under, and as defined in,
the Credit Agreement, whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body, shall constitute an Event
of Default hereunder. Any such Event of Default shall be considered cured or
waived for the purposes of this Agreement when it has been cured or waived in
accordance with the Credit Agreement.

          (b) Grantor represents and warrants to and in favor of Administrative
Agent and the other Secured Parties, as of the [DATE HEREOF] [CLOSING DATE], as
follows:

               (i) Grantor is [ORGANIZED] [FORMED] and validly existing under
     the laws of the State of [__________] and is qualified to do business in
     such jurisdiction and in each other jurisdiction in which the conduct of
     its business requires such qualification.

               (ii) Grantor has the full power and authority to conduct its
     business as contemplated by this Agreement and each other Operative
     Documents. This Agreement and the other Operative Documents to which
     Grantor is a party have been duly authorized, executed and delivered by
     Grantor.

               (iii) The execution, delivery and performance by Grantor of this
     Agreement and each other Operative Document to which it is a party and the
     consummation of the transactions contemplated hereby (including the
     granting of security interests hereunder) or under any other Operative
     Document to which it is a party do not and will not (A) violate any
     provision of (I) any Legal Requirement applicable to Grantor, (II) the
     Governing Documents of Grantor, or (III) any order, judgment or decree of
     any court or agency or Governmental Instrumentality binding on Grantor, (B)
     conflict with, result in a breach of or constitute (with due notice or
     lapse of time or both) a default under any material contractual obligation
     of Grantor, (C) result in or require the creation or imposition of any Lien
     upon any of the properties or assets of Grantor (other than any Liens
     created hereby or under any of the other Credit Documents in favor of
     Administrative Agent on behalf of the Secured Parties), or (D) require any
     approval of any Person, except for such approvals or consents which will be
     obtained on or before the [CLOSING DATE] [DATE HEREOF] and disclosed in
     writing to the Administrative Agent.

               (iv) Grantor has not executed and is not aware of any effective
     financing statement, security agreement or other instrument similar in
     effect covering all or any part of the Collateral on file in any recording
     office, except such as may have been filed pursuant to this Agreement and
     the other Credit Documents or permitted pursuant hereto or thereto.

               (v) This Agreement and each other Operative Document to which
     Grantor is a party constitutes a legal, valid and binding obligation of
     Grantor enforceable against Grantor in accordance with its terms, except to
     the extent that enforceability may

                                       7

     be limited by applicable bankruptcy, insolvency, moratorium, reorganization
     or other similar laws affecting the enforcement of creditors' rights or by
     the effect of general equitable principles (regardless of whether such
     enforceability is considered in a proceeding in equity or at law).

               (vi) Grantor is in compliance with all Legal Requirements, except
     noncompliance which could not reasonably be expected to have a Material
     Adverse Effect.

               (vii) Grantor is not an "investment company" or a company
     "controlled" by an "investment company," within the meaning of the
     Investment Company Act of 1940, as amended. No provision of the FPA or
     PUHCA as to securities, rates or financial or organizational matters
     precludes Grantor from entering into and performing its obligations
     hereunder.

               (viii) The name of Grantor is "[________________]," as indicated
     in the public records of the State of [_____________________]. Grantor's
     federal employee identification number is [_____________________] and
     Grantor's [____________________] organizational number is
     [___________________].

               (ix) After giving effect to the transactions contemplated by this
     Agreement and the contingent obligations evidenced hereby (but excluding
     the effect of the provisions of Article III which limit the Obligations to
     an amount that would not render Grantor's indebtedness, liabilities or
     obligations under this Agreement subject to avoidance), Grantor is Solvent.

               (x) Grantor is not executing this Agreement with any intention to
     hinder, delay or defraud any present or future creditor or creditors of
     Grantor.

               (xi) The security interest granted to Administrative Agent (for
     the benefit of the Secured Parties) pursuant to this Agreement in the
     Collateral constitutes a valid lien, subject, with respect to any proceeds,
     to the limitations set forth in Section 9-315 of the UCC. The security
     interest granted to Administrative Agent (for the benefit of the Secured
     Parties) pursuant to this Agreement in the Collateral will be perfected (A)
     with respect to any property that can solely be perfected by filing, to the
     extent Article 9 of the UCC applies thereto, upon the filing of financing
     statements in the filing offices identified on Exhibit D-6 to the Credit
     Agreement and (B) with respect to any property that can be perfected by
     possession, upon Administrative Agent receiving possession thereof, and in
     each case such security interest will be, as to Collateral perfected under
     the UCC, superior and prior to the rights of all third Persons now existing
     or hereafter arising whether by way of mortgage, Lien, security interests,
     encumbrance, assignment or otherwise, except (I) with respect to the
     Collateral described in clause (A) of this Section 4(b)(xi), the Permitted
     Liens described in clauses (a) and (e) of the definition of "Permitted
     Liens" and, to the extent required by Governmental Rule, those matters
     described in clauses (b), (c) and (g) of the definition of "Permitted
     Liens" and (II) with respect to the Collateral described in clause (B) of
     this Section 4(b)(xi), the Permitted Liens described in clause (a) of the
     definition of "Permitted Liens" and, to the

                                        8

     extent required by Governmental Rule, those matters described in clause (b)
     of the definition of "Permitted Liens". Except to the extent possession of
     portions of such Collateral is required for perfection, all such action as
     is necessary has been taken to establish and perfect Administrative Agent's
     rights in and to such Collateral to the extent Administrative Agent's
     security interest can be perfected by filing, including any recording,
     filing, registration, giving of notice or other similar action. Subject to
     the requirements contained in the UCC with respect to the filing of
     continuation statements, as of [THE CLOSING DATE][THE DATE HEREOF], no
     filing, recordation, re-filing or re-recording other than [THOSE LISTED ON
     EXHIBIT D-6 TO THE CREDIT AGREEMENT][INSERT REQUIRED FILINGS] is necessary
     to perfect and maintain the perfection of the interest, title or Liens of
     this Agreement, and on [THE CLOSING DATE][THE DATE HEREOF] all such filings
     or recordings will have been made to the extent Administrative Agent's
     security interest can be perfected by filing. Grantor has properly
     delivered or caused to be delivered to Administrative Agent all such
     Collateral that requires perfection of the Lien and security interest
     described above by possession.

                                   ARTICLE V.
                        REMEDIES UPON AN EVENT OF DEFAULT

     5.1 Remedies Upon Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Administrative Agent shall have the right,
but not the obligation, to do any of the following:

               (a) declare [(INCLUDING BY CALLING UPON THE SUBSIDIARY GUARANTY)]
any amounts payable by Grantor under any of the Credit Documents to be due and
payable immediately, and thereupon the same shall become immediately due and
payable without presentment, demand, notice of dishonor, protest or further
notice of any kind, all of which are expressly waived by Grantor, anything
contained herein to the contrary notwithstanding (provided that, if such Event
of Default occurs under Section __________ of the Credit Agreement with respect
to [BORROWER] [GRANTOR], all such amounts shall become automatically due and
payable);

               (b) proceed to protect and enforce the rights vested in it by
this Agreement and under the UCC;

               (c) cause all revenues hereby pledged as security and all other
moneys and other property pledged hereunder to be paid and/or delivered directly
to it, and demand, sue for, collect and receive any such moneys and property;

               (d) cause any action at law or suit in equity or other proceeding
to be instituted and prosecuted to collect or enforce any of the Obligations, or
rights hereunder or included in the Collateral, or for specific enforcement of
any covenant or agreement contained herein or in any of the Assigned Agreements,
or in aid of the exercise of any power herein or therein granted, or for any
foreclosure hereunder and sale under a judgment or decree in any judicial
proceeding, or to enforce any other legal or equitable right vested in it by
this Agreement or by law;

                                       9

               (e) foreclose or enforce any other agreement or other instrument
by or under or pursuant to which the Obligations are issued or secured;

               (f) incur expenses, including reasonable attorneys' fees,
reasonable consultants' fees, and other reasonable costs appropriate to the
exercise of any right or power under this Agreement;

               (g) perform any obligation of Grantor hereunder or under any
other Credit Document or Assigned Agreement, submit renewal notices or exercise
any purchase options under leases, and make payments, purchase, contest or
compromise any encumbrance, charge, or lien, and pay taxes and expenses and
insure, process and preserve the Collateral without, however, any obligation to
do so;

               (h) take possession of the Collateral and of any and all books of
account and records of Grantor relating to any of the Collateral and render it
usable and repair and renovate the same without, however, any obligation to do
so, and enter upon, or authorize its designated agent to enter upon, any
location where the same may be located for that purpose (including the right of
Administrative Agent to exclude Grantor and all Persons claiming access through
Grantor from any access to the Collateral or to any part thereof) and
Administrative Agent and its representatives are hereby granted an irrevocable
license to enter upon such premises for such purpose, control, manage, operate,
rent and lease the Collateral, either separately or in conjunction with a
Project, collect all rents and income from the Collateral and apply the same to
reimburse the Secured Parties for any reasonable cost or expenses incurred
hereunder or under any of the Credit Documents and to the payment or performance
of Grantor's obligations hereunder or under any of the Credit Documents, and
apply the balance to the Obligations as provided for in the Credit Agreement and
any remaining excess balance to whomsoever is legally entitled thereto;

               (i) make any reasonable compromise or settlement deemed desirable
with respect to any of the Collateral and may extend the time of payment,
arrange for payment installments, or otherwise modify the terms of, any
Collateral;

               (j) secure the appointment of a receiver of the Collateral or any
part thereof, whether incidental to a proposed sale of the Collateral or
otherwise, and all disbursements made by such receiver and the expenses of such
receivership shall be added to and be made a part of the Obligations, and,
whether or not said principal sum, including such disbursements and expenses,
exceeds the indebtedness originally intended to be secured hereby, the entire
amount of said sum, including such disbursements and expenses, shall be secured
by this Agreement and shall be due and payable upon demand therefor and
thereafter shall bear interest at the Default Rate or the maximum rate permitted
by applicable Legal Requirements, whichever is less;

               (k) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for, the Collateral or any part
thereof;

                                       10

               (l) transfer the Collateral or any part thereof to the name of
Administrative Agent or to the name of Administrative Agent's nominee;

               (m) take possession of and endorse in the name of Grantor or in
the name of Administrative Agent, for the account of Grantor, any bills of
exchange, checks, drafts, money orders, notes or any other chattel paper,
documents or instruments constituting all or any part of the Collateral or
received as interest, rent or other payment on or on account of the Collateral
or any part thereof or on account of its sale or lease;

               (n) appoint another (who may be an employee, officer or other
representative of Administrative Agent) to do any of the foregoing, or take any
other action permitted hereunder, on behalf of Administrative Agent;

               (o) execute (in the name, place and stead of Grantor)
endorsements, assignments and other instruments of conveyance or transfer with
respect to all or any of the Collateral;

               (p) take any other action which Administrative Agent deems
necessary or desirable to protect or realize upon its security interest in the
Collateral or any part thereof;

               (q) require Grantor to assemble the Collateral or any part
thereof and to make the same (to the extent the same is reasonably moveable)
available to Administrative Agent at a place to be designated by Administrative
Agent which is reasonably convenient to Grantor and Administrative Agent;

               (r) make formal application for the transfer of all of Grantor's
Permits to Administrative Agent or to any assignee of Administrative Agent or to
any purchaser of any of the Collateral to the extent the same are assignable in
accordance with their terms and applicable Legal Requirements; and/or

               (s) exercise any other or additional rights or remedies granted
to Administrative Agent under any other provision of this Agreement or any
related agreement, or exercisable by a secured party under the UCC or under any
other applicable Legal Requirement.

     5.2 Minimum Notice Period. If, pursuant to applicable Legal Requirements,
prior notice of any action described in Section 5.1 is required to be given to
Grantor, Grantor hereby acknowledges that the minimum time required by such
applicable Legal Requirements, or, if no minimum time is specified, fifteen (15)
Banking Days, shall be deemed a reasonable notice period.

     5.3 Sale of Collateral. In addition to exercising the foregoing rights,
Administrative Agent may, to the extent permitted by applicable Legal
Requirements, arrange for and conduct the sale of the Collateral at a public or
private Sale (as Administrative Agent may elect) which sale may be conducted by
an employee or representative of Administrative Agent, and any such sale shall
be considered or deemed to be a sale made in a commercially reasonable manner.
Administrative Agent agrees to provide at least fifteen (15) Banking Days' prior
written notice to Grantor specifying the time and place of any public sale or
the time after which any private sale is to be made and Grantor agrees that such
fifteen (15) Banking Days' notice shall constitute

                                       11

reasonable notification (unless a longer notice period shall be required by
applicable Legal Requirements). Administrative Agent may release, temporarily or
otherwise, to Grantor any item of Collateral of which Administrative Agent has
taken possession pursuant to any right granted to Administrative Agent by this
Agreement without waiving any rights granted to Administrative Agent under this
Agreement, the Credit Agreement, the other Credit Documents or any other
agreement related hereto or thereto. Grantor, in dealing with or disposing of
the Collateral or any part thereof, hereby waives all rights, legal and
equitable, it may now or hereafter have to require marshaling of assets or to
require, upon foreclosure, sales of assets in a particular order. Each successor
of Grantor under the Credit Documents agrees that it shall be bound by the above
waiver, to the same extent as if such holder gave the waiver itself. Grantor
also hereby waives, to the full extent it may lawfully do so, the benefit of all
laws providing for rights of appraisal, valuation, stay, extension or redemption
after foreclosure now or hereafter in force. If Administrative Agent sells any
of the Collateral upon credit, Grantor will be credited only with payments
actually made by the purchaser and received by Administrative Agent. In the
event the purchaser fails to pay for the Collateral, Administrative Agent may
resell the Collateral and Grantor shall be credited with the proceeds of the
sale. In the event Administrative Agent shall bid at any foreclosure or
trustee's sale or at any private sale permitted by Legal Requirements or this
Agreement or any other Credit Document, Administrative Agent may bid all or less
than the amount of the Obligations.

     5.4 Sales of Private Securities. Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws (collectively, the "Securities Laws"),
Administrative Agent may be compelled, with respect to any sale of all or any
part of the Collateral constituting "securities", however defined in the
Securities Laws, to limit purchasers to those who will agree, among other
things, to acquire such Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Grantor acknowledges that any
such private sales may be at prices and on terms less favorable to
Administrative Agent and the other Secured Parties than those obtainable through
a public sale without such restrictions, and, notwithstanding such
circumstances, Administrative Agent shall have no obligation to engage in public
sales and no obligation to delay the sale of any Collateral for the period of
time necessary to permit the issuer thereof to register it for public sale.

     5.5 Registration of Securities. If Administrative Agent with the prior
written consent of the other Secured Parties shall decide to exercise its right
to sell any or all of the Collateral, and if, in the opinion of counsel for
Administrative Agent, it is necessary to have such Collateral, or that portion
thereof to be sold, registered under the provisions of any Securities Laws,
Grantor shall execute and deliver, all at Grantor's expense, all such
instruments and documents which, in the opinion of Administrative Agent, are
necessary to register or qualify such Collateral, or that portion thereof to be
sold, under the provisions of the Securities Laws and shall use best efforts to
cause any registration statement relating thereto to become effective and to
remain effective for a period of not less than six months from the date of the
first public offering of such Collateral, or that portion thereof to be sold,
and to make all amendments thereto and/or to any related prospectus or similar
document which, are necessary, all in conformity with the Securities Laws
applicable thereto. Without limiting the generality of the foregoing, Grantor
agrees to comply with the applicable provisions of the securities or "Blue Sky"
laws of any jurisdiction(s) which Administrative Agent shall reasonably
designate and to make available to

                                       12

its security holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 1l(a) of the Securities Act of 1933.

     5.6 Actions Taken by Administrative Agent. Any action or proceeding to
enforce this Agreement or any Assigned Agreement may be taken by Administrative
Agent either in Grantor's name or in Administrative Agent's name, as
Administrative Agent may deem necessary.

     5.7 Private Sales. Administrative Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Article V conducted in a commercially reasonable manner and in
accordance with the requirements of applicable Legal Requirements. Grantor
hereby waives any claims against Administrative Agent and the other Secured
Parties arising by reason of the fact that the price at which the Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if Administrative Agent accepts the first offer received and
does not offer the Collateral to more than one offeree, provided that such
private sale is conducted in a commercially reasonable manner and in accordance
with applicable Legal Requirements.

     5.8 Waiver of Rights and Remedies Under Applicable Legal Requirements. To
the extent permitted under applicable Legal Requirements, Grantor hereby waives
all rights and remedies of a debtor or grantor under the UCC or other applicable
Legal Requirements, and all formalities prescribed by law relative to the sale
or disposition of the Collateral (other than notice of sale and any other
rights, remedies and formalities that are expressly contemplated by this
Agreement) during the continuation of an Event of Default and all other rights
and remedies of Grantor with respect thereto. To the extent that any such
rights, remedies or formalities are not waivable under the UCC or other
applicable Legal Requirements, Administrative Agent agrees to comply and observe
such formalities and requirements in accordance with the UCC and applicable
Legal Requirements. In exercising its right to take possession of the Collateral
upon the occurrence and during the continuation of an Event of Default
hereunder, Administrative Agent, personally or by its agents or attorneys, and
subject to the rights of any tenant under any lease or sublease of the
Collateral, to the fullest extent permitted by Legal Requirements, may enter
upon any land owned or leased by Grantor without being guilty of trespass or any
wrongdoing, and without liability to Grantor for damages thereby occasioned.

     5.9 Compliance With Limitations and Restrictions. Grantor hereby agrees
that in respect of any sale of any of the Collateral pursuant to the terms
hereof, Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable Legal Requirements, or
in order to obtain any required approval of the sale or of the purchaser by any
Governmental Authority or official, and Grantor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall Administrative Agent be
liable or accountable to Grantor for any discount allowed by reason of the fact
that such Collateral is sold in compliance with any such limitation or
restriction.

                                       13

     5.10 No Impairment of Remedies. If, in the exercise of any of its rights
and remedies hereunder, Administrative Agent shall forfeit any of its rights or
remedies, including any right to enter a deficiency judgment against Grantor or
any other Person, whether because of any applicable Legal Requirements
pertaining to "election of remedies" or otherwise, Grantor hereby consents to
such action by Administrative Agent and, to the extent permitted by applicable
Legal Requirements, waives any claim based upon such action, even if such action
by Administrative Agent shall result in a full or partial loss of any rights of
subrogation, indemnification or reimbursement which Grantor might otherwise have
had but for such action by Administrative Agent or the terms herein. Any
election of remedies which results in the denial or impairment of the right of
Administrative Agent to seek a deficiency judgment against any of the parties to
any of the Credit Documents shall not, to the extent permitted by applicable
Legal Requirements, impair Grantor's obligation hereunder.

                                   ARTICLE VI.
                                  MISCELLANEOUS

     6.1 Remedies Cumulative; Delay Not Waiver.

          6.1.1 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to Administrative Agent hereunder is intended to be exclusive
of any other right, power or remedy, and every such right, power and remedy
shall, to the extent permitted by applicable Legal Requirements, be cumulative
and in addition to every other right, power and remedy given hereunder or under
any other Credit Document now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by Administrative Agent or any other Secured Party, may be taken concurrently or
successively and in one or several consolidated or independent judicial actions
or lawfully taken nonjudicial proceedings, or both.

          6.1.2 Delay Not Waiver; Separate Causes of Action. No delay or
omission to exercise any right, power or remedy accruing to Administrative Agent
upon the occurrence of any Event of Default shall impair any such right, power
or remedy of Administrative Agent, nor shall it be construed to be a waiver of
any such Event of Default, or an acquiescence therein, or of or in any other
breach or default thereafter occurring, nor shall any waiver of any other breach
or default under this Agreement or any other Credit Document be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of
Administrative Agent of any breach or default under this Agreement, or any
waiver on the part of the Secured Parties or Administrative Agent of any
provision or condition of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. Each and
every default by Grantor in payment hereunder shall give rise to a separate
cause of action hereunder, and separate suits may be brought hereunder as each
cause of action arises.

     6.2 Attorney-In-Fact. Grantor hereby constitutes and appoints
Administrative Agent, acting for and on behalf of itself and the other Secured
Parties and each successor or permitted assign of Administrative Agent and the
other Secured Parties, the true and lawful attorney-in-fact of Grantor, with
full power and authority in the place and stead of Grantor and in the name of

                                       14

Grantor, Administrative Agent or otherwise to enforce all rights, interests and
remedies of Grantor with respect to the Collateral or enforce all rights,
interests and remedies of Administrative Agent under this Agreement (including
the rights set forth in Section 5.1); provided, however, that Administrative
Agent shall not exercise any of the aforementioned rights unless an Event of
Default has occurred and is continuing and has not been waived or cured in
accordance with the Credit Documents. This power of attorney is a power coupled
with an interest and shall be irrevocable; provided further, however, that
nothing in this Agreement shall prevent Grantor from, prior to the exercise by
Administrative Agent of any of the aforementioned rights, undertaking Grantor's
operations in the ordinary course of business in accordance with the Collateral
and the Credit Documents.

     6.3 Perfection: Further Assurances: Certain Waivers.

          6.3.1 Perfection. Grantor agrees that from time to time, at the
expense of Grantor, Grantor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary, or that Administrative Agent may reasonably request, in order to
perfect, to ensure the continued perfection of, and to protect the assignment
and security interest granted or intended to be granted hereby or to enable
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, Grantor shall: (a) if any Collateral shall be evidenced by a
promissory note or other instrument, deliver and pledge to Administrative Agent
such note or instrument duly endorsed (without recourse) and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Administrative Agent; and (b) authorize, execute and file such
financing statements or continuation statements, or amendments thereto, and such
other instruments, endorsements or notices, as may be reasonably necessary or
desirable, or as Administrative Agent may reasonably request or as required by
applicable Legal Requirements, in order to perfect and preserve the assignments
and security interests granted or purported to be granted hereby. If Grantor
shall at any time acquire a commercial tort claim, as defined in the UCC, with a
fair market value in excess of $50,000 Grantor shall promptly notify
Administrative Agent in a writing signed by Grantor of the brief details thereof
and grant to Administrative Agent in such writing a security interest therein
and in the proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance reasonably satisfactory to Administrative
Agent.

          6.3.2 Filing of Financing and Continuation Statements. Grantor hereby
authorizes the filing of any financial statements or continuation statements,
and amendments to financing statements, or any similar document in any
jurisdictions and with any filing offices as Administrative Agent may determine,
in its sole discretion, are necessary or advisable to perfect the security
interest granted to Administrative Agent, for the benefit of the Secured
Parties, herein. Such financing statements may describe the Collateral in the
same manner as described herein or may contain an indication or description of
the Collateral that describes such property in any other manner as
Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to Administrative Agent herein, including describing such
property as "all assets" or "all personal property", whether now owned or
hereafter acquired.

                                       15

          6.3.3 Information Concerning Collateral. Grantor shall promptly upon
request, and at the expense of Grantor, provide to Administrative Agent all
information and evidence it may reasonably request concerning the Collateral to
enable Administrative Agent to enforce the provisions of this Agreement.

          6.3.4 Waiver. Grantor hereby waives, to the maximum extent permitted
by applicable Legal Requirements, (a) all rights under any law limiting
remedies, including recovery of a deficiency, under an obligation secured by a
mortgage or deed of trust on real property if the real property is sold under a
power of sale contained in such mortgage or deed of trust; (b) all rights under
any law to require Administrative Agent to pursue any Person other than Grantor,
any security which Administrative Agent may hold, or any other remedy before
proceeding against Grantor; (c) all rights of reimbursement or subrogation and
all rights to participate in any security held by Administrative Agent until the
Obligations have been paid and the covenants of the Credit Documents have been
performed in full; (d) all rights to require Administrative Agent to give any
notices of any kind, including without limitation notices of nonpayment,
nonperformance, protest, dishonor, default, delinquency or acceleration, or to
make any presentments, demands or protests, except as set forth herein or as
expressly provided in the Credit Agreement or other Credit Documents; (e) all
rights to assert the bankruptcy or insolvency of Grantor as a defense hereunder
or as the basis for rescission hereof; (f) subject to Section 6.6, all rights
under any law purporting to reduce Grantor's obligations hereunder if the
Obligations are reduced (other than as a result of payment of such Obligations);
(g) all defenses based on the disability or lack of authority of Grantor or any
Person, the repudiation of the Credit Documents by Grantor or any Person, the
failure by Administrative Agent or the Secured Parties to enforce any claim
against Grantor, or the unenforceability in whole or in part of any Credit
Documents; and (h) all suretyship and guarantor's defenses generally.

     6.4 Continuing Assignment and Security Interest; Transfer of Notes. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash and performance in full of the Obligations (other
than the Obligations that are intended to survive the termination of the Credit
Documents); (b) be binding upon Grantor and its successors and assigns; and (c)
inure, together with the rights and remedies of Administrative Agent, to the
benefit of Administrative Agent and its successors and permitted assigns for the
benefit of the Secured Parties. Without limiting the generality of the foregoing
clause (c), any of the Secured Parties may assign or otherwise transfer the
Notes or other evidence of indebtedness held by them to any other Person to the
extent permitted by and in accordance with the Credit Agreement, and such other
Person shall thereupon become vested with all or an appropriate part of the
benefits in respect thereof granted to the Secured Parties herein or otherwise.
The release of the security interest in any or all of the Collateral, the taking
or acceptance of additional security, or the resort by Administrative Agent to
any security it may have in any order it may deem appropriate, shall not affect
the liability of any Person on the indebtedness secured hereby, except for
release of Collateral upon the payment in full in cash and performance in full
of the Obligations.

     6.5 Termination of Security Interest. Upon the payment in full in cash and
performance in full of all Obligations (other than the Obligations that are
intended to survive the termination of the Credit Documents), this Agreement and
the security interest and all other rights granted hereby shall terminate and
all rights to the Collateral shall revert to Grantor. Upon

                                       16

any such termination, Administrative Agent shall, at Grantor's expense and upon
its written direction, execute and, subject to Section 6.10, deliver to Grantor
such documents (including UCC-3 termination statements) as Grantor shall
reasonably request to evidence such termination, to release all security
interest on the Collateral and to return such Collateral to Grantor.

     6.6 Limitation on Duty of Administrative Agent with Respect to the
Collateral. The powers conferred on Administrative Agent hereunder are solely to
protect its interest and the interests of the Secured Parties in the Collateral
and shall not impose any duty on it to exercise any such powers. Except for (a)
the safe custody of any Collateral in its possession, (b) the accounting for
monies actually received by it hereunder and (c) any duty expressly imposed on
Administrative Agent by applicable Legal Requirements with respect to any
Collateral that has not been waived by Grantor hereunder, Administrative Agent
shall have no duty with respect to any Collateral and no implied duties or
obligations shall be read into this Agreement against Administrative Agent.
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment that is substantially equivalent to that which
Administrative Agent accords its own property, it being expressly agreed, to the
maximum extent permitted by applicable Legal Requirements, that Administrative
Agent shall have no responsibility for (i) taking any necessary steps to
preserve rights against any parties with respect to any Collateral or (ii)
taking any action to protect against any diminution in value of the Collateral,
but, in each case, Administrative Agent may do so and all expenses reasonably
incurred in connection therewith shall be part of the Obligations.

     6.7 Liability. Recourse against Grantor, any of its Affiliates and other
Nonrecourse Persons under this Agreement shall be limited to the extent provided
in Article 8 of the Credit Agreement.

     6.8 Amendments; Waivers; Consents. This Agreement may not be amended,
modified or supplemented, except in a writing signed by each of the parties
hereto and otherwise in accordance with the provisions of Section 9.9 of the
Credit Agreement.

     6.9 Notices. All notices required or permitted under the terms and
provisions hereof shall be in writing, and any such notice shall be effective if
given in accordance with the provisions of Section 10.1 of the Credit Agreement.
Notices to Grantor or Administrative Agent may be given at the addresses set
forth in the [CREDIT AGREEMENT] [GUARANTY].

     6.10 Reinstatement. This Agreement and the obligations of Grantor hereunder
shall automatically be reinstated if and to the extent that for any reason any
payment made pursuant to this Agreement is rescinded or must otherwise be
restored or returned, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise with respect to Grantor or any other Person or as a
result of any settlement or compromise with any Person (including Grantor) in
respect of such payment, and Grantor shall pay Administrative Agent on demand
all of its reasonable costs and expenses (including reasonable fees of counsel)
incurred by Administrative Agent in connection with such rescission or
restoration.

     6.11 Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the

                                       17

Collateral shall be applied in accordance with Section 2.4.5 of the Credit
Agreement. Grantor and its Affiliates which are parties to the Credit Documents
shall remain liable for any deficiency in accordance with the respective Credit
Documents to which each is a party.

     6.12 Administrative Agent May Perform. Upon the occurrence and during the
continuance of an Event of Default, if Grantor fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.

     6.13 Expenses; Interest.

          6.13.1 Expenses. Grantor agrees to pay on demand to Administrative
Agent all costs and expenses incurred by Administrative Agent (including the
reasonable fees and disbursements of counsel) incident to its enforcement,
exercise, protection or preservation of any of its rights, remedies or claims
(or the rights or claims of any other Secured Party) under this Agreement.

          6.13.2 Interest. Any amount required to be paid by Grantor pursuant to
the terms hereof that is not paid when due shall bear interest at the Default
Rate or the maximum rate permitted by law, whichever is less, from the date due
until paid in full in cash.

     6.14 Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.

     6.15 Survival of Provisions. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Documents and the making of the Loans and extensions of credit under the
Credit Agreement. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Grantor set forth herein shall terminate at
the same time as the security interest and other rights granted hereunder shall
terminate pursuant to Section 6.5.

     6.16 Successions or Assignments.

          6.16.1 Successors. This Agreement shall inure to the benefit of the
successors or permitted assigns of the Secured Parties under the Credit
Agreement who shall have, to the extent of their interest, the rights of the
Secured Parties hereunder.

          6.16.2 Assignment. This Agreement is binding upon Grantor and its
successors and assigns. Grantor is not entitled to assign its obligations
hereunder to any other Person without the written consent of Administrative
Agent, and any purported assignment in violation of this provision shall be
void.

     6.17 Headings Descriptive. Article and Section headings have been inserted
in this Agreement as a matter of convenience for reference only and it is agreed
that such article and

                                       18

section headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.

     6.18 Entire Agreement. This Agreement, together with the other Credit
Documents, is intended by the parties as a final expression of their agreement
and is intended as a complete and exclusive statement of the terms and
conditions thereof.

     6.19 Time. Time is of the essence of this Agreement.

     6.20 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. NO CREDIT DOCUMENT TO WHICH BEAL BANK, S.S.B. IS A PARTY
SHALL BE EFFECTIVE UNLESS TWO OFFICERS OF BEAL BANK, S.S.B. SHALL HAVE EXECUTED
SUCH CREDIT DOCUMENT.

     6.21 Governing Law. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the State of New York, without
reference to conflicts of law (other than Section 5-1401 and Section 5-1402 of
the New York General Obligations Law), except as required by mandatory
provisions of law and except to the extent that the validity or perfection of
the lien and security interest hereunder, or remedies hereunder, in respect of
any particular Collateral are governed by the laws of a jurisdiction other than
the State of New York.

     6.22 WAIVER OF JURY TRIAL. GRANTOR AND ADMINISTRATIVE AGENT HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR
ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF ADMINISTRATIVE AGENT OR GRANTOR. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT.

     6.23 Submission to Jurisdiction. Administrative Agent and Grantor agree
that any legal action or proceeding by or against Grantor or with respect to or
arising out of this Agreement may be brought in or removed to the courts of the
State of New York, in and for the Borough of Manhattan, or of the United States,
of America for the Southern District of New York, as Administrative Agent may
elect. By execution and delivery of this Agreement, Administrative Agent and
Grantor accept, for themselves and in respect of their property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Administrative Agent and Grantor irrevocably consent to the service of process
out of any of the aforementioned courts in any manner permitted by law.
Administrative Agent and Grantor

                                       19

hereby waive any right to stay or dismiss any action or proceeding under or in
connection with this Agreement brought before the foregoing courts on the basis
of forum non-conveniens. Nothing herein shall affect the right of Administrative
Agent to bring legal action or proceedings in any other competent jurisdiction.

     6.24 Third Party Rights. Nothing in this Agreement, expressed or implied,
is intended or shall be construed to confer upon, or give to any Person, other
than Grantor, Administrative Agent and the other Secured Parties, any security,
rights, remedies or claims, legal or equitable, under or by reason hereof, or
any covenant or condition hereof; and this Agreement and the covenants and
agreements herein contained are and shall be held to be for the sole and
exclusive benefit of Grantor, Administrative Agent and the other Secured
Parties.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       20

     IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to legally bound, have caused this Security Agreement to be duly
executed as of the date first above written.

                                        [INSERT NAME OF GRANTOR],

                                        a                        ,
                                          -----------------------
                                        as Grantor

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        BEAL BANK, S.S.B.,
                                        as Administrative Agent

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      S-1

                       [           's Security Agreement]
                        -----------

                                    EXHIBIT A

                               Assigned Agreements

                               [ORMAT TO PROVIDE.]

                                      A-1

                                                                     EXHIBIT D-3
                                                             to Credit Agreement

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

                                     FORM OF
                         PLEDGE AND SECURITY AGREEMENT

                                      among

                            [INSERT NAME OF PLEDGOR],

                      a
                        ---------------------------------
                                    (Pledgor)

                                       and

              [INSERT NAME OF ISSUER OF PLEDGED EQUITY INTERESTS],

                    a
                      ---------------------------------------
                                    (Company)

                                       and

                                BEAL BANK, S.S.B.
                             (Administrative Agent)

                        DATED AS OF               ,
                                    --------------  -----

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

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE I. DEFINITIONS........................................................2

   1.1  Defined Terms.........................................................2
   1.2  Credit Agreement and UCC Definitions..................................3
   1.3  Rules of Interpretation...............................................3

ARTICLE II. PLEDGE AND GRANT OF SECURITY INTEREST.............................3

   2.1  Granting Clause.......................................................3
   2.2  Delivery of Certificates..............................................4
   2.3  Retention of Certain Rights...........................................4

ARTICLE III. OBLIGATIONS SECURED..............................................4

ARTICLE IV. EVENTS OF DEFAULT.................................................5

ARTICLE V. REPRESENTATIONS AND WARRANTIES.....................................5

   5.1  Organization..........................................................5
   5.2  Power and Authorization; Enforceable Obligations......................5
   5.3  No Legal Bar..........................................................5
   5.4  Beneficial Ownership; Pledged Equity Interests........................6
   5.5  No Prior Assignment...................................................6
   5.6  No Other Financing Documents..........................................6
   5.7  Compliance with Law...................................................6
   5.8  Investment Company Act; Federal Energy Laws...........................6
   5.9  Name; Organizational Number...........................................6
   5.10 Company Information...................................................6
   5.11 Capital Adequacy; Etc.................................................7
   5.12 Perfection of Security Interest.......................................7

ARTICLE VI. COVENANTS OF PLEDGOR..............................................7

   6.1  Defense of Collateral.................................................8
   6.2  Limitation of Liens...................................................8
   6.3  No Other Filings .....................................................8
   6.4  No Sale of Collateral.................................................8
   6.5  Filing of Bankruptcy Proceedings......................................8
   6.6  Distributions ........................................................8
   6.7  Maintenance of Records................................................8
   6.8  Name; Jurisdiction of Organization....................................8
   6.9  Certificated Securities...............................................9
   6.10 Amendments to Organizational Documents................................9

ARTICLE VII. REMEDIES UPON EVENT OF DEFAULT...................................9

   7.1  Remedies Upon an Event of Default.....................................9
   7.2  Minimum Notice Period................................................10
   7.3  Right to Cure........................................................10
   7.4  Expenses; Interest...................................................10
   7.5  Sale of Collateral...................................................10
   7.6  Compliance With Limitations and Restrictions.........................11
   7.7  Registration of Securities...........................................11

                                       i

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
   7.8   No Impairment of Remedies...........................................12

ARTICLE VIII. MISCELLANEOUS..................................................12

   8.1  Remedies Cumulative; Delay Not Waiver................................12
   8.2  Company's Consent and Covenant.......................................15
   8.3  Attorney-in-Fact.....................................................15
   8.4  Perfection; Further Assurances.......................................15
   8.5  Payment of Taxes.....................................................16
   8.6  Place of Business; Location of Records...............................16
   8.7  Continuing Assignment and Security Interest; Transfer
           of Notes..........................................................16
   8.8  Termination of Security Interest.....................................16
   8.9  Security Interest Absolute...........................................17
   8.10 Limitation on Duty of Administrative Agent with
           Respect to the Collateral.........................................17
   8.11 Liability............................................................18
   8.12 Amendments; Waivers; Consents........................................18
   8.13 Notices..............................................................18
   8.14 Delivery of Collateral; Proxy........................................19
   8.15 Governing Law........................................................20
   8.16 Reinstatement........................................................20
   8.17 Severability.........................................................20
   8.18 Survival of Provisions...............................................20
   8.19 Headings Descriptive.................................................20
   8.20 Entire Agreement.....................................................20
   8.21 Time.................................................................21
   8.22 Counterparts.........................................................21
   8.23 Limitation of Liability..............................................21
   8.24 Submission to Jurisdiction...........................................21
   8.25 WAIVER OF JURY TRIAL.................................................21
   8.26 Knowledge and Attribution............................................22
   8.27 Rights of Administrative Agent.......................................22
   8.28 Consent and Acknowledgement..........................................22
   8.29 Third Party Beneficiaries............................................22
   8.30 Waiver of Transfer Restrictions......................................22

EXHIBITS AND SCHEDULE

Exhibit A - Irrevocable Proxy

Exhibit B - Transfer Document

Schedule I - Description of Pledged Equity Interests

                                       ii

                          PLEDGE AND SECURITY AGREEMENT

     This PLEDGE AND SECURITY AGREEMENT, dated as of [_______] [___], [_____]
(as amended, amended and restated, supplemented or otherwise modified from time
to time, this "Agreement") is entered into by and among [INSERT NAME OF
PLEDGOR], a ________________ [ORGANIZED][FORMED] and existing under the laws of
the State of _______________ ("Pledgor"), [INSERT NAME OF ISSUER OF PLEDGED
EQUITY INTERESTS], a _________________ [ORGANIZED][FORMED] and existing under
the laws of the State of _________________ ("Company"), and BEAL BANK, S.S.B.,
in its capacity as administrative agent (together with its successors, designees
and assigns in such capacity, "Administrative Agent") for the Secured Parties.

