Document:

Exhibit 4.3

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                            ORMAT TECHNOLOGIES, INC.

                                       and

                   AMERICAN STOCK TRANSFER & TRUST COMPANY, AS

                                  RIGHTS AGENT

                                RIGHTS AGREEMENT

                          Dated as of [       ], 2004

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                                TABLE OF CONTENTS

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Section 1.       Certain Definitions..............................................................................2

Section 2.       Appointment of Rights Agent......................................................................8

Section 3.       Issue of Right Certificates......................................................................8

Section 4.       Form of Right Certificates......................................................................13

Section 5.       Countersignature and Registration...............................................................13

Section 6.       Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
                 Lost or Stolen Right Certificates...............................................................14

Section 7.       Exercise of Rights; Purchase Price; Expiration Date of Rights...................................16

Section 8.       Cancellation and Destruction of Right Certificates..............................................18

Section 9.       Availability of Preferred Shares................................................................19

Section 10.      Preferred Shares Record Date....................................................................20

Section 11.      Adjustment of Purchase Price, Number of Shares or Number of Rights..............................20

Section 12.      Certificate of Adjusted Purchase Price or Number of Shares......................................35

Section 13.      Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................35

Section 14.      Fractional Rights and Fractional Shares.........................................................37

Section 15.      Rights of Action................................................................................40

Section 16.      Agreement of Right Holders......................................................................40

Section 17.      Right Holder Not Deemed a Stockholder...........................................................41

Section 18.      Concerning the Rights Agent.....................................................................42

Section 19.      Merger or Consolidation or Change of Name of Rights Agent.......................................43

Section 20.      Duties of Rights Agent..........................................................................44

Section 21.      Change of Rights Agent..........................................................................48

Section 22.      Issuance of New Right Certificates..............................................................50

Section 23.      Redemption......................................................................................52

Section 24.      Exchange........................................................................................53

Section 25.      Notice of Certain Events........................................................................56

Section 26.      Notices.........................................................................................57

Section 27.      Supplements and Amendments......................................................................58

Section 28.      Successors......................................................................................60

Section 29.      Benefits of this Agreement......................................................................60

Section 30.      Severability....................................................................................60

Section 31.      Governing Law...................................................................................60

Section 32.      Counterparts....................................................................................60

Section 33.      Descriptive Headings............................................................................61

Exhibit A - Form of Right Certificate

                                       ii

                                RIGHTS AGREEMENT

         Agreement, dated as of [        ], 2004, between Ormat Technologies,
Inc., a Delaware corporation (the "Corporation"), and, a American Stock Transfer
& Trust Company, a New York banking corporation, as Rights Agent (the "Rights
Agent").

         The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Corporation outstanding as of the
effective date of this Agreement (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share of the Corporation that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to shares of Common Stock of the
Corporation that shall become outstanding after the Distribution Date and prior
to the earlier of the Redemption Date and the Final Expiration Date in
accordance with the provisions of Section 22 hereof.

         Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

         Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

         (a) "Acquiring Person" shall mean any Person (as such term is
    hereinafter defined) who or which on or after the Record Date, together with
    all Affiliates and Associates (as such terms are hereinafter defined) of
    such Person, shall be the Beneficial Owner (as such term is hereinafter
    defined) of 15% or more of the Common Stock then outstanding, but shall not
    include the Corporation, any Subsidiary (as such term is hereinafter
    defined) of the Corporation, any employee benefit plan of the Corporation,
    Ormat Industries, or any Subsidiary of the Corporation, or any entity
    holding Common Stock for or pursuant to the terms of any such plan.
    Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
    as the result of an acquisition of shares of Common Stock by the
    Corporation, which, by reducing the number of shares of Common Stock
    outstanding, increases the proportionate number of the shares of Common
    Stock beneficially owned by such Person to 15% or more of the Common Stock
    then outstanding; provided, however, that if a Person shall become the
    Beneficial Owner of 15% or more of the Common Stock then outstanding by
    reason of share purchases by the Corporation and shall, after such share
    purchases by the Corporation, become the Beneficial Owner of any additional
    shares of Common Stock (other than an acquisition that does not directly or
    indirectly increase the proportionate share of the Common Stock then
    outstanding beneficially owned by

                                       2

    such Person), then such Person shall be deemed to be an "Acquiring Person".
    Notwithstanding the foregoing, if the Board of Directors of the Corporation
    determines in good faith that a Person who would otherwise be an "Acquiring
    Person", as defined pursuant to the foregoing provisions of this paragraph
    (a), has become such inadvertently, and such Person divests as promptly as
    practicable a sufficient number of shares of Common Stock so that such
    Person would no longer be an "Acquiring Person", as defined pursuant to the
    foregoing provisions of this paragraph (a), then such Person shall not be
    deemed to be an "Acquiring Person" for any purposes of this Agreement.
    Notwithstanding the foregoing provisions of this paragraph (a), Ormat
    Industries shall not be deemed to be an Acquiring Person as a result of its
    ownership of capital stock of the Corporation.