                                    RECITALS

     A. [PLEDGOR] [COMPANY] [ORCAL GEOTHERMAL INC., A CORPORATION ORGANIZED
UNDER THE LAWS OF THE STATE OF DELAWARE ("BORROWER")] directly or indirectly
[INTENDS TO ACQUIRE] [HAS ACQUIRED] (the "Acquisition") certain Persons who
directly or indirectly own, lease, operate and use certain geothermal power
plants and geothermal fluid facilities located in the State of California, known
as the Heber Project, the Mammoth Lakes Project and the SIGC Project (the
"Projects").

     B. In order to partially finance the Acquisition, [BORROWER] [PLEDGOR]
[COMPANY] has entered into that certain Credit Agreement, dated as of December
18, 2003 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among [BORROWER] [PLEDGOR]
[COMPANY], the financial institutions from time to time parties thereto
(collectively, "Lenders"), and the agents listed on the signature pages thereto,
pursuant to which, among other things, Lenders have [MADE][EXTENDED COMMITMENTS
TO MAKE] loans to, and for the benefit of, [BORROWER] [PLEDGOR] [COMPANY].

     C. As of the Closing Date, Pledgor is a [PARTNER] [MEMBER] [SHAREHOLDER]
and owns ____% of the [PARTNERSHIP] [MEMBERSHIP] [OWNERSHIP] interests of
Company.

     [D.] [PLEDGOR IS A WHOLLY-OWNED [DIRECT] [INDIRECT] SUBSIDIARY OF BORROWER,
AND PLEDGOR [HAS AND] WILL RECEIVE SUBSTANTIAL BENEFITS FROM THE MAKING OF SUCH
LOANS TO BORROWER. PLEDGOR HAS GUARANTEED THE OBLIGATIONS OF BORROWER UNDER THE
CREDIT AGREEMENT PURSUANT TO THAT CERTAIN SUBSIDIARY GUARANTY, DATED AS OF THE
DATE HEREOF (AS AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME, THE "SUBSIDIARY GUARANTY"), AND THE LIENS CREATED
HEREBY SECURE, AMONG OTHER THINGS, PLEDGOR'S OBLIGATIONS THEREUNDER.]

     [D.] [E.] [IT IS A CONDITION PRECEDENT TO THE EFFECTIVENESS OF THE CREDIT
AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AND THE MAKING OF THE ADVANCES OF
CREDIT CONTEMPLATED THEREBY, THAT PLEDGOR SHALL HAVE EXECUTED THIS AGREEMENT.]
[IT IS A REQUIREMENT UNDER THE CREDIT AGREEMENT THAT PLEDGOR EXECUTE AND DELIVER
THIS AGREEMENT.]

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the promises contained herein, and to
induce Lenders to enter into the Credit Agreement and to make the advances of
credit to [COMPANY] [BORROWER] contemplated thereby, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Company and Pledgor hereby agree with Administrative Agent, for
the benefit of the Secured Parties, as follows:

                                   ARTICLE I.
                                   DEFINITIONS

     1.1 Defined Terms. The following terms (whether or not underscored) when
used in this Agreement, including its preamble and recitals, shall have the
following meanings:

          "Acquisition" has the meaning given in the recitals to this Agreement.

          "Administrative Agent" has the meaning given in the preamble to this
     Agreement.

          "Collateral" has the meaning given in Section 2.1.

          "Company" has the meaning given in the preamble to this Agreement.

          "Credit Agreement" has the meaning given in the recitals to this
     Agreement.

          "Governing Agreement" has the meaning given in Section 8.30.

          "Lenders" has the meaning given in the recitals to this Agreement.

          "Obligations" means and includes all loans, advances, debts,
     liabilities, and obligations, howsoever arising, owed by [BORROWER,]
     Company, Pledgor or any Affiliate thereof to Administrative Agent or any
     Lender of every kind and description (whether or not evidenced by any note
     or instrument and whether or not for the payment of money), direct or
     indirect, absolute or contingent, due or to become due, now existing or
     hereafter arising, pursuant to the terms of the Credit Agreement or any of
     the other Credit Documents [(INCLUDING THE SUBSIDIARY GUARANTY)], including
     all interest, reasonable fees, reasonable charges, reasonable expenses,
     reasonable attorneys' fees and consultant fees chargeable to [BORROWER,]
     Company, Pledgor or any Affiliate thereof and payable by [BORROWER,]
     Company, Pledgor or any Affiliate thereof hereunder or thereunder.

          "Pledged Equity Interests" has the meaning given in Section 2.1.

          "Pledgor" has the meaning given in the preamble to this Agreement.

          "Projects" has the meaning given in the recitals to this Agreement.

          "Securities Laws" has the meaning given in Section 7.7.

          ["SUBSIDIARY GUARANTY" HAS THE MEANING GIVEN IN THE RECITALS TO THIS
     AGREEMENT.]

                                        2

          "UCC" means the Uniform Commercial Code as the same may, from time to
     time, be in effect in the State of New York; provided, however, that in the
     event that, by reason of mandatory provisions of law, any or all of the
     perfection or priority of the security interest in any Collateral 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 perfection or priority and for purposes
     of definitions related to such provisions.

     1.2 Credit Agreement and UCC Definitions. Unless otherwise defined herein
or unless the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in Exhibit A to
the Credit Agreement or, if not defined therein, the UCC.

     1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A to the Credit Agreement shall apply to
this Agreement, including its preamble and recitals.

                                   ARTICLE II.
                      PLEDGE AND GRANT OF SECURITY INTEREST

     2.1 Granting Clause. To secure the timely payment in full in cash and
performance in full of the Obligations, Pledgor hereby collaterally assigns,
grants and pledges to Administrative Agent, for the benefit of Administrative
Agent and the other Secured Parties, a continuing security interest in all the
estate, right, title and interest of Pledgor, now owned or hereafter existing or
acquired, in, to and under any and all of the following (the "Collateral"):

     Any and all of Pledgor's right(s), title(s) and interest(s), whether now
owned or hereafter existing or acquired, in Company, and all of the [PARTNERSHIP
INTERESTS] [MEMBERSHIP INTERESTS] [SHARES] of Company related thereto (the
"Pledged Equity Interests"), including the [PARTNERSHIP INTERESTS] [MEMBERSHIP
INTERESTS] [SHARES] described on Schedule I hereto and Pledgor's share of:

          (a) all rights to receive income, gain, profit, dividends and other
distributions allocated or distributed to Pledgor in respect of or in exchange
for all or any portion of the Pledged Equity Interests;

          (b) all of Pledgor's capital or ownership interest, including capital
accounts, in Company;

          (c) all of Pledgor's voting rights in or rights to control or direct
the affairs of Company;

          (d) all of Pledgor's rights, title and interest, as a [MEMBER]
[PARTNER] [SHAREHOLDER] of Company, in, to or under any and all of Company's
assets or properties derived from the Pledged Equity Interests;

                                        3

          (e) all other rights, title and interest in or to Company derived from
the Pledged Equity Interests;

          (f) all indebtedness or other obligations of Company owed to Pledgor;

          (g) all claims of Pledgor for damages arising out of, or for any
breach or default relating to, the Collateral;

          (h) all rights of Pledgor to terminate, amend, supplement, modify, or
cancel, the Governing Documents of Company, to take all actions thereunder and
to compel performance and otherwise exercise all remedies thereunder;

          (i) all securities, notes, certificates and other instruments
representing or evidencing any of the foregoing rights and interests or the
ownership thereof and any interest of Pledgor reflected in the books of any
financial intermediary pertaining to such rights and interests and all non-cash
dividends, cash, options, warrants, stock splits, reclassifications, rights,
instruments or other investment property and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such rights and interests; and

          (j) all proceeds of the foregoing Collateral, whether cash or
non-cash; provided, however, that "Collateral" shall not include (i) any cash or
other property distributed to Pledgor following a distribution made pursuant to
Waterfall Level 8 or Section 3.6.2(b) of the Depositary Agreement or (ii) any
other distribution or dividend to Pledgor expressly permitted pursuant to the
terms of the Credit Agreement or any other Credit Document.

     2.2 Delivery of Certificates. All certificates, notes and other instruments
representing or evidencing any Collateral (including the certificates described
on Schedule I hereto) shall be delivered to and held by or on behalf of, and, in
the case of notes, endorsed to the order of, Administrative Agent, or its
designee pursuant hereto, in the manner set forth in Section 8.14.

     2.3 Retention of Certain Rights. So long as Administrative Agent has not
exercised remedies with respect to the Collateral under this Agreement or any
other Credit Document upon the occurrence and during the continuation of an
Event of Default, Pledgor reserves the right to exercise all voting and other
rights, title and interest with respect to the Collateral (except as limited by
the Credit Documents) and to receive all income, gains, profits, dividends and
other distributions from the Collateral whether non-cash dividends, cash,
options, warrants, stock splits, reclassifications, rights, instruments or other
investment property or other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such rights and interests (except as limited by the Credit Documents);
provided that no vote shall be cast, right exercised or other action taken which
could reasonably be expected to result in a Material Adverse Effect.

                                  ARTICLE III.
                              OBLIGATIONS SECURED

     Without limiting the generality of the foregoing, this Agreement and all of
the Collateral secure the payment and performance when due of all Obligations.
If, notwithstanding the

                                       4

representation and warranty set forth in Section 5.11 or anything to the
contrary herein, enforcement of the liability of Pledgor under this Agreement
for the full amount of the Obligations would be an unlawful or voidable transfer
under any applicable fraudulent conveyance or fraudulent transfer law or any
comparable law, then the liability of Pledgor hereunder shall be reduced to the
highest amount for which such liability may then be enforced without giving rise
to an unlawful or voidable transfer under any such law.

                                   ARTICLE IV.
                               EVENTS OF DEFAULT

     The occurrence of an Event of Default under, and as defined in, the Credit
Agreement, whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an Event of Default
hereunder. Any such Event of Default shall be considered cured or waived for the
purposes of this Agreement when it has been cured or waived in accordance with
the Credit Agreement.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

     Pledgor represents and warrants to and in favor of Administrative Agent and
the other Secured Parties, as of the [DATE HEREOF] [CLOSING DATE], as follows:

     5.1 Organization. Pledgor is [organized] [formed] and validly existing
under the laws of the State of [___________] and is qualified to do business in
such jurisdiction and in each other jurisdiction in which the conduct of its
business requires such qualification.

     5.2 Power and Authorization; Enforceable Obligations. Pledgor has the full
power and authority to conduct its business as contemplated by this Agreement
and each other Operative Documents. This Agreement and the other Operative
Documents to which Pledgor is a party have been duly authorized, executed and
delivered by Pledgor. This Agreement and each other Operative Document to which
Pledgor is a party constitutes a legal, valid and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights or by the effect of general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

     5.3 No Legal Bar. The execution, delivery and performance by Pledgor of
this Agreement and each other Operative Document to which it is a party and the
consummation of the transactions contemplated hereby (including the granting of
security interests hereunder) or under any other Operative Document to which it
is a party do not or will not violate any applicable Legal Requirement or any
material contractual obligation of Pledgor and do not or will not result in, or
require, the creation or imposition of any Lien (other than the Liens created
hereby) on any of the properties or revenues of Pledgor pursuant to any
applicable Legal Requirement or any such contractual obligation.

                                       5

     5.4 Beneficial Ownership; Pledged Equity Interests. Pledgor is the lawful
and beneficial owner of and has full right, title and interest in, to and under
rights and interests comprising the Collateral, subject to no Liens (other than
the Liens created hereby). The Pledged Equity Interests (a) have been duly
authorized and validly issued, (b) are fully paid and non-assessable and (c)
constitute [________%] of the outstanding [MEMBERSHIP INTERESTS] [PARTNERSHIP
INTERESTS] [SHARES] of Company.

     5.5 No Prior Assignment. Pledgor has not previously assigned any of its
rights in, to or under all or any portion of the Collateral, except as
specifically permitted by the Credit Agreement or the other Credit Documents.

     5.6 No Other Financing Documents. Pledgor has not executed and is not aware
of any effective financing statement, security agreement or other instrument
similar in effect covering all or any part of the Collateral on file in any
recording office, except such as may have been filed pursuant to this Agreement
and the other Credit Documents.

     5.7 Compliance with Law. Pledgor is not (a) in violation of any applicable
Legal Requirements in any material respect or (b) subject to or in default in
any material respect with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.

     5.8 Investment Company Act; Federal Energy Laws. Pledgor is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. No
provision of the FPA or PUHCA as to securities, rates or financial or
organizational matters precludes Pledgor from entering into and performing its
obligations hereunder.

     5.9 Name; Organizational Number. The name of Pledgor is
"[_________________________]," as indicated in the public records of the State
of [___________________]. Pledgor's federal employee identification number is
[___________________] and Pledgor's [___________________] organizational number
is [_____________________].

     5.10 Company Information. Pledgor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial or otherwise) of [BORROWER,] [COMPANY], each
Guarantor and Non-Guarantor and their respective properties (including the
Projects) on a continuing basis, and Pledgor now is and hereafter will be
completely familiar with the businesses, operations and condition (financial or
otherwise) of [BORROWER,] [COMPANY], each Guarantor and Non-Guarantor and their
respective properties (including the Projects). Pledgor hereby agrees that none
of the Secured Parties shall have any duty to advise Pledgor of information
known to any such Secured Party regarding such condition or any such
circumstances or of any changes or potential changes affecting the Collateral.
In the event any Secured Party, in its respective discretion, undertakes at any
time or from time to time to provide any such information to Pledgor, neither
such Secured Party nor any other Secured Party shall be under any obligation (a)
to undertake any investigation not a part of its regular business routine, or
reasonable commercial lending practices or (b) to make any other or future
disclosure of such information to Pledgor.

                                       6

     5.11 Capital Adequacy; Etc.

          (a) After giving effect to the transactions contemplated by this
Agreement and the contingent obligations evidenced hereby (but excluding the
effect of the provisions of Article III which limit the Obligations to an amount
that would not render Pledgor's indebtedness, liabilities or obligations under
this Agreement subject to avoidance), Pledgor is Solvent.

          (b) Pledgor is not executing this Agreement with any intention to
hinder, delay or defraud any present or future creditor or creditors of Pledgor.

     5.12 Perfection of Security Interest. The security interest granted to
Administrative Agent (for the benefit of the Secured Parties) pursuant to this
Agreement in the Collateral constitutes a valid lien, subject, with respect to
any proceeds, to the limitations set forth in Section 9-315 of the UCC. The
security interest granted to Administrative Agent (for the benefit of the
Secured Parties) pursuant to this Agreement in the Collateral will be perfected
(a) with respect to any property that can solely be perfected by filing, to the
extent Article 9 of the UCC applies thereto, upon the filing of financing
statements in the filing offices identified on Exhibit D-6 to the Credit
Agreement and (b) with respect to any property that can be perfected by
possession, upon Administrative Agent receiving possession thereof, and in each
case such security interest will be, as to Collateral perfected under the UCC,
superior and prior to the rights of all third Persons now existing or hereafter
arising whether by way of mortgage, Lien, security interests, encumbrance,
assignment or otherwise, except (I) with respect to the Collateral described in
clause (a) of this Section 5.12, the Permitted Liens described in clauses (a)
and (e) of the definition of "Permitted Liens" and, to the extent required by
Governmental Rule, those matters described in clauses (b), (c) and (g) of the
definition of "Permitted Liens" and (II) with respect to the Collateral
described in clause (b) of this Section 5.12, the Permitted Liens described in
clause (a) of the definition of "Permitted Liens" and, to the extent required by
Governmental Rule, those matters described in clause (b) of the definition of
"Permitted Liens". Except to the extent possession of portions of such
Collateral is required for perfection, all such action as is necessary has been
taken to establish and perfect Administrative Agent's rights in and to such
Collateral to the extent Administrative Agent's security interest can be
perfected by filing, including any recording, filing, registration, giving of
notice or other similar action. Subject to the requirements contained in the UCC
with respect to the filing of continuation statements, as of [THE CLOSING DATE]
[THE DATE HEREOF], no filing, recordation, re-filing or re-recording other than
[THOSE LISTED ON EXHIBIT D-6 TO THE CREDIT AGREEMENT] [INSERT REQUIRED FILINGS]
is necessary to perfect and maintain the perfection of the interest, title or
Liens of this Agreement, and on [THE CLOSING DATE] [THE DATE HEREOF] all such
filings or recordings will have been made to the extent Administrative Agent's
security interest can be perfected by filing. Pledgor has properly delivered or
caused to be delivered to Administrative Agent all such Collateral that requires
perfection of the Lien and security interest described above by possession.

                                   ARTICLE VI.
                              COVENANTS OF PLEDGOR

     Pledgor covenants to and in favor of Administrative Agent and the other
Secured Parties as follows:

                                       7

     6.1 Defense of Collateral. Pledgor shall, until the indefeasible payment in
full in cash of all Obligations, defend its title to the Collateral and the
interest of Administrative Agent (for the benefit of itself and the other
Secured Parties) in the Collateral pledged hereunder against the claims and
demands of all other Persons.

     6.2 Limitation of Liens. Pledgor shall not directly or indirectly create,
incur, assume or suffer to exist any Liens on or with respect to all or any part
of the Collateral (other than Permitted Liens). Pledgor shall at its own cost
and expense promptly take such action as may be necessary to discharge any such
Liens.

     6.3 No Other Filings. Pledgor shall not file or authorize or permit to be
filed in any jurisdiction any financing statements under the UCC or any like
statement relating to the Collateral in which Administrative Agent (for the
benefit of itself and the other Secured Parties) is not named as the sole
secured party.

     6.4 No Sale of Collateral. Except as expressly permitted by this Agreement
or the other Credit Documents, Pledgor shall not cause, suffer or permit the
sale, assignment, conveyance, pledge or other transfer of all or any portion of
Pledgor's ownership interest in Company or any other portion of the Collateral.

     6.5 Filing of Bankruptcy Proceedings. To the extent it may do so under
applicable Legal Requirements, Pledgor, for itself, its successors and assigns,
shall not cast any vote as an owner in Company (a) in favor of the commencement
of a voluntary case or other proceeding seeking liquidation, reorganization,
rehabilitation or other relief with respect to Company or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect in any
jurisdiction or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of the owners of Company or any substantial
part of Company's property, (b) to authorize Company to consent to any such
aforesaid relief or to the appointment of or taking possession by any such
aforesaid official in an involuntary case or other proceeding commenced against
Company or (c) to authorize Company to make a general assignment for the benefit
of creditors.

     6.6 Distributions. If Pledgor in its capacity as an owner of Company
receives any income, dividend or other distribution of money or property of any
kind from Company (other than as expressly permitted by the Credit Documents),
Pledgor shall hold such income or distribution as trustee for and shall promptly
deliver the same to Administrative Agent.

     6.7 Maintenance of Records. Pledgor shall, at all times, keep accurate and
complete records of the Collateral. Pledgor shall permit representatives of
Administrative Agent, upon reasonable prior notice, at any time during normal
business hours of Pledgor to inspect and make abstracts from Pledgor's books and
records pertaining to the Collateral. Upon the occurrence and during the
continuation of any Event of Default, at Administrative Agent's request, Pledgor
shall promptly deliver copies of any and all such records to Administrative
Agent.

     6.8 Name; Jurisdiction of Organization. Pledgor shall not change its name,
its jurisdiction of organization, the location of its principal place of
business or its organization identification number without notice to
Administrative Agent at least 30 days prior to such

                                        8

change. In the event of such change, Pledgor shall (at its expense) execute and
deliver such instruments and documents as may be required by Administrative
Agent or applicable Legal Requirements to maintain a prior perfected security
interest in the Collateral.

     6.9 Certificated Securities. Pledgor shall cause its equity interests to be
evidenced by and remain "certificated securities" as defined in Article 8 of the
UCC.

     6.10 Amendments to Organizational Documents. Except as expressly permitted
by this Agreement or the other Credit Documents, Pledgor shall not terminate,
amend, supplement or otherwise modify, or cancel, the Governing Documents of
Company.

                                  ARTICLE VII.
                         REMEDIES UPON EVENT OF DEFAULT

     7.1 Remedies Upon an Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Administrative Agent shall have the right,
at its election, but not the obligation, to do any of the following:

          (a) vote or exercise any and all of Pledgor's rights or powers
incident to its ownership of the Pledged Equity Interests, including any rights
or powers to manage or control Company;

          (b) demand, sue for, collect or receive any money or property at any
time payable to or receivable by Pledgor on account of or in exchange for all or
any part of the Collateral;

          (c) cause any action at law or suit in equity or other proceeding to
be instituted and prosecuted to collect or enforce any obligation or right
hereunder or included in the Collateral, including specific enforcement of any
covenant or agreement contained herein, or to foreclose or enforce the security
interest in all or any part of the Collateral granted herein, or to enforce any
other legal or equitable right vested in it by this Agreement or by applicable
Legal Requirements;

          (d) amend, terminate, supplement or modify Company's Governing
Documents;

          (e) incur expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement;

          (f) perform any obligation of Pledgor hereunder;

          (g) secure the appointment of a receiver of the Collateral or
any part thereof, whether incidental to a proposed sale of the Collateral or
otherwise, and all disbursements made by such receiver and the expenses of such
receivership shall be added to and be made a part of the Obligations, and,
whether or not said principal sum, including such disbursements and expenses,
exceeds the indebtedness originally intended to be secured hereby, the entire
amount of said sum, including such disbursements and expenses, shall be secured
by this Agreement and

                                       9

shall be due and payable upon demand therefor and thereafter shall bear interest
at the Default Rate or the maximum rate permitted by applicable Legal
Requirements, whichever is less;

          (h) exercise any other or additional rights or remedies granted to
Administrative Agent under any other provision of this Agreement or any other
Credit Document, or exercisable by a secured party under the UCC or under any
other applicable Legal Requirement;

          (i) take any other action which Administrative Agent deems necessary
or desirable to protect or realize upon its security interest in the Collateral
or any part thereof; and/or

          (j) appoint another Person (who may be an employee, officer or other
representative of Administrative Agent) to do any of the foregoing, or take any
other action permitted hereunder, on behalf of Administrative Agent.

     7.2 Minimum Notice Period. If, pursuant to applicable Legal Requirements,
prior notice of any action described in Section 7.1 is required to be given to
Pledgor or Company, Pledgor and Company hereby acknowledge and agree that the
minimum time required by such applicable Legal Requirements, or if no minimum is
specified, fifteen (15) Banking Days, shall be deemed a reasonable notice
period.

     7.3 Right to Cure. In addition to the foregoing remedies, Administrative
Agent may, but shall not be obligated to, cure any Event of Default and incur
reasonable fees, costs and expenses in doing so, in which event Pledgor and
Company shall reimburse Administrative Agent for all such fees, costs and
expenses as provided for in Section 7.4 below.

     7.4 Expenses; Interest.

          (a) Each of Pledgor and Company jointly and severally agrees to pay on
demand to Administrative Agent all costs and expenses incurred by Administrative
Agent (including the reasonable fees and disbursements of counsel) in connection
with exercising any actions taken under Section 7.1 or the enforcement,
exercise, protection or preservation of any of its rights, remedies or claims
(or the rights or claims of any other Secured Party) under this Agreement.

          (b) Any amount required to be paid by Pledgor or Company pursuant to
the terms hereof that is not paid when due shall bear interest at the Default
Rate or the maximum rate permitted by law, whichever is less, from the date due
until paid in full in cash.

     7.5 Sale of Collateral. In addition to exercising the foregoing rights,
Administrative Agent may, to the extent permitted by applicable Legal
Requirements, arrange for and conduct a sale of the Collateral at a public or
private sale (as Administrative Agent may elect) which sale may be conducted by
an employee or representative of Administrative Agent, and any such sale shall
be considered or deemed to be a sale made in a commercially reasonable manner.
Administrative Agent agrees to provide at least fifteen (15) Banking Days' prior
written notice to Pledgor specifying the time and place of any public sale or
the time after which any private sale is to be made and Pledgor agrees that such
fifteen (15) Banking Days' notice shall constitute

                                       10

reasonable notification (unless a longer notice period shall be required by
applicable Legal Requirements). Administrative Agent may release, temporarily or
otherwise, to Pledgor any item of Collateral of which Administrative Agent has
taken possession pursuant to any right granted to Administrative Agent by this
Agreement without waiving any rights granted to Administrative Agent under this
Agreement, the Credit Agreement or the other Credit Documents. Pledgor, in
dealing with or disposing of the Collateral or any part thereof, hereby waives
all rights, legal and equitable, it may now or hereafter have to require
marshaling of assets or to require, upon foreclosure, sales of assets in a
particular order. Pledgor also waives its right to challenge the reasonableness
of any disclaimer of warranties, title and the like made by Administrative Agent
in connection with a sale of the Collateral. Each successor of Pledgor under the
Credit Documents agrees that it shall be bound by the above waiver, to the same
extent as if such holder gave the waiver itself. Pledgor also hereby waives, to
the full extent it may lawfully do so, the benefit of all laws providing for
rights of appraisal, valuation, stay or extension or of redemption after
foreclosure now or hereafter in force. If Administrative Agent sells any of the
Collateral upon credit, Pledgor will be credited only with payments actually
made by the purchaser and received by Administrative Agent. In the event the
purchaser fails to pay for the Collateral, Administrative Agent may resell the
Collateral and Pledgor shall be credited with the proceeds of the sale. In the
event Administrative Agent shall bid at any foreclosure or trustee's sale or at
any private sale permitted by Legal Requirements or this Agreement or any other
Credit Document, Administrative Agent may bid all or less than the amount of the
Obligations.

     7.6 Compliance With Limitations and Restrictions. Pledgor hereby agrees
that in respect of any sale of any of the Collateral pursuant to the terms
hereof, Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with such sale as Administrative Agent may be
advised by counsel is necessary in order to avoid any violation of applicable
Legal Requirements, or in order to obtain any required approval of the sale or
of the purchaser by any Governmental Authority or official, and Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall
Administrative Agent be liable or accountable to Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.

     7.7 Registration of Securities. If Administrative Agent shall decide to
exercise its right to sell any or all of the Collateral, and if, in the opinion
of counsel to Administrative Agent, it is necessary to have such Collateral, or
that portion thereof to be sold, registered under the provisions of the
Securities Act of 1933, as amended, or otherwise registered or qualified under
any federal or state securities laws or regulations (collectively, the
"Securities Laws"), Pledgor and Company will execute and deliver, all at
Pledgor's and Company's expense, all such instruments and documents which, in
the opinion of Administrative Agent, are necessary to register or qualify such
Collateral, or that portion thereof to be sold, under the provisions of the
Securities Laws. Pledgor and Company will execute and will use best efforts to
cause any registration statement relating thereto to become effective and to
remain effective for a period of not less than six months from the date of the
first public offering of such Collateral, or that portion thereof to be sold,
and to make all amendments thereto and/or to any related prospectus or similar
document which, in the reasonable opinion of Administrative Agent, are
necessary, all in conformity with the Securities Laws applicable thereto.
Without limiting the generality of the

                                       11

foregoing, Pledgor and Company agree to comply with the applicable provisions of
the securities or "Blue Sky" laws of any jurisdiction(s) which Administrative
Agent shall reasonably designate and to make available to its security holders,
as soon as practicable, an earnings statement which will satisfy the provisions
of Section 11(a) of the Securities Act of 1933.

     7.8 No Impairment of Remedies. If, in the exercise of any of its rights and
remedies under this Agreement, Administrative Agent shall forfeit any of its
rights or remedies, including any right to enter a deficiency judgment against
Pledgor or any other Person, whether because of any applicable Legal
Requirements pertaining to "election of remedies" or otherwise, Pledgor hereby
consents to such action by Administrative Agent and, to the extent permitted by
applicable Legal Requirements, waives any claim based upon such action, even if
such action by Administrative Agent shall result in a full or partial loss of
any rights of subrogation, indemnification or reimbursement which Pledgor might
otherwise have had but for such action by Administrative Agent or the terms
herein. Any election of remedies which results in the denial or impairment of
the right of Administrative Agent to seek a deficiency judgment against any of
the parties to any of the Credit Documents shall not, to the extent permitted by
applicable Legal Requirements, impair Pledgor's obligation hereunder.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

     8.1 Remedies Cumulative; Delay Not Waiver.

          8.1.1 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to Administrative Agent is intended to be exclusive of any
other right, power or remedy, and every such right, power and remedy shall, to
the extent permitted by applicable Legal Requirements, be cumulative and in
addition to every other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. Resort to any or all
security now or hereafter held by Administrative Agent may be taken concurrently
or successively and in one or several consolidated or independent judicial
actions or lawfully taken non-judicial proceedings, or both.

          8.1.2 No Waiver; Separate Causes of Action. No delay or omission to
exercise any right, power or remedy accruing to Administrative Agent upon the
occurrence and during the continuance of any Event of Default as aforesaid shall
impair any such right, power or remedy of Administrative Agent, nor shall it be
construed to be a waiver of any such Event of Default or of any similar breach
or default thereafter occurring or an acquiescence therein, nor shall any waiver
of any other breach or default under this Agreement or any other Credit Document
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Each and every default by Pledgor in payment hereunder shall give
rise to a separate cause of action hereunder, and separate suits may be brought
hereunder as each cause of action arises and every power and remedy given by
this Agreement may be exercised from time to time, and as often as shall be
deemed expedient, by Administrative Agent.

                                       12

          8.1.3 Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of or other
realization upon, all or any part of the Collateral shall be applied in
accordance with Section 2.4.5 of the Credit Agreement. Pledgor and its
Affiliates which are party to any Credit Documents shall remain liable for any
deficiency in accordance with the respective Credit Documents to which each is a
party.

          8.1.4 Certain Waivers. Pledgor hereby waives and relinquishes, to the
maximum extent permitted by applicable Legal Requirements, all rights and
remedies accorded to pledgors, sureties or guarantors and agrees not to assert
or take advantage of any such rights or remedies, including: (a) any law
limiting remedies, including recovery of a deficiency, under an obligation
secured by a mortgage or deed of trust on real property if the real property is
sold under a power of sale contained in the mortgage or deed of trust, and all
defenses based on any loss whether as a result of any such sale or otherwise;
(b) any right to require Administrative Agent or the other Secured Parties to
proceed against Company or any other Person or to proceed against or exhaust any
security held by Administrative Agent or the other Secured Parties at any time
or to pursue any other remedy in Administrative Agent's or any other Secured
Party's power before proceeding against Pledgor; (c) any defense that may arise
by reason of the incapacity, lack of power or authority, death, dissolution,
merger, termination or disability of Pledgor, Company or any other Person or the
failure of Administrative Agent or any other Secured Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other proceeding)
of Pledgor, Company or any other Person; (d) any right to enforce any remedy
that Administrative Agent or the other Secured Parties may have against Company
or any other Person and any right to participate in any security held by
Administrative Agent until the Obligations have been paid and the covenants of
the Credit Documents have been performed in full; (e) any right to require
Administrative Agent to give any notices of any kind, including, without
limitation, notices of nonpayment, nonperformance, protest, dishonor, default,
delinquency or acceleration, or to make any presentments, demands or protests,
except as set forth herein or expressly provided in the Credit Agreement or any
of the Credit Documents; (f) any right to assert the bankruptcy or insolvency of
Company or any other Person as a defense hereunder or as the basis for
rescission hereof and any defense arising because of Administrative Agent's or
any other Secured Party's election, in any proceeding instituted under the
Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code; (g) subject to Section 8.9, any right under any law purporting
to reduce Pledgor's obligations hereunder if the Obligations are reduced other
than as a result of payment of such Obligations; (h) any defense based on the
repudiation of the Credit Documents by Company or any other Person, the failure
by Administrative Agent or the Secured Parties to enforce any claim against
Pledgor, Company or any other Person or the unenforceability in whole or in part
of any Credit Documents; (i) all suretyship and guarantor's defenses generally;
(j) any right to insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshaling
of assets, redemption or similar law, or exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect the performance
by Pledgor of its obligations under, or the enforcement by Administrative Agent
of, this Agreement; (k) any requirement on the part of Administrative Agent or
the holder of any Notes to mitigate the damages resulting from any default; (l)
any defense based upon an election of remedies by Administrative Agent or the
other Secured Parties, including an election to proceed by non-judicial rather
than judicial foreclosure, which destroys or otherwise impairs the

                                       13

subrogation rights of Pledgor, the right of Pledgor to proceed against Company
or another Person for reimbursement, or both; (m) any defense based on any
offset against any amounts which may be owed by any Person to Pledgor for any
reason whatsoever; (n) any defense based on any act, failure to act, delay or
omission whatsoever on the part of Company or any of its Affiliates or the
failure by Company or any of its Affiliates to do any act or thing or to observe
or perform any covenant, condition or agreement to be observed or performed by
it under the Credit Documents, (o) any defense, setoff or counterclaim which may
at any time be available to or asserted by Company or any of its Affiliates
against Administrative Agent, the other Secured Parties or any other Person
under the Credit Documents; (p) any duty on the part of Administrative Agent or
any other Secured Party to disclose to Pledgor any facts Administrative Agent or
any other Secured Party may now or hereafter know about Company or any of its
Affiliates, regardless of whether Administrative Agent or any other Secured
Party has reason to believe that any such facts materially increase the risk
beyond that which Pledgor intends to assume, or have reason to believe that such
facts are unknown to Pledgor, or have a reasonable opportunity to communicate
such facts to Pledgor; (q) any defense based on any change in the time, manner
or place of any payment under, or in any other term of, the Credit Documents or
any other amendment, renewal, extension, acceleration, compromise or waiver of
or any consent or departure from the terms of the Credit Documents; and (r) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code.

          8.1.5 Foreclosure Waiver. To the extent permitted by Legal
Requirements, Pledgor waives the posting of any bond otherwise required of
Administrative Agent in connection with any judicial process or proceeding to
obtain possession of, replevy, attach, or levy upon the Collateral, to enforce
any judgment or other security for the Obligations, to enforce any judgment or
other court order entered in favor of Administrative Agent, or to enforce by
specific performance, temporary restraining order, preliminary or permanent
injunction, this Agreement or any other agreement or document between Pledgor,
Administrative Agent and the other Secured Parties. Pledgor further agrees that
upon the occurrence and during the continuation of an Event of Default,
Administrative Agent may elect to non-judicially or judicially foreclose against
any real or personal property security it holds for the Obligations or any part
thereof, or to exercise any other remedy against Company or any other Person,
any security or any guarantor, even if the effect of that action is to deprive
Pledgor of the right to collect reimbursement from Company or any other Person
for any sums paid by Pledgor to Administrative Agent or any Lender.

          8.1.6 Waiver of Rights of Subrogation. Until the indefeasible payment
in full in cash of the Obligations, (a) Pledgor shall not exercise any right of
subrogation and shall not enforce any remedy which the Secured Parties now have
or may hereafter have against Company, and waives the benefit of, and all rights
to participate in, any security now or hereafter held by Administrative Agent or
any other Secured Party from Company and (b) Pledgor agrees not to exercise any
claim, right or remedy which Pledgor may now have or hereafter acquire against
Company that arises hereunder and/or from the performance by Pledgor
hereunder, including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Secured Parties against Company, or any security which the
Secured Parties now have or hereafter acquire, whether or not such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise. Any amount paid to Pledgor on account of any such subrogation rights
prior to the

                                       14

indefeasible payment in full in cash of the Obligation shall be held in trust
for the benefit of Administrative Agent and shall immediately thereafter be paid
to Administrative Agent, for the benefit of the Secured Parties.

     8.2 Company's Consent and Covenant. Company hereby consents to the
assignment of and grant of a security interest in the Collateral to
Administrative Agent (for the benefit of the Secured Parties) and to the
exercise by Administrative Agent of all rights and powers assigned or delegated
to Administrative Agent by Pledgor hereunder, including the rights upon and
during an Event of Default to exercise Pledgor's voting rights and other rights
to manage or control Company, all in accordance with the Credit Documents.

     8.3 Attorney-in-Fact. Pledgor hereby constitutes and appoints
Administrative Agent, acting for and on behalf of itself and the other Secured
Parties and each successor or permitted assign of Administrative Agent and the
other Secured Parties, the true and lawful attorney-in-fact of Pledgor, with
full power and authority in the place and stead of Pledgor and in the name of
Pledgor, Administrative Agent or otherwise to enforce all rights, interests and
remedies of Pledgor with respect to the Collateral or enforce all rights,
interests and remedies of Administrative Agent under this Agreement (including
the rights set forth in Section 7.1); provided, however, that Administrative
Agent shall not exercise any of the aforementioned rights unless an Event of
Default has occurred and is continuing and has not been waived or cured in
accordance with the Credit Documents. This power of attorney is a power coupled
with an interest and shall be irrevocable; provided, however, that nothing in
this Agreement shall prevent Pledgor from, prior to the exercise by
Administrative Agent of any of the aforementioned rights, undertaking Pledgor's
operations in the ordinary course of business in accordance with the Collateral
and the Credit Documents.

     8.4 Perfection; Further Assurances.

          8.4.1 Perfection. Pledgor agrees that from time to time, at the
expense of Company and Pledgor, Pledgor shall promptly execute and deliver all
further instruments and documents, and take all further action, that may be
reasonably necessary, or that Administrative Agent may reasonably request, in
order to perfect, to ensure the continued perfection of, and to protect the
assignment and security interest granted or intended to be granted hereby or to
enable Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, Pledgor shall (a) deliver the Collateral or any part thereof to
Administrative Agent, as Administrative Agent may request, accompanied by such
duly executed instruments of transfer or assignment as Administrative Agent may
request, and (b) authorize, execute and file such financing or continuation
statements, or amendments thereto, and such other instruments, endorsements or
notices, as may be reasonably necessary or desirable or as Administrative Agent
may reasonably request, in order to perfect and preserve the assignments and
security interests granted or purported to be granted hereby.

          8.4.2 Filing of Financing and Continuation Statements. Pledgor hereby
authorizes the filing of any financing statements or continuation statements,
and amendments to financing statements, or any similar document in any
jurisdictions and with any filing offices as Administrative Agent may determine,
in its sole discretion, are necessary or advisable to perfect

                                       15

the security interest granted to Administrative Agent, for the benefit of the
Secured Parties, herein. Such financing statements may describe the Collateral
in the same manner as described herein or may contain an indication or
description of the Collateral that describes such property in any other manner
as Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to Administrative Agent herein.

          8.4.3 Information Concerning Collateral. Pledgor shall, promptly upon
request, provide to Administrative Agent all information and evidence it may
reasonably request concerning the Collateral to enable Administrative Agent to
enforce the provisions of this Agreement.

     8.5 Payment of Taxes. Pledgor shall pay or cause to be paid, before any
fine, penalty, interest or cost attaches thereto, all taxes, assessments and
other governmental or non-governmental charges or levies (other than those
taxes, assessments or charges that it is contesting in good faith and by
appropriate proceedings, and in respect of which it has established adequate
reserves for such taxes) now or hereafter assessed or levied against the
Collateral pledged by it hereunder and shall retain copies of, and, upon
request, permit Administrative Agent or any Lender to examine receipts showing
payment of any of the foregoing.

     8.6 Place of Business; Location of Records. Unless Administrative Agent is
otherwise notified under Section 6, the chief executive office of Pledgor is,
and all records of Pledgor concerning the Collateral are and will be, located at
the address set forth in Section 8.13.

     8.7 Continuing Assignment and Security Interest; Transfer of Notes. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the indefeasible payment in full in cash and performance in full of the
Obligations (other than the Obligations that are intended to survive the
termination of the Credit Agreement) and as otherwise provided in Section 8.16;
(b) be binding upon Company, Pledgor, and their respective successors and
assigns; and (c) inure, together with the rights and remedies of Administrative
Agent, to the benefit of Administrative Agent, the Secured Parties and their
respective successors and permitted assigns. Without limiting the generality of
the foregoing clause (c), Administrative Agent or any of the Secured Parties may
assign or otherwise transfer the Notes or other evidence of indebtedness held by
them to any other Person to the extent permitted by and in accordance with
Article 9 of the Credit Agreement, and such other Person shall thereupon become
vested with all or an appropriate part of the benefits in respect thereof
granted to the Secured Parties herein or otherwise. The release of the security
interest in any of the Collateral, the taking or acceptance of additional
security, or the resort by Administrative Agent to any security it may have in
any order it may deem appropriate, shall not affect the liability of any Person
on the indebtedness secured hereby.

     8.8 Termination of Security Interest. Upon the payment in full in cash and
performance in full of all Obligations (other than the obligations that are
intended to survive the termination of the Credit Documents), this Agreement and
the security interest and all other rights granted hereby shall terminate and
all rights to the Collateral shall revert to Pledgor. Upon any such termination,
Administrative Agent will return all certificates previously delivered to

                                       16

Administrative Agent representing the Pledged Equity Interests and, at Pledgor's
expense and upon its written direction, execute and, subject to Section 8.16,
deliver to Pledgor such documents (including UCC-3 termination statements) as
Company or Pledgor shall reasonably request to evidence such termination, to
release all security interest on the Collateral and to return such Collateral to
Pledgor. If this Agreement shall be terminated or revoked by operation of law,
Pledgor shall indemnify and save Administrative Agent and the other Secured
Parties harmless from any loss which may be suffered or incurred by
Administrative Agent and the other Secured Parties in acting hereunder prior to
the receipt by Administrative Agent, its successors, transferees, or assigns of
notice of such termination or revocation.

     8.9 Security Interest Absolute. All rights of Administrative Agent and the
other Secured Parties and the security interest hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional irrespective of: (a)
any lack of validity or enforceability of the Credit Agreement, any other Credit
Document or any other agreement or instrument relating thereto; (b) the exercise
by any Secured Party of any remedy, power or privilege contained in any Credit
Document or available at law, equity or otherwise; (c) the failure of any
Secured Party (i) to assert any claim or demand or to enforce any right or
remedy against Company, any Affiliate of Company or any other Person under the
provisions of the Credit Agreement, any Note, any other Credit Document or
otherwise or (ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any of the Obligations; (d) any change in the time,
manner or place of payment of, or in any other term of the Obligations
(including any increase in the amount thereof), or any other amendment or waiver
of or any consent to any departure from the Credit Agreement or any other Credit
Document; (e) any action by Administrative Agent to take and hold security or
collateral for the payment of the Obligations, or sell, exchange, release,
dispose of, or otherwise deal with, any property pledged, mortgaged or conveyed,
or in which Administrative Agent has been granted a Lien, to secure any
indebtedness to Administrative Agent of Pledgor, Company, any of its Affiliates
or any other Person party to a Credit Document; (f) any reduction, limitation,
impairment or termination of any of the Obligations for any reason other than
the written agreement of the Secured Parties to terminate the Obligations in
full, but including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to, and Pledgor hereby waives any right to
or claim of, any defense or setoff, counterclaim, recoupment, or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Obligation of Company, any Affiliate of Company or otherwise; (g)
any amendment to, rescission, waiver, or other modification of, or any consent
to departure from, any of the terms of the Credit Agreement, any Note, or any
other Credit Document; (h) any exchange, surrender, release or non-perfection of
any Collateral, or any release, amendment or waiver or addition of or consent to
departure from any other security interest held by any Secured Party; (i) the
application by Administrative Agent of any sums by whomever paid or however
realized to any amounts owing by Pledgor, Company or any other Loan Party to
Administrative Agent in such manner as Administrative Agent shall determine in
its discretion; (j) any bankruptcy or insolvency of Company, Pledgor or any
other Person; or (k) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor or any third party pledgor
(other than the defense of payment).

     8.10 Limitation on Duty of Administrative Agent with Respect to the
Collateral. The powers conferred on Administrative Agent hereunder are solely to
protect its interest and the

                                       17

interests of the other Secured Parties in the Collateral and shall not impose
any duty on Administrative Agent or any of its designated agents to exercise any
such powers. Except for (a) the safe custody of any Collateral in its
possession, (b) the accounting for monies actually received by it hereunder and
(c) any duty expressly imposed on Administrative Agent by applicable Legal
Requirements with respect to any Collateral that has not been waived hereunder,
Administrative Agent shall have no duty with respect to any Collateral and no
implied duties or obligations shall be read into this Agreement against
Administrative Agent. Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment that is substantially
equivalent to that which Administrative Agent accords its own property, it being
expressly agreed, to the maximum extent permitted by applicable Legal
Requirements, that Administrative Agent shall have no responsibility for (i)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral, or (ii) taking any action to protect against any diminution
in value of the Collateral, but, in each case, Administrative Agent may do so
and all expenses reasonably incurred in connection therewith shall be part of
the Obligations.

     8.11 Liability. Recourse against Company, Pledgor, their respective
Affiliates and the other Nonrecourse Persons under this Agreement shall be
limited to the extent provided in Article 8 of the Credit Agreement.

     8.12 Amendments; Waivers; Consents. This Agreement may not be amended,
amended and restated, supplemented or otherwise modified, except in a writing
signed by each of the parties hereto and otherwise in accordance with the
provisions of Section 9.9 of the Credit Agreement.

     8.13 Notices. Any communications between the parties hereto or notices
provided herein to be given may be given to the following addresses:

If to Administrative Agent:   Beal Bank, S.S.B.
                              6000 Legacy Dr., 4E
                              Plano, Texas 75024
                              Attn: William T. Saurenmann
                              Telephone No.: (469) 467-5510
                              Telecopy No.: (469) 241-9568
                              E-mail: bsaurenmann@bealbank.com

with a copy to:               CSG Investments, Inc.
                              6000 Legacy Dr., 4W
                              Plano, Texas 75024
                              Attn: Steve Harvey
                              Tel: (469) 467-5652
                              Fax: (469) 241-9567
                              E-mail: sharvey@csginvestments.com

                                       18

If to Company:   [INSERT NAME OF COMPANY]
                 980 Greg Street
                 Sparks, NV 89431
                 Attn: President
                 Telephone No.: (775) 356-9029
                 Telecopy No.: (775) 356-9039
                 E-mail: dbronicki@ormat.com

If to Pledgor:   [INSERT NAME OF PLEDGOR]
                 980 Greg Street
                 Sparks, NV 89431
                 Attn: President
                 Telephone No.: (775) 356-9029
                 Telecopy No.: (775) 356-9039
                 E-mail: dbronicki@ormat.com

     All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS and other similar overnight delivery services), (c) if
mailed by first class United States Mail, postage prepaid, registered or
certified with return receipt requested, (d) if sent by facsimile or (e) if sent
via other electronic means (including electronic mail). Notice so given shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by facsimile or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a Banking Day
and, if not, on the next following Banking Day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following Banking Day; provided, however, that (i) if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender, and (ii) with
respect to any notice given via facsimile or other electronic means, the sender
of such message shall promptly provide the addressee with an original copy of
such notice by any of the means specified in clause (a), (b) or (c) above. Any
party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of 5 Banking Days'
notice to the other parties in the manner set forth above.

     8.14 Delivery of Collateral; Proxy. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of Administrative Agent pursuant hereto. All such certificates or
instruments shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance acceptable to Administrative Agent. Administrative Agent
shall have the right, at any time in its discretion and without prior notice to
Pledgor, following the occurrence and during the continuation of an Event of
Default, to transfer to or to register in the name of Administrative Agent or
any of its nominees any or all of the Collateral and to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations; provided, however, that once
such Event of Default has been cured or waived, Administrative Agent will
promptly transfer to or register in the name or cause

                                       19

its nominees to transfer to or register in the name of Pledgor all such
Collateral. In furtherance of the foregoing, Pledgor shall further execute and
deliver to Administrative Agent a proxy in the form attached hereto as Exhibit A
and, if any ownership interest shall be evidenced by certificates or documents,
an irrevocable power in the form of Exhibit B with respect to the ownership
interests of Company owned by Pledgor.

     8.15 Governing Law. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral, shall be governed by the laws of the State of New York, without
reference to conflicts of law (other than Section 5-1401 and Section 5-1402 of
the New York General Obligations Law), except as required by mandatory
provisions of law and except to the extent that the validity or perfection or
priority of the lien and security interest hereunder, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York.

     8.16 Reinstatement. This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time any payment
pursuant to this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, liquidation of
Pledgor, Company or any other Person party to a Credit Document or upon the
dissolution of, or appointment of any intervenor or conservator of, or trustee
or similar official for, Pledgor, Company or any other Person party to a Credit
Document or any substantial part of Pledgor's, any Company's or any other such
Person's assets, or otherwise, all as though such payments had not been made,
and Company shall pay Administrative Agent on demand all reasonable costs and
expenses (including reasonable fees of counsel) incurred by Administrative Agent
in connection with such rescission or restoration.

     8.17 Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.

     8.18 Survival of Provisions. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
other Credit Documents and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Pledgor set forth herein shall terminate at the same
time as the security interest and other rights granted hereunder shall terminate
pursuant to Section 8.8.

     8.19 Headings Descriptive. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

     8.20 Entire Agreement. This Agreement, together with each other Credit
Document, is intended by the parties as a final expression of their agreement
and is intended as a complete and exclusive statement of the terms and
conditions thereof.

                                       20

     8.21 Time. Time is of the essence of this Agreement.

     8.22 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document. NO CREDIT DOCUMENT TO WHICH BEAL BANK, S.S.B. IS A PARTY SHALL BE
EFFECTIVE UNLESS TWO OFFICERS OF BEAL BANK, S.S.B. SHALL HAVE EXECUTED SUCH
CREDIT DOCUMENT.

     8.23 Limitation of Liability. No claim shall be made by Pledgor or Company
against Administrative Agent or the Secured Parties or any of their Affiliates,
directors, employees, attorneys or agents for any loss of profits, business or
anticipated savings, special or punitive damages or any indirect or
consequential loss whatsoever in respect of any breach or wrongful conduct
(whether or not the claim therefor is based on contract, tort or duty imposed by
law), in connection with, arising out of or in any way related to the
transactions contemplated by this Agreement or the other Credit Documents or any
act or omission or event occurring in connection therewith; and Pledgor and
Company hereby waive, release and agree not to sue upon any such claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in their favor.

     8.24 Submission to Jurisdiction. Administrative Agent, Company and Pledgor
agree that any legal action or proceeding by or against Pledgor or Company or
with respect to or arising out of this Agreement or any other Credit Document
may be brought in or removed to the courts of the State of New York, in and for
the Borough of Manhattan, or of the United States of America for the Southern
District of New York, as Administrative Agent may elect. By execution and
delivery of this Agreement, Administrative Agent, Company and Pledgor accept,
for themselves and in respect of their property, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts. Administrative Agent,
Company and Pledgor irrevocably consent to the service of process out of any of
the aforementioned courts in any manner permitted by law. Administrative Agent,
Company and Pledgor hereby waive any right to stay or dismiss any action or
proceeding under or in connection with this Agreement brought before the
foregoing courts on the basis of forum non-conveniens. Nothing herein shall
affect the right of Administrative Agent to bring legal action or proceedings in
any other competent jurisdiction.

     8.25 WAIVER OF JURY TRIAL. PLEDGOR, COMPANY AND ADMINISTRATIVE AGENT HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG
PLEDGOR, COMPANY AND ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. PLEDGOR,
COMPANY AND ADMINISTRATIVE AGENT ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE

                                       21

TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. PLEDGOR, COMPANY AND
ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     8.26 Knowledge and Attribution. Reference in this Agreement to the
"knowledge," "best knowledge" or facts and circumstances "known to" Pledgor, and
all like references, means facts or circumstances of which a Responsible Officer
of Pledgor has actual knowledge (after due inquiry).

     8.27 Rights of Administrative Agent. Administrative Agent shall be entitled
to the rights, protections, immunities and indemnities set forth in the Credit
Agreement as if specifically set forth herein.

     8.28 Consent and Acknowledgement. Pledgor hereby acknowledges receiving
copies of the Credit Agreement, the Depository Agreement and the other Credit
Documents and consents to the terms and provisions of each.

     8.29 Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon, or give to any
Person, other than Pledgor, Company, Administrative Agent and the other Secured
Parties, any security, rights, remedies or claims, legal or equitable, under or
by reason hereof, or any covenant or condition hereof; and this Agreement and
the covenants and agreements herein contained are and shall be held to be for
the sole and exclusive benefit of Pledgor, Company, Administrative Agent and the
other Secured Parties.

     8.30 Waiver of Transfer Restrictions. Notwithstanding anything to the
contrary contained in that certain [INSERT DESCRIPTION OF GOVERNING DOCUMENT]
(the "Governing Agreement"), Pledgor hereby waives any requirement contained in
the Governing Agreement that it consent to a transfer of a [MEMBERSHIP INTEREST]
[PARTNERSHIP INTEREST] [SHARE] in Company in connection with a foreclosure on
such [MEMBERSHIP INTEREST] [PARTNERSHIP INTEREST] [SHARE] under the Credit
Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       22

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

                                        [INSERT NAME OF PLEDGOR],

                                        a                                      ,
                                          -------------------------------------
                                        as Pledgor

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                        [INSERT NAME OF COMPANY],

                                        a                                      ,
                                          -------------------------------------
                                        as Company

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                        BEAL BANK, S.S.B.,
                                        as Administrative Agent

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                       S-1

                         [_________'s Pledge Agreement]

                                    EXHIBIT A
                                IRREVOCABLE PROXY

     The undersigned hereby appoints Beal Bank, S.S.B., not in its individual
capacity but solely as "Administrative Agent" under the Credit Agreement (the
"Administrative Agent"), as Proxy with full power of substitution, and hereby
authorizes Administrative Agent to represent and vote all of the [MEMBERSHIP
INTERESTS] [PARTNERSHIP INTERESTS] [SHARES] OF [INSERT NAME OF COMPANY), a
[______________], owned by the undersigned on the date of exercise hereof during
the continuance of an Event of Default under, and as defined in, the Pledge and
Security Agreement, dated as of December ____, 2003, among [INSERT NAME
OF PLEDGOR], [INSERT NAME OF COMPANY] and Administrative Agent at any meeting or
at any other time chosen by Administrative Agent in its sole discretion.

Date:                                   [INSERT NAME OF PLEDGOR]
      --------------------

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                       A-1

                                    EXHIBIT B
                               TRANSFER DOCUMENT

     FOR VALUE RECEIVED, [INSERT NAME OF PLEDG0R] hereby sells, assigns and
transfers unto ______________________ all of its ownership interests in [INSERT
NAME OF COMPANY], a [__________________] standing in its name on the books of
[INSERT NAME OF COMPANY], a [__________________], represented by the following
certificate(s): ________________, and irrevocably appoints ____________________
as attorney to transfer the ownership interests with full power of substitution
in the premises.

Date:                                             [INSERT NAME OF PLEDGOR]
      -------------------

                                                  By:
                                                      --------------------------
                                                      Name:
                                                            --------------------
                                                      Title:
                                                            --------------------

In the presence of:

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

                                       B-1

                                   SCHEDULE I
                    DESCRIPTION OF PLEDGED EQUITY INTERESTS

--------------------------------------------------------------------------------
CERTIFICATE NO.                            DESCRIPTION:
--------------------------------------------------------------------------------

[__________]      [_______%] of the [PARTNERSHIP INTERESTS] [EQUITY INTERESTS]
                  [SHARES] of [INSERT NAME OF COMPANY]
--------------------------------------------------------------------------------

                                       I-1

                                                                     Exhibit D-4
                                                         to the Credit Agreement

                               SUBORDINATION TERMS

1.   General: Payment of the Subordinated Costs of OrCal Geothermal Inc., a
     corporation organized and existing under the laws of the State of Delaware
     ("Borrower") to the issuer of the DSR Letter of Credit (the "Junior
     Claimant") shall be junior, subordinate and subject in right of payment in
     accordance with the terms hereof to the prior payment in full in cash of
     all of the Senior Claims. The Junior Claimant agrees that it will not ask,
     demand, sue for, take or receive from Borrower or any of its subsidiaries
     by set-off or in any other manner, or (subject to the last sentence of this
     paragraph) retain payment (in whole or in part) of, any of the Subordinated
     Costs or any security therefor. Borrower agrees that (subject to the last
     sentence of this paragraph) it will not make, nor permit to be made, any
     payment of any kind on account of, or provide any additional security or
     guarantee for, the Subordinated Costs (whether on behalf of Borrower or
     otherwise). Junior Claimant directs Borrower to make, and Borrower agrees
     to make, the payment of the Senior Claims in full in cash prior to the
     payment of the Subordinated Costs. Notwithstanding the foregoing, Borrower
     may pay to Junior Claimant Subordinated Costs due to Junior Claimant with
     funds available for distribution by Borrower pursuant to Waterfall Level 8
     or Section 3.6.2(b) of the Depositary Agreement, in each case in accordance
     with the Depositary Agreement.

2.   Definitions: The following terms have the following meanings:

     "Credit Agreement" means that certain Credit Agreement, dated as of
     December 18, 2003 (as amended, amended and restated, supplemented or
     otherwise modified from time to time), among Borrower, the financial
     institutions from time to time parties thereto (collectively, the "Banks"),
     and Beal Bank, S.S.B., as administrative agent (in such capacity,
     "Administrative Agent").

     "Obligations" means and includes all loans, advances, debts, liabilities,
     and obligations, howsoever arising, owed by Borrower or any Affiliate
     thereof to Administrative Agent or any Bank of every kind and description
     (whether or not evidenced by any note or instrument and whether or not for
     the payment of money), direct or indirect, absolute or contingent, due or
     to become due, now existing or hereafter arising, pursuant to the terms of
     the Credit Agreement or any of the other documents entered into in
     connection therewith, including all interest, reasonable fees, reasonable
     charges, reasonable expenses, reasonable attorneys' fees and consultant
     fees chargeable to Borrower or any Affiliate thereof and payable by
     Borrower or any Affiliate thereof hereunder or thereunder.

     "Proceeding" means any (a) insolvency, bankruptcy, receivership,
     liquidation, reorganization, readjustment, composition or other similar
     proceeding relating to Borrower or any subsidiary thereof or its property,
     (b) proceeding for any liquidation, dissolution or other winding-up of
     Borrower or any subsidiary thereof, voluntary or involuntary, whether or
     not involving insolvency or bankruptcy proceedings, (c) general assignment
     for the benefit of creditors of Borrower or any subsidiary thereof, or (d)
     other marshaling of the assets of

                                        1

     Borrower or any subsidiary thereof.

     "Senior Claimants" means the Banks and Administrative Agent.

     "Senior Claims" means (a) the principal of, and premium, if any, and
     interest on the Loans under the Credit Agreement (including any interest
     accruing thereon at the legal rate after the commencement of any Proceeding
     and any additional interest that would have accrued thereon but for the
     commencement of such Proceeding); and (b) all other Obligations owing to
     any Senior Claimant.

     "Subordinated Costs" means and includes all reimbursement obligations,
     loans, advances, debts, liabilities, and obligations, howsoever arising,
     owed by Borrower to Junior Claimant of every kind and description (whether
     or not evidenced by any note or instrument and whether or not for the
     payment of money), direct or indirect, absolute or contingent, due or to
     become due, now existing or hereafter arising, pursuant to the terms of the
     DSR Letter of Credit and related agreements, including all interest, fees,
     charges, expenses, attorneys' fees and consultant fees chargeable to
     Borrower and payable by Borrower thereunder.

     "Subordination Period" means the period of time commencing on December 18,
     2003 and ending on the date on which all Senior Claims shall have been
     indefeasibly paid in full in cash.

3.   Payment Upon Dissolution, Etc.: In the event of (a) any insolvency or
     bankruptcy case or proceeding in connection therewith, relative to Borrower
     or to its creditors as such, or to its assets, (b) any liquidation,
     dissolution or other winding up of Borrower, whether partial or complete
     and whether voluntary or involuntary and whether or not involving
     insolvency or bankruptcy or (c) any assignment for the benefit of creditors
     or any other marshaling of assets and liabilities of Borrower, then
     (without limiting any of the subordination provisions set forth herein) the
     Senior Claimants shall be entitled to receive payment in full in cash of
     all amounts due or to become due on or in respect of all Senior Claims
     before the Junior Claimant shall be entitled to receive any payment on
     account of the Subordinated Costs.

4.   Payments in Error: Should any payment on account of, or any collateral for
     any part of, the Subordinated Costs be received by Junior Claimant in
     violation of the terms hereof, such payment or collateral shall be
     delivered by Junior Claimant forthwith to Administrative Agent, on behalf
     of the Senior Claimants, for deposit into the Revenue Account referred to
     in the Credit Agreement, in the case of any such payment, or to secure the
     Senior Claims, in the case of any such collateral, in each case in the form
     received. Administrative Agent shall be irrevocably authorized to supply
     any required endorsement or assignment which may have been omitted. Until
     so delivered, any such payment or collateral shall be held by Junior
     Claimant in trust for the Senior Claimants and shall not be commingled with
     other funds or property of Junior Claimant.

5.   Proceeding Against Borrower; No Collateral; No Action: During the
     Subordination Period, but subject to paragraph 6, Junior Claimant shall not
     commence or voluntarily permit Borrower or any of its subsidiaries to
     commence or, unless the holders of the Senior Claims

                                       2

     shall also join therein, join with any other creditor or creditors of
     Borrower or any of its subsidiaries in commencing any Proceeding against
     Borrower or any of its subsidiaries. At any general meeting of creditors of
     Borrower or any of its subsidiaries during the Subordination Period, or in
     the event of any Proceeding during the Subordination Period,
     Administrative Agent, on behalf of the Senior Claimants, shall be
     irrevocably authorized at any such meeting or in any such Proceeding:

               (a) to enforce claims comprising the Subordinated Costs in the
               name of Junior Claimant, by proof of debt, proof of claim, suit
               or otherwise;

               (b) to collect any assets of Borrower or any of its subsidiaries
               distributed, dividend or applied by way of dividend or payment as
               a result of a Proceeding, or securities issued, on account of the
               Subordinated Costs as a result thereof and apply the same, or the
               proceeds of any realization upon the same that the Senior
               Claimants in their discretion elect to effect, to the payment of
               Senior Claims until all Senior Claims shall have been paid in
               full (the Senior Claimants hereby agreeing to render any surplus
               to Junior Claimant (in satisfaction of the Subordinated Costs) or
               as a court of competent jurisdiction may direct); and

               (c) other than voting claims comprising or arising out of the
               Subordinated Costs in any Proceeding (including the right to vote
               to accept or reject any plan of partial or complete liquidation
               or reorganization), to take generally any action in connection
               with any such meeting or Proceeding which Junior Claimant might
               otherwise have the right to take in respect of the Subordinated
               Costs and claims relating thereto.

6.   Authorizations to Senior Claimants: After the commencement of any
     Proceeding referred to above, Junior Claimant shall be entitled inquire of
     Administrative Agent in writing whether Administrative Agent, on behalf of
     Senior Claimants, intends to exercise the foregoing rights with respect to
     the Subordinated Costs. Should Administrative Agent fail, within a
     reasonable time after receipt of such inquiry (but in any event no earlier
     than 15 business days following any such inquiry), either to file a proof
     of claim with respect to the Subordinated Costs and to furnish a copy
     thereof to Junior Claimant, or to inform Junior Claimant in writing that
     the Senior Claimants intend to exercise their rights to assert the
     Subordinated Costs in the manner hereinabove provided, Junior Claimant
     shall be entitled, but shall not be required to, proceed to file a proof of
     claim with respect to the Subordinated Costs and take such further steps
     with respect thereto, not inconsistent with the terms hereof, as Junior
     Claimant shall reasonably deem proper.

7.   Notice: Any communications between the parties shall utilize the following
     addresses:

                                       3

If to Administrative Agent   Beal Bank, S.S.B.
or Senior Claimants:         6000 Legacy Dr., 4E
                             Plano, Texas 75024
                             Attn: William T. Saurenmann
                             Tel: (469) 467-5510
                             Fax: (469) 241-9568
                             E-mail: bsaurenmann@bealbank.com

with a copy to:              CSG Investments, Inc.
                             6000 Legacy Dr., 4W
                             Plano, Texas 75024
                             Attn: Steve Harvey
                             Tel: (469) 467-5652
                             Fax: (469) 241-9567
                             E-mail: sharvey@csginvestments.com

If to Borrower:              OrCal Geothermal Inc.
                             980 Greg Street
                             Sparks, Nevada 89431-6039
                             Attn: President
                             Tel: (775) 356-9029
                             Fax: (775)356-9039
                             E-mail: dbronicki@ormat.com

All notices or other communications required or permitted to be given under the
relevant agreement shall be in writing and shall be considered as properly given
(a) if delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS and other similar overnight delivery services), (c) if
mailed by first class United States Mail, postage prepaid, registered or
certified with return receipt requested, (d) if sent by facsimile or (e) if sent
via other electronic means (including electronic mail). Notice so given shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by facsimile or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a business day
and, if not, on the next following business day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following business day; provided, however, that (i) if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender, and (ii) with
respect to any notice given via facsimile or other electronic means, the sender
of such message shall promptly provide the addressee with an original copy of
such notice by any of the means specified in clause (a), (b) or (c) above. Any
party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of 5 business
days' notice to the other parties in the manner set forth above

                                       4

8.   No Waiver; Modification to Senior Debt: Administrative Agent and the Senior
     Claimants shall be authorized to demand specific performance of the terms
     hereof, whether or not Borrower shall have complied with the provisions
     hereof applicable to it, at any time when Junior Claimant shall have failed
     to comply with any provision hereof applicable to it. Junior Claimant shall
     irrevocably waive any defense based on the adequacy of a remedy at law
     which might be asserted as a bar to the remedy of specific performance
     hereof in any action brought therefor by the Senior Claimants. Junior
     Claimant shall further waive presentment, notice and protest in connection
     with all negotiable instruments evidencing Senior Claims or Subordinated
     Costs to which Junior Claimant may be a party, notice of the acceptance
     thereof by the Senior Claimants, notice of any loan made, extension granted
     or other action taken in reliance hereon, and all demands and notices of
     every kind in connection herewith, Senior Claims or time of payment of
     Senior Claims or Subordinated Costs (other than notices expressly required
     hereby). Junior Claimant shall assent to any renewal, extension or
     postponement of the time of payment of Senior Claims or any other
     indulgence with respect thereto, to any increase in the amount of Senior
     Claims, to any substitution, exchange or release of collateral therefor and
     to the addition or release of any person primarily or secondarily liable
     thereon and assents to the provisions of any instrument, security or other
     writing evidencing Senior Claims.

9.   Subrogation: Subject to and from and after the expiration of the
     Subordination Period, Junior Claimant shall be subrogated to the rights of
     the Senior Claimants to receive payments or distributions of cash, property
     or securities of Borrower applicable to the Senior Claims until all amounts
     owing on the Subordinated Costs shall be paid in full, it being understood
     that the provisions hereof are intended solely for the purpose of defining
     the relative rights of Junior Claimant and the Senior Claimants; provided
     that such rights of subrogation shall be nonexclusive, and shall be shared
     with any other subordinated creditor of Borrower which has entered into an
     agreement with the Administrative Agent providing similar rights of
     subrogation.

10.  Benefit of Subordination Provisions: Nothing contained in these
     subordination provisions is intended to or shall impair, as between
     Borrower, its creditors other than the Senior Claimants and Junior
     Claimant, the obligation of Borrower, which is absolute and unconditional,
     to pay to Junior Claimant the principal of and the premium, if any, and the
     interest on the Subordinated Costs as and when the same shall become due
     and payable in accordance with, and subject to, the terms hereof and the
     DSR Letter of Credit, or to affect the relative rights of Junior Claimant
     and creditors of Borrower other than the Senior Claimants.

11.  Further Assurances: Borrower and Junior Claimant shall execute and deliver
     to the Senior Claimants such further instruments and shall take such
     further action as the Senior Claimants may at any time or times reasonably
     request in order to carry out the provisions and intent hereof. To this
     end, Junior Claimant (a) shall irrevocably authorize and empower (without
     imposing any obligation on) the Senior Claimants and any agent thereof to
     demand, sue for, collect and receive all payments and distributions on or
     in respect of its Subordinated Costs which are required to be paid or
     delivered to the Senior Claimants, as provided herein, and to

                                       5

     file and prove all claims therefor and take all such other action, in the
     name of Junior Claimant or otherwise, as the Senior Claimants reasonably
     may determine to be necessary or appropriate for the enforcement of these
     subordination provisions, all in such manner as the Senior Claimants or
     Administrative Agent reasonably shall instruct, (b) in connection with any
     Proceeding, shall irrevocably authorize and empower (without imposing any
     obligation on) the Senior Claimants and Administrative Agent to vote the
     Subordinated Costs in such manner as the Senior Claimants or Administrative
     Agent shall instruct and (c) shall agree to execute and deliver to the
     Senior Claimants or Administrative Agent all such further instruments
     confirming the above authorization, and all such powers of attorney, proofs
     of claim, assignments of claim and other instruments, and to take all such
     other action, as reasonably may be requested by Senior Claimants in order
     to enable the Senior Claimants to enforce all claims upon or in respect of
     the Subordinated Costs in accordance herewith.

12.  Amendment: These subordination provisions shall not be amended, modified or
     supplemented, except in a writing signed by each of the parties.

13.  Beneficiaries: Nothing in these subordination provisions, expressed or
     implied, shall give or be construed to give to any Person other than the
     parties hereto and the Senior Claimants, any legal or equitable right,
     remedy or claim hereunder, or under any covenants and provisions hereof,
     each such covenant and provision being for the sole benefit of the parties
     hereto and the Senior Claimants. The rights granted to the Senior Claimants
     in these subordination provisions are solely for their protection and
     nothing contained in these subordination provisions shall impose on the
     Senior Claimants any duties with respect to any property of Borrower, any
     of its subsidiaries or Junior Claimant received hereunder. Except as
     expressly required by applicable law, the Senior Claimants shall have no
     duty to preserve rights against prior parties in any property of any kind
     received hereunder.

14.  Documentation: Junior Claimant and Borrower shall agree to become bound by
     these subordination provisions pursuant to an agreement which is reasonably
     satisfactory to Administrative Agent.

15.  Bankruptcy: These subordination provisions shall remain in full force and
     effect as between Junior Claimant and Senior Claimant notwithstanding the
     occurrence of any Proceeding affecting Borrower or any of its subsidiaries.

16.  Representations and Warranties: Junior Claimant, shall represent and
     warrant to and in favor of Administrative Agent and the Banks, as of the
     date of the incurrence of the Subordinated Costs, that these subordination
     provisions constitute its legal, valid and binding obligation enforceable
     against it in accordance with its terms, except to the extent that
     enforceability may be limited by applicable bankruptcy, insolvency,
     moratorium, reorganization or other similar laws affecting the enforcement
     of creditors' rights or by the effect of general equitable principles
     (regardless of whether such enforceability is considered in a proceeding in
     equity or at law).

                                       6

                                                                     EXHIBIT D-5
                                                             to Credit Agreement

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

                                     FORM OF
                               SUBSIDIARY GUARANTY

                                       by

                           [INSERT NAME OF GUARANTOR],
                              a[__________________]
                                   (Guarantor)

                                   in favor of

                                BEAL BANK, S.S.B.
                             (Administrative Agent)

                        DATED AS OF________ _______, _____

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                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE I. DEFINITIONS.........................................................2

   1.1   Defined Terms.........................................................2
   1.2   General Definitions...................................................2
   1.3   Rules of Interpretation...............................................2

ARTICLE II. GUARANTY...........................................................3

   2.1   Guaranty..............................................................3
   2.2   Obligations Absolute and Unconditional................................3

ARTICLE III. REPRESENTATIONS AND WARRANTIES; EVENTS OF DEFAULT.................5

   3.1   Guarantor Representations and Warranties..............................5
   3.2   Events of Default.....................................................6

ARTICLE IV. COVENANTS..........................................................7

   4.1   Maintenance of Corporate Existence....................................7
   4.2   Compliance with Laws..................................................7
   4.3   Further Assurances....................................................7
   4.4   Security Documents....................................................7
   4.5   Credit Agreement......................................................7

ARTICLE V. SUBORDINATION; SUBROGRATION; ETC....................................7

   5.1   Taxes ................................................................7
   5.2   Subordination.........................................................8
   5.3   Waiver................................................................8
   5.4   Subrogation..........................................................10
   5.5   Bankruptcy...........................................................10
   5.6   Reinstatement........................................................11

ARTICLE VI. MISCELLANEOUS.....................................................12

   6.1   Obligations Secured..................................................12
   6.2   Successions or Assignments...........................................12
   6.3   Other Waivers........................................................12
   6.4   Headings.............................................................12
   6.5   Remedies Cumulative..................................................13
   6.6   Severability.........................................................13
   6.7   Amendments...........................................................13

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   6.8   Jurisdiction.........................................................13
   6.9   Governing Law........................................................13
   6.10  Integration of Terms.................................................13
   6.11  Notices..............................................................14
   6.12  Interest; Collection Expenses; Set-Off...............................15
   6.13  Counterparts.........................................................15
   6.14  Limitations on Liability.............................................15
   6.15  Time.................................................................15
   6.16  Termination..........................................................16
   6.17  Credit Documents.....................................................16

                                       ii

          This SUBSIDIARY GUARANTY, dated as of _____________, ______(as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Guaranty"), is entered into by [INSERT NAME OF GUARANTOR], a
[______________] [ORGANIZED] [FORMED] and existing under the laws of the State
of [___________] ("Guarantor") in favor of BEAL BANK, S.S.B., in its capacity as
administrative agent (in such capacity, "Administrative Agent") for each of the
Secured Parties.