         (b) "Affiliate" and "Associate" shall have the respective meanings
    ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
    under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
    as in effect on the date of this Agreement.

         (c) A Person shall be deemed the "Beneficial Owner" of and shall be
    deemed to have "Beneficial Ownership" of and to "beneficially own" any
    securities:

              (i) which such Person or any of such Person's Affiliates or
         Associates beneficially owns, directly or indirectly;

                                       3

              (ii) which such Person or any of such Person's Affiliates or
         Associates has (A) the right to acquire (whether such right is
         exercisable immediately or only after the passage of time) pursuant to
         any agreement, arrangement or understanding (other than customary
         agreements with and between underwriters and selling group members with
         respect to a bona fide public offering of securities), or upon the
         exercise of conversion rights, exchange rights, rights (other than the
         Rights), warrants or options, or otherwise; provided, however, that a
         Person shall not be deemed the Beneficial Owner of, or to beneficially
         own, securities tendered pursuant to a tender or exchange offer made by
         or on behalf of such Person or any of such Person's Affiliates or
         Associates until such tendered securities are accepted for purchase or
         exchange; or (B) the right to vote pursuant to any agreement,
         arrangement or understanding; provided, however, that a Person shall
         not be deemed the Beneficial Owner of, or to beneficially own, any
         security if the agreement, arrangement or understanding to vote such
         security (1) arises solely from a revocable proxy or consent given to
         such Person in response to a public proxy or consent solicitation made
         pursuant to, and in accordance with, the applicable rules and
         regulations promulgated under the Exchange Act and (2) is not also then
         reportable on Schedule 13D under the Exchange Act (or any comparable or
         successor report); or

                                       4

              (iii) which are beneficially owned, directly or indirectly, by any
         other Person with which such Person or any of such Person's Affiliates
         or Associates has any agreement, arrangement or understanding (other
         than customary agreements with and between underwriters and selling
         group members with respect to a bona fide public offering of
         securities) for the purpose of acquiring, holding, voting (except to
         the extent contemplated by the proviso to Section l(c)(ii)(B)) or
         disposing of any securities of the Corporation.

    Notwithstanding anything in this definition of Beneficial Ownership to the
    contrary, the phrase "then outstanding", when used with reference to a
    Person's Beneficial Ownership of securities of the Corporation, shall mean
    the number of such securities then issued and outstanding together with the
    number of such securities not then actually issued and outstanding which
    such Person would be deemed to own beneficially hereunder.

         (d) "Business Day" shall mean any day other than a Saturday, a Sunday,
    or a day on which banking institutions in the State of New York are
    authorized or obligated by law or executive order to close.

         (e) "close of business" on any given date shall mean 5:00 P.M., New
    York City time, on such date; provided, however, that if such date is not a
    Business Day it shall mean 5:00 P.M., New York City time, on the next
    succeeding Business Day.

                                       5

         (f) "Common Shares" when used with reference to any Person other than
    the Corporation shall mean the capital stock (or equity interest) with the
    greatest voting power of such other Person or, if such other Person is a
    Subsidiary of another Person, the Person or Persons which ultimately control
    such first-mentioned Person.

         (g) "Common Stock" shall mean the Common Stock, par value $.001 per
    share, of the Corporation.

         (h) "current per share market price" shall have the meaning set forth
    in Section 11(d)(i) hereof.

         (i) "Designated Office" shall have the meaning set forth in Section 5
    hereof.

         (j) "Distribution Date" shall have the meaning set forth in Section
    3(a) hereof.

         (k) "equivalent preferred shares" shall have the meaning set forth in
    Section 11(b) hereof.

         (l) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
    hereof.

         (m) "Final Expiration Date" shall have the meaning set forth in Section
    7(b) hereof.

         (n) "Nasdaq" shall have the meaning set forth in Section 11(d)(i)
    hereof.