                                    RECITALS

          A. OrCal Geothermal Inc., a corporation organized and existing under
the laws of the State of Delaware ("Borrower"), directly or indirectly, [INTENDS
TO ACQUIRE] [HAS ACQUIRED] (the "Acquisition") ownership interests in certain
Persons which directly or indirectly lease, own, operate and use certain
geothermal power plants and geothermal fluid facilities located in the State of
California, known as the Heber Project, the Mammoth Lakes Project and the SIGC
Project (the "Projects").

          B. In order to partially finance the Acquisition, Borrower has entered
into that certain Credit Agreement, dated as of December 18, 2003 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Borrower, the financial institutions from time to
time parties thereto (collectively, the "Banks"), and each of the agents listed
on the signature pages thereto, pursuant to which, among other things, the Banks
have [MADE] [EXTENDED COMMITMENTS TO MAKE] loans to, and for the benefit of,
Borrower.

          C. Guarantor is a wholly-owned [DIRECT] [INDIRECT] subsidiary of
Borrower, and Guarantor [HAS AND] will receive substantial economic benefits
from the making of such loans to Borrower.

          D. Guarantor has agreed to, among other things, guarantee payment in
full in cash and performance in full of the Obligations.

          E. [IT IS A CONDITION PRECEDENT TO THE EFFECTIVENESS OF THE CREDIT
AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AND THE MAKING OF THE ADVANCES OF
CREDIT CONTEMPLATED THEREBY, THAT GUARANTOR SHALL HAVE EXECUTED THIS GUARANTY.]
[IT IS A REQUIREMENT UNDER THE CREDIT AGREEMENT THAT GUARANTOR EXECUTE AND
DELIVER THIS GUARANTY.]

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the promises contained herein, and
to induce the Banks to enter into the Credit Agreement and to make the loans to
Borrower contemplated thereby, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Guarantor hereby
agrees with Administrative Agent (for the benefit of the Secured Parties) as
follows:

                                   ARTICLE I.
                                  DEFINITIONS

          1.1 Defined Terms. The following terms (whether or not underscored)
when used in this Guaranty, including its preamble and recitals, shall have the
following meanings:

          "Acquisition" has the meaning given in the recitals to this Guaranty.

          "Administrative Agent" has the meaning given in the preamble to this
Guaranty.

          "Banks" has the meaning given in the recitals to this Guaranty.

          "Borrower" has the meaning given in the recitals to this Guaranty.

          "Credit Agreement" has the meaning given in the recitals to this
Guaranty.

          "Guaranteed Obligations" has the meaning given in Section 2.1(a).

          "Guarantor" has the meaning given in the preamble to this Guaranty.

          "Guaranty" has the meaning given in the preamble to this Guaranty.

          "Obligations" means and includes all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by Borrower, Guarantor or
any Affiliate thereof to Administrative Agent or any Lender of every kind and
description (whether or not evidenced by any note or instrument and whether or
not for the payment of money), direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, pursuant to the terms of
the Credit Agreement or any of the other Credit Documents (including this
Guaranty), including all interest, reasonable fees, reasonable charges,
reasonable expenses, reasonable attorneys' fees and consultant fees chargeable
to Borrower, Guarantor or any Affiliate thereof and payable by Borrower,
Guarantor or any Affiliate thereof hereunder or thereunder

          "Project Participants" means Sponsor, each Guarantor and each
Non-Guarantor.

          "Projects" has the meaning given in the recitals to this Guaranty.

          1.2 General Definitions. Unless otherwise defined herein or unless the
context otherwise requires, capitalized terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in Exhibit A to the Credit
Agreement.

          1.3 Rules of Interpretation. Unless otherwise provided herein, the
rules of interpretation set forth in Exhibit A to the Credit Agreement shall
apply to this Guaranty, including its preamble and recitals.

                                       2

                                   ARTICLE II.
                                    GUARANTY

          2.1 Guaranty.

               (a) Guarantor, as primary obligor and not merely as surety,
hereby unconditionally and irrevocably guarantees to Administrative Agent (for
the benefit of the Secured Parties) the prompt payment in full in cash and the
prompt performance in full of the Obligations (collectively, the "Guaranteed
Obligations").

               (b) Guarantor agrees that if for any reason Borrower or any
Project Participant shall fail to pay or perform, as the case may be, when due
any of the Guaranteed Obligations, Guarantor shall promptly pay or perform, as
the case may be, the same forthwith on the date such payment or performance of
such Guaranteed Obligation is due or required, without regard to any exercise or
non-exercise by Guarantor, Borrower, any Affiliate of Borrower, Administrative
Agent or any other Secured Party of any right, remedy, power or privilege under
or in respect of the Credit Agreement or the other Credit Documents, and that in
the case of any extension of time of the payment, performance or renewal of any
of the Guaranteed Obligations, the same will be promptly paid or performed, as
the case may be, in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension or renewal.

               (c) Without limiting the foregoing, Guarantor acknowledges and
agrees that, upon the occurrence and during the continuance of an Event of
Default as set forth in Section 3.2, at the election of the Majority Banks, all
of the Guaranteed Obligations shall immediately become due and payable.

          2.2 Obligations Absolute and Unconditional.

               (a) The obligations of Guarantor hereunder are primary
obligations of Guarantor and are an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance of the Guaranteed Obligations
and the other obligations of Guarantor hereunder and not of collectibility, and
are in no way conditioned on or contingent upon any attempt to enforce in whole
or in part Borrower's, any Project Participant's or any of Borrower's
Affiliates' liabilities and obligations to the Secured Parties. Each failure by
Guarantor to pay or perform, as the case may be, a Guaranteed Obligation or any
other obligation hereunder shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.

               (b) The Secured Parties may, at any time and from time to time
(whether or not after revocation or termination of this Guaranty) without the
consent of or notice to Guarantor, except such notice as may be required by the
Credit Documents or applicable law which cannot be waived, without incurring
responsibility to Guarantor, without impairing or releasing the obligations of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part:

                    (i) change the manner, place and terms of payment or
     performance of, or renew or alter, any Guaranteed Obligation or any
     obligations and liabilities

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     (including any of those hereunder) incurred directly or indirectly in
     respect thereof or hereof, or in any manner modify, amend or supplement the
     terms of the Credit Documents or any documents, instruments or agreements
     executed in connection therewith, in each case with the consent of
     Borrower, the Project Participants and Guarantor (in each case, as and to
     the extent required by the applicable Credit Document), and the agreements
     and guarantees herein made shall apply to the Guaranteed Obligations or
     such other obligations as changed, extended, renewed, modified, amended,
     supplemented or altered in any manner;

                    (ii) exercise or refrain from exercising any rights against
     Borrower, any Project Participant, or others (including Guarantor) or
     otherwise act or refrain from acting;

                    (iii) add or release any other guarantor from its
     obligations without affecting or impairing the obligations of Guarantor
     hereunder;

                    (iv) settle or compromise any Guaranteed Obligations or any
     obligations and liabilities (including any of those hereunder) incurred
     directly or indirectly in respect thereof or hereof, and may subordinate
     the payment or performance of all or any part thereof to the payment or
     performance of any obligations and liabilities which may be due to the
     Secured Parties or others;

                    (v) sell, exchange, release, surrender, realize upon or
     otherwise deal with in any manner or in any order any property by
     whomsoever pledged or mortgaged to secure or securing the Guaranteed
     Obligations or any liabilities or obligations (including any of those
     hereunder) incurred directly or indirectly in respect thereof or hereof
     and/or any offset thereagainst;

                    (vi) apply any sums by whomsoever paid or howsoever realized
     to any obligations and liabilities of Borrower or any Project Participant
     to the Secured Parties under the Credit Documents in the manner provided
     therein regardless of what obligations and liabilities remain unpaid,
     except that sums paid by Guarantor hereunder shall be deemed to have been
     paid in respect of the applicable obligation of Guarantor hereunder;

                    (vii) consent to or waive any breach of, or any act,
     omission or default under, the Credit Documents or otherwise amend, modify
     or supplement (with the consent of Guarantor, Borrower and the Project
     Participants, as and to the extent required by the Credit Documents) the
     Credit Documents or any of such other instruments or agreements; and/or

                    (viii) act or fail to act in any manner referred to in this
     Guaranty which may deprive Guarantor of its right to subrogation against
     Borrower or any Project Participant to recover full indemnity for any
     payments or performances made pursuant to this Guaranty or of its right of
     contribution against any other party.

               (c) No invalidity, irregularity or unenforceability of the
Guaranteed Obligations or invalidity, irregularity, unenforceability or
non-perfection of any collateral

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     (including any of those hereunder) incurred directly or indirectly in
     respect thereof or hereof, or in any manner modify, amend or supplement the
     terms of the Credit Documents or any documents, instruments or agreements
     executed in connection therewith, in each case with the consent of
     Borrower, the Project Participants and Guarantor (in each case, as and to
     the extent required by the applicable Credit Document), and the agreements
     and guarantees herein made shall apply to the Guaranteed Obligations or
     such other obligations as changed, extended, renewed, modified, amended,
     supplemented or altered in any manner;

                    (ii) exercise or refrain from exercising any rights against
     Borrower, any Project Participant, or others (including Guarantor) or
     otherwise act or refrain from acting;

                    (iii) add or release any other guarantor from its
     obligations without affecting or impairing the obligations of Guarantor
     hereunder;

                    (iv) settle or compromise any Guaranteed Obligations or any
     obligations and liabilities (including any of those hereunder) incurred
     directly or indirectly in respect thereof or hereof, and may subordinate
     the payment or performance of all or any part thereof to the payment or
     performance of any obligations and liabilities which may be due to the
     Secured Parties or others;

                    (v) sell, exchange, release, surrender, realize upon or
     otherwise deal with in any manner or in any order any property by
     whomsoever pledged or mortgaged to secure or securing the Guaranteed
     Obligations or any liabilities or obligations (including any of those
     hereunder) incurred directly or indirectly in respect thereof or hereof
     and/or any offset thereagainst;

                    (vi) apply any sums by whomsoever paid or howsoever realized
     to any obligations and liabilities of Borrower or any Project Participant
     to the Secured Parties under the Credit Documents in the manner provided
     therein regardless of what obligations and liabilities remain unpaid,
     except that sums paid by Guarantor hereunder shall be deemed to have been
     paid in respect of the applicable obligation of Guarantor hereunder;

                    (vii) consent to or waive any breach of, or any act,
     omission or default under, the Credit Documents or otherwise amend, modify
     or supplement (with the consent of Guarantor, Borrower and the Project
     Participants, as and to the extent required by the Credit Documents) the
     Credit Documents or any of such other instruments or agreements; and/or

                    (viii) act or fail to act in any manner referred to in this
     Guaranty which may deprive Guarantor of its right to subrogation against
     Borrower or any Project Participant to recover full indemnity for any
     payments or performances made pursuant to this Guaranty or of its right of
     contribution against any other party.

               (c) No invalidity, irregularity or unenforceability of the
Guaranteed Obligations or invalidity, irregularity, unenforceability or
non-perfection of any collateral

                                        4

therefor, shall affect, impair or be a defense to this Guaranty, which is a
primary obligation of Guarantor.

               (d) This is a continuing Guaranty and all obligations to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. In the event that, notwithstanding the
provisions of Section 2.3(a) above, this Guaranty shall be deemed revocable in
accordance with applicable law, then any such revocation shall become effective
only upon receipt by Administrative Agent of written notice of revocation signed
by Guarantor. To the extent permitted by applicable law, no revocation or
termination hereof shall affect, in any manner, rights arising under this
Guaranty with respect to Guaranteed Obligations arising prior to receipt by
Administrative Agent of written notice of such revocation or termination. Any
such revocation or termination shall be deemed to be an Event of Default.

                                  ARTICLE III.
                REPRESENTATIONS AND WARRANTIES; EVENTS OF DEFAULT

          3.1 Guarantor Representations and Warranties. Guarantor represents and
warrants to and in favor of Administrative Agent and the other Secured Parties,
as of the [CLOSING DATE] [DATE HEREOF], that:

               3.1.1 Existence. Guarantor is [ORGANIZED] [FORMED] and validly
existing under the laws of the jurisdiction of its [INCORPORATION] [FORMATION]
and is qualified to do business in such jurisdiction and in each other
jurisdiction in which the conduct of their business requires such qualification.

               3.1.2 Power and Authorization. Guarantor has full power and
authority to conduct its business as contemplated by the Operative Documents.
The Credit Documents and the Project Documents to which Guarantor is a party
have been duly authorized, executed and delivered by Guarantor.

               3.1.3 No Conflict. The execution, delivery and performance by
Guarantor of the Credit Documents and Major Project Documents to which it is a
party and the consummation of the transactions contemplated by the Credit
Documents and the Major Project Documents do not and will not (a) violate any
provision of (i) any Legal Requirement applicable to Guarantor, (ii) the
Governing Documents of Guarantor or (iii) any order, judgment or decree of any
court or agency or Governmental Instrumentality binding on Guarantor, (b)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation of Guarantor,
(c) result in or require the creation or imposition of any Lien upon any of the
properties or assets of Guarantor (other than any Liens created under any of the
Credit Documents in favor of Administrative Agent on behalf of the Secured
Parties), or (d) require any approval of any Person, except for such approvals
or consents which will be obtained on or before the [CLOSING DATE] [DATE HEREOF]
and disclosed in writing to the Administrative Agent.

               3.1.4 Enforceable Obligations. Each Credit Document and Major
Project Document to which Guarantor is a party constitutes a legal, valid and
binding obligation of such party, as the case may be, enforceable in accordance
with its terms, except to the extent

                                        5

that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights or by the effect of general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

               3.1.5 Compliance with Law. Guarantor (a) is not in violation of
any applicable Legal Requirements in any material respect and (b) is not subject
to or in default in any material respect with respect to any final judgments,
writs, injunctions, decrees, rules or regulations of any court or any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign.

               3.1.6 Adequate Financial Means.

               (a) After giving effect to the transactions contemplated by this
Guaranty and the contingent obligations evidenced hereby (but excluding the
effect of the provisions of Section 6.1 which limit the Guaranteed Obligations
to an amount that would not render Guarantor's indebtedness, liabilities or
obligations under this Guaranty subject to avoidance), Guarantor is Solvent.

               (b) Guarantor is not executing this Guaranty with any intention
to hinder, delay or defraud any present or future creditor or creditors of
Guarantor.

               3.1.7 Capital Structure. [INSERT REPRESENTATION OUTLINING
OWNERSHIP OF GUARANTOR AND ITS SUBSIDIARIES.]

               3.1.8 Collateral. [INSERT REPRESENTATION REGARDING LIENS AND
COLLATERAL OF GUARANTOR AND ITS SUBSIDIARIES. TO BE MODIFIED DEPENDING ON
APPLICABLE COLLATERAL.]

               3.1.9 Credit Agreement. The representations and warranties of
Borrower contained in Article 4 of the Credit Agreement (insofar as such
representations and warranties apply to Guarantor or the [__________] Project)
are true and correct.

          3.2 Events of Default. The occurrence of an Event of Default under,
and as defined in, the Credit Agreement, whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body, shall
constitute an Event of Default hereunder. Any such Event of Default shall be
considered cured or waived for the purposes of this Guaranty when it has been
cured or waived in accordance with the Credit Agreement.

                                        6

                                   ARTICLE IV.
                                    COVENANTS

          Guarantor hereby covenants and agrees for the benefit of Borrower, the
Project Participants, Administrative Agent and the other Secured Parties, until
this Guaranty is terminated pursuant to Section 6.15, as follows:

          4.1 Maintenance of Corporate Existence. Guarantor shall maintain and
preserve its existence and all material rights, privileges and franchises
necessary in the normal conduct of its business.

          4.2 Compliance with Laws. Guarantor shall promptly comply, or cause
compliance, in all material respects with all Legal Requirements (including
Legal Requirements and applicable Permits relating to pollution control,
environmental protection, equal employment opportunity or employee benefit
plans, ERISA Plans and employee safety, with respect to Guarantor or the
[_________] Project), and make such alterations to such Project as may be
required for such compliance.

          4.3 Further Assurances. Guarantor shall promptly provide
Administrative Agent with such information and other documents related to this
Guaranty and the Guaranteed Obligations that Administrative Agent may reasonably
request.

          4.4 Security Documents. Concurrent with the execution of this
Guaranty, Guarantor shall [ENTER INTO A DEED OF TRUST IN THE FORM OF EXHIBIT D-1
TO THE CREDIT AGREEMENT,] enter into a Security Agreement in the form of Exhibit
D-2 to the Credit Agreement, enter into a Pledge Agreement in the form of
Exhibit D-3 to the Credit Agreement, enter into a joinder agreement pursuant to
the Depositary Agreement, and take all other actions which the Administrative
Agent may reasonably request in order to create a first priority, perfected Lien
on all assets, properties and ownership interests of Guarantor (subject to
Permitted Liens).

          4.5 Credit Agreement. Guarantor shall comply with the covenants set
forth in Articles 5 and 6 of the Credit Agreement (insofar as such covenants
apply to Guarantor or the [_________] Project). Guarantor acknowledges that
failure to comply with such any such covenants could result in the occurrence of
an Event of Default.

                                   ARTICLE V.
                        SUBORDINATION; SUBROGRATION; ETC.

          5.1 Taxes. Except as otherwise required by applicable Legal
Requirements, each payment required to be made by Guarantor hereunder shall be
made in immediately available funds without deduction or withholding for or on
account of Taxes or Other Taxes. If such deduction or withholding is so
required, Guarantor shall, upon notice thereof from Administrative Agent, (a)
pay the amount required to be deducted or withheld to the appropriate
authorities before penalties attach thereto or interest accrues thereon, (b) on
or before the 60th day after payment of such amount, forward to Administrative
Agent an official receipt evidencing such payment (or a certified copy thereof),
and (c) in the case of any such deduction or withholding, forthwith pay to
Administrative Agent (for the benefit of the Secured Parties)

                                        7

such additional amount as may be necessary to ensure that the net amount
actually received by Administrative Agent (for the benefit of the Secured
Parties) is free and clear of such Taxes or Other Taxes, as the case may be,
including any Taxes or Other Taxes on such additional amount, is equal to the
amount that the Administrative Agent (for the benefit of the Secured Parties)
would have received had there been no such deduction or withholding.

          5.2 Subordination. Except as otherwise specifically provided in this
Guaranty, all existing and future indebtedness of, or other obligations owed by,
Borrower or any of its subsidiaries to Guarantor is hereby subordinated to all
Guaranteed Obligations. Without the prior written consent of Administrative
Agent, such subordinated indebtedness (including interest thereon) shall not be
paid or withdrawn in whole or in part, nor shall Guarantor accept any payment of
or on account of any such indebtedness while this Guaranty is in effect. Any
payment by Borrower or any subsidiary thereof in violation of this Guaranty
shall be received by Guarantor in trust for Administrative Agent and the Secured
Parties, and Guarantor shall cause the same to be paid to Administrative Agent
for the benefit of the Secured Parties immediately upon demand by Administrative
Agent on account of the Guaranteed Obligations. Guarantor shall not assign all
or any portion of such indebtedness while the Guaranty remains in effect except
upon prior written notice to Administrative Agent and pursuant to an agreement
by which the assignee of any such indebtedness agrees that the assignment is
made subject to the terms of this Guaranty, and that any attempted assignment of
such indebtedness in violation of the provisions hereof shall be void. Nothing
in this Section 5.2 shall apply to any repayment of existing or future
indebtedness or obligation, distribution, withdrawal of capital or any other
payment of any kind or nature whether in cash, in kind, or otherwise, that is
permitted to be made to Guarantor or any of its Affiliates pursuant to and in
accordance with the Credit Documents.

          5.3 Waiver. Guarantor hereby unconditionally and irrevocably waives
and relinquishes, to the maximum extent permitted by applicable Legal
Requirements, all rights and remedies accorded to sureties or guarantors and
agrees not to assert or take advantage of any such rights or remedies,
including:

               (a) any right to require Administrative Agent or the other
Secured Parties to proceed against Borrower, any Project Participant or any
other Person or to proceed against or exhaust any security held by
Administrative Agent or any other Secured Party at any time or to pursue any
other remedy in Administrative Agent's or any other Secured Party's power before
proceeding against Guarantor;

               (b) any defense that may arise by reason of the incapacity, lack
of power or authority, death, dissolution, merger, termination or disability of
Guarantor, Borrower, any Project Participant or any other Person or the failure
of Administrative Agent or any other Secured Party to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
Guarantor, Borrower, any Project Participant or any other Person;

               (c) promptness, diligence, demand, presentment, protest and
notice of any kind, including notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of Borrower, any Project Participant, Administrative Agent, the
other Secured Parties, any endorser or creditor of the

                                        8

foregoing or on the part of any other Person under this or any other instrument
in connection with any obligation or evidence of indebtedness held by
Administrative Agent or the other Secured Parties as collateral or in connection
with any Guaranteed Obligation;

               (d) any defense based upon an election of remedies by
Administrative Agent or the other Secured Parties, including an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Guarantor, the right of Guarantor to
proceed against Borrower, any Project Participant or another Person for
reimbursement, or both;

               (e) any defense based on any offset against any amounts which may
be owed by any Person to Guarantor for any reason whatsoever;

               (f) any defense based on any act, failure to act, delay or
omission whatsoever on the part of Borrower, any Project Participant or any of
Borrower's Affiliates or the failure by Borrower, any Project Participant or any
of Borrower's Affiliates to do any act or thing or to observe or perform any
covenant, condition or agreement to be observed or performed by it under the
Credit Agreement or any other Operative Document;

               (g) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;

               (h) any defense setoff or counterclaim which may at any time be
available to or asserted by Borrower, any Project Participant or any of
Borrower's Affiliates thereof against Administrative Agent, the other Secured
Parties or any other Person under the Credit Agreement or any other Operative
Document;

               (i) any duty on the part of Administrative Agent or any other
Secured Party to disclose to Guarantor any facts any Secured Party may now or
hereafter know about Borrower, any Project Participant or the Projects,
regardless of whether Administrative Agent or any other Secured Party has reason
to believe that any such facts materially increase the risk beyond that which
Guarantor intends to assume, or have reason to believe that such facts are
unknown to Guarantor, or have a reasonable opportunity to communicate such facts
to Guarantor, since Guarantor acknowledges that Guarantor is fully responsible
for being and keeping informed of the financial condition of Borrower and of all
circumstances bearing on the risk of non-payment or non-performance of any
Guaranteed Obligation;

               (j) any defense based on any change in the time, manner or place
of any payment or performance under, or in any other term of, the Credit
Agreement or any other Operative Document, or any other amendment, renewal,
extension, acceleration, compromise or waiver of or any consent or departure
from the terms of the Credit Agreement or any other Operative Document;

               (k) any right to assert the bankruptcy or insolvency of Borrower,
any Project Participant or any other Person as a defense hereunder or as the
basis for rescission hereof and any defense arising because of Administrative
Agent's or any other Secured Party's

                                       9

election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code;

               (l) any defense based upon any borrowing or grant of a security
interest under Section 364 of the Federal Bankruptcy Code; and

               (m) any other circumstance (including any statute of
limitations), any act or omission by Borrower, any Project Participant, or any
existence of or reliance on any representation by Administrative Agent,
Borrower, any Project Participant or any Secured Party that might otherwise
constitute a defense available to, or discharge of, any guarantor or surety
(other than, subject to Section 5.6, defense of payment or performance of the
applicable Guaranteed Obligations).

          5.4 Subrogation. Until this Guaranty is terminated in accordance with
Section 6.15 below, (a) none of Guarantor, Borrower, and any Project Participant
(or any Person on their respective behalf) shall exercise any right of
subrogation or enforce any remedy which it now may have or may hereafter have
against any Person in respect of the Guaranteed Obligations, and will not claim
the benefit of any rights to, or seek to participate in, any security now or
hereafter held by Guarantor, Borrower, any Project Participant or any other
Person from any Person in respect of the Guaranteed Obligations, and (b) none of
Guarantor, Borrower, and any Project Participant (or any Person on their
respective behalf) shall enforce any claim, right or remedy which Guarantor may
now have or may hereafter acquire against any Person that arises hereunder, from
the existence or enforcement of this Guaranty or from the performance by
Guarantor hereunder (including any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or participation in
any claim, right or remedy of Guarantor, Borrower, any Project Participant or
any other Person against any Person, or any security which Guarantor, Borrower,
any Project Participant or any other Person now may have or may hereafter
acquire), whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise.

          5.5 Bankruptcy.

               (a) The obligations of Guarantor under this Guaranty shall not be
altered, limited or affected by any proceeding, voluntary or involuntary,
involving the bankruptcy, reorganization, insolvency, receivership, liquidation
or arrangement of Borrower, any Project Participant or any Affiliate thereof, or
by any defense which Borrower, any Project Participant or any Affiliate thereof
may have by reason of any order, decree or decision of any court or
administrative body resulting from any such proceeding.

               (b) Guarantor shall file, in any bankruptcy or other proceeding
in which the filing of claims is required or permitted by law, all claims which
Guarantor may have against Borrower or any Project Participant relating to any
indebtedness of Borrower or any Project Participant to Guarantor, and hereby
assigns to Administrative Agent (on behalf of the Secured Parties) all rights of
Guarantor thereunder. If Guarantor does not file any such claim, Administrative
Agent, as attorney-in-fact for Guarantor, is hereby authorized to do so in the
name of Guarantor or, in Administrative Agent's discretion, to assign the claim
to a nominee and to cause proofs of claim to be filed in the name of
Administrative Agent's nominee. The

                                       10

foregoing power of attorney is coupled with an interest and cannot be revoked.
Administrative Agent or its nominee shall have the sole right to accept or
reject any plan proposed in any such proceeding and to take any other action
which a party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to Administrative Agent to the extent of any Guaranteed
Obligations which then remain unpaid or unperformed, and, to the full extent
necessary for that purpose, Guarantor hereby assigns to Administrative Agent all
of Guarantor's rights to all such payments or distributions to which Guarantor
would otherwise be entitled; provided, however, that Guarantor's obligations
hereunder shall not be satisfied except to the extent that Administrative Agent
receives cash by reason of any such payment or distribution. If Administrative
Agent receives anything hereunder other than cash, the same shall be held as
collateral for amounts due under this Guaranty.

               (c) Guarantor hereby irrevocably waives, to the extent it may do
so under applicable Legal Requirements, any protection to which it may be
entitled under Sections 365(c)(l), 365(c)(2) and 365(e)(2) of the Bankruptcy Law
or equivalent provisions of the laws or regulations of any other jurisdiction
with respect to any proceedings, or any successor provision of law of similar
import, in the event of any Bankruptcy Event with respect to Borrower or any
Project Participant. Specifically, in the event that the trustee (or similar
official) in a Bankruptcy Event with respect to Borrower or any Project
Participant or the debtor-in-possession takes any action (including the
institution of any action, suit or other proceeding for the purpose of enforcing
the rights of Borrower, or any Project Participant under this Guaranty or any
other Credit Document), Guarantor shall not assert any defense, claim or
counterclaim denying liability hereunder on the basis that this Guaranty or any
other Credit Document is an executory contract or a "financial accommodation"
that cannot be assumed, assigned or enforced or on any other theory directly or
indirectly based on Section 365(c)(l), 365(c)(2) or 365(e)(2) of the Bankruptcy
Law, or equivalent provisions of the law or regulations of any other
jurisdiction with respect to any proceedings or any successor provision of law
of similar import. If a Bankruptcy Event with respect to Borrower or any Project
Participant shall occur, Guarantor agrees, after the occurrence of such
Bankruptcy Event, to reconfirm in writing, to the extent permitted by applicable
Legal Requirements, its pre-petition waiver of any protection to which it may be
entitled under Sections 365(c)(l), 365(c)(2) and 365(e)(2) of the Bankruptcy Law
or equivalent provisions of the laws or regulations of any other jurisdiction
with respect to proceedings and, to give effect to such waiver, Guarantor
consents to the assumption and enforcement of each provision of this Guaranty
and any other Credit Document by the debtor-in-possession or Borrower's or any
Project Participant's trustee in bankruptcy, as the case may be.

          5.6 Reinstatement. This Guaranty and the obligations of Guarantor
hereunder shall continue to be effective or be automatically reinstated, as the
case may be, if and to the extent that for any reason any payment by or on
behalf of Guarantor in respect of the Guaranteed Obligations is rescinded or
otherwise restored to Guarantor or Borrower, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as if such payment
had not been made, and Guarantor agrees that it will indemnify Administrative
Agent, the Secured Parties and their respective successors and assigns, on
demand for all reasonable costs and expenses (including reasonable fees of
counsel) incurred by Administrative Agent, the Secured Parties and their
respective successors and assigns in connection with any such rescission or
restoration.

                                       11

                                   ARTICLE VI.
                                  MISCELLANEOUS

          6.1 Obligations Secured. Without limiting the generality of the
foregoing, this Guaranty and all of the Collateral secure the payment and
performance when due of all Guaranteed Obligations. If, notwithstanding the
representation and warranty set forth in Section 3.1.5 or anything to the
contrary herein, enforcement of the liability of Guarantor under this Guaranty
for the full amount of the Guaranteed Obligations would be an unlawful or
voidable transfer under any applicable fraudulent conveyance or fraudulent
transfer law or any comparable law, then the liability of Guarantor hereunder
shall be reduced to the highest amount for which such liability may then be
enforced without giving rise to an unlawful or voidable transfer under any such
law.

          6.2 Successions or Assignments.

               (a) This Guaranty shall inure to the benefit of the successors or
permitted assigns of the Secured Parties under the Credit Agreement who shall
have, to the extent of their interest, the rights of the Secured Parties
hereunder.

               (b) This Guaranty is binding upon Guarantor and its successors
and permitted assigns. Guarantor may not assign any of its obligations hereunder
without the prior written consent of the Banks (and any purported assignment in
violation of this Section shall be void).

          6.3 Other Waivers.

               (a) No delay or omission on the part of Administrative Agent or
the Secured Parties in exercising any of their rights (including those
hereunder) and no partial or single exercise thereof and no action or non-action
by Administrative Agent or the other Secured Parties, with or without notice to
Guarantor, Borrower, any Project Participant or any other Person, shall
constitute a waiver of any rights or shall affect or impair this Guaranty.

               (b) ADMINISTRATIVE AGENT AND GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF THE SECURED PARTIES, ADMINISTRATIVE AGENT OR GUARANTOR. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE SECURED PARTIES AND ADMINISTRATIVE AGENT TO ACCEPT
THIS GUARANTY, ENTER INTO THE CREDIT AGREEMENT AND MAKE LOANS THEREUNDER.

          6.4 Headings. The headings in this Guaranty are for convenience of
reference only and shall not constitute a part of this Guaranty for any other
purpose or be given any substantive effect.

                                       12

          6.5 Remedies Cumulative. Each and every right and remedy of
Administrative Agent or the other Secured Parties hereunder shall be cumulative
and shall be in addition to any other right or remedy given hereunder or under
any other Credit Document, or now or hereafter existing at law or in equity.

          6.6 Severability. Any provision of this Guaranty that may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

          6.7 Amendments. This Guaranty may be amended, waived or otherwise
modified only with the written consent of the parties hereto and otherwise in
accordance with Section 9.9 of the Credit Agreement.

          6.8 Jurisdiction. Administrative Agent and Guarantor agree that any
legal action or proceeding by or against Guarantor or with respect to or arising
out of this Guaranty or any other Credit Document may be brought in or removed
to the courts of the State of New York, in and for the Borough of Manhattan, or
of the United States of America for the Southern District of New York, as
Administrative Agent may elect. By execution and delivery of this Guaranty,
Administrative Agent and Guarantor accept, for themselves and in respect of
their property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts. Administrative Agent and Guarantor irrevocably consent to
the service of process out of any of the aforementioned courts in any manner
permitted by law. Any such process or summons in connection with any such action
or proceeding may also be served by mailing a copy thereof by certified or
registered mail, or any substantially similar form of mail, addressed to
Guarantor as provided for notices hereunder. Guarantor agrees that service of
process upon CT Corporation System and written notice of such service given to
Guarantor shall be deemed in every respect effective service of process upon
Guarantor in any such suit, action or proceeding in any such court.
Administrative Agent and Guarantor hereby waive any right to stay or dismiss any
action or proceeding under or in connection with any or all of the Projects,
this Guaranty or any other Credit Document brought before the foregoing courts
on the basis of forum non-conveniens. Nothing herein shall affect the right of
Administrative Agent to bring legal action or proceedings in any other competent
jurisdiction. Administrative Agent and Guarantor further agree that the
aforesaid courts of the State of New York and of the United States of America
shall have exclusive jurisdiction with respect to any claim or counterclaim of
Guarantor based upon the assertion that the rate of interest charged by the
Secured Parties on or under this Guaranty and/or the other Credit Documents is
usurious.

          6.9 Governing Law. This Guaranty and the rights and obligations of
Administrative Agent and Guarantor shall be governed by, and construed in
accordance with, the law of the State of New York without reference to
principles of conflicts of law (other than Section 5-1401 and Section 5-1402 of
the New York General Obligations Law).

          6.10 Integration of Terms. This Guaranty, together with the other
Credit Documents, is intended by the parties as a final expression of their
agreement and is intended as a complete and exclusive statement of the terms and
conditions thereof.

                                       13

          6.11 Notices. Any communications between the parties hereto or notices
provided herein to be given may be given to the following addresses:

If to Administrative Agent:   Beal Bank, S.S.B.
                              6000 Legacy Dr., 4E
                              Plano, Texas 75024
                              Attn: William T. Saurenmann
                              Telephone No.: (469) 467-5510
                              Telecopy No.: (469) 241-9568
                              E-mail: bsaurenmann@bealbank.com

with a copy to:               CSG Investments, Inc.
                              6000 Legacy Dr., 4W
                              Plano, Texas 75024
                              Attn: Steve Harvey
                              Telephone No.: (469) 467-5652
                              Telecopy No.: (469) 241-9567
                              E-mail: sharvey@csginvestments.com

If to Guarantor:              [INSERT NAME OF GUARANTOR]
                              c/o OrCal Geothermal Inc.
                              980 Greg Street
                              Sparks, Nevada 89431-6039
                              Attn: President
                              Tel: (775)356-9029
                              Fax: (775)356-9039
                              E-mail: dbronicki@ormat.com

          All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS and other similar overnight delivery services), (c) if
mailed by first class United States Mail, postage prepaid, registered or
certified with return receipt requested, (d) if sent by facsimile or (e) if sent
via other electronic means (including electronic mail). Notice so given shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by facsimile or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a Banking Day
and, if not, on the next following Banking Day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following Banking Day; provided, however, that (i) if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender, and (ii) with
respect to any notice given via facsimile or other electronic means, the sender
of such message shall promptly provide the addressee with an original copy of
such notice by any of the means specified in clauses (a), (b) or (c) above. Any
party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of five Banking
Days' notice to the other parties in the manner set forth above.

                                       14

          6.12 Interest; Collection Expenses; Set-Off.

               (a) Without regard to any limitation set forth in this Guaranty,
any amount required to be paid by Guarantor pursuant to the terms hereof that is
not paid when due shall bear interest at the Default Rate or the maximum rate
permitted by law, whichever is less, from the date due until paid in full in
cash.

               (b) Without regard to any limitation set forth in this Guaranty,
if Administrative Agent is required to pursue any remedy against Guarantor
hereunder, Guarantor shall pay to Administrative Agent upon demand therefore,
all reasonable attorneys' fees and all other costs and expenses incurred by
Administrative Agent in enforcing this Guaranty (and such fees, costs and
expenses shall be deemed to be part of the Guaranteed Obligations).

               (c) In addition to any rights now or hereafter granted under
applicable Legal Requirements or otherwise, and not by way of limitation of any
such rights, upon the failure of Guarantor to make any payment as required
hereunder, Administrative Agent is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to
Guarantor or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by Administrative
Agent or any Bank (including by branches and agencies of Administrative Agent
and each Bank wherever located) to or for the credit or the account of
Guarantor, against and on account of the obligations of Guarantor under this
Guaranty, irrespective of whether or not Administrative Agent shall have made
any demand hereunder.

          6.13 Counterparts. This Guaranty and any amendments, waivers, consents
or supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document. NO CREDIT DOCUMENT TO WHICH BEAL BANK, S.S.B. IS A PARTY SHALL BE
EFFECTIVE UNLESS TWO OFFICERS OF BEAL BANK, S.S.B. SHALL HAVE EXECUTED SUCH
CREDIT DOCUMENT.

          6.14 Limitations on Liability. No claim shall be made by Guarantor
against Administrative Agent or the Secured Parties or any of their Affiliates,
directors, employees, attorneys or agents for any loss of profits, business or
anticipated savings, special or punitive damages or any indirect or
consequential loss whatsoever in respect of any breach or wrongful conduct
(whether or not the claim therefor is based on contract, tort or duty imposed by
law), in connection with, arising out of or in any way related to the
transactions contemplated by this Guaranty or the other Credit Documents or any
act or omission or event occurring in connection therewith; and Guarantor hereby
waives, releases and agrees not to sue upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in their
favor.

          6.15 Time. Time is of the essence of this Guaranty.

                                       15

          6.16 Termination. Subject to Section 5.6, this Guaranty and all of the
obligations of Guarantor hereunder shall terminate upon the payment in full in
cash and performance in full of all Guaranteed Obligations in accordance with
the Credit Documents (other than the Guaranteed Obligations that are intended to
survive the termination of the Credit Documents). Unless earlier terminated
pursuant to the foregoing sentence, this Guaranty shall survive any foreclosure
proceedings instituted, commenced or completed against Borrower or any of its
subsidiaries.

          6.17 Credit Documents. Guarantor acknowledges that it has been
provided with a copy of the Credit Agreement, the Depositary Agreement and the
other Credit Documents and has read and is familiar with the provisions of the
Credit Agreement, the Depositary Agreement and the other Credit Documents.
Guarantor hereby consents to the terms set forth in the Credit Agreement, the
Depositary Agreement and the other Credit Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       16

          IN WITNESS WHEREOF, the parties hereto, by their authorized
representatives duly authorized, intending to be legally bound, have caused this
Subsidiary Guaranty to be duly executed and delivered as of the date first above
written.

                                        [INSERT NAME OF GUARANTOR],
                                        a[___________________],
                                        as Guarantor

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        BEAL BANK, S.S.B.,
                                        as Administrative Agent

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      S-1

                        [_________'s Subsidiary Guaranty]

                                                                     EXHIBIT D-6
                                                             to Credit Agreement

                          SCHEDULE OF SECURITY FILINGS

--------------------------------------------------------------------------------
  DEBTOR              COLLATERAL DOCUMENT                   FILING OFFICE
--------------------------------------------------------------------------------
Sponsor     Pledge Agreement among Borrower,       Delaware Secretary of State
            Sponsor and Administrative Agent
            dated as of the Closing Date

--------------------------------------------------------------------------------
Borrower    Security Agreement between Borrower    Delaware Secretary of State
            and Administrative Agent dated as of
            the Closing Date

--------------------------------------------------------------------------------
Borrower    Pledge Agreement among Borrower,       Delaware Secretary of State
            OrHeber 1 and Administrative Agent
            dated as of the Closing Date

--------------------------------------------------------------------------------
Borrower    Pledge Agreement among Borrower,       Delaware Secretary of State
            OrMammoth and Administrative Agent
            dated as of the Closing Date

--------------------------------------------------------------------------------
Borrower    Pledge Agreement among Borrower,      Delaware Secretary of State
            OrHeber 1, HGC, HFC and
            Administrative Agent dated as of the
            Closing Date

--------------------------------------------------------------------------------
OrHeber 1   Security Agreement between OrHeber 1   Delaware Secretary of State
            and Administrative Agent dated as of
            the Closing Date

--------------------------------------------------------------------------------
OrHeber 1   Pledge Agreement among Borrower,       Delaware Secretary of State
            OrHeber 1, HGC, HFC and
            Administrative Agent dated as of the
            Closing Date

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

--------------------------------------------------------------------------------
  DEBTOR             COLLATERAL DOCUMENT                   FILING OFFICE
--------------------------------------------------------------------------------
OrHeber 1   Pledge Agreement among OrHeber 1,      Delaware Secretary of State
            ORNI and Administrative Agent

--------------------------------------------------------------------------------
OrMammoth   Security Agreement between OrMammoth   Delaware Secretary of State
            and Administrative Agent dated as of
            the Closing Date

--------------------------------------------------------------------------------
HFC         Security Agreement between HFC and     Nevada Secretary of State
            Administrative Agent dated as of the
            Closing Date

--------------------------------------------------------------------------------
HFC         Security Agreement between HFC and     California Secretary of State
            Administrative Agent dated as of the
            Closing Date

--------------------------------------------------------------------------------
HGC         Security Agreement between HGC and     Nevada Secretary of State
            Administrative Agent dated as of the
            Closing Date

--------------------------------------------------------------------------------
HGC         Security Agreement between HGC and     California Secretary of State
            Administrative Agent dated as of the
            Closing Date

--------------------------------------------------------------------------------
HFC         Deed of Trust, Assignment of Rents,    County Recorder of Imperial
            Security Agreement and Fixture         County, California
            Filings by HFC to Chicago Title
            Insurance Company, as Trustee, for
            the benefit of Administrative Agent,
            dated as of the Closing Date

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

                                        2

--------------------------------------------------------------------------------
  DEBTOR             COLLATERAL DOCUMENT                   FILING OFFICE
--------------------------------------------------------------------------------
 HGC        Deed of Trust, Assignment of Rents,    County Recorder of Imperial
            Security Agreement and Fixture         County, California
            Filings by HGC to Chicago Title
            Insurance Company, as Trustee, for
            the benefit of Administrative Agent,
            dated as of the Closing Date

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

                                       3

                                                                     EXHIBIT E-l
                                                             to Credit Agreement

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

                                     FORM OF
                              CONSENT AND AGREEMENT

                                      among

                       [INSERT NAME OF CONTRACTING PARTY],
                            a[_____________________]
                               (Contracting Party)

                                       and

                         [INSERT NAME OF PROJECT OWNER],
                           a[_______________________]
                                 (Project Owner)

                                       and

                                BEAL BANK, S.S.B.
                             (Administrative Agent)

                      DATED AS OF ______________ , _____

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

          This CONSENT AND AGREEMENT, dated as of [_______________] [__], [____]
(this "Consent"), is entered into by and among [INSERT NAME OF CONTRACTING
PARTY], a [_______________] [ORGANIZED] [FORMED] and existing under the laws of
the State of [_______________] (together with its permitted successors and
assigns, "Contracting Party"), BEAL BANK, S.S.B., in its capacity as
Administrative Agent for the Secured Parties referred to below (together with
its successors, designees and assigns in such capacity, "Administrative Agent"),
and [INSERT NAME OF PROJECT OWNER], a [_______________] [ORGANIZED] [FORMED] and
existing under the laws of the State of California (together with its permitted
successors and assigns, "Project Owner").

                                    RECITALS

          A. OrCal Geothermal Inc., a corporation organized and existing under
the laws of the State of Delaware and a direct or indirect parent of Project
Owner ("Borrower") directly or indirectly has acquired (the "Acquisition")
certain Persons (including Project Owner) which directly or indirectly own,
lease, use and operate certain geothermal power plants and geothermal fluid
facilities located in the State of California, including the [INSERT NAME OF
RELEVANT PROJECT] (the "Project").

          B. In order to partially finance the Acquisition, Borrower has entered
into that certain Credit Agreement, dated as of December 18, 2003 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Borrower, the financial institutions from time
to time parties thereto (collectively, the "Lenders"), and each of the agents
listed on the signature pages thereto, pursuant to which, among other things,
the Lenders have made loans to, and for the benefit of, Borrower. Borrower is a
direct or indirect parent of Project Owner, and Project Owner will receive
substantial benefits from the making of these loans to Borrower.

          C. Contracting Party and Project Owner have entered into that certain
[INSERT DESCRIPTION OF RELEVANT PROJECT DOCUMENT(S)], dated as of
[_______________] [__], [_____] (as amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with the terms thereof and
hereof, the "Assigned Agreement[S]").

          D. Pursuant to a guaranty agreement executed by Project Owner and
Administrative Agent (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Guaranty Agreement"), Project Owner
has guaranteed all of Borrower's obligations to the Lenders.

          E. Pursuant to a security agreement executed by Project Owner and
Administrative Agent (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Security Agreement"), Project Owner
has agreed, among other things, to assign, as collateral security for its
obligations under the Guaranty Agreement and related documents (collectively,
the "Credit Documents"), all of its right, title and interest in, to and under
the Assigned Agreement to Administrative Agent for the benefit of itself, the
Lenders and each other entity or person provided collateral security under the
Credit Documents (the "Secured Parties").

          F. It is a requirement under the Credit Agreement that Contracting
Party and Project Owner execute and deliver this Consent.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the parties hereto hereby
agree, notwithstanding anything in the Assigned Agreement to the contrary, as
follows:

     1.   Assignment and Agreement.

          1.1 Consent to Assignment. Contracting Party (a) is hereby notified
that the Lenders have made the extensions of credit contemplated by the Credit
Agreement, (b) consents to the collateral assignment under the Security
Agreement of all of Project Owner's right, title and interest in, to and under
the Assigned Agreement, including, without limitation, all of Project Owner's
rights to receive payment and all payments due and to become due to Project
Owner under or with respect to the Assigned Agreement (collectively, the
"Assigned Interests") and (c) acknowledges the right of Administrative Agent, in
the exercise of Administrative Agent's rights and remedies pursuant [AND
SUBJECT(1)] to the Security Agreement, upon written notice to Contracting Party,
to make all demands, give all notices, take all actions and exercise all rights
of Project Owner under the Assigned Agreement.

     1.2  Subsequent Owner.

               (a) Contracting Party agrees that, if Administrative Agent
notifies Contracting Party in writing that, pursuant to and in accordance with
the Security Agreement, it has assigned, foreclosed or sold the Assigned
Interest, then (i) Administrative Agent or its successor, assignee and/or
designee, or any purchaser of the Assigned Interests (a "Subsequent Owner")
shall be substituted for Project Owner under the Assigned Agreement and (ii)
Contracting Party shall (A) recognize Administrative Agent or the Subsequent
Owner, as the case may be, as its counterparty under the Assigned Agreement and
(B) continue to perform its obligations under the Assigned Agreement in favor of
Administrative Agent or the Subsequent Owner, as the case may be; provided that
Administrative Agent or such Subsequent Owner, as the case may be, has assumed
in writing all of Project Owner's rights and obligations (including, without
limitation, the obligation to cure any then existing payment and performance
defaults, but excluding any obligation to cure any then existing performance
defaults which by their nature are incapable of being cured) under the Assigned
Agreement.

               (b) [INSERT THE FOLLOWING ONLY IF WARRANTIES ARE PROVIDED BY
CONTRACTING PARTY UNDER THE RELEVANT ASSIGNED AGREEMENT: Without limiting
anything herein, the warranties provided by Contracting Party under the Assigned
Agreement shall continue in full force and effect (until the expiration of the
applicable warranty periods set forth in the

----------
(1) Bracketed language to be included only in the Consents related to Project
Documents to which an Affiliate of Project Company is a Contracting Party.

                                        2

Assigned Agreement) in the event that Administrative Agent or a Subsequent Owner
succeeds to Project Owner's right, title and interest in the Assigned
Agreement.]

          1.3 Right to Cure. If Project Owner defaults in the performance of any
of its obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable Contracting Party to terminate or suspend its
performance under the Assigned Agreement (each hereinafter a "default").
Contracting Party shall not terminate or suspend its performance under the
Assigned Agreement until it first gives written notice of such default to
Administrative Agent and affords Administrative Agent a period of at least 30
days (or if such default is a nonmonetary default, such longer period (not to
exceed 90 days) as may be required so long as Administrative Agent has commenced
and is diligently pursuing appropriate action to cure such default within such
longer period) from receipt of such notice to cure such default; provided,
however, that (a) if possession of the Project is necessary to cure such
nonmonetary default and Administrative Agent has commenced foreclosure
proceedings, Administrative Agent shall be allowed a reasonable time to complete
such proceedings within such longer period, and (b) if Administrative Agent is
prohibited from curing any such nonmonetary default by any process, stay or
injunction issued by any governmental authority or pursuant to any bankruptcy or
insolvency proceeding or other similar proceeding involving Project Owner, then
the time periods specified herein for curing a nonmonetary default shall be
extended for the period of such prohibition. In the event the Administrative
Agent does not cure any such default within such applicable extended cure
period, Contracting Party shall continue to have all rights and remedies
afforded to it under the Assigned Agreement.

          1.4  No Amendments.

               (a) Contracting Party agrees that it shall not, without the prior
written consent of Administrative Agent, enter into any novation, material
amendment or other material modification of the Assigned Agreement.

               (b) Contracting Party agrees that it shall not, without the prior
written consent of Administrative Agent, (i) sell, assign or otherwise transfer
any of its rights under the Assigned Agreement (other than (A) its right to
receive payments under the Assigned Agreement and (B) its right to subcontract
under the Assigned Agreement), (ii) terminate, cancel or suspend its performance
under the Assigned Agreement (unless it has given Administrative Agent any
notice and opportunity to cure that are required by Section 1.3 hereof), (iii)
consent to any assignment or other transfer by Project Owner of its rights under
the Assigned Agreement or (iv) consent to any voluntary termination,
cancellation or suspension of performance by Project Owner under the Assigned
Agreement.

          1.5 Replacement Agreements. In the event the Assigned Agreement is
rejected or terminated as a result of any bankruptcy, insolvency, reorganization
or similar proceeding affecting Project Owner, Contracting Party shall, at the
option of Administrative Agent exercised within 45 days after such rejection or
termination, enter into a new agreement with Administrative Agent having
identical terms, conditions, agreements, provisions and limitations as the
Assigned Agreement (subject to any conforming changes necessitated by the

                                        3

substitution of parties and other changes as the parties may mutually agree),
provided that (a) the term under such new agreement shall be no longer than the
remaining balance of the term specified in the Assigned Agreement, and (b) upon
execution of such new agreement, Administrative Agent cures any outstanding
payment and performance defaults under the Assigned Agreement, excluding any
performance defaults which by their nature are incapable of being cured.

          1.6 Limitations on Liability. Contracting Party acknowledges and
agrees that Administrative Agent shall not have any liability or obligation
under the Assigned Agreement as a result of this Consent, the Security Agreement
or otherwise, nor shall Administrative Agent be obligated or required to (a)
perform any of Project Owner's obligations under the Assigned Agreement, except
during any period in which Administrative Agent has assumed Project Owner's
rights and obligations under the Assigned Agreement pursuant to Section 1.2[(A)]
above, or (b) take any action to collect or enforce any claim for payment
assigned under the Security Agreement. If Administrative Agent has assumed
Project Owner's rights and obligations under the Assigned Agreement pursuant to
Section 1.2[(A)] above or has entered into a new agreement pursuant to Section
1.5 above, Administrative Agent's liability to Contracting Party under the
Assigned Agreement or such new agreement, and the sole recourse of Contracting
Party in seeking enforcement of the obligations under such agreements, shall be
limited to the interest of Administrative Agent in the Project.

          1.7 Delivery of Notices. Contracting Party shall deliver to
Administrative Agent, concurrently with the delivery thereof to Project Owner, a
copy of each notice, request or demand given by Contracting Party to Project
Owner pursuant to the Assigned Agreement relating to (a) a default by Project
Owner under the Assigned Agreement and (b) any matter that would require the
consent of Administrative Agent pursuant to Section 1.4 of this Consent. Failure
of Contracting Party to provide a copy of any such notice, request or demand or
any other notice specified in Section 1.3 hereof to Administration Agent shall
not constitute a breach of this Consent and Administrative Agent agrees that
Contracting Party shall have no liability to Administrative Agent for such
failure; provided, however, that no cancellation, suspension or termination of
the Assigned Agreement by Contracting Party, or any other actions taken by
Contracting Party under the Assigned Agreement, shall be binding upon
Administrative Agent or Project Owner without such notice, request or demand (as
applicable), if applicable under Section 1.3, the opportunity to cure during the
applicable extended cure period specified in Section 1.3 and, if applicable
under Section 1.4, consent of Administrative Agent.

          1.8 Transfer. In the event Administrative Agent or its designee is
substituted for Project Owner under the Assigned Agreement pursuant to Section
1.2 or a new agreement entered into pursuant to Section 1.5, then, subsequent to
such substitution, Administrative Agent shall have the right to assign all of
its interest in the Assigned Agreement or such new agreement to any entity;
provided that such assignee assumes in writing the obligations of Administrative
Agent under the Assigned Agreement or such new agreement. Upon such assignment,
Administrative Agent shall be released from any further liability under the
Assigned Agreement or such new agreement.

                                       4

     2. Payments under the Assigned Agreement.

          2.1 Payments. Contracting Party shall pay all amounts (if any) payable
by it under the Assigned Agreement in the manner and as and when required by the
Assigned Agreement directly into the account specified on Exhibit A hereto, or
to such other person, entity or account as shall be specified from time to time
by Administrative Agent to Contracting Party in writing. Notwithstanding the
foregoing, if any entity or person has become a Subsequent Owner pursuant to the
terms hereof, then Contracting Party shall pay all such amounts directly to such
Subsequent Owner or an account designated by Subsequent Owner. Contracting
Party, Project Owner and Administrative Agent each acknowledge and agree that
each payment made by Contracting Party in accordance with this Section 2.1
shall, to the extent of the amount paid, constitute payment of the relevant
amount owing by Contracting Party to Project Owner under the Assigned Agreement
and that such payment shall discharge the obligation of Contracting Party under
the Assigned Agreement to make such payment to Project Owner.

          2.2 No Offset, Etc. All payments required to be made by Contracting
Party under the Assigned Agreement shall be made without any offset, recoupment,
abatement, withholding, reduction or defense whatsoever, other than those
allowed by the terms of the Assigned Agreement.

     3. Representations and Warranties of Contracting Party. Contracting Party
hereby represents and warrants, in favor of Administrative Agent and the
Lenders, as of the date hereof, that:

          (a) Contracting Party (i) is a [________________] duly [FORMED]
[ORGANIZED] and validly existing under the laws of the State of
[_________________], (ii) is duly qualified, authorized to do business and in
good standing in the State of California, and (iii) has all requisite power and
authority to enter into and to perform its obligations hereunder and under the
Assigned Agreement, and to carry out the terms hereof and thereof and the
transactions contemplated hereby and thereby;

          (b) the execution, delivery and performance by Contracting Party of
this Consent and the Assigned Agreement have been duly authorized by all
necessary corporate or other action on the part of Contracting Party and do not
require any approvals, filings with, or consents of any entity or person which
have not previously been obtained or made;

          (c) each of this Consent and the Assigned Agreement is in full force
and effect, has been duly executed and delivered on behalf of Contracting Party
by the appropriate officers of Contracting Party, and constitutes the legal,
valid and binding obligation of Contracting Party, enforceable against
Contracting Party in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and (ii)
general equitable principles (whether considered in a proceeding in equity or at
law);

          (d) there is no litigation, action, suit, proceeding or investigation
pending or (to the best of Contracting Party's knowledge) threatened against
Contracting Party before or by any court, administrative agency, arbitrator or
governmental authority, body or agency which, if

                                       5

adversely determined, individually or in the aggregate, could have a material
adverse effect on the performance by Contracting Party of its obligations
hereunder or under the Assigned Agreement;

          (e) the execution, delivery and performance by Contracting Party of
this Consent and the Assigned Agreement, and the consummation of the
transactions contemplated hereby and thereby, do or will not result in any
violation of, breach of or default under any term of its formation or governance
documents, or of any contract or agreement to which it is a party or by which it
or its property is bound, or of any license, permit, franchise, judgment,
injunction, order, law, rule or regulation applicable to it, other than any such
violation, breach or default which could not reasonably be expected to have a
material adverse effect on Contracting Party's ability to perform its
obligations under the Assigned Agreement or this Consent;

          (f) neither Contracting Party nor, to the best of Contracting Party's
knowledge, any other party to the Assigned Agreement, is in default of any of
its obligations thereunder;

          (g) to the best of Contracting Party's knowledge, (i) no event of
force majeure exists under, and as defined in, the Assigned Agreement and (ii)
no event or condition exists which would either immediately or with the passage
of any applicable grace period or giving of notice, or both, enable either
Contracting Party or Project Owner to terminate or suspend its obligations under
the Assigned Agreement; and

          (h) the Assigned Agreement and this Consent are the only agreements
between Project Owner and Contracting Party with respect to the Project, and all
of the conditions precedent to effectiveness under the Assigned Agreement have
been satisfied or waived.

          Each of the representations and warranties set forth in this Section 3
shall survive the execution and delivery of this Consent and the Assigned
Agreement and the consummation of the transactions contemplated hereby and
thereby.

     4. Additional Provisions.

          [INSERT SPECIFIC PROVISIONS AS MAY BE RELEVANT TO THE ASSIGNED
AGREEMENT. SUCH PROVISIONS, IF ANY, TO BE IDENTIFIED AFTER DUE DILIGENCE AND
REVIEW OF THE ASSIGNED AGREEMENT. WITH RESPECT TO AFFILIATE CONTRACTS, SUCH
PROVISIONS TO INCLUDE RIGHT OF ADMINISTRATIVE AGENT TO TERMINATE THE ASSIGNED
AGREEMENT UPON 30 DAYS NOTICE IN THE EVENT OF A STOCK OR ASSET FORECLOSURE.]

     5. Miscellaneous.

          5.1 Addresses. Any communications between the parties hereto or
notices provided herein to be given may be given to the following addresses:

                                       6

          If to Project Owner:          [INSERT NAME OF PROJECT OWNER]
                                        980 Greg Street
                                        Sparks, NV 89431
                                        Attn: President
                                        Tel: (775) 356-9029
                                        Fax: (775) 356-9039
                                        E-mail:
                                                ----------------------

          If to Contracting Party:      [INSERT NAME OF CONTRACTING PARTY]

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

                                        -----------------------------
                                        Attn:
                                              ---------------------------
                                        Tel:
                                             ----------------------------
                                        Fax:
                                             ----------------------------
                                        E-mail:
                                                -------------------------

          If to Administrative Agent:   Beal Bank, S.S.B.
                                        6000 Legacy Dr., 4E
                                        Plano, Texas 75024
                                        Attn: William T. Saurenmann
                                        Tel: (469) 467-5510
                                        Fax: (469) 241-9568
                                        E-mail:
                                                -----------------------

          with a copy to:               CSG Investments, Inc.
                                        6000 Legacy Dr., 4W
                                        Plano, Texas 75024
                                        Attn: Steve Harvey
                                        Tel: (469) 467-5652
                                        Fax: (469) 241-9567
                                        E-mail: sharvey@csginvestments.com

     All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS and other similar overnight delivery services), (c) if
mailed by first class United States Mail, postage prepaid, registered or
certified with return receipt requested, (d) if sent by facsimile or (e) if sent
via other electronic means (including electronic mail). Notice so given shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by facsimile or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a Banking Day
and, if not, on the next following Banking Day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following Banking Day; provided, however, that (i) if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender, and (ii) with
respect to any notice given via facsimile or other electronic means, the sender
of such message shall promptly provide the addressee with an original copy of
such notice by any of the means

                                       7

specified in clause (a), (b) or (c) above. Any party shall have the right to
change its address for notice hereunder to any other location within the
continental United States by giving of 5 Banking Days' notice to the other
parties in the manner set forth above.

          5.2 Governing Law; Submission to Jurisdiction.

               (a) THIS CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

               (b) Any legal action or proceeding with respect to this Consent
and any action for enforcement of any judgment in respect thereof may be brought
in the courts of the Borough of Manhattan or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Consent, Contracting Party hereby accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and appellate courts from any appeal thereof. Contracting Party
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to Contracting Party at its
notice address provided pursuant to Section 5.1 hereof. Contracting Party hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Consent brought in the courts referred to above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of
Administrative Agent to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Contracting Party in any
other jurisdiction.

          5.3 Counterparts. This Consent 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.

          5.4 Headings Descriptive. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.

          5.5 Severability. In case any provision in or obligation under this
Consent 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.

          5.6 Amendment, Waiver. Neither this Consent nor any of the terms
hereof may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by Contracting Party, Project Owner and
Administrative Agent.

                                        8

          5.7 Successors and Assigns. This Consent shall bind and benefit
Contracting Party, Administrative Agent, and their respective successors and
permitted assigns.

          5.8 Third Party Beneficiaries. Contracting Party and Administrative
Agent hereby acknowledge and agree that the Secured Parties are intended
third-party beneficiaries of this Consent.

          5.9 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, CONTRACTING PARTY, PROJECT OWNER AND ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER
ARISING HEREUNDER.

          5.10 Entire Agreement. This Consent and any agreement, document or
instrument attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings between the parties hereto in respect of the
subject matter hereof. In the event of any conflict between the terms,
conditions and provisions of this Consent and any such agreement, document or
instrument (including, without limitation, the Assigned Agreement), the terms,
conditions and provisions of this Consent shall prevail.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9

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

                                             [INSERT NAME OF PROJECT OWNER],

                                             a[____________________],
                                             as Project Owner

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             [INSERT NAME OF CONTRACTING PARTY],

                                             a[____________________],
                                             as Contracting Party

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

Accepted and Agreed to:

BEAL BANK, S.S.B.,
as Administrative Agent

By:
    -------------------------------
    Name:
    Title:

By:
    -------------------------------
    Name:
    Title:

                                       S-1

                  [[INSERT NAME OF CONTRACTING PARTY] Consent]

                                                                    Exhibit A to
                                                           Consent and Agreement

                              Payment Instructions

All amounts owed to Project Owner shall be paid to the following account:

          -----------------------
          ABA                                                   #
          Account                                                ---------------
          For the account of                                    #
                             ----------------------------         --------------
          Revenue Account, Account No.
                                       ------------------------

Administrative Agent shall be permitted to modify the account information set
forth above upon five (5) days' prior written notice to Contracting Party and
Project Owner.

                                       A-1

                                                                     EXHIBIT E-2
                                                             to Credit Agreement

                        SCHEDULE OF POST-CLOSING CONSENTS

--------------------------------------------------------------------------------
   MAJOR PROJECT PARTICIPANT                  MAJOR PROJECT DOCUMENTS
--------------------------------------------------------------------------------
Edison                            HGC Power Purchase Agreement, HGC
                                  Interconnection Agreement
--------------------------------------------------------------------------------
Edison                            Mammoth G-1 Power Purchase Agreement
--------------------------------------------------------------------------------
Edison                            Mammoth G-2 Power Purchase Agreement,
                                  Mammoth G-2 Interconnection Agreement
--------------------------------------------------------------------------------
Edison                            Mammoth G-3 Power Purchase Agreement,
                                  Mammoth G-3 Interconnection Agreement
--------------------------------------------------------------------------------
Edison                            SIGC Power Purchase Agreement
--------------------------------------------------------------------------------
IID                               HGC Water Supply Agreement, HGC Connection
                                  Agreement
--------------------------------------------------------------------------------
IID                               SIGC Water Supply Agreement, SIGC Transmission
                                  Service Agreement, SIGC Connection Agreement
--------------------------------------------------------------------------------

                                                                     Exhibit F-l
                                                             to Credit Agreement

                              ORCAL GEOTHERMAL INC.

Beal Bank, S.S.B.,
as Administrative Agent
6000 Legacy Dr.
Plano, Texas 75024

                         BORROWER'S CLOSING CERTIFICATE

          The undersigned, Connie Stechman, does hereby certify that she is the
Assistant Secretary of OrCal Geothermal Inc. a Delaware corporation, (the
"Borrower"), and, as such, she does hereby further certify on behalf of the
Borrower to the Administrative Agent and the Banks that, as of the Closing Date:

          1. All conditions precedent to the occurrence of the Closing Date have
been satisfied [OR WAIVED].

          2. All conditions (other than the payment of the purchase price) to
the consummation of the Acquisition in accordance with the terms and provisions
of the Acquisition Agreement have been satisfied without waiver or amendment,
except [INSERT ANY WAIVERS OR AMENDMENTS AGREED TO BY BANKS].

          3. Borrower has complied with all of the terms and provisions of, and
representations and warranties contained in, the Commitment Letter.

          4. Immediately prior to and after the Closing Date and the
consummation of the Acquisition, Borrower, OrHeber 1 and OrMammoth is and will
be Solvent.

          5. The Projections, the Initial Operating Budget and the Initial
Capital Expenditures Budget were prepared in good faith based on reasonable
assumptions.

          I am delivering this Borrower's Closing Certificate pursuant to
Section 3.1.7 of the Credit Agreement. The certifications made in this
Borrower's Closing Certificate are solely for the benefit of the Administrative
Agent and the Banks. I have made the certifications contained herein in my
capacity as a Responsible Officer of the Borrower.

          Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Credit Agreement, dated as of December 18, 2003
(the "Credit Agreement"), by and among OrCal Geothermal Inc., a corporation
organized under the laws of

the State of Delaware, the financial institutions from time to time parties
thereto (collectively, the "Banks"), and each of the agents listed on the
signature pages thereto.

                  [Remainder of page intentionally left blank]

          IN WITNESS WHEREOF, the undersigned has executed this Borrower's
Closing Certificate on behalf of the Borrower as of this ______ day of December,
2003.

                                        OrCal Geothermal Inc.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                                                     Exhibit F-2
                                                             to Credit Agreement

                                ORMAT NEVADA INC.

Beal Bank, S.S.B.,
as Administrative Agent
6000 Legacy Dr.
Plano, Texas 75024

                          SPONSOR'S CLOSING CERTIFICATE

          The undersigned, Connie Stechman, does hereby certify that she is the
Assistant Secretary of Ormat Nevada Inc. a Delaware corporation, (the
"Sponsor"), and, as such, she does hereby further certify on behalf of the
Sponsor to the Administrative Agent and the Banks that, as of the Closing Date,
all of the representations and warranties set forth in the Sponsor Guaranty are
true and correct.

          I am delivering this Sponsor's Closing Certificate pursuant to Section
3.1.7 of the Credit Agreement. The certifications made in this Sponsor's Closing
Certificate are solely for the benefit of the Administrative Agent and the
Banks. I have made the certifications contained herein in my capacity as a
Responsible Officer of the Sponsor.

          Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Credit Agreement, dated as of December 18, 2003
(the "Credit Agreement"), by and among OrCal Geothermal Inc., a corporation
organized under the laws of the State of Delaware, the financial institutions
from time to time parties thereto (collectively, the "Banks"), and each of the
agents listed on the signature pages thereto.

          IN WITNESS WHEREOF, the undersigned has executed this Sponsor's
Closing Certificate on behalf of the Sponsor as of this ______ day of December,
2003.

                                        Ormat Nevada Inc.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                                                     Exhibit F-3
                                                             to Credit Agreement

                                                             December     , 2003
                                                                      ----

                          [INSERT NAME OF ORMAT ENTITY]

Beal Bank, S.S.B.,
as Administrative Agent
6000 Legacy Dr.
Plano, Texas 75024

                         LOAN PARTY CLOSING CERTIFICATE

          The undersigned, ______________________, does hereby certify that [HE]
[SHE] is ________________ of [INSERT NAME OF ORMAT ENTITY], a
______________________ (the "Loan Party"), and, as such, [HE] [SHE] does hereby
further certify on behalf of the Loan Party to the Administrative Agent and the
Banks that, as of the Closing Date:

          1. Neither the Loan Party nor, to the Loan Party's knowledge, any
other party to any Major Project Document is or, but for the passage of time or
giving of notice or both will be, in breach of any material obligation
thereunder.

          2. All conditions precedent to the performance of the Loan Party, and,
to the Loan Party's knowledge, all conditions precedent to the performance of
the other parties under the Major Project Documents required to have been
performed have been satisfied.

          3. Immediately prior to and at the Close of Escrow, each of the
Guarantors is Solvent.

          4. All conditions precedent set forth in Section 3.2 of the Credit
Agreement have been satisfied, except [INSERT ANY WAIVERS AGREED TO BY BANKS].

          I am delivering this Loan Party Closing Certificate pursuant to
Section 3.2.7 of the Credit Agreement. The certifications made in this Loan
Party Closing Certificate are solely for the benefit of the Administrative Agent
and the Banks. I have made the certifications contained herein in my capacity as
a Responsible Officer of the Loan Party.

          Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Credit Agreement, dated as of December 18, 2003
(the "Credit Agreement"), by and among OrCal Geothermal Inc., a corporation
organized under the laws of the State of Delaware, the financial institutions
from time to time parties thereto (collectively, the "Banks"), and each of the
agents listed on the signature pages thereto.

          IN WITNESS WHEREOF, the undersigned has executed this Loan Party
Closing Certificate on behalf of the Loan Party as of this _____ day of
December, 2003.