                                       6

         (o) "Ormat Industries" shall mean Ormat Industries Ltd., an Israeli
    corporation and corporate parent of the Corporation.

         (p) "Person" shall mean any individual, firm, corporation or other
    entity, and shall include any successor (by merger or otherwise) of such
    entity.

         (q) "Preferred Shares" shall mean shares of Series A Junior
    Participating Preferred Stock, par value $.001 per share, of the Corporation
    having the rights and preferences set forth in the Restated Certificate of
    Incorporation of the Corporation.

         (r) "Purchase Price" shall have the meaning set forth in Section 7(a)
    hereof.

         (s) "Record Date" shall have the meaning set forth in the second
    paragraph of the Preamble hereof.

         (t) "Redemption Date" shall have the meaning set forth in Section 7(b)
    hereof.

         (u) "Redemption Price" shall have the meaning set forth in Section
    23(a) hereof.

         (v) "Right" shall have the meaning set forth in the second paragraph of
    the Preamble hereof.

         (w) "Right Certificate" shall have the meaning set forth in Section
    3(a) hereof.

         (x) "Security" shall have the meaning set forth in Section 11(d)(i)
    hereof.

                                       7

         (y) "Shares Acquisition Date" shall mean the first date of public
    announcement by the Corporation or an Acquiring Person that an Acquiring
    Person has become such.

         (z) "Subsidiary" of any Person shall mean any corporation or other
    entity of which a majority of the voting power of the voting equity
    securities or equity interest is owned, directly or indirectly, by such
    Person.

         (aa) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
    hereof.

         Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable, for the acts or omissions of any
co-Rights Agent.

         Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day
(or such later date as may be determined by action of the Board of Directors of
the Corporation prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of any Subsidiary of the Corporation or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan) of, or of

                                       8

the first public announcement of the intention of any Person (other than the
Corporation, any Subsidiary of the Corporation, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation or any entity holding Common
Shares for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming an
Acquiring Person, the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be attached to (subject to the
provisions of Section 3(b) hereof) the shares of Common Stock (whether in
book-entry, uncertificated or certificated form) issued and outstanding and the
Rights will be owned by the registered holders of the shares of Common Stock and
will not be evidenced by separate Right Certificates, and (y) any transfer of
shares of Common Stock (or any interest therein, including the creation of a
security interest) will also effect a transfer of the associated Rights (or the
equivalent interest therein) and neither the Rights nor any interest therein may
be transferred otherwise than by transfer of the associated shares of Common
Stock (or the equivalent interest therein). As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the Rights Agent
will countersign, and the Corporation will send or cause to be sent (and the
Rights Agent will, if requested and provided with a list of the relevant holders
of Common Stock by the Corporation, send) by first-class, insured,
postage-prepaid mail, to each record holder of shares of Common Stock as of the
close of business on the Distribution Date, at the address of such holder shown
on the records of the Corporation, a Right Certificate, in substantially the
form of Exhibit A hereto (a

                                       9

"Right Certificate"), evidencing one Right for each share of Common Stock so
held, subject, in the case of shares of Common Stock held in uncertificated form
on the Distribution Date, to the rights provided by law to a registered pledgee
whose security interest has been duly registered with the Corporation. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

         (b) Until the earliest of the Distribution Date, the Redemption Date or
    the Final Expiration Date, certificates for shares of Common Stock shall
    have impressed on, printed on, written on or otherwise affixed to them
    substantially the following legend:

    This certificate also evidences and entitles the holder hereof to certain
    Rights as set forth (and as defined) in a Rights Agreement between Ormat
    Technologies, Inc. and American Stock Transfer & Trust Company, as Rights
    Agent, dated as of [       ], 2004, as it may be amended from time to time
    (the "Rights Agreement"), the terms of which are hereby incorporated herein
    by reference and a copy of which is on file at the principal executive
    offices of Ormat Technologies, Inc. Under certain circumstances, as set
    forth in the Rights Agreement, such Rights will be evidenced by separate
    certificates and will no longer be evidenced by this certificate. Ormat
    Technologies, Inc. will mail to the holder of this certificate a copy of the
    Rights Agreement without charge after receipt of a written request therefor.
    Under certain circumstances, as set forth in the Rights Agreement, Rights
    beneficially owned by any Person (as defined in the Rights Agreement) who
    becomes an Acquiring Person (as defined in the Rights Agreement) may become
    void.