                                        [INSERT NAME OF ORMAT ENTITY]

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                                                   EXHIBIT G - 1

                       INITIAL CAPITAL EXPENDITURES BUDGET

------------------------------------------------------------------------------------------------------------------------------
Capital Expenditures   Q1/2004   Q2/2004   Q3/2004   Q4/2004   TOTAL 2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005   TOTAL 2005
--------------------   -------   -------   -------   -------   ----------   -------   -------   -------   -------   ----------

Heber                   2,913     4,855     1,700     4,855      14,324        0       1,942     3,884       971       6,797
                                                                      0                                                    0
Mammoth                     0         0         0         0           0        0       2,468         0         0       2,468
                        -----     -----     -----     -----      ------      ---       -----     -----       ---       -----
                        2,913     4,855     1,700     4,855      14,324        0       4,410     3,884       971       9,265
------------------------------------------------------------------------------------------------------------------------------

1 OUT OF 1                      CLOSING VERSION

                                                                   EXHIBIT G - 2

                            INITIAL OPERATING BUDGET
                           FOR THE 2004 CALENDAR YEAR

--------------------------------------------------------------------------------------
                          Jan-04   FEB-04   MAR-04   APR-04   MAY-04   JUN-04   JUL-04
                          ------   ------   ------   ------   ------   ------   ------

Energy Revenues
   Heber                   3,893    3,493    3,796    3,662    3,747    3,662    3,796
   Mammoth                   587      538      561      542      480      415      383
Capacity Revenues
   Heber                     247      247      247      247      247    2,656    2,656
   Mammoth                    54       54       54       54       54      584      584
Other&Bonus Revenues
   Heber                      90       90       90       90       90       90       90
   Mammoth                    41       41       41       41       41       41       41
--------------------------------------------------------------------------------------
Total Revenues             4,912    4,463    4,789    4,636    4,659    7,448    7,550
--------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                     512      512      512      512      512      512      512
   Mammoth                   104      104      104      104      104      104      104
Variable O&M Expenses
   Heber                     561      561      561      561      561      561      561
   Mammoth                    95       95       95       95       95       95       95
Utilities (IID)
   Heber                     256      256      256      256      256      256      256
   Mammoth                    49       49       49       49       49       49       49
--------------------------------------------------------------------------------------
Total O&M Expenses         1,578    1,578    1,578    1,578    1,578    1,578    1,578
--------------------------------------------------------------------------------------
Royalties
   Heber                     239      199      215      208      213      333      340
   Mammoth                    62       57       59       57       52       94       92
Property Tax
   Heber                       0        0        0      449        0        0        0
   Mammoth                     0        0        0       20        0        0        0
Insurance
   Heber                      70       70       70       70       70       70       70
   Mammoth                    17       17       17       17       17       17       17
Surface Use Rental
   Heber                       8        8        8        8        8        8        8
   Mammoth                     3        3        3        3        3        3        3
--------------------------------------------------------------------------------------
Total Owner's Costs          399      355      373      832      363      525      529
--------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation        510      510      510      510      510      510      510
   Lease Interest             78       78       78       78       78       78       78
   Interest on Escrow        -18      -18      -18      -18      -18      -18      -18
--------------------------------------------------------------------------------------
Total Lease Expenses         570      570      570      570      570      570      570
--------------------------------------------------------------------------------------
Legal Costs                    0        0        0        0        0        0        0
Financing Costs                5        5        5        5        5        5        5
--------------------------------------------------------------------------------------
EBITDA                     2,871    2,465    2,774    2,161    2,654    5,280    5,378
======================================================================================
Depreciation
   Heber                     848      848      848      848      848      848      848
   Mammoth                   140      140      140      140      140      140      140
--------------------------------------------------------------------------------------
Total Depreciation           988      988      988      988      988      988      988
--------------------------------------------------------------------------------------
Senior Loan Interest           0        0        0        0        0        0        0
Bank Loan Interest             0        0    2,752        0        0    2,752        0
--------------------------------------------------------------------------------------
EBT                        1,372      967   -1,477      662    1,155    1,030    3,879
======================================================================================

---------------------------------------------------------------------------------
                          AUG-04   SEP-04   OCT-04   NOV-04   DEC-04   TOTAL 2004
                          ------   ------   ------   ------   ------   ----------

Energy Revenues
   Heber                   3,747    3,601    3,637    3,650    3,734     44,417
   Mammoth                   403      420      515      549      604      5,997
Capacity Revenues
   Heber                   2,656    2,656      247      247      247     12,599
   Mammoth                   584      584       54       54       54      2,772
Other&Bonus Revenues
   Heber                      90       90       90       90       90      1,077
   Mammoth                    41       41       41       41       41        496
---------------------------------------------------------------------------------
Total Revenues             7,522    7,393    4,584    4,631    4,770     67,358
---------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                     512      512      512      512      512      6,148
   Mammoth                   104      104      104      104      104      1,253
Variable O&M Expenses
   Heber                     561      561      561      561      561      6,735
   Mammoth                    95       95       95       95       95      1,140
Utilities (IID)
   Heber                     256      256      256      256      256      3,074
   Mammoth                    49       49       49       49       49        589
---------------------------------------------------------------------------------
Total O&M Expenses         1,578    1,578    1,578    1,578    1,578     18,939
---------------------------------------------------------------------------------
Royalties
   Heber                     337      329      207      207      212      3,039
   Mammoth                    93       95       55       58       63        837
Property Tax
   Heber                     898        0        0        0      449      1,795
   Mammoth                    40        0        0        0       20         80
Insurance
   Heber                      70       70       70       70       70        843
   Mammoth                    17       17       17       17       17        206
Surface Use Rental
   Heber                       8        8        8        8        8         97
   Mammoth                     3        3        3        3        3         32
---------------------------------------------------------------------------------
Total Owner's Costs        1,466      522      360      364      842      6,929
---------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation        510      510      510      510      510      6,125
   Lease Interest             78       78       78       78       78        931
   Interest on Escrow        -18      -18      -18      -18      -18       -215
---------------------------------------------------------------------------------
Total Lease Expenses         570      570      570      570      570       6841
---------------------------------------------------------------------------------
Legal Costs                    0        0        0        0        0          0
Financing Costs                5        5        5        5        5         60
---------------------------------------------------------------------------------
EBITDA                     4,413    5,227    2,581    2,624    2,286     40,714
=================================================================================
Depreciation
   Heber                     848      848      848      848      848     10,174
   Mammoth                   140      140      140      140      140      1,684
---------------------------------------------------------------------------------
Total Depreciation           988      988      988      988      988     11,858
---------------------------------------------------------------------------------
Senior Loan Interest           0        0        0        0        0          0
Bank Loan Interest             0    2,738        0        0    2,718     10,960
---------------------------------------------------------------------------------
EBT                        2,914      990    1,083    1,126   -1,931     11,771
=================================================================================

1 OUT OF 1                       CLOSING VERSION

                                                                   EXHIBIT G - 3

                                   PROJECTIONS

-------------------------------------------------------------------------------------------------------------------
QUARTERLY PROFIT AND LOSS STATEMENT   Q1/2004   Q2/2004   Q3/2004   Q4/2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005
-----------------------------------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                               11,181    11,071    11,143    11,021    11,196    11,267    11,762    11,983
   Mammoth                              1,686     1,437     1,207     1,667     2,000     1,705     1,431     1,978
Capacity Revenues
   Heber                                  741     3,150     7,968       741       741     3,150     7,968       741
   Mammoth                                163       693     1,753       163       163       693     1,753       163
Other & Bonus Revenues
   Heber                                  269       269       269       269       567       567       567       567
   Mammoth                                124       124       124       124       125       126       126       126
-------------------------------------------------------------------------------------------------------------------
Total Revenues                         14,164    16,744    22,464    13,985    14,792    17,507    23,606    15,558
-------------------------------------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                                1,537     1,537     1,537     1,537     1,542     1,542     1,542     1,542
   Mammoth                                313       313       313       313       321       321       321       321
Variable O&M Expenses
   Heber                                1,684     1,684     1,684     1,684     1,199     1,199     1,199     1,199
   Mammoth                                285       285       285       285       374       374       374       374
Utilities (IID)
   Heber                                  769       769       769       769       783       783       783       783
   Mammoth                                147       147       147       147       151       151       151       151
-------------------------------------------------------------------------------------------------------------------
Total O&M Expenses                      4,735     4,735     4,735     4,735     4,370     4,370     4,370     4,370
-------------------------------------------------------------------------------------------------------------------
Royalties
   Heber                                  654       754     1,006       625       650       778     1,052       690
   Mammoth                                178       204       280       178       207       228       301       205
Property Tax
   Heber                                    0       449       898       449         0       440       880       440
   Mammoth                                  0        20        40        20         0        78       156        78
Insurance
   Heber                                  211       211       211       211       217       217       217       217
   Mammoth                                 52        52        52        52        53        53        53        53
Surface Use Rental
   Heber                                   24        24        24        24        25        25        25        25
   Mammoth                                  8         8         8         8         8         8         8         8
-------------------------------------------------------------------------------------------------------------------
Total Owner's Costs                     1,126     1,720     2,518     1,565     1,160     1,827     2,691     1,715
-------------------------------------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation                   1,531     1,531     1,531     1,531     1,322     1,322     1,322     1,322
   Lease Interest                         233       233       233       233       156       156       156       156
   Interest on Escrow                     (54)      (54)      (54)      (54)      (74)      (74)      (74)      (74)
-------------------------------------------------------------------------------------------------------------------
TOTAL LEASE EXPENSES                    1,710     1,710     1,710     1,710     1,404     1,404     1,404     1,404
-------------------------------------------------------------------------------------------------------------------
Financing Costs                            15        15        15        15        15        15        15        15
-------------------------------------------------------------------------------------------------------------------
EBITDA                                  8,110    10,095    15,018     7,491     9,165    11,212    16,448     9,375
===================================================================================================================
Depreciation
   Heber                                2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543
   Mammoth                                421       421       421       421       421       421       421       421
-------------------------------------------------------------------------------------------------------------------
Total Depreciation                      2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
-------------------------------------------------------------------------------------------------------------------
Senior Loan Interest                        0         0         0         0         0         0         0         0
Bank Loan Interest                      2,752     2,752     2,738     2,718     2,886     2,872     2,864     2,842
-------------------------------------------------------------------------------------------------------------------
EBT                                       852     2,848     7,784       278     1,992     4,054     9,297     2,246
-------------------------------------------------------------------------------------------------------------------
Income Tax                                345     1,140     3,116       111       797     1,623     3,722       899
-------------------------------------------------------------------------------------------------------------------
Net Income                                517     1,708     4,667       167     1,194     2,431     5,575     1,347
===================================================================================================================

-----------------------------------------------------------------------------------------------------------
QUARTERLY PROFIT AND LOSS STATEMENT   Q1/2006   Q2/2006   Q3/2006   Q4/2006   Q1/2007   Q2/2007   Q3/2007
-----------------------------------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                               12,361    12,242    12,230    11,911    11,924    10,475     9,805
   Mammoth                              2,000     1,705     1,431     1,978     2,000     1,470     1,114
Capacity Revenues
   Heber                                  741     3,150     7,968       741       741     3,150     7,968
   Mammoth                                163       693     1,753       163       163       693     1,753
Other & Bonus Revenues
   Heber                                  567       567       567       567       567       567       567
   Mammoth                                127       127       127       127       125       125       125
-----------------------------------------------------------------------------------------------------------
Total Revenues                         15,959    18,484    24,076    15,487    15,519    16,479    21,331
-----------------------------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                                1,580     1,580     1,580     1,580     1,620     1,620     1,620
   Mammoth                                329       329       329       329       337       337       337
Variable O&M Expenses
   Heber                                1,155     1,155     1,155     1,155     1,216     1,216     1,216
   Mammoth                                304       304       304       304       310       310       310
Utilities (IID)
   Heber                                  799       799       799       799       814       814       814
   Mammoth                                155       155       155       155       158       158       158
-----------------------------------------------------------------------------------------------------------
Total O&M Expenses                      4,322     4,322     4,322     4,322     4,456     4,456     4,456
-----------------------------------------------------------------------------------------------------------
Royalties
   Heber                                  710       828     1,076       686       687       737       951
   Mammoth                                207       228       301       206       207       207       271
Property Tax
   Heber                                    0       431       862       431         0       422       845
   Mammoth                                  0        76       153        76         0        75       150
Insurance
   Heber                                  224       224       224       224       230       230       230
   Mammoth                                 55        55        55        55        56        56        56
Surface Use Rental
   Heber                                   25        25        25        25        26        26        26
   Mammoth                                  8         8         8         8         6         6         6
-----------------------------------------------------------------------------------------------------------
Total Owner's Costs                     1,228     1,876     2,703     1,710     1,212     1,759     2,535
-----------------------------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation                     917       917       917       917       724       724       724
   Lease Interest                          91        91        91        91        46        46        46
   Interest on Escrow                     (36)      (36)      (36)      (36)      (35)      (35)      (35)
-----------------------------------------------------------------------------------------------------------
TOTAL LEASE EXPENSES                      972       972       972       972       736       736       736
-----------------------------------------------------------------------------------------------------------
Financing Costs                            16        16        16        16        16        16        16
-----------------------------------------------------------------------------------------------------------
EBITDA                                 10,338    12,217    16,981     9,384     9,824    10,237    14,313
===========================================================================================================
Depreciation
   Heber                                2,543     2,543     2,543     2,543     2,543     2,543     2,543
   Mammoth                                421       421       421       421       421       421       421
-----------------------------------------------------------------------------------------------------------
Total Depreciation                      2,964     2,964     2,964     2,964     2,964     2,964     2,964
-----------------------------------------------------------------------------------------------------------
Senior Loan Interest                        0         0         0         0         0         0         0
Bank Loan Interest                      3,165     3,140     3,123     3,073     3,374     3,327     3,281
-----------------------------------------------------------------------------------------------------------
EBT                                     3,292     5,196     9,976     2,430     2,761     3,221     7,343
-----------------------------------------------------------------------------------------------------------
Income Tax                              1,318     2,080     3,994       973     1,106     1,289     2,940
-----------------------------------------------------------------------------------------------------------
Net Income                              1,974     3,115     5,982     1,457     1,656     1,931     4,403
===========================================================================================================

-------------------------------------------------------------------------------------
QUARTERLY PROFIT AND LOSS STATEMENT   Q4/2007   Q1/2008   Q2/2008   Q3/2008   Q4/2008
-----------------------------------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                                9,548     9,922     9,826     7,307     7,120
   Mammoth                              1,540     1,587     1,353     1,136     1,570
Capacity Revenues
   Heber                                  741       741     3,150     7,968       741
   Mammoth                                163       163       693     1,753       163
Other & Bonus Revenues
   Heber                                  567       567       567       567       567
   Mammoth                                125       125       125       125       125
-------------------------------------------------------------------------------------
Total Revenues                         12,683    13,105    15,714    18,856    10,286
-------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                                1,620     1,660     1,660     1,680     1,660
   Mammoth                                337       346       346       346       346
Variable O&M  Expenses
   Heber                                1,216     1,379     1,379     1,379     1,379
   Mammoth                                310       317       317       317       317
Utilities (IID)
   Heber                                  814       830       830       830       830
   Mammoth                                158       162       162       162       162
-------------------------------------------------------------------------------------
Total O&M Expenses                      4,456     4,694     4,694     4,694     4,694
-------------------------------------------------------------------------------------
Royalties
   Heber                                  584       583       702       817       434
   Mammoth                                164       169       196       273       167
Property Tax
   Heber                                  422         0       414       828       414
   Mammoth                                 75         0        73       147        73
Insurance
   Heber                                  230       237       237       237       237
   Mammoth                                 56        58        58        58        58
Surface Use Rental
   Heber                                   26        27        27        27        27
   Mammoth                                  6         6         6         6         6
-------------------------------------------------------------------------------------
Total Owner's Costs                     1,545     1,080     1,714     2,393     1,416
-------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation                     724       448       448       448       448
   Lease Interest                          46        14        14        14        14
   Interest on Escrow                     (35)      (42)      (42)      (42)      (42)
-------------------------------------------------------------------------------------
TOTAL LEASE EXPENSES                      736       420       420       420       420
-------------------------------------------------------------------------------------
Financing Costs                            16        16        16        16        16
-------------------------------------------------------------------------------------
EBITDA                                  6,655     7,343     9,319    11,782     4,188
=====================================================================================
Depreciation
   Heber                                2,543     2,543     2,543     2,543     2,543
   Mammoth                                421       421       421       421       421
-------------------------------------------------------------------------------------
Total Depreciation                      2,964     2,964     2,964     2,964     2,964
-------------------------------------------------------------------------------------
Senior Loan Interest                        0         0         0         0         0
Bank Loan Interest                      3,225     3,334     3,285     3,256     3,187
-------------------------------------------------------------------------------------
EBT                                      -259       597     2,622     5,114    -2,412
-------------------------------------------------------------------------------------
Income Tax                               -104       239     1,050     2,047      -966
-------------------------------------------------------------------------------------
Net Income                               -155       358     1,572     3,066    -1,446
=====================================================================================

1 OUT OF 13                      CLOSING VERSION                     EXHIBIT G-3

                                   Projections

----------------------------------------------------------------------------------------------------------------------------
Quarterly Profit and

                           Q1/2009   Q2/2009   Q3/2009   Q4/2009   Q1/2010   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                     7,522     7,453     7,447     7,256     7,720     7,649     7,643     7,448     7,924     7,851
   Mammoth                   1,627     1,387     1,164     1,609     1,665     1,420     1,192     1,647     1,704     1,453
Capacity Revenues
   Heber                       741     3,150     7,968       741       741     3,150     7,968       741       741     3,150
   Mammoth                     163       693     1,753       163       163       693     1,753       163       163       693
Other and Bonus Revenues
   Heber                       567       567       567       567       567       567       567       567       567       567
   Mammoth                     127       127       127       127       129       129       129       129       131       131
----------------------------------------------------------------------------------------------------------------------------
Total Revenues              10,747    13,377    19,026    10,463    10,985    13,608    19,252    10,694    11,230    13,845
----------------------------------------------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                     1,702     1,702     1,702     1,702     1,744     1,744     1,744     1,744     1,788     1,788
   Mammoth                     354       354       354       354       363       363       363       363       372       372
Variable O&M Expenses
   Heber                     1,243     1,243     1,243     1,243     1,309     1,309     1,309     1,309     1,306     1,306
   Mammoth                     323       323       323       323       329       329       329       329       336       336
Utilities (IID)
   Heber                       847       847       847       847       863       863       863       863       881       881
   Mammoth                     166       166       166       166       171       171       171       171       175       175
----------------------------------------------------------------------------------------------------------------------------
Total O&M Expenses           4,635     4,635     4,635     4,635     4,780     4,780     4,780     4,780     4,858     4,858
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                       455       575       824       441       465       586       834       451       475       596
   Mammoth                     172       199       276       171       176       202       279       174       180       205
Property Tax
   Heber                         0       406       811       406         0       398       795       398         0       390
   Mammoth                       0        72       144        72         0        70       141        70         0        69
Insurance
   Heber                       244       244       244       244       252       252       252       252       259       259
   Mammoth                      60        60        60        60        62        62        62        62        63        63
Surface Use Rental
   Heber                        27        27        27        27        28        28        28        28        29        29
   Mammoth                       6         6         6         6         6         6         6         6         6         6
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs            965     1,590     2,393     1,427       989     1,603     2,396     1,441     1,013     1,618
----------------------------------------------------------------------------------------------------------------------------
Lease Expenses (Holder)
   Lease Depreciation            0         0         0         0         0         0         0         0         0         0
   Lease Interest                0         0         0         0         0         0         0         0         0         0
   Interest on Escrow            0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                 17        17        17        17        17        17        17        17        17        17

----------------------------------------------------------------------------------------------------------------------------
EBITDA                       5,130     7,135    11,981     4,384     5,200     7,208    12,059     4,457     5,342     7,352
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543
   Mammoth                     421       421       421       421       421       421       421       421       421       421
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation           2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,954     2,964     2,964
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest             0         0         0         0         0         0         0         0         0         0
Bank Loan Interest           3,080     3,064     3,060     2,962     2,865     2,845     2,841     2,743     2,630     2,601
----------------------------------------------------------------------------------------------------------------------------
EBT                           -914     1,106     5,957    -1,543      -629     1,398     6,254    -1,251      -252     1,787
----------------------------------------------------------------------------------------------------------------------------

Income Tax                    -366       443     2,385      -618      -252       560     2,504      -501      -101       715

----------------------------------------------------------------------------------------------------------------------------
Net Income                    -546       663     3,572      -925      -377       839     3,750      -750      -151     1,072
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
                           Q3/2011   Q4/2011   Q1/2012   Q2/2012   Q3/2012   Q4/2012   Q1/2013   Q2/2013   Q3/2013   Q4/2013
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                     7,845     7,644     7,890     7,817     7,811     7,610     8,347     8,270     8,263     8,052
   Mammoth                   1,220     1,686     1,745     1,488     1,249     1,726     1,785     1,522     1,278     1,766
Capacity Revenues
   Heber                     7,968       741       741     3,150     7,968       741       741     3,150     7,968       741
   Mammoth                   1,753       163       163       693      1753       163       163       693     1,753       163
Other and Bonus Revenues
   Heber                       567       567       567       567       567       567       567       567       567       567
   Mammoth                     131       131       133       133       133       133       135       135       135       135
----------------------------------------------------------------------------------------------------------------------------
Total Revenues              19,483    10,931    11,239    13,847    19,480    10,940    11,738    14,337    19,964    11,423
----------------------------------------------------------------------------------------------------------------------------
Fixed O&M Expenses
   Heber                     1,788     1,788     1,832     1,832     1,832     1,832     1,878     1,878     1,878     1,878
   Mammoth                     372       372       382       382       382       382       391       391       391       391
Variable O&M Expenses
   Heber                     1,306     1,306     1,339     1,339     1,339     1,339     1,409     1,409     1,409     1,409
   Mammoth                     336       336       343       343       343       343       350       350       350       350
Utilities (IID)
   Heber                       881       881       898       898       898       898       916       916       916       916
   Mammoth                     175       175       179       179       179       179       184       184       184       184
----------------------------------------------------------------------------------------------------------------------------
Total O&M Expenses           4,858     4,858     4,973     4,973     4,973     4,973     5,128     5,128     5,128     5,128
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                       844       461       474       595       843       460       497       617       866       482
   Mammoth                     281       178       184       209       284       182       187       212       287       186
Property Tax
   Heber                       779       390         0       382       764       382         0       374       748       374
   Mammoth                     138        89         0        68       135        68         0        66       133        66
Insurance
   Heber                       259       259       267       267       267       267       275       275       275       275
   Mammoth                      63        63        65        65        65        65        67        67        67        67
Surface Use Rental
   Heber                        29        29        30        30        30        30        30        30        30        30
   Mammoth                       6         6         7         7         7         7         7         7         7         7
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs          2,401     1,455     1,026     1,621     2,394     1,459     1,064     1,649     2,413     1,487
----------------------------------------------------------------------------------------------------------------------------
Lease Expenses (Holder)
   Lease Depreciation            0         0         0         0         0         0         0         0         0         0
   Lease Interest                0         0         0         0         0         0         0         0         0         0
   Interest on Escrow            0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                 17        17        18        18        18        18        18        18        18        18

----------------------------------------------------------------------------------------------------------------------------
EBITDA                      12,208     4,601     5,222     7,236    12,095     4,490     5,528     7,542    12,405     4,790
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543
   Mammoth                     421       421       421       421       421       421       421       421       421       421
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation           2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Bank Loan Interest           2,591     2,483     2,483     2,452     2,436     2,319     2,185     2,144     2,114     1,990
----------------------------------------------------------------------------------------------------------------------------
EBT                          6,552      -847      -255     1,819     6,695      -793       379     2,433     7,327      -165
----------------------------------------------------------------------------------------------------------------------------

Income Tax                   2,663      -339       -90       728     2,681      -318       152       974     2,934       -66

----------------------------------------------------------------------------------------------------------------------------
Net Income                   3,989      -508      -135      1091     4,015      -476       227     1,459     4,394       -99
----------------------------------------------------------------------------------------------------------------------------

2 out of 13                      Closing Version                     EXHIBIT G-3

                                   Projections

----------------------------------------------------------------------------------------------------------------------------
Quarterly Profit and

                           Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015   Q3/2015   Q4/2015   Q1/2016   Q2/2016
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                     8,567     8,488     8,481     8,264     8,792     8,711     8,704     8,481     9,024     8,940
   Mammoth                   1,827     1,558     1,308     1,807     1,870     1,594     1,338     1,849     1,913     1,631
Capacity Revenues
   Heber                       741     3,150     7,968       741       741     3,150     7,968       741       352     1,496
   Mammoth                     163       693     1,753       163       163       693     1,753       163       163       693
Other and Bonus Revenues
   Heber                       567       567       567       567       567       567       567       567       269       269
   Mammoth                     137       137       137       137       139       139       139       139       114       114
----------------------------------------------------------------------------------------------------------------------------
Total Revenues              12,001    14,592    20,213    11,678    12,271    14,854    20,469    11,940    11,834    13,143
----------------------------------------------------------------------------------------------------------------------------
Fixed O & M Expenses
   Heber                     1,925     1,925     1,925     1,925     1,973     1,973     1,973     1,973     2,023     2,023
   Mammoth                     401       401       401       401       411       411       411       411       421       421
Variable O & M Expenses
   Heber                     1,406     1,406     1,406     1,406     1,441     1,441     1,441     1,441     1,516     1,516
   Mammoth                     357       357       357       357       364       364       364       364       372       372
Utilities (IID)
   Heber                       934       934       934       934       953       953       953       953       972       972
   Mammoth                     188       188       188       188       193       193       193       193       198       198
----------------------------------------------------------------------------------------------------------------------------
Total O & M Expenses         5,212     5,212     5,212     5,212     5,336     5,336     5,336     5,336     5,502     5,502
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                       508       629       877       493       520       640       888       504       498       554
   Mammoth                     191       215       290       189       195       219       293       193       198       221
Property Tax
   Heber                         0       367       733       367         0       359       719       359         0       352
   Mammoth                       0        65       130        65         0        64       127        64         0        62
Insurance
   Heber                       263       283       283       283       292       292       292       292       301       301
   Mammoth                      69        69        69        69        71        71        71        71        73        73
Surface Use Rental
   Heber                        31        31        31        31        32        32        32        32        33        33
   Mammoth                       7         7         7         7         7         7         7         7         8         8
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs          1,090     1,666     2,421     1,505     1,118     1,684     2,429     1,523     1,110     1,604
----------------------------------------------------------------------------------------------------------------------------

Lease Expenses (Heber)
   Lease Depreciation            0         0         0         0         0         0         0         0         0         0
   Lease Interest                0         0         0         0         0         0         0         0         0         0
   Interest on Escrow            0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                 18        18        18        18        19        19        19        19        19        19

----------------------------------------------------------------------------------------------------------------------------
EBITDA                       5,680     7,695    12,562     4,943     5,799     7,815    12,684     5,062     5,203     6,018
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                     2,543     2,543     2,543     2,543     2,543     2,543     2,543     2,543     1,587     1,587
   Mammoth                     421       421       421       421       421       421       421       421       421       421
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation           2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,008     2,008
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest             0         0         0         0         0         0         0         0         0         0
Bank Loan Interest           1,847     1,795     1,754     1,611     1,447     1,395     1,354     1,211     1,088     1,057
----------------------------------------------------------------------------------------------------------------------------
EBT                            869     2,935     7,843       368     1,388     3,455     8,366       887     2,108     2,954
----------------------------------------------------------------------------------------------------------------------------

Income Tax                     348     1,175     3,140       147       555     1,383     3,349       355       844     1,183
----------------------------------------------------------------------------------------------------------------------------
Net Income                     521     1,760     4,703       221       832     2,072     5,016       532     1,264     1,771
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
                           Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017   Q1/2018   Q2/2018   Q3/2018   Q4/2018
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                     8,933     8,704     8,984     8,900     8,893     8,665     9,504     9,416     9,409     9,167
   Mammoth                   1,369     1,892     1,958     1,669     1,401     1,936     2,003     1,708     1,434     1,981
Capacity Revenues
   Heber                     3,784       352       352     1,496     3,784       352       352     1,496     3,784       352
   Mammoth                   1,753       163       163       693     1,753       163       163       693     1,753       163
Other and Bonus Revenues
   Heber                       269       269       269       269       269       269       269       269       269       269
   Mammoth                     114       114       116       116       116       116       118       118       118       118
----------------------------------------------------------------------------------------------------------------------------
Total Revenues              16,223    11,494    11,842    13,144    16,217    11,501    12,410    13,701    18,767    12,051
----------------------------------------------------------------------------------------------------------------------------
Fixed O & M Expenses
   Heber                     2,023     2,023     2,073     2,073     2,073     2,073     2,125     2,125     2,125     2,125
   Mammoth                     421       421       432       432       432       432       443       443       443       443
Variable O & M Expenses
   Heber                     1,516     1,516     1,514     1,514     1,514     1,514     1,552     1,552     1,552     1,552
   Mammoth                     372       372       379       379       379       379       387       387       387       387
Utilities (IID)
   Heber                       972       972       992       992       992       992     1,012     1,012     1,012     1,012
   Mammoth                     198       198       203       203       203       203       208       208       208       208
----------------------------------------------------------------------------------------------------------------------------
Total O & M Expenses         5,502     5,502     5,594     5,594     5,594     5,594     5,727     5,727     5,727     5,727
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                       676       481       496       553       675       479       522       579       701       505
   Mammoth                     294       196       202       225       297       200       207       228       301       205
Property Tax
   Heber                       704       352         0       345       690       345         0       338       676       338
   Mammoth                     125        62         0        61       122        61         0        60       120        60
Insurance
   Heber                       301       301       310       310       310       310       319       319       319       319
   Mammoth                      73        73        76        76        76        76        78        78        78        78
Surface Use Rental
   Heber                        33        33        33        33        33        33        34        34        34        34
   Mammoth                       8         8         8         8         8         8         8         8         8         8
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs          2,214     1,506     1,125     1,610     2,211     1,512     1,168     1,644     2,236     1,547
----------------------------------------------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation            0         0         0         0         0         0         0         0         0         0
   Lease Interest                0         0         0         0         0         0         0         0         0         0
   Interest on Escrow            0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                 19        19        19        19        19        19        20        20        20        20

----------------------------------------------------------------------------------------------------------------------------
EBITDA                       8,488     4,467     5,104     5,921     8,393     4,375     5,495     6,310     8,784     4,757
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587
   Mammoth                     421       421       421       421       421       421       421       421       421       421
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation           2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest             0         0         0         0         0         0         0         0         0         0
Bank Loan Interest           1,026       954       893       841       800       718       636       575       513       421
----------------------------------------------------------------------------------------------------------------------------
EBT                          5,454     1,505     2,203     3,072     5,585     1,649     2,851     3,727     8,263     2,329
----------------------------------------------------------------------------------------------------------------------------
Income Tax                   2,184       602       882     1,230     2,236       660     1,141     1,492     2,508       932
----------------------------------------------------------------------------------------------------------------------------
Net Income                   3,270       902     1,321     1,842     3,349       989     1,709     2,235     3,756     1,395
----------------------------------------------------------------------------------------------------------------------------

3 out of 13                      Closing Version                     EXHIBIT G-3

                                   Projections

----------------------------------------------------------------------------------------------------------------------------
Quarterly Profit and

                           Q1/2019   Q2/2019   Q3/2019   Q4/2019   Q1/2020   Q2/2020   Q3/2020   Q4/2020   Q1/2021   Q2/2021
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                    9,754     9,663      9,656     9,408    10,010     9,917     9,909     9,655    10,272    10,177
   Mammoth                  2,050     1,748      1,467     2,028     2,098     1,789     1,502     2,075         0         0
Capacity Revenues
   Heber                      352     1,496      3,784       352       352     1,496     3,784       352       352     1,496
   Mammoth                    163       693      1,753       163       163       693     1,753       163         0         0
Other and Bonus Revenues
   Heber                      269       269        269       269       269       269       269       269       269       269
   Mammoth                    120       120        120       120       123       123       123       123         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Revenues             12,708    13,990     17,050    12,340    13,014    14,287    17,340    12,636    10,894    11,943
----------------------------------------------------------------------------------------------------------------------------
Fixed O & M Expenses
   Heber                    2,178     2,178      2,178     2,178     2,233     2,233     2,233     2,233     2,289     2,289
   Mammoth                    454       454        454       454       465       465       485       465         0         0
Variable O & M Expenses
   Heber                    1,632     1,632      1,632     1,632     1,631     1,631     1,631     1,631     1,671     1,671
   Mammoth                    395       395        395       395       404       404       404       404         0         0
Utilities (IID)
   Heber                    1,033     1,033      1,033     1,033     1,054     1,054     1,054     1,054     1,075     1,075
   Mammoth                    213       213        213       213       218       218       218       218         0         0
----------------------------------------------------------------------------------------------------------------------------
Total O & M Expenses        5,905     5,905      5,905     5,905     6,004     6,004     6,004     6,004     5,035     5,035
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                      535       592        713       517       548       605       726       530       562       618
   Mammoth                    211       232        304       209       216       236       307       213         0         0
Property Tax
   Heber                        0       331        663       331         0       325       650       325         0       318
   Mammoth                      0        59        117        59         0        58       115        58         0         0
Insurance
   Heber                      328       328        328       328       338       338       338       338       348       348
   Mammoth                     80        80         80        80        83        83        83        83         0         0
Surface Use Rental
   Heber                       35        35         35        35        36        36        36        36        37        37
   Mammoth                      8         8          8         8         8         8         8         8         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs         1,198     1,666      2,249     1,658     1,229     1,688     2,263     1,591       947     1,322
----------------------------------------------------------------------------------------------------------------------------
Lease Expenses (Heber)
   Lease Depreciation           0         0          0         0         0         0         0         0         0         0
   Lease Interest               0         0          0         0         0         0         0         0         0         0
   Interest on Escrow           0         0          0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses            0         0          0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                20        20         20        20         0         0         0         0         0

----------------------------------------------------------------------------------------------------------------------------
EBITDA                      5,585     6,399      8,875     4,846     5,781     6,595     9,072     5,041     4,911     5,586
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                    1,587     1,587      1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587
   Mammoth                    421       421        421       421       421       421       421       421         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation          2,008     2,008      2,008     2,008     2,008     2,008     2,008     2,008     1,587     1,587
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest            0         0          0         0         0         0         0         0         0         0
Bank Loan Interest            339       277        215       113         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
EBT                         3,238     4,114      6,652     2,726     3,773     4,587     7,065     3,033     3,325     3,999
----------------------------------------------------------------------------------------------------------------------------

Income Tax                  1,297     1,647     2,663     1,091     1,511     1,836     2,828     1,214     1,331     1,601

----------------------------------------------------------------------------------------------------------------------------
Net Income                  1,942     2,467     3,989     1,634     2,263     2,750     4,236     1,819     1,994     2,398
----------------------------------------------------------------------------------------------------------------------------

                           Q3/2021   Q4/2021   Q1/2022   Q2/2022   Q3/2022   Q4/2022   Q1/2023   Q2/2023   Q3/2023   Q4/2023
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy Revenues
   Heber                    10,169     9,908     4,536     4,486     4,478     4,352     4,652     4,600     4,591     4,483
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Capacity Revenues
   Heber                     3,784       352       352     1,496     3,784       352       352     1,496     3,784       352
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Other and Bonus Revenues
   Heber                       269       269       269       269       269       269       269       269       269       269
   Mammoth                       0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Revenues              14,223    10,529     5,157     6,251     8,531     4,973     5,273     6,385     8,645     5,084
----------------------------------------------------------------------------------------------------------------------------
Fixed O & M Expenses
   Heber                     2,289     2,289     1,078     1,078     1,078     1,078     1,105     1,105     1,105     1,105
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Variable O & M Expenses
   Heber                     1,671     1,671       995       995       995       995       944       944       944       944
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Utilities (IID)
   Heber                     1,075     1,075       515       515       515       515       526       526       526       526
   Mammoth                       0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total O & M Expenses         5,035     5,035     2,587     2,587     2,587     2,587     2,575     2,575     2,575     2,575
----------------------------------------------------------------------------------------------------------------------------

Royalties
   Heber                       740       543       275       334       458       266       282       340       462       271
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Property Tax
   Heber                       637       318         0       221       443       221         0       217       434       217
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Insurance
   Heber                       348       348       158       158       158       158       163       163       163       163
   Mammoth                       0         0         0         0         0         0         0         0         0         0
Surface Use Rental
   Heber                        37        37        38        38        38        39        39        39        39        39
   Mammoth                       0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Owner's Costs          1,762     1,247       471       751     1,094       683       483       758     1,097       690
----------------------------------------------------------------------------------------------------------------------------
Lease Expenses (Holder)
   Lease Depreciation            0         0         0         0         0         0         0         0         0         0
   Lease Interest                0         0         0         0         0         0         0         0         0         0
   Interest on Escrow            0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Lease Expenses             0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------

Financing Costs                  0         0         0         0         0         0         0         0         0         0

----------------------------------------------------------------------------------------------------------------------------
EBITDA                       7,426     4,248     2,099     2,913     4,850     1,703     2,215     3,032     4,972     1,818
----------------------------------------------------------------------------------------------------------------------------
Depreciation
   Heber                     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587
   Mammoth                       0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
Total Depreciation           1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587
----------------------------------------------------------------------------------------------------------------------------
Senior Loan Interest             0         0         0         0         0         0         0         0         0         0
Bank Loan Interest               0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------
EBT                          5,839     2,661       512     1,326     3,263       116       828     1,445     3,386       232
----------------------------------------------------------------------------------------------------------------------------

Income Tax                   2,338     1,065       205       531     1,306        47       251       578     1,356        93

----------------------------------------------------------------------------------------------------------------------------
Net Income                   3,501     1,595       307       795     1,956        70       376       866     2,030       139
----------------------------------------------------------------------------------------------------------------------------

4 out of 13                      Closing Version                     EXHIBIT G-3

                                                                     EXHIBIT G-3

                                   Projections

--------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow

                                  Q1/2004  Q2/2004  Q3/2004  Q4/2004  Q1/2005  Q2/2005  Q3/2005  Q4/2005  Q1/2006  Q2/2006
                                  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------

EBT                                   862    2,848    7,784      278    1,992    4,054    9,297    2,246    3,292    5,196
   Add Back Interest                2,752    2,752    2,738    2,718    2,886    2,872    2,864    2,842    3,165    3,140
   Add Back Depreciation            4,496    4,496    4,496    4,496    4,287    4,287    4,287    4,287    3,881    3,881
   Minus Lease Principal           (1,531)  (1,531)  (1,531)  (1,531)  (1,322)  (1,322)  (1,322)  (1,322)    (917)    (917)
   Minus/Plus Lease Reserve Acco   (4,500)       0        0        0        0        0        0    4,500        0        0
   Minus Add.Payment to Lessor          0        0        0        0        0        0        0        0        0        0
   Plus/Minus WC                    3,330   (2,856)  (2,806)   5,513     (294)  (2,908)  (3,217)   5,279      118   (2,833)
--------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Service       5,408    5,708   10,680   11,473    7,549    6,982   11,909   17,831    9,539    8,467
--------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                     (2,913)  (4,855)  (1,700)  (4,855)       0   (4,410)  (3,884)    (971)       0        0
   Minus Senior Loan DS                 0        0        0        0        0        0        0        0        0        0
   MinusBank Loan DS               (2,752)  (3,525)  (3,897)  (3,876)  (3,659)  (3,258)  (4,023)  (5,160)  (4,324)  (3,912)
   Debt Reserve Account in/out        113    1,321   (2,557)     215      401      328    2,016      623      411   (1,528)
--------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax              -143   -1,351    2,527    2,957    4,291     -358    1,986   12,323    5,627    3,026
==========================================================================================================================
Cash After Tax
EBT                                   862    2,848    7,784      278    1,992    4,054    9,297    2,246    3,292    5,196
Plus Book Depreciation              4,496    4,496    4,496    4,496    4,287    4,287    4,287    4,287    3,881    3,881
Minus Tax Depreciation             (6,143)  (6,143)  (6,143)  (6,143)  (8,888)  (8,888)  (8,888)  (8,888)  (6,009)  (6,009)
Taxable Income                       -785    1,201    6,136   -1,369   -2,610     -548    4,695   -2,356    1,165    3,068
Paid Taxes                              0     (166)  (2,457)       0        0        0      (68)       0        0     (752)
--------------------------------------------------------------------------------------------------------------------------
Cash After Tax                       -143   -1,517       70    2,957    4,231     -358    1,919   12,323    5,627    2,275
==========================================================================================================================

--------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow
                                  Q3/2006  Q4/2006  Q1/2007  Q2/2007  Q3/2007  Q4/2007  Q1/2008  Q2/2008  Q3/2008  Q4/2008
                                  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------