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of

                                       10

any such certificate shall also constitute the transfer of the Rights associated
with the shares of Common Stock represented thereby.

         (c) Until the earliest of the Distribution Date, the Redemption Date or
    the Final Expiration Date, confirmations and account statements sent to
    holders of shares of Common Stock in book-entry form and initial transaction
    statements relating to the registration, pledge or release from pledge of
    shares of Common Stock in uncertificated form shall have impressed on,
    printed on, written on or otherwise affixed to them substantially the
    following legend:

    The shares of Common Stock, par value $.001 per share, of Ormat
    Technologies, Inc. to which this statement relates also evidence and entitle
    the holder thereof to certain Rights as set forth (and as defined) in a
    Rights Agreement between Ormat Technologies, Inc. and American Stock
    Transfer & Trust Company, as Rights Agent, dated as of [      ], 2004 (the
    "Rights Agreement"), the terms of which are hereby incorporated herein by
    reference and a copy of which is on file at the principal executive offices
    of Ormat Technologies, Inc. Under certain circumstances, as set forth in the
    Rights Agreement, such Rights will be evidenced by separate certificates and
    will no longer be evidenced by the shares to which this statement relates.
    Ormat Technologies, Inc. will mail to the holder of the shares to which this
    statement relates and any registered pledgee of uncertificated shares a copy
    of the Rights Agreement without charge after receipt of a written request
    therefor. Under certain circumstances, as set forth in the Rights Agreement,
    Rights beneficially owned by any Person (as defined in the Rights Agreement)
    who becomes an Acquiring Person (as defined in the Rights Agreement) may
    become void.

With respect to shares of Common Stock in book-entry form for which there has
been sent a confirmation or account statement and shares of Common Stock in
uncertificated form for which there has been sent an initial transaction
statement containing the foregoing legend, until the earliest of the
Distribution Date, the Redemption Date or the

                                       11

Final Expiration Date, the Rights associated with such Common Shares shall be
evidenced by such Common Shares alone, and the registration of transfer or
pledge, or the release from pledge, of any such Common Shares shall also
constitute the registration of transfer or pledge, or the release from pledge,
as the case may be, of the Rights associated with such Common Shares.

         (d) In the event that the Corporation purchases or acquires any shares
    of Common Stock after the Record Date but prior to the Distribution Date,
    any Rights associated with such Common Shares shall be deemed canceled and
    retired so that the Corporation shall not be entitled to exercise any Rights
    associated with the shares of Common Stock which are no longer outstanding.

                                       12

         Section 4. Form of Right Certificates. Subject to the provisions of
Section 22 hereof, the Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and which do not affect
the rights, duties or responsibilities of the Rights Agent, and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or the National Association of Securities
Dealers, Inc., or to conform to usage.

         Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Corporation by the Chairman of the Board or a
Vice Chairman of the Board, if any, or the President or a Vice President and by
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, shall have affixed thereto the Corporation's seal or a facsimile
thereof, and shall be attested by the Secretary or an Assistant Secretary of the
Corporation, either manually or by facsimile signature. The Right Certificates
shall be countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless countersigned. In case
any officer of the Corporation who shall have signed any of the Right
Certificates shall cease to be such officer of the Corporation before
countersignature by the Rights Agent

                                       13

and issuance and delivery by the Corporation, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Corporation with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the
Corporation; and any Right Certificate may be signed on behalf of the
Corporation by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Corporation to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.

         Following the Distribution Date and receipt by the Rights Agent of a
list of the relevant holders of Common Stock as of the Distribution Date
provided by the Corporation, the Rights Agent will keep or cause to be kept, at
an office designated by the Rights Agent for such purpose (the "Designated
Office"), books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the Right Certificates.

         Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right

                                       14

Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder of the Rights evidenced
thereby to purchase a like number of one one-hundredths of a Preferred Share as
the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the Designated Office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Corporation may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. The Rights Agent is not
responsible or obligated to inquire as to whether the Corporation required that
any such taxes or charges be paid or whether the payment of any such taxes or
charges has been made.

         Upon receipt by the Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Corporation's request, reimbursement
to the Corporation and the

                                       15

Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Corporation will make and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

         Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Each Right (other than Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) shall initially entitle the registered holder thereof to purchase one
one-hundredth of a Preferred Share, subject to adjustment from time to time as
provided in Section 11 or 13 hereof. The purchase price (the "Purchase Price")
for each one one-hundredth of a Preferred Share purchasable pursuant to the
exercise of a Right shall be $[___], and shall be subject to adjustment from
time to time as provided in Section 11 or 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.