EBT                                 9,976    2,430    2,761    3,221    7,343     -259      597    2,622    5,114   -2,412
   Add back Interest                3,123    3,073    3,374    3,327    3,281    3,225    3,334    3,285    3,256    3,187
   Add back Depreciation            3,881    3,881    3,689    3,689    3,689    3,689    3,412    3,412    3,412    3,412
   Minus Lease Principal             (917)    (917)    (724)    (724)    (724)    (724)    (448)    (448)    (448)    (448)
   Minus/Plus Lease Reserve Acod        0        0        0        0        0        0        0        0        0    3,000
   Minus Add Payment to Lessor          0        0        0        0        0        0        0        0        0        0
   Plus/Minus WC                   (2,694)   5,541      274   (1,258)  (2,744)   5,617      (39)  (2,856)  (1,096)   5,600
--------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Service      13,370   14,009    9,374    8,254   10,845   11,548    6,856    6,015   10,238   12,340
--------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                          0        0        0        0        0        0        0        0        0        0
   Minus Senior Loan DS                 0        0        0        0        0        0        0        0        0        0
   MinusBank Loan DS               (5,441)  (5,391)  (5,305)  (5,259)  (5,598)  (5,543)  (5,265)  (4,444)  (5,959)  (7,436)
   Debt Reserve Account in/out         50       86       46     (340)      56      277      821      801   (2,154)   3,701
--------------------------------------------------------------------------------------------------------------------------
Cash for Equity Pre Tax             7,979    8,704    4,115    2,656    5,302    6,289    2,412      771    2,124    8,605
==========================================================================================================================
Cash After Tax
EBT                                 9,976    2,430    2,761    3,221    7,343     -259      597    2,622    5,114   -2,412
Plus Book Depreciation              3,881    3,881    3,689    3,689    3,689    3,689    3,412    3,412    3,412    3,412
Minus Tax Depreciation             (6,009)  (6,009)  (4,225)  (4,225)  (4,225)  (4,225)  (4,174)  (4,174)  (4,174)  (4,174)
Taxable Income                      7,849      303    2,225    2,684    6,807     -796     -165    1,860    4,352   -3,174
Paid Taxes                         (3,143)    (121)    (891)  (1,075)  (2,725)       0        0     (360)  (1,742)       0
--------------------------------------------------------------------------------------------------------------------------
Cash After Tax                      4,836    8,583    3,225    1,581    2,577    6,283    2,412      411      382    8,605
==========================================================================================================================

5 out of 13                      Closing Version

                                                                     EXHIBIT G-3

                                   Projections

----------------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow

                                 Q1/2009   Q2/2009   Q3/2009   Q4/2009   Q1/2010   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                                 -914     1,106     5,957    -1,543      -629     1,398     6,254    -1,251      -252     1,787
   Add Back Interest               3,080     3,064     3,060     2,962     2,865     2,845     2,841     2,743     2,630     2,601
   Add Back Depreciation           2,984     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
   Minus Lease Principal               0         0         0         0         0         0         0         0         0         0
   Minus/Plus Lease Reserve            0         0         0         0         0         0         0         0         0         0
   Minus Add Payment to Lessor      (321)     (321)     (321)     (321)     (318)     (318)     (318)     (318)     (332)     (332)
   Plus/Minus WC                    (109)   (2,827)   (2,774)    5,593      (145)   (2,824)   (2,770)    5,586      (149)   (2,822)
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Service      4,700     3,988     8,886     9,656     4,737     4,068     8,971     9,725     4,881     4,199
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                         0         0         0         0         0         0         0         0         0         0
   Minus Senior Loan DS                0         0         0         0         0         0         0         0         0         0
   MinusBank Loan DS              (3,698)   (3,219)   (6,923)   (6,825)   (3,637)   (3,000)   (6,704)   (7,224)   (3,789)   (2,987)
   Debt Reserve Account in/out       479      (399)     (997)      978       638      (548)   (1,149)      908       802      (621)
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax            1,481       369       967     3,809     1,738       518     1,119     3,409     1,874       591
==================================================================================================================================
Cash After Tax
EBT                                 -914     1,106     5,957    -1,543      -629     1,398     6,254    -1,251      -252     1,787
Plus Book Depreciation             2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
Minus Tax Depreciation            (2,855)   (2,855)   (2,855)   (2,855)   (1,567)   (1,567)   (1,567)   (1,567)   (1,574)   (1,574)
Taxable Income                      -804     1,218     6,067    -1,432       76_     2,795     7,651       146     1,138     3,178
Paid Taxes                             0         0    (1,323)        0         0      (853)   (3,063)      (59)     (456)   (1,272)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                     1,481       369      -365     3,809     1,738      -335    -1,944     3,351     1,419      -681
==================================================================================================================================

----------------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow

                                 Q3/2011   Q4/2011   Q1/2012   Q2/2012   Q3/2012   Q4/2012   Q1/2013   Q2/2013   Q3/2013   Q1/2013
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                                6,652      -847      -225     1,819     6,695      -793       379     2,433     7,327      -165
   Add Back Interest               2,591     2,483     2,483     2,452     2,436     2,319     2,185     2,144     2,114     1,990
   Add Back Depreciation           2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
   Minus Lease Principal               0         0         0         0         0         0         0         0         0         0
   Minus/Plus Lease Reserve            0         0         0         0         0         0         0         0         0         0
   Minus Add Payment to Les         (332)     (332)     (337)     (337)     (337)     (337)     (334)     (334)     (334)     (334)
   Plus/Minus WC                  (2,766)    5,579         5    (2,816)   (2,765)    5,571      (314)   (2,817)   (2,757)    5,565
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Ser          9,110     9,848     4,890     4,082     8,993     9,724     4,881     4,392     9,314    10,022
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                         0         0         0         0         0         0         0         0         0         0
   Minus Senior Loan DS                0         0         0         0         0         0         0         0         0         0
   MinusBank Loan DS              (6,840)   (7,118)   (3,642)   (3,070)   (6,839)   (7,340)   (3,730)   (3,303)   (6,749)   (7,398)
   Debt Reserve Account in/out    (1,150)    1,116       572      (521)   (1,092)      953       427      (559)   (1,298)    1,382
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax            1,120     3,846     1,820       491     1,062     3,337     1,578       529     1,268     4,006
==================================================================================================================================
Cash After Tax
EBT                                6,652      -847      -225     1,819     6,695      -793       379     2,433     7,327      -165
Plus Book Depreciation             2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964
Minus Tax Depreciation            (1,574)   (1,574)   (1,572)   (1,572)   (1,572)   (1,572)   (1,587)   (1,587)   (1,587)   (1,587)
Taxable Income                     8,043       544     1,167     3,211     8,087       599     1,756     3,810     8,704     1,212
Paid Taxes                        (3,220)     (218)     (467)   (1,286)   (3,238)     (240)     (703)   (1,526)   (3,485)     (485)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                    -2,100     3,629     1,353      -795    -2,176     3,097       875      -996    -2,217     3,521
==================================================================================================================================

6 out of 13                      Closing Version

                                                                     EXHIBIT G-3

                                   Projections

----------------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow

                                 Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015   Q3/2015   Q4/2015   Q1/2016   Q2/2016
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                                  869     2,935     7,843       368     1,388     3,455     8,366       887     2,108     2,954
   Add Back Interest               1,847     1,795     1,754     1,611     1,447     1,395     1,354     1,211     1,088     1,057
   Add Back Depreciation           2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,008     2,008
   Minus Lease Principal               0         0         0         0         0         0         0         0         0         0
   Minus/Plus Lease Reserve            0         0         0         0         0         0         0         0         0         0
   Minus Add Payment to Les         (349)     (348)     (349)     (349)     (354)     (354)     (354)     (354)     (350)     (350)
   Plus/Minus WC                    (161)   (2,814)   (2,753)    5,558      (165)   (2,811)   (2,748)    5,551       306    (1,544)
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Ser          5,171     4,533     9,461    10,153     5,279     4,649     9,582    10,259     5,159     4,124
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                         0         0         0         0         0         0         0         0         0         0
   Minus Senior Loan DS                0         0         0         0         0         0         0         0         0         0
   MinusBank Loan DS              (3,778)   (3,340)   (7,162)   (7,791)   (3,378)   (2,940)   (6,762)   (5,846)   (2,246)   (2,216)
   Debt Reserve Account in/out       438      (611)   (1,164)    1,738       438      (869)   (1,425)    2,989        31      (969)
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax            1,830       581     1,134     4,100     2,339       838     1,395     7,402     2,944       939
==================================================================================================================================
Cash After Tax
EBT                                  869     2,935     7,843       368     1,388     3,455     8,366       887     2,108     2,954
Plus Book Depreciation             2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,964     2,008     2,008
Minus Tax Depreciation            (1,594)   (1,594)   (1,594)   (1,594)   (1,597)   (1,597)   (1,597)   (1,597)   (1,198)   (1,198)
Taxable Income                     2,239     4,305     9,213     1,738     2,755     4,822     9,733     2,255     2,918     3,764
Paid Taxes                          (897)   (1,724)   (3,689)     (696)   (1,103)   (1,931)   (3,897)     (903)   (1,168)   (1,507)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                       934    -1,143    -2,554     3,404     1,236    -1,091    -2,502     6,499     1,775      -568
==================================================================================================================================

----------------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow
                                 Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017   Q1/2018   Q2/2018   Q3/2018   Q4/2018
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                                5,454     1,505     2,203     3,072     5,585     1,649     2,851     3,727     6,263     2,329
   Add Back Interest               1,026       954       893       841       800       718       636       575       813       421
   Add Back Depreciation           2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008
   Minus Lease Principal               0         0         0         0         0         0         0         0         0         0
   Minus/Plus Lease Reserve            0         0         0         0         0         0         0         0         0         0
   Minus Add Payment to Les         (350)     (350)     (366)     (366)     (366)     (366)     (372)     (372)     (372)     (372)
   Plus/Minus WC                  (1,478)    3,014         6    (1,538)   (1,477)    3,005      (358)   (1,538)   (1,468)    2,998
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Ser          6,659     7,130     4,744     4,017     6,650     7,014     4,785     4,400     6,944     7,384
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                         0         0         0         0         0         0         0         0         0         0
   Minus Senior Loan DS                0         0         0         0         0         0         0         0         0         0
   MinusBank Loan DS              (3,730)   (3,272)   (2,824)   (2,386)   (3,890)   (3,808)   (2,954)   (2,892)   (3,989)   (3,511)
   Debt Reserve Account in/out       (87)      448       438      (830)     (591)      855        62      (769)      150       855
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax            2,842     4,306     2,358       800     2,069     4,081     1,873       736     3,105     4,728
==================================================================================================================================
Cash After Tax
EBT                                5,454     1,505     2,203     3,072     5,585     1,649     2,851     3,727     6,263     2,329
Plus Book Depreciation             2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008
Minus Tax Depreciation            (1,198)   (1,198)   (1,198)   (1,198)   (1,198)   (1,198)   (1,213)   (1,213)   (1,213)   (1,213)
Taxable Income                     6,264     2,315     3,013     3,881     6,394     2,459     3,646     4,522     7,058     3,124
Paid Taxes                        (2,508)     (927)   (1,206)   (1,554)   (2,560)     (984)   (1,460)   (1,810)   (2,826)   (1,251)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                       334     3,379     1,152      -753      -491     3,076       413    -1,072       279     3,477
==================================================================================================================================

7 out of 13                      Closing Version

                                                                     EXHIBIT G-3

                                   PROJECTIONS

----------------------------------------------------------------------------------------------------------------------------------
Quarterly Cash Flow

                                 Q1/2019   Q2/2019   Q3/2019   Q4/2019   Q1/2020   Q2/2020   Q3/2020   Q4/2020   Q1/2021   Q2/2021
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                               3,238     4,114     6,652     2,726     3,773     4,587     7,065     3,033     3,325     3,999

   Add Back Interest                339       277       215       113         0         0         0         0         0         0

   Add Back Depreciation          2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,008     1,587     1,587

   Minus Lease Principal              0         0         0         0         0         0         0         0         0         0

   Minus/Plus Lease Reserve           0         0         0         0         0         0         0         0         0         0

   Minus Add Payment to Lessor     (367)     (367)     (367)     (367)     (383)     (383)     (383)     (383)     (389)     (389)

   Plus/Minus WC                   (184)   (1,535)   (1,463)    2,990      (189)   (1,532)   (1,458)    2,982     1,286    (1,258)
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Ser         5,034     4,496     7,045     7,469     5,209     4,579     7,231     7,640     5,808     3,938
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                        0         0         0         0         0         0         0         0         0         0

   Minus Senior Loan DS               0         0         0         0         0         0         0         0         0         0

   Minus Bank Loan DS            (2,656)   (2,595)   (4,078)   (4,362)        0         0         0         0         0         0

   Debt Reserve Account in/o_        62      (966)     (801)    4,377         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax           2,439       936     2,166     7,484     5,209     4,679     7,231     7,640     5,808     3,938
==================================================================================================================================
Cash After Tax

EBT                               3,238     4,114     6,652     2,726     3,773     4,587     7,065     3,033     3,325     3,999

Plus Book Depreciation            2,008     2,008     2,008     2,008     2,008     2,008     2,008     2,006     1,587     1,587
Minus Tax Depreciation           (1,042)   (1,042)   (1,042)   (1,042)   (1,048)   (1,048)   (1,048)   (1,048)     (643)     (643)

Taxable income                    4,204     5,080     7,618     3,691     4,733     5,546     8,024     3,993     4,269     4,943

Paid Taxes                       (1,683)   (2,034)   (3,050)   (1,478)   (1,895)   (2,221)   (3,213)   (1,599)   (1,709)   (1,979)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                      756    -1,098      -884     6,006     3,314     2,458     4,018     6,041     4,099     1,959
----------------------------------------------------------------------------------------------------------------------------------

                                 Q3/2021   Q4/2021   Q1/2022   Q2/2022   Q3/2022   Q4/2022   Q1/2023   Q2/2023   Q3/2023   Q4/2023
                                 -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

EBT                               5,839     2,661       512     1,326     3,263       116       628     1,445     3,386       232

   Add Back Interest                  0         0         0         0         0         0         0         0         0         0

   Add Back Depreciation          1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587

   Minus Lease Principal              0         0         0         0         0         0         0         0         0         0

   Minus/Plus Lease Reserve           0         0         0         0         0         0         0         0         0         0

   Minus Add Payment to Lessor     (389)     (389)     (385)     (385)     (385)     (385)     (402)     (402)     (402)     (402)

   Plus/Minus WC                 (1,014)    2,332     3,681    (1,190)   (1,081)    2,309      (113)   (1,191)   (1,080)    2,310
----------------------------------------------------------------------------------------------------------------------------------
Free Cash Before Debt Ser         6,023     6,190     5,396     1,338     3,384     3,628     1,700     1,430     3,491     3,727
----------------------------------------------------------------------------------------------------------------------------------
   Minus CapEx                        0         0         0         0         0         0         0         0         0         0

   Minus Senior Loan DS               0         0         0         0         0         0         0         0         0         0

   Minus Bank Loan DS                 0         0         0         0         0         0         0         0         0         0

   Debt Reserve Account in/o_         0         0         0         0         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------------------------
Cash For Equity Pre Tax           6,023     6,190     5,396     1,338     3,384     3,628     1,700     1,439     3,491     3,727
==================================================================================================================================
Cash After Tax

EBT                               5,839     2,661       512     1,326     3,263       118       628     1,445     3,386       232

Plus Book Depreciation            1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587     1,587
Minus Tax Depreciation             (643)     (643)     (643)     (643)     (643)     (643)     (643)     (643)     (643)     (643)

Taxable income                    6,783     3,605     1,456     2,270     4,207     1,060     1,572     2,389     4,329     1,175

Paid Taxes                       (2,716)   (1,443)     (583)     (909)   (1,684)     (424)     (629)     (956)   (1,733)     (471)
----------------------------------------------------------------------------------------------------------------------------------
Cash After Tax                    3,207     4,747     4,813       429     1,699     3,203     1,071       482     1,758     3,256
----------------------------------------------------------------------------------------------------------------------------------

8 OUT OF 13                      CLOSING VERSION

                                                                     EXHIBIT G-3

                                   PROJECTIONS

--------------------------------------------------------------------------------------------------------------------------
                                            Q1/2004   Q2/2004   Q3/2004   Q4/2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005
                                            -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                            0.50%     0.50%     0.50%     0.50%     0.63%     0.63%     0.63%     0.63%
Margin                                         1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%
                                            -------   -------   -------   -------   -------   -------   -------   -------
Total Interest Rate                            1.78%     1.78%     1.78%     1.78%     1.91%     1.91%     1.91%     1.91%

Quarterly Repayment                100.00%     0.00%     0.50%     0.75%     0.75%     0.50%     0.25%     0.75%     1.50%

                                  -------
Senior Loan Principal                   0
                                  -------

Beginning Balance                                 0         0         0         0         0         0         0         0
Principal Repayment                               0         0         0         0         0         0         0         0
Interest                                          0         0         0         0         0         0         0         0
Ending Balance                                    0         0         0         0         0         0         0         0

Free Cash Before Debt Service                 5,408     5,708    10,680    11,473     7,549     6,982    11,909    17,831

                                  -------
Bank Loan Principal               154,500
                                  -------
                                                                                1                                       2
Beginning Balance                           154,500   154,500   153,728   152,569   151,410   150,838   150,251   149,093
Principal Repayment                               0       773     1,159     1,158       773       386     1,159     2,318
Interest                                      2,752     2,752     2,738     2,718     2,886     2,872     2,854     2,842
Ending Balance                              154,500   153,728   152,569   151,410   150,638   150,251   149,093   146,775
                                                                            3,090                                   4,635

Free Cash Before Debt Service                 5,408     5,708    10,680    11,473     7,549     6,982    11,909    17,831

Cash After DS and CapEx                        -257    -2,672     5,083     2,741     3,890      -685     4,002    11,700

                                            -------------------------------------
Senior Loan Coverage Ratio           0.00      NA        NA        NA        NA        NA        NA        NA        NA
                                            -------------------------------------

Quarterly Debt Coverage Ratio                  1.97      1.62      2.74      2.06      2.06      2.14      2.96      3.46
                                            -------------------------------------
Defined Debt Coverage Ratio                    2.37      2.37      2.37      2.37      2.37      2.37      2.50      2.56
                                            -------------------------------------
                                     1.32                  Blended
                                            -------------------------------------

DSRF - O.Balance                              2,767     2,654     1,333     3,889     3,674     3,273     2,945     4,961
   Addition/(Deduction) to DSRF
      (based on next year's DS                 (113)   (1,321)    2,557      (215)     (401)     (326)    2,016      (623)
   Addition/(Deduction) to DSRF
      (Annual Dividend Covenant                   0         0         0         0         0         0         0         0
DSRF - C.Balance                              2,654     1,333     3,889     3,674     3,273     2,945     4,961     4,339
Financing Fees Reserve                 15
--------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                  Q1/2006   Q2/2006   Q3/2006   Q4/2006   Q1/2007   Q2/2007   Q3/2007   Q4/2007
                                  -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                  0.88%     0.88%     0.88%     0.88%     1.13%     1.13%     1.13%     1.13%
Margin                               1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%
                                  -------   -------   -------   -------   -------   -------   -------   -------
Total Interest Rate                  2.16%     2.16%     2.16%     2.16%     2.41%     2.41%     2.41%     2.41%

Quarterly Repayment                  0.75%     0.50%     1.50%     1.50%     1.25%     1.25%     1.50%     1.50%

Senior Loan Principal

Beginning Balance                       0         0         0         0         0         0         0         0
Principal Repayment                     0         0         0         0         0         0         0         0
Interest                                0         0         0         0         0         0         0         0
Ending Balance                          0         0         0         0         0         0         0         0

Free Cash Before Debt Service       9,539     8,467    13,370    14,009     9,374     8,254    10,845    11,548

Bank Loan Principal

                                                                      3                                       4
Beginning Balance                 146,775   145,616   144,844   142,526   140,209   138,278   138,346   134,029
Principal Repayment                 1,159       773     2,318     2,318     1,931     1,931     2,318     2,318
Interest                            3,165     3,140     3,123     3,073     3,374     3,327     3,261     3,225
Ending Balance                    145,616   144,844   142,526   140,209   138,278   136,346   134,029   131,711
                                                                  6,566                                   8,498

Free Cash Before Debt Service       9,539     8,467    13,370    14,009     9,374     8,254    10,845    11,548

Cash After DS and CapEx             5,216     4,555     7,929     8,618     4,069     2,996     5,246     6,005

Senior Loan Coverage Ratio           NA        NA        NA        NA        NA        NA        NA        NA

Quarterly Debt Coverage Ratio        2.21      2.16      2.46      2.60      1.77      1.57      1.94      2.08

Defined Debt Coverage Ratio          2.75      2.76      2.74      2.61      2.38      2.26      2.10      1.97

DSRF - O.Balance                    4,339     3,927     5,456     5,406     5,320     5,274     5,613     5,558
   Addition/(Deduction) to DSRF
      (based on next year's DS       (411)    1,528       (50)      (86)      (46)      340       (56)     (277)
   Addition/(Deduction) to DSRF
      (Annual Dividend Covenant         0         0         0         0         0         0         0         0
DSRF - C.Balance                    3,927     5,456     5,406     5,320     5,274     5,613     5,558     5,280
Financing Fees Reserve
----------------------------------------------------------------------------------------------------------------

9 OUT OF 13                     CLOSING VERSION

                                                                     EXHIBIT G-3

                                   PROJECTIONS

-------------------------------------------------------------------------------------------------------------------
                                     Q1/2008   Q2/2008   Q3/2008   Q4/2008   Q1/2009   Q2/2009   Q3/2009   Q4/2009
                                     -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%
Margin                                  1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%
                                     -------   -------   -------   -------   -------   -------   -------   -------
Total Interest Rate                     2.53%     2.53%     2.53%     2.53%     2.53%     2.53%     2.53%     2.53%

Quarterly Repyment                      1.25%     0.75%     1.75%     2.75%     0.40%     0.10%     2.50%     2.50%

Senior Loan Principal

Beginning Balance                          0         0         0         0         0         0         0         0
Principal Repayment                        0         0         0         0         0         0         0         0
Interest                                   0         0         0         0         0         0         0         0
Ending Balance                             0         0         0         0         0         0         0         0

Free Cash Before Debt Service          6,856     6,015    10,238    12,340     4,700     3,988     8,886     9,656

Bank Loan Principal                                                      5                                       6

Beginning Balance                    131,711   129,780   128,621   125,918   121,669   121,051   120,896   117,034
Principal Repayment                    1,931     1,159     2,704     4,249       618       155     3,863     3,863
Interest                               3,334     3,285     3,256     3,187     3,080     3,064     3,060     2,962
Ending Balance                       129,780   128,621   125,918   121,669   121,051   120,896   117,034   113,171
                                                                    10,043                                   8,498

Free Cash Before Debt Service          6,856     6,015    10,238    12,340     4,700     3,988     8,886     9,656

Cash After DS and CapEx                1,591     1,571     4,278     4,904     1,002       769     1,963     2,831

Senior Loan Coverage Ratio              NA        NA        NA        NA        NA        NA        NA        NA

Quarterly Debt Coverage Ratio           1.30      1.35      1.72      1.66      1.27      1.24      1.28      1.41
Defined Debt Coverage Ratio             1.84      1.73      1.69      1.63      1.53      1.55      1.54      1.41

DSRF - O.Balance                       5,280     4,459     5,260     7,414     3,713     3,234     3,633     4,630
   Addition/(Deductions) to DSRF        (821)      801     2,154    (3,701)     (479)      399       997      (978)
   Addition/(Deductions) to DSRF           0         0         0         0         0         0         0         0
DSRF - C.Balance                       4,459     5,260     7,414     3,713     3,234     3,633     4,630     3,652
Financing Fees Reserve
-------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
                                     Q1/2010   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011   Q3/2011   Q4/2011
                                     -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%    1.25%
Margin                                  1.28%     1.28%     1.28%     1.28%     1.28%     1.28%     1.28%    1.28%
                                     -------   -------   -------   -------   -------   -------    ------   ------
Total Interest Rate                     2.53%     2.53%     2.53%     2.53%     2.53%     2.53%     2.53%    2.53%

Quarterly Repyment                      0.50%     0.10%     2.50%     2.90%     0.75%     0.25%     2.75%    3.00%

Senior Loan Principal

Beginning Balance                          0         0         0         0         0         0         0        0
Principal Repayment                        0         0         0         0         0         0         0        0
Interest                                   0         0         0         0         0         0         0        0
Ending Balance                             0         0         0         0         0         0         0        0

Free Cash Before Debt Service          4,737     4,066     8,971     9,725     4,861     4,199     9,110    9,848

Bank Loan Principal                                                      7                                      8

Beginning Balance                    113,171   112,399   112,244   108,382   103,901   102,743   102,356   98,108
Principal Repayment                      773       155     3,863     4,481     1,159       386     4,249    4,635
Interest                               2,865     2,845     2,841     2,743     2,630     2,601     2,591    2,483
Ending Balance                       112,399   112,244   108,382   103,901   102,743   102,356    98,108   93,473
                                                                     9,270                                 10,429

Free Cash Before Debt Service          4,737     4,066     8,971     9,725     4,861     4,199     9,110    9,848

Cash After DS and CapEx                1,100     1,067     2,267     2,502     1,073     1,212     2,270    2,730

Senior Loan Coverage Ratio              NA        NA        NA        NA        NA        NA        NA       NA

Quarterly Debt Coverage Ratio           1.30      1.36      1.34      1.35      1.28      1.41      1.33     1.38
Defined Debt Coverage Ratio             1.32      1.32      1.34      1.36      1.34      1.33      1.34     1.34

DSRF - O.Balance                       3,652     3,015     3,563     4,712     3,804     3,002     3,623    4,773
   Addition/(Deductions) to DSRF        (638)      548     1,149      (908)     (802)      621     1,150   (1,116)
   Addition/(Deductions) to DSRF           0         0         0         0         0         0         0        0
DSRF - C.Balance                       3,015     3,563     4,712     3,804     3,002     3,623     4,773    3,657
Financing Fees Reserve
------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------
                                     Q1/2012   Q2/2012   Q3/2012   Q4/2012
                                     -------   -------   -------   -------

Assumed LIBOR Rates                    1.25%     1.25%     1.25%     1.25%
Margin                                 1.41%     1.41%     1.41%     1.41%
                                     ------    ------    ------    ------
Total Interest Rate                    2.66%     2.66%     2.66%     2.66%

Quarterly Repyment                     0.75%     0.40%     2.85%     3.25%

Senior Loan Principal

Beginning Balance                         0         0         0         0
Principal Repayment                       0         0         0         0
Interest                                  0         0         0         0
Ending Balance                            0         0         0         0

Free Cash Before Debt Service         4,890     4,082     8,993     9,724

Bank Loan Principal

                                                                        9
Beginning Balance                    93,473    92,314    91,696    87,293
Principal Repayment                   1,159       618     4,403     5,021
Interest                              2,483     2,452     2,436     2,319
Ending Balance                       92,314    91,696    87,293    82,271
                                                                   11,201

Free Cash Before Debt Service         4,890     4,082     8,993     9,724

Cash After DS and CapEx               1,248     1,012     2,154     2,384

Senior Loan Coverage Ratio               NA        NA        NA        NA

Quarterly Debt Coverage Ratio          1.34      1.33      1.32      1.32
Defined Debt Coverage Ratio            1.35      1.36      1.35      1.35

DSRF - O.Balance                      3,857     3,085     3,606     4,698
   Addition/(Deductions) to DSRF       (572)      521     1,092      (953)
   Addition/(Deductions) to DSRF          0         0         0         0
DSRF - C.Balance                      3,085     3,606     4,698     3,745
Financing Fees Reserve
--------------------------------------------------------------------------

10 OUT OF 13                    CLOSING VERSION                      EXHIBIT G-3

                                  PROJECTIONS

------------------------------------------------------------------------------------------------------------------------------------
                                   Q1/2013   Q2/2013   Q3/2013   Q4/2013   Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015
                                   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                  1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%
Margin                               1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%
                                   ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total Interest Rate                  2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%
Quarterly Repayment                  1.00%     0.75%     3.00%     3.50%     1.25%     1.00%     3.50%     4.00%     1.25%     1.00%
Senior Loan Principal
Beginning Balance                       0         0         0         0         0         0         0         0         0         0
Principal Repayment                     0         0         0         0         0         0         0         0         0         0
Interest                                0         0         0         0         0         0         0         0         0         0
Ending Balance                          0         0         0         0         0         0         0         0         0         0
Free Cash Before Debt Service       4,881     4,392     9,314    10,022     5,171     4,533     9,451    10,153     5,279     4,649
Bank Loan Principal
                                                                     10                                      11
Beginning Balance                  82,271    80,726    79,568    74,933    69,525    67,594    66,049    60,641    54,461    52,530
Principal Repayment                 1,545     1,159     4,635     5,408     1,931     1,545     5,408     6,180     1,931     1,545
Interest                            2,185     2,144     2,114     1,990     1,847     1,795     1,754     1,611     1,447     1,395
Ending Balance                     80,726    79,568    74,933    69,525    67,594    66,049    60,641    54,461    52,530    50,985
                                                                 12,746                                  15,064
Free Cash Before Debt Service       4,881     4,392     9,314    10,022     5,171     4,533     9,461    10,153     5,279     4,649
Cash After DS and CapEX             1,150     1,089     2,566     2,624     1,393     1,192     2,299     2,362     1,901     1,709
Senior Loan Coverage Ratio            NA        NA        NA        NA        NA        NA        NA        NA        NA        NA
Quarterly Debt Coverage Ratio        1.31      1.33      1.38      1.35      1.37      1.36      1.32      1.30      1.58      1.58
Defined Debt Coverage Ratio          1.33      1.32      1.32      1.34      1.35      1.36      1.37      1.35      1.33      1.36
DSRF - O.Balance                    3,745     3,318     3,877     5,175     3,793     3,355     3,967     5,131     3,393     2,955
   Addition/(Deductions) to DSRF     (427)      559     1,298    (1,382)     (438)      611     1,164    (1,738)     (438)      869
   Addition/(Deductions) to DSRF        0         0         0         0         0         0         0         0         0         0
DSRF - C.Balance                    3,318     3,877     5,175     3,793     3,355     3,967     5,131     3,393     2,955     3,825
Financing Fees Reserve
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                   Q3/2015   Q4/2015   Q1/2016   Q2/2016   Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017
                                   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                  1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%
Margin                               1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%
                                   ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total Interest Rate                  2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%
Quarterly Repayment                  3.50%     3.00%     0.75%     0.75%     1.75%     1.50%     1.25%     1.00%     2.00%     2.00%
Senior Loan Principal
Beginning Balance                       0         0         0         0         0         0         0         0         0         0
Principal Repayment                     0         0         0         0         0         0         0         0         0         0
Interest                                0         0         0         0         0         0         0         0         0         0
Ending Balance                          0         0         0         0         0         0         0         0         0         0
Free Cash Before Debt Service       9,582    10,259     5,159     4,124     6,659     7,130     4,744     4,017     6,550     7,014
Bank Loan Principal
                                                 12                                      13                                      14
Beginning Balance                  50,985    45,578    40,943    39,784    38,625    35,921    33,604    31,673    30,128    27,038
Principal Repayment                 5,408     4,635     1,159     1,159     2,704     2,318     1,931     1,545     3,090     3,090
Interest                            1,354     1,211     1,088     1,057     1,026       954       893       841       800       718
Ending Balance                     45,578    40,943    39,784    38,625    35,921    33,604    31,673    30,128    27,038    23,948
                                             13,519                                   7,339                                   9,656
Free Cash Before Debt Service       9,582    10,259     5,159     4,124     6,659     7,130     4,744     4,017     6,550     7,014
Cash After DS and CapEX             2,820     4,413     2,913     1,908     2,929     3,858     1,920     1,631     2,660     3,206
Senior Loan Coverage Ratio            NA        NA        NA        NA        NA        NA        NA        NA        NA        NA
Quarterly Debt Coverage Ratio        1.42      1.75      2.30      1.86      1.79      2.18      1.68      1.68      1.68      1.84
Defined Debt Coverage Ratio          1.39      1.42      1.57      1.67      1.71      1.87      2.01      1.88      1.85      1.81
DSRF - O.Balance                    3,825     5,250     2,261     2,231     3,200     3,287     2,839     2,401     3,232     3,823
   Addition/(Deductions) to DSRF    1,425    (2,989)      (31)      969        87      (448)     (438)      830       591      (855)
   Addition/(Deductions) to DSRF        0         0         0         0         0         0         0         0         0         0
DSRF - C.Balance                    5,250     2,261     2,231     3,200     3,287     2,839     2,401     3,232     3,823     2,969
Financing Fees Reserve
------------------------------------------------------------------------------------------------------------------------------------

11 OUT OF 13                    CLOSING VERSION                      EXHIBIT G-3

                                  PROJECTIONS

----------------------------------------------------------------------------------------------------------------
                                   Q1/2018   Q2/2018   Q3/2018   Q4/2018   Q1/2019   Q2/2019   Q3/2019   Q4/2019
                                   -------   -------   -------   -------   -------   -------   -------   -------

Assumed LIBOR Rates                  1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%     1.25%
Margin                               1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%     1.41%
                                   ------    ------    ------    ------    ------    ------    ------    ------
Total Interest Rate                  2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%     2.66%
Quarterly Repayment                  1.50%     1.50%     2.25%     2.00%     1.50%     1.50%     2.50%     2.75%
Senior Loan Principal
Beginning Balance                       0         0         0         0         0         0         0         0
Principal Repayment                     0         0         0         0         0         0         0         0
Interest                                0         0         0         0         0         0         0         0
Ending Balance                          0         0         0         0         0         0         0         0
Free Cash Before Debt Service       4,765     4,400     6,944     7,384     5,034     4,496     7,045     7,469
Bank Loan Principal
                                                                     15                                      16
Beginning Balance                  23,948    21,630    19,313    15,836    12,746    10,429     8,111     4,249
Principal Repayment                 2,318     2,318     3,476     3,090     2,318     2,318     3,863     4,249
Interest                              636       575       513       421       339       277       215       113
Ending Balance                     21,630    19,313    15,836    12,746    10,429     8,111     4,249         0
                                                                 11,201                                  12,746
Free Cash Before Debt Service       4,765     4,400     6,944     7,364     5,034     4,496     7,045     7,469
Cash After DS and CapEX             1,811     1,508     2,955     3,873     2,378     1,902     2,967     3,108
Senior Loan Coverage Ratio             NA        NA        NA        NA        NA        NA        NA        NA
Quarterly Debt Coverage Ratio        1.61      1.52      1.74      2.10      1.90      1.73      1.73      1.71
Defined Debt Coverage Ratio          1.73      1.71      1.68      1.69      1.76      1.82      1.87      1.87
DSRF - O.Balance                    2,969     2,907     3,676     3,526     2,671     2,610     3,575     4,377
   Addition/(Deductions) to DSRF      (62)      769      (150)     (855)      (62)      966       801    (4,377)
   Addition/(Deductions) to DSRF        0         0         0         0         0         0         0         0
DSRF - C.Balance                    2,907     3,676     3,526     2,671     2,610     3,575     4,377         0
Financing Fees Reserve
----------------------------------------------------------------------------------------------------------------

12 OUT OF 13                    CLOSING VERSION                      EXHIBIT G-3

                                   PROJECTIONS

------------------------------------------------------------------------------------------------------------------------------------
Quarterly Production

               Q1/2004   Q2/2004   Q3/2004   Q4/2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005   Q1/2006   Q2/2006   Q3/2006   Q4/2006
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    150,453   149,037   150,492   149,815   154,553   155,010   164,329   167,848   174,903   173,294   173,162   168,732
Mammoth         62,782    53,533    44,938    62,094    74,481    63,509    53,312    73,665    74,481    63,509    53,312    73,665
Total          213,235   202,571   195,430   211,909   229,034   218,519   217,641   241,513   249,384   236,803   226,474   242,397
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Quarterly Production

               Q1/2007   Q2/2007   Q3/2007   Q4/2007   Q1/2008   Q2/2008   Q3/2008   Q4/2008   Q1/2009   Q2/2009   Q3/2009   Q4/2009
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    169,111   167,549   167,417   163,124   173,687   172,088   171,956   167,555   173,079   171,485   171,353   166,967
Mammoth         74,482    63,509    53,312    73,666    74,482    63,509    53,312    73,666    74,482    63,509    53,312    73,666
Total          243,593   231,058   220,729   236,790   248,169   235,598   225,269   241,221   247,561   234,995   224,666   240,632
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
               Q1/2010   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011   Q3/2011   Q4/2011   Q1/2012   Q2/2012   Q3/2012   Q4/2012
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    172,472   170,882   170,750   166,378   171,864   170,279   170,147   165,790   166,150   164,610   164,478   160,256
Mammoth         74,020    63,116    52,982    73,209    73,563    62,726    52,655    72,757    73,108    62,339    52,329    72,307
Total          246,492   233,998   223,733   239,588   245,427   233,005   222,802   238,547   239,258   226,949   216,808   232,564
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
               Q1/2013   Q2/2013   Q3/2013   Q4/2013   Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015   Q3/2015   Q4/2015
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    170,649   169,074   168,942   164,613   170,041   168,471   168,339   164,024   169,433   167,868   167,736   163,436
Mammoth         72,633    61,933    51,989    71,837    72,161    61,531    51,651    71,371    71,692    61,131    51,316    70,907
Total          243,282   231,007   220,931   236,450   242,202   230,002   219,990   235,395   241,125   228,999   219,052   234,343
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
               Q1/2016   Q2/2016   Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017   Q1/2018   Q2/2018   Q3/2018   Q4/2018
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    168,825   167,265   167,133   162,847   163,188   161,672   161,540   157,388   167,610   166,059   165,927   161,670
Mammoth         71,226    60,734    50,982    70,446    70,763    60,339    50,651    69,988    70,303    59,947    50,322    69,533
Total          240,051   227,998   218,115   233,293   233,951   222,011   212,191   227,376   237,913   226,006   216,249   231,203
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
               Q1/2019   Q2/2019   Q3/2019   Q4/2019   Q1/2020   Q2/2020   Q3/2020   Q4/2020   Q1/2021   Q2/2021   Q3/2021   Q4/2021
               -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber    167,002   165,456   165,324   161,082   166,395   164,853   164,721   160,493   165,787   164,250   164,118   159,905
Mammoth         69,846    59,557    49,994    69,081    69,392    59,170    49,669    68,632         0         0         0         0
Total          236,848   225,013   215,319   230,163   235,787   224,023   214,391   229,125   165,787   164,250   164,118   159,905
------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------
               Q1/2022   Q2/2022   Q3/2022   Q4/2022   Q1/2023   Q2/2023   Q3/2023   Q4/2023
               -------   -------   -------   -------   -------   -------   -------   -------

Energy (mWh)
Heber
Total Heber     71,080    70,292    70,160    68,193    70,764    69,979    69,847    67,887
Mammoth              0         0         0         0         0         0         0         0
Total           71,080    70,292    70,160    68,193    70,764    69,979    69,847    67,887
--------------------------------------------------------------------------------------------

13 OUT OF 13                    CLOSING VERSION                      EXHIBIT G-3

                                                                     EXHIBIT G-4
                                                             to Credit Agreement

                         HAZARDOUS SUBSTANCES DISCLOSURE

The following hazardous substances disclosures are referenced to the individual
sub-sections of Section 4.10 of the Credit Agreement:

Section 4.10.1:

     Schedule 4.26 ("Environmental Matters") to the Acquisition Agreement, Items
     A.5., C.17., C.19.,and D.26.;

     "Phase I Environmental Site Assessment Update, Mammoth-Pacific, L.P.,
     Properties (MPI, MPII and PLESI), Mono County, California," prepared by
     Environmental Management Associates, Inc. and dated November 2003, page 22,
     paragraph 2 (regarding the discharge and use of isobutane), and page 23,
     paragraph 3 (regarding the injection of oil); and

     "Phase I Environmental Site Assessment Update, Heber Geothermal Plant/SIGC
     Geothermal Plant and Associated Geothermal Properties, Imperial County,
     California," prepared by Environmental Management Associates, Inc. and
     dated November 2003, page 20, paragraph 5 (regarding the discharge and use
     of isobutane).

Section 4.10.2

     Schedule 4.26 ("Environmental Matters") to the Acquisition Agreement, Item
C.19.

Section 4.10.3

     Schedule 4.26 ("Environmental Matters") to the Acquisition Agreement, Item
C.19.

                                                                     EXHIBIT G-5
                                                             to Credit Agreement

                     SCHEDULE OF HOLDING COMPANY AGREEMENTS

--------------------------------------------------------------------------------
        GUARANTOR OR NON-GUARANTOR                        AGREEMENT
--------------------------------------------------------------------------------
OrHeber 1 Inc.                              Operation and Maintenance Agreement,
                                            dated as of the Closing Date,
                                            between Heber Field Company, Heber
                                            Geothermal Company, OrHeber 1 Inc.
                                            and Ormat Nevada Inc.

--------------------------------------------------------------------------------
OrHeber 1 Inc., OrHeber 2 Inc., OrHeber 3   Ownership Interest Purchase
Inc., and OrMammoth Inc.                    Agreement, dated as of November 21,
                                            2003, by and among Covanta, the
                                            Sellers, OrHeber 1 Inc., OrMammoth
                                            Inc. and Borrower (as assignee in
                                            interest to OrHeber 2 Inc. and
                                            OrHeber 3 Inc., as applicable,
                                            pursuant to that certain Assignment
                                            Agreement dated as of December 17,
                                            2003 among OrHeber 1 Inc., OrHeber 2
                                            Inc., OrHeber 3 Inc., OrMammoth
                                            Inc., and OrCal Geothermal Inc.)

--------------------------------------------------------------------------------
OrHeber 1 Inc., OrHeber 2 Inc., OrHeber 3   Assignment Agreement dated as of
Inc.,  and OrMammoth Inc.                   December 17, 2003 among OrHeber 1
                                            Inc., OrHeber 2 Inc., OrHeber 3
                                            Inc., OrMammoth Inc., and OrCal
                                            Geothermal Inc.

--------------------------------------------------------------------------------
ORNI 10 LLC                                 Pledge Agreement, dated as of
                                            December 18, 2003, among ORNI 10 LLC
                                            and General Electric Capital
                                            Corporation, as Agent for the
                                            Secured Parties

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

--------------------------------------------------------------------------------
OrHeber 2 Inc. and OrHeber 3 Inc.           Assignment of Partnership Interests,
                                            dated as of December 18, 2003, among
                                            OrHeber 2 Inc., OrHeber 3 Inc., and
                                            General Electric Capital Corporation
--------------------------------------------------------------------------------
OrHeber 1 Inc. and OrMammoth Inc.           Credit Documents to which it is
                                            party
--------------------------------------------------------------------------------

                                                                     EXHIBIT G-6
                                                             to Credit Agreement

                        Material Real Property Interests

A.   Insured Heber Geothermal Leases:

     (i) Geothermal Lease dated February 28, 1964 with Guadalupe Kurupas,
recorded in Book 1193, Page 129;

     (ii) Geothermal Lease dated June 14, 1971 with Fitzhugh Lee Brewer, Jr., a
married man, as his separate property, Donna Hawk, a married woman, as her
separate property and Ted Draper and Helen Draper, husband and wife, recorded in
Book 1312, Page 949;

     (iii) Geothermal Lease dated November 1, 1969 with Chrisman Jackson and
Mary Angela Jackson, recorded in Book 1442, Page 926;

     (iv) Geothermal Lease dated February 20, 1964 with El Toro Land & Cattle,
recorded in Book 1193, Page 74;

     (v) Geothermal Lease dated March 28, 1964 with Lloyd K. Williamson, Robert
C. Williamson and Neva Smith, recorded in Book 1193, Page 203;

     (vi) Geothermal Lease dated February 15, 1977 with Walter J. Holtz,
recorded in Book 1400, Page 1487;

     (vii) Geothermal Lease dated February 17, 1977 with Joseph J. Holtz,
recorded in Book 1401, Page 925;

     (viii) Geothermal Lease dated March 17, 1964 with Helen S. Fugate, recorded
in Book 1193, Page 42;

     (ix) Geothermal Lease dated April 7, 1972 with the Nowlin Partnership,
recorded in Book 1327, Page 157;

     (x) Geothermal Lease with Joseph L. Holtz dated February 17, 1977, recorded
in Book 1401, Page 923;

     (xi) Geothermal Lease dated September 22, 1976 with El Toro Land & Cattle
Co., recorded in Book 1396, Page 218;

     (xii) Geothermal Lease dated May 10, 1969 with Stanley A. Scaroni, Executor
of the Estate of May Scaroni, deceased, recorded in Book 1279, Page 93;

                                                                               1

     (xiii) Geothermal Lease dated October 1, 1972 with Wertheimer Cattle
Company, recorded in Book 1350, Page 756;

     (xiv) Subsurface Geothermal Lease dated May 19, 1987 with the County of
Imperial, recorded in Book 1617, Page 1504;

     (xv) Geothermal Lease dated May 13, 1971 with Mathew J. LaBrucherie and
Jane E. LaBrucherie, as to an undivided 1/2 interest and Robert T. O'Dell and
Phyllis M. O'Dell as to an undivided 1/2 interest recorded in Book 1311, Page
996;

     (xvi) Geothermal Lease dated January 1, 1972 with Walter J. Thomson Co,
Ltd., recorded in Book 1325, Page 1033;

     (xvii) Geothermal Lease dated March 5, 1964 with Edith B. Beyschlag,
Guardian of the Estate of Carol Ann Beyschlag, a minor, recorded in Book 1193,
Page 282;

     (xviii) Geothermal Lease with John D. Jackson and Frances J. Jackson dated
February 16, 1964, recorded in Book 1193, Page 298;

     (xix) Geothermal Lease dated March 11, 1964 with John D. Jackson and
Frances Jones Jackson, recorded in Book 1193, Page 33;

     (xx) Geothermal Lease dated February 16, 1964 with John D. Jackson, as
Conservator for the Estate of Alphia D. Jackson, recorded in Book 1193, Page
106;

     (xxi) Geothermal Lease dated August 11, 1964 with John D. Jackson, recorded
in Book 1196, Page 241.

B.   Insured Heber Surface Leases:

     (i) Drillsite Lease Agreement dated October 18, 1993 with Tom G. Kurupas
and Eleanor B. Kurupas, recorded in Book 1513, Page 925;

     (ii) Drillsite Lease Agreement dated December 31, 1980 with Mario Saikhon
and Dora Saikhon, recorded in Book 1472, Page 673;

     (iii) Drillsite Lease Agreement dated April 1, 1987 with Walter J. Holtz
and Toni F. Holtz, recorded in Book 1608, Page 1252; and

     (iv) Ground Lease dated March 1, 1985 with Timothy J. LaBrucherie and Mary
K. LaBrucherie, recorded in Book 1540, Page 1217.

C.   Insured Heber Easements:

                                                                               2

     (i) Pipeline Easement dated July 16, 1984 with Nonnan E. Wallace and Norma
E. Wallace, Trustee, recorded in Book 1527, Page 171;

     (ii) Pipeline Easement dated July 1, 1984 with John D. Jackson as
Conservator of the Estate of Alphia Jackson Wallen, recorded in Book 1615, Page
683;

     (iii) Pipeline Easement with Chrisman Jackson dated December 18, 1991,
recorded on May 24, 1993 in Book 1733, Page 1218;

     (iv) Pipeline Easement dated September 1, 1984 with Tom G. Kurupas and
Eleanor B. Kurupas, recorded in Book 1554, Page 701;

     (v) Pipeline Easement dated September 1, 1984 with Matthew J. La Brucherie
and Jane E. La Brucherie, recorded in Book 1554, Page 698;

     (vi) Pipeline Easement dated September 1, 1984 with John D. Jackson, Sr.,
Conservator for the Estate of Alphia Jackson Wallen, recorded in Book 1554, Page
695 and Book 1557, Page 1698;

     (vii) Pipeline Easement dated August 4, 1987 with John D. Jackson, Sr.,
Conservator for the Estate of Alphia Jackson Wallen, recorded in Book 1609, Page
1678;

     (viii) Pipeline Easement dated September 1, 1984 with Joseph L. Holtz,
recorded in Book 1556, Page 89;

     (ix) Pipeline Easement dated September 1, 1984 with Walter J. Holtz,
recorded in Book 1557, Page 277;

     (x) Pipeline Easement dated November 19, 1987 with Walter J. Holtz and Toni
F. Holtz, recorded in Book 1598, Page 74;

     (xi) Pipeline Easement dated September 18, 1984 with the County of
Imperial, recorded in Book 1532, Page 46;

     (xii) Pipeline Easement dated April 28, 1987 with the County of Imperial,
recorded in Book 1615, Page 470;

     (xiii) Pipeline Easement dated December 18, 1991, with Heber Geothermal
Company, recorded April 21, 1993 as Instrument No. 93-008852;

     (xiv) Pipeline Easement dated April 21, 1993 with Califia Company and San
Diego Gas and Electric, recorded June 29, 1993 as Instrument No. 93-14792;

     (xv) Pipeline Easement dated August 4, 1993 with Chester Horton, recorded
August 31, 1993 in Book 1743, Page 1043 as Instrument No. 93-20795;

                                                                               3

     (xvi) Construction Easement recorded August 13, 1984 in Book 1527, Page
171.

D.   Insured Heber Fee Title Interests:

     (i) Fee title interest owned by Heber Geothermal Company in the East Half
of Tract 45, Township 16 South, Range 14 East, San Bernardino Meridian,
according the official plat thereof, lying easterly of the east line of the
Southern Pacific Railroad Company right-of-way as the same was located April
17, 1913, as more particularly described in Title Commitment No. 13929-HGC-A1-3
issued by Chicago Title Insurance Company;

     (ii) Fee title interest owned by Heber Field Company in Parcel 2 of Parcel
Map No. M-l106, recorded November 28, 1978 in Book 4 of Parcel Maps at Page 63
of Official Records, as more particularly described in Title Commitment No.
13929-A1-1 issued by Chicago Title Insurance Company;

     (iii) Fee interested owned by Heber Field Company, as more particularly
described in Title Commitment No. 13929-Al-2, 3 issued by Chicago Title
Insurance Company; and

     (iv) Mineral interests owned by Heber Field Company from below 500 feet
below the surface of the property described as Lots 1 to 8, both inclusive in
Block 88, Townsite of Heber, according to Map No. 169 and that portion of Block
D-l of the Amended Map No. 2 of Townsite of Heber, according to Map No. 226, all
as more particularly described in that certain Title Commitment 13929-HTL-MR
issued by Chicago Title Insurance Company.

E.   Insured SIGC Interests:

     (i) Sublease and Geothermal Fluid Agreement dated November 17, 1992 with
Heber Field Company as Lessor and Second Imperial Geothermal Company as Lessee,
recorded November 25, 1992 in Book 1715, Page 1472 as Instrument #92-026085; and

     (ii) Plant Lease dated September 1, 1993 with U.S. Trust company of
California, N.A., not in its individual capacity but solely as owner Trust as
Lessor and Second Imperial Geothermal Company, as Lessee.

F.   Additional Material Heber Real Property Interests:

     (i) Geothermal Lease dated May 31, 1971 with El Toro Land & Cattle Co.,
recorded in Book 1310, Page 1105;

     (ii) Geothermal Lease dated November 15, 1977 with Southern Pacific
Transportation Company, recorded in Book 1410, Page 0534; and

     (iii) Geothermal Lease dated March 1, 1981 with the Bureau of Land
Management, Serial No. CA 9062.

G.   Mammoth Interests:

                                                                               4

     (i) License for Electric Power Plant Site Utilizing Geothermal Resources,
Serial No. CACA 021918, dated July 26, 1989, granted by the United States of
America, as licensor acting through the Department of the Interior Bureau of
Land Management, and held by Mammoth-Pacific, L.P.

     (ii) Lease dated August 31, 1983 between Magma Power Company, as successor
in interest to Magma Energy, Inc., and Holt Geothermal Company, as assigned by
Holt Geothermal Company to Mammoth-Pacific on August 31, 1983, and as amended by
the First Amendment to Geothermal Lease dated April 30, 1987, as further amended
by the Second Amendment to Geothermal Lease dated January 1, 1990 and as further
amended by the Third Amendment to Geothermal Lease dated April 12, 1991.

     (iii) Federal Geothermal Resources Leases granted by the United States of
America, as lessor acting through the Bureau of Land Management, Serial Files
CACA 14408, CACA 11667 and CACA 11667A.

                                                                               5

                                                                       EXHIBIT H
                                                             to Credit Agreement

                           BANKS/PROPORTIONATE SHARES

--------------------------------------------------------------------------------
         BANKS                   LENDING OFFICE                 COMMITMENT
--------------------------------------------------------------------------------
Beal Bank, S.S.B.        6000 Legacy Dr.                       $154,500,000
                         Plano, Texas 75024
--------------------------------------------------------------------------------

                                                                       EXHIBIT I

                             AMMORTIZATION SCHEDULE

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

AMORTIZATION SCHEDULE ASSUMING BOTH MAMMOTH COLLATERAL RELEASE AND LEASE BUYOUT
HAVE NOT OCCURRED

Q1/2004   Q2/2004   Q3/2004   Q4/2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005   Q1/2006   Q2/2006   Q3/2006   Q4/2006
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.00%     0.50%     0.75%     0.75%     0.50%     0.25%     0.75%     1.50%     0.75%     0.50%     1.50%     1.50%

Q1/2007   Q2/2007   Q3/2007   Q4/2007   Q1/2008   Q2/2008   Q3/2008   Q4/2008   Q1/2009   Q2/2009   Q3/2009   Q4/2009
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 1.25%     1.25%     1.50%     1.50%     1.25%     0.75%     1.75%     2.75%     0.40%     0.10%     2.50%     2.50%

Q1/201O   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011   Q3/2011   Q4/2011   Q1/2012   Q2/2012   Q3/2012   Q4/2012
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.50%     0.10%     2.50%     2.90%     0.75%     0.25%     2.75%     3.00%     0.75%     0.40%     2.85%     3.25%

Q1/2013   Q2/2013   Q3/2013   Q4/2013   Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015   Q3/2015   Q4/2015
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 1.00%     0.75%     3.00%     3.50%     1.25%     1.00%     3.50%     4.00%     1.25%     1.00%     3.50%     3.00%

Q1/2016   Q2/2016   Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017   Q1/2018   Q2/2018   03/2018   Q4/2018
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.75%     0.75%     1.75%     1.50%     1.25%     1.00%     2.00%     2.00%     1.50%     1.50%     2.25%     2.00%

Q1/2019   Q2/2019   Q3/2019   Q4/2019
-------   -------   -------   -------

 1.50%     1.50%     2.50%     2.75%

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

1 OUT OF 1                       CLOSING VERSION                       EXHIBIT I

                             AMMORTIZATION SCHEDULE

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

AMORTIZATION SCHEDULE ASSUMING BOTH MAMMOTH COLLATERAL RELEASE AND LEASE BUYOUT
HAVE OCCURRED

Q1/2004   Q2/2004   Q3/2004   Q4/2004   Q1/2005   Q2/2005   Q3/2005   Q4/2005   Q1/2006   Q2/2006   Q3/2006   Q4/2006
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.00%     0.50%     1.00%     1.00%     0.50%     1.00%     1.00%     1.00%     1.00%     1.00%     1.50%     1.50%

Q1/2007   Q2/2007   Q3/2007   Q4/2007   Q1/2008   Q2/2008   Q3/2008   Q4/2008   Q1/2009   Q2/2009   Q3/2009   Q4/2009
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 1.75%    1.50%      2.25%     2.75%     1.00%     0.75%     2.75%     2.25%     0.25%     0.00%     2.00%     2.50%

Q1/2010   Q2/2010   Q3/2010   Q4/2010   Q1/2011   Q2/2011   Q3/2011   Q4/2011   Q1/2012   Q2/2012   Q3/2012   Q4/2012
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.25%     0.00%     2.25%     2.50%     0.50%     0.25%     2.50%     2.75%     0.50%     0.25%     2.50%     2.50%

Q1/2013   Q2/2013   Q3/2013   Q4/2013   Q1/2014   Q2/2014   Q3/2014   Q4/2014   Q1/2015   Q2/2015   Q3/2015   Q4/2015
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 0.75%     0.50%     2.75%     3.00%     1.00%     0.75%     3.00%     3.25%     1.25%     1.00%     3.25%     3.50%

Q1/2016   Q2/2016   Q3/2016   Q4/2016   Q1/2017   Q2/2017   Q3/2017   Q4/2017   Q1/2018   Q2/2018   Q3/2018   Q4/2018
-------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------   -------

 1.50%     1.00%     2.00%     2.25%     1.25%     1.00%     2.00%     2.00%     1.50%     1.25%     2.25%     2.25%

Q1/2019   Q2/2019   Q3/2019   Q4/2019
-------   -------   -------   -------

 1.50%     1.50%     2.50%     2.75%

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

1 OUT OF 1                       CLOSING VERSION                       EXHIBIT I

                                                                       EXHIBIT J
                                                             to Credit Agreement

                         [Letterhead of Non-U.S. Lender]

                          FORM OF NON-BANK CERTIFICATE

                                                   Date: [__________ ___, _____]

Beal Bank, S.S.B.,
as Administrative Agent
6000 Legacy Dr., 4E
Plano, Texas 75024
Attn: William T. Saurenmann
Telephone No.: (469) 467-5510
Telecopy No.: (469) 241-9568

OrCal Geothermal Inc.
980 Greg Street
Sparks, Nevada 89431-6039
Attn: President
Fax: (775)356-9039

          Re: OrCal Geothermal Inc. - Non-Bank Certificate

Ladies and Gentleman:

          This Non-Bank Certificate is delivered to you pursuant to Section
2.4.6 of the Credit Agreement, dated as of December 18, 2003 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among OrCal Geothermal Inc., a corporation organized under
the laws of the State of Delaware ("Borrower"), the financial institutions from
time to time parties thereto, and each of the agents listed on the signature
pages thereto. Unless otherwise defined herein, capitalized terms used herein
have the meanings provided in the Credit Agreement.

          [INSERT NAME OF APPLICABLE BANK] ("Non-U.S. Lender") is providing this
Non-Bank Certificate pursuant to Section 2.4.6 of the Credit Agreement. Non-U.S.
Lender hereby represents and warrants that:

          1. Non-U.S. Lender is the sole record and beneficial owner of the
Loans in respect of which it is providing this Non-Bank Certificate. Non-U.S.
Lender is not a "bank" for purposes of Section 871(h) or 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended (the "Code"). In this regard, Non-U.S.
Lender further represents and warrants that Non-U.S. Lender is not subject to
regulatory or other Legal Requirements as a bank in any jurisdiction;

                                       1

          2. Non-U.S. Lender is not a 10-percent shareholder of Borrower within
the meaning of Section 871(h) or 881(c)(3)(B) of the Code; and

          3. Non-U.S. Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 871(h) or
881(c)(3)(C) of the Code.

          IN WITNESS WHEREOF, the undersigned has duly executed this Non-Bank
Certificate as of the date first written above.

                                        [INSERT NAME OF APPLICABLE BANK]

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        2

                             [Non-Bank Certificate]

                                                                       EXHIBIT K
                                                         to the Credit Agreement

                             INSURANCE REQUIREMENTS

1. Borrower shall, without cost to the Banks, maintain or cause to be maintained
on its behalf in effect at all times the types of insurance required by the
following provisions, in form acceptable to Administrative Agent (for purposes
of this Exhibit K, "Agent"), required hereunder, with insurance companies rated
"A-" or better, with a minimum size rating of "IX," by Best's Insurance Guide
and Key Ratings (or an equivalent rating by another nationally recognized
insurance rating agency of similar standing if Best's Insurance Guide and Key
Ratings is not available) or other insurance companies of recognized
responsibility satisfactory to Agent, the following insurance coverages:

               a. Comprehensive or commercial general liability insurance for
each Project on an "occurrence" policy form or claims-first-made form, including
coverage for premises/operations, explosion, collapse and underground hazards,
products/completed operations, contractual liability for written contracts,
personal injury and sudden and accidental pollution liability for Borrower, with
primary coverage limits of no less than $1,000,000 for injuries or death to one
or more persons or damage to property resulting from any one occurrence and a
$1,000,000 aggregate limit.

          The comprehensive or commercial general liability policy shall also
include a severability of interest clause and a cross liability clause in the
event more than one entity is "named insured" under the liability policy.

               b. Automobile liability insurance, including coverage for
non-owned and hired automobiles (and owned autos should the Borrower acquire any
vehicles) for both bodily injury and property damage and containing appropriate
no-fault insurance provisions or other endorsements in accordance with state
legal requirements, with limits of no less than $1,000,000 per accident with
respect to bodily injury, property damage or death.

               c. Workers compensation insurance and employer's liability (if
Borrower has any employees), with a limit of not less than $1,000,000, and such
other forms of insurance which Borrower is required by law to provide including
statutory benefits and other states' endorsement and USL&H Act coverage and
Jones Act (if any exposure exists), covering loss resulting from injury,
sickness, disability or death of the employees of Borrower.

               d. "All risk" property insurance coverage in the amount not less
than the full replacement value of each Project or a loss limit as agreed to by
the Agent, including a full replacement cost endorsement (no co-insurance) with
no deduction for depreciation, providing, without limitation, (i) coverages
against loss or damage by fire, lightning, windstorm, hail, explosion, riot,
civil commotion, aircraft, vehicles, smoke, other risks from time to time
included

                                                                           DRAFT

under "all risk" or "extended coverage" policies, earthquake, flood (provided,
however, that earthquake coverage may be subject to an annual aggregate limit
of not less than $10,000,000 and flood coverage may be subject to an annual
aggregate limit of not less than $10,000,000), collapse, sinkhole, subsidence
and such other perils as Agent, after consultation with Borrower, may from time
to time require to be insured, with a sublimit of not less than $500,000 for
on-site clean-up required as a result of the occurrence of an insured risk, (ii)
off-site coverage with a per occurrence limit in an amount as is sufficient to
cover off-site equipment, (iii) transit coverage (including ocean cargo where
ocean transit will be required) with a per occurrence limit of not less than an
amount as is sufficient to cover values at risk during transit, and (iv) boiler
and machinery coverage on a "comprehensive" basis including breakdown and
repair.

Borrower shall either (a) maintain or cause to be maintained with respect to
each Project business interruption insurance on an "all risk" basis as set forth
in (d)(i) through (d)(iv) above, in an amount equal to satisfy policy
coinsurance conditions, but not less than the sum of twelve (12) months of gross
revenue. Borrower shall also maintain or cause to be maintained, expediting or
extra expense coverage in an amount not less than $2,000,000. The
policy/policies shall include increased cost of construction coverage and debris
removable subject to a sublimit of $1,000,000.

All such policies may have deductibles of not greater than $100,000 per loss
inclusive of losses to turbine generators and transformers; business
interruption coverage shall have a waiting period of not greater than thirty
(30) days. Earthquake and flood may have deductibles of not greater than 5% of
values subject to a minimum of $250,000.

          e. Earthquake coverage shall include coverage for movement,
earthquakes, shocks, tremors, landslides, mine subsidence, volcanic activity,
sinkhole coverage, or any other earth movement, a11 whether direct or indirect,
approximate or remote or in whole or in part caused by, contributed to or
aggravated by any physical damage insured against by such policy regardless of
any other cause or event that contributes, concurrently or in sequence.

Flood coverage shall include, but not be limited to, coverage for waves, tide or
tidal water, of lakes, ponds, reservoirs, rivers, harbours, streams, or other
bodies of water, whether or not driven by wind.

               f . Umbrella Excess Liability Insurance of not less than
$10,000,000 per occurrence and in the aggregate. Such coverages shall be on a
per occurrence policy form or the claims-first-made form and over and above
coverage provided by the policies described in paragraphs (a), (b) and (c) above
whose limits shall apply toward the $10,000,000 limits set forth in this
section. The umbrella and/or excess policies shall not contain endorsements
which restrict coverages as set forth in paragraphs (a), (b) and (c) above, and
which are provided in the underlying policies. If the policy or policies
provided under this paragraph (f) contain(s) aggregate limits applying to more
the one of the operations of Borrower, and such limits are diminished below
$5,000,000 by any incident, occurrence, claim, settlement or judgment against
such insurance,

                                                                           DRAFT

Borrower shall take immediate steps to restore such aggregate limits or shall
provide other equivalent insurance protection for such aggregate limits.

               g. Such other or additional insurance (as to risks covered,
policy amounts, policy provisions or otherwise) as, under Prudent Utility
Practices, are from time to time insured against for property and facilities
similar in nature, use and location to each Project which Agent may reasonably
require.

          2. All insurance coverage shall be in such form (including the form of
the loss payable clauses) as shall be acceptable to Agent (which acceptance
shall not be unreasonably withheld).

          3. All policies wherein Agent has an insurable interest shall insure
the interests of the Bank as well as Borrower and all policies, with the
exception of workers compensation insurance, and shall name Agent as additional
insured, unless Agent is named as an insured under the policy. All policies
covering real or personal property or business interruption shall name Agent as
loss payee in accordance with Lender's Loss Payable Endorsement 438 BFU or its
equivalent and shall provide that any payment thereunder for any loss or damage
with respect to the Projects shall be made to Agent, except that such policies
may provide that any payments of less than $25,000 made in respect of any single
casualty or other occurrence may be paid solely to Borrower, unless Agent shall
have notified the insurer that an Event of Default has occurred thereunder and
shall be continuing. Loss payments of $25,000 or more will be paid into the Loss
Proceeds Account in accordance with the terms of Section 3.7 of the Depositary
Agreement and any distributions made from such account shall be in accordance
with the terms of the Depositary Agreement. Upon payment and satisfaction of all
of Borrower's obligations under, and termination of, the Credit Documents, Agent
will instruct the insurers to name Borrower or such successor credit provider or
other Person as Borrower shall specify, as loss payee. All policies covering
real or personal property or business interruption will be endorsed to provide
that each policy shall expressly provide that all provisions thereof, except the
limits of liability (which shall be applicable to all insureds as a group) and
liability for premiums (which shall be solely a liability of Borrower) shall
operate in the same manner as if there were a separate policy covering each such
insured. Each policy (except workers compensation) shall waive subrogation
against Agent, any of the Banks or Borrower and shall waive any right of the
insurers to any setoff or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of Borrower or the Banks.
Each such policy shall provide that if any premium or installment is not paid
when due, or if such insurance is to be cancelled, terminated or materially
changed for any reason whatsoever, the insurers (or their representatives) will
promptly notify Borrower and Agent, and any such cancellation, termination or
change shall not be effective until thirty (30) days (except for 10 days for
non-payment of premium) after receipt of such notice by Agent, and that
appropriate certification shall be made to Borrower by each insurer with respect
thereto. Policies required in this Section 3 shall contain an agreement by the
insurer that any loss thereunder that would otherwise be payable to the Agent
will be so payable notwithstanding any action, inaction or

                                                                           DRAFT

breach of representation or warranty by the Borrower or any foreclosure of any
Project or any change in ownership of all or any portion of any Project.

          4. In the event that Borrower fails to respond in a timely and
appropriate manner (as reasonably determined by Agent) to take any steps
necessary or reasonably requested by Agent to collect from any insurers for any
loss covered by any insurance required to be maintained by this Exhibit K, Agent
shall have the right to make all proofs of loss, adjust all claims and/or
receive all or any part of the proceeds of the foregoing insurance policies,
either in its own name or the name of Borrower; provided, however, that Borrower
shall, upon Agent's request and at Borrower's own cost and expense, make all
proofs of loss and take all other steps necessary or reasonably requested by
Agent to collect from insurers for any loss covered by any insurance required to
be obtained by this Exhibit K.

          5. In the event that at any time the insurance as herein provided
shall be reduced or cease to be maintained, then (without limiting the rights of
Agent hereunder in respect of the Event of Default which arises as a result of
such failure) Agent may at its option maintain the insurance required hereby
and, in such event, Borrower shall reimburse Agent upon demand for the cost
thereof together with interest thereon at a rate per annum equal to the Default
Rate, but in no event shall the rate of interest exceed the maximum rate
permitted by law.

          6. In the event any insurance (including the limits or deductibles
thereof) hereby required to be maintained, other than insurance required by law
to be maintained and the property insurance described in paragraph 1(d) above
shall not be available and commercially feasible in the commercial insurance
market, Agent, with the validation of the Insurance Consultant, shall not
unreasonably withhold its agreement to waive such requirement to the extent the
maintenance thereof is not so available; provided, however, that (i) Borrower
shall first request any such waiver in writing, which request shall be
accompanied by written reports prepared by an independent insurance advisor of
recognized national standing certifying that such insurance is not reasonably
available and commercially feasible in the commercial insurance market for
electric generating plants of similar type and capacity (and, in any case where
the required amount is not so available, certifying as to the maximum amount
which is so available) and explaining in detail the basis for such conclusions,
such insurance advisers and the form and substance of such reports to be
reasonably acceptable to Agent; (ii) at any time after the granting of any such
waiver, Agent may request, and Borrower shall furnish to Agent within fifteen
(15) days after such request, supplemental reports reasonably acceptable to
Agent from such insurance advisers updating their prior reports and reaffirming
such conclusion; and (iii) any such waiver shall be effective only so long as
such insurance shall not be available and commercially feasible in the
commercial insurance market, it being understood that the failure of Borrower to
timely furnish any such supplemental report shall be conclusive evidence that
such waiver is no longer effective because such condition no longer exists, but
that such failure is not the only way to establish such non-existence.

                                                                           DRAFT

          7. In the event that any policy is written on a "claims-made" basis
and such policy is not renewed or the retroactive date of such policy is to be
changed, Borrower shall obtain for each such policy or policies the broadest
basic and supplemental extended reporting period coverage or "tail" reasonably
available in the commercial insurance market for each such policy or policies
and shall provide Agent with proof that such basic and supplemental extended
reporting period coverage or "tail" has been obtained.

                                                                       EXHIBIT L
                                                             to Credit Agreement

                        CAPITAL STRUCTURE OF LOAN PARTIES

Sponsor

100% of the equity interests in Sponsor, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by Ormat Technologies.

Borrower

100% of the equity interests in Borrower, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by Sponsor.

OrHeber 1

100% of the equity interests in OrHeber 1, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by Borrower.

HFC

A 50% general partnership interest in HFC is owned by Borrower.

A 50% general partnership interest in HFC is owned by OrHeber 1.

HGC

A 50% general partnership interest in HGC is owned by Borrower.

A 50% general partnership interest in HGC is owned by OrHeber 1.

ORNI

A 100% membership interest in ORNI is owned by OrHeber 1.

OrHeber 2

100% of the equity interests in OrHeber 2, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by ORNI.

OrHeber 3

100% of the equity interests in OrHeber 3, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by ORNI.

SIGC

A 0.002% limited partnership interest in SIGC is owned by OrHeber 3.

A 99.998% general partnership interest in SIGC is owned by OrHeber 2.

OrMammoth

100% of the equity interests in OrMammoth, consisting of 3000 shares of common
stock having a par value of $1.00 per share, is owned by Borrower.

Mammoth Lakes

A 1% limited partnership interest in Mammoth Lakes is owned by OrMammoth.

A 49% general partnership interest in Mammoth Lakes is owned by OrMammoth.

                                        2

                                                                       EXHIBIT M
                                                             to Credit Agreement

                      ORGANIZATIONAL IDENTIFICATION NUMBERS

----------------------------------------------------------------------
                               Organizational      Federal Employee
          Name                     Number        Identification Number
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Heber Field Company                 N/A                94-3148255
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Heber Geothermal Company            N/A                25-1450942
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Mammoth-Pacific, L.P.        CA No. 9000300010         95-4250959
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OrCal Geothermal Inc.          DE No. 3726051          20-0382842
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OrHeber 1 Inc.                 DE No. 3726052          20-0382789
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OrHeber 2 Inc.                 DE No. 3726038          20-0382911
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OrHeber 3 Inc.                 DE No. 3726037          20-0382965
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OrMammoth Inc.                 DE No. 3706043          20-0382999
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Ormat Nevada Inc.              DE No. 2278574          88-0278853
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ORNI 10 LLC                    DE No. 3554313             N/A
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Second Imperial Geothermal    CA No. 232900002         13-3844555
   Company, L.P.
----------------------------------------------------------------------

                                                                       EXHIBIT N
                                                             to Credit Agreement

                        OUTSTANDING NON-ROYALTY CLAIMANTS

Arradondo, Cynthia Holtz
Bellah, Bernadette
Boxley, Julia E.
Croisette, Catherine
Davila, Janet Patricia
Hebert, Mark
Hebert, Paul Martin
Holtz, Andrew Jr.
Holtz, Brian
Holtz, Charles
Holtz, Dennis Lee
Holtz, Edward
Holtz, Joseph
Holtz, Steve
Holtz, W. & T. (re: Uncle Joe Lease)
Holtz, W. & T. (re: Magma Lease)
Knirk, Christine
Oldham, Barbara
Infinity Thomson
Quasar Thomson
Victor Thomson
Walter Thomson, Trustee of W.J. and H.O. Thomson 1978 Trust
El Toro Land & Cattle Co.
Walter and Toni Holtz
L.F. Hulse Trust by Bank of America, Trustee
Chrisman B. Jackson
Tom G. and Eleanor B. Kurupas
Timothy J. LaBrucharie
Beyschiag Real Property Trust
by Carol Beyschiag Love, Trustee
Love Family Trust by Russell R. Love, Trustee
Maltz, Marie Murdy (Sotelo)
Murdy, Catherine Ann
Murdy, Susan
Saikhon Family Trust by Dean Saikhon, Trustee
Scaroni Properties, Inc.
Larry and Marcella Smith
Helen Pugette Trust by Rowan Sokolowski, Trustee
(now Paul Marsh Pitman)
Rowan Sokolowski

                                       N-1

Victor Thomson
Walter J. & Holly O. Thomson 1978 Trust
by Walter J. Thomson, Trustee
Saikhon Family Trust (Subsidence)
Scaroni Properties, Inc. (Spray drift from cooling tower)

                                       N-2

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