         (b) The registered holder of any Right Certificate may exercise the
    Rights evidenced thereby (except as otherwise provided herein) in whole or
    in part at any time after the Distribution Date upon surrender of the Right
    Certificate evidencing such Rights, with the form of election to purchase on
    the reverse side thereof duly and properly executed, to the Rights Agent at
    the Designated Office of the Rights Agent, together with payment of the
    Purchase Price for each one one-hundredth of a Preferred Share as to which
    the Rights are exercised, at or prior to the earliest of (i) the close of
    business on the tenth anniversary of the Record Date (the "Final

                                       16

    Expiration Date"), (ii) the time at which the Rights are redeemed as
    provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
    which such Rights are exchanged as provided in Section 24 hereof.

         (c) Upon receipt of a Right Certificate representing exercisable
    Rights, with the form of election to purchase duly executed and properly
    completed, accompanied by payment of the Purchase Price for the shares to be
    purchased and an amount equal to any applicable tax or charge required to be
    paid by the holder of the Rights evidenced by such Right Certificate in
    accordance with Section 9 hereof by certified check, cashier's check or
    money order payable to the order of the Corporation, the Rights Agent shall
    thereupon promptly (i) (A) requisition from any transfer agent of the
    Preferred Shares certificates for the number of Preferred Shares to be
    purchased and the Corporation hereby irrevocably authorizes its transfer
    agent to comply with all such requests, or (B) requisition from the
    depositary agent depositary receipts representing such number of one
    one-hundredths of a Preferred Share as are to be purchased (in which case
    certificates for the Preferred Shares represented by such receipts shall be
    deposited by the transfer agent for the Preferred Shares with the depositary
    agent) and the Corporation hereby directs the depositary agent to comply
    with such request, (ii) when appropriate, requisition from the Corporation
    the amount of cash to be paid in lieu of issuance of fractional shares in
    accordance with Section 14 hereof, (iii) after receipt of such certificates
    or depositary receipts, cause the

                                       17

    same to be delivered to or upon the order of the registered holder of the
    Rights evidenced by such Right Certificate, registered in such name or names
    as may be designated by such holder and (iv) when appropriate, after
    receipt, deliver such cash to or upon the order of the registered holder of
    the Rights evidenced by such Right Certificate.

         (d) In case the registered holder of the Rights evidenced by any Right
    Certificate shall exercise less than all the Rights evidenced thereby, a new
    Right Certificate evidencing Rights equivalent to the Rights remaining
    unexercised shall be issued by the Rights Agent to the registered holder of
    such Rights or to his duly authorized assigns, subject to the provisions of
    Section 6 and Section 14 hereof.

         Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the or Corporation to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Corporation
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Corporation, or shall, at the written request
of the Corporation,

                                       18

destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Corporation.

         Section 9. Availability of Preferred Shares. The Corporation covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 hereof.
The Corporation covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.

         The Corporation further covenants and agrees that it will pay when due
and payable any and all taxes and charges which may be payable in respect of the
issuance or delivery of the Rights or the Right Certificates or of any Preferred
Shares upon the exercise of Rights. The Corporation shall not, however, be
required to pay any such tax or charge which may be payable in respect of any
transfer or delivery of Rights or Right Certificates to a person other than, or
the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Rights evidenced by Right Certificates surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax and charge shall have been paid (any
such tax and charge

                                       19

being payable by the holder of such Rights at the time of surrender of the
related Right Certificates) or until it has been established to the
Corporation's reasonable satisfaction that no such tax or charge is due.

         Section 10. Preferred Shares Record Date. Each Person in whose name any
Preferred Shares are issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such Preferred Shares on, and
the date of issuance of such Preferred Shares and the date of any certificate
for such Preferred Shares shall be, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or charges pursuant to Section 9) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Shares transfer books of the Corporation are closed, such Person shall
be deemed to have become the record holder of such shares on, and the date of
issuance of such Preferred Shares and the date of any such certificate shall be,
the next succeeding Business Day on which the Preferred Shares transfer books of
the Corporation are open. Prior to the exercise of any Rights, the holder
thereof shall not be entitled to any rights of a holder of Preferred Shares for
which the Rights shall be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Corporation, except as provided herein.

         Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each Right

                                       20

and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

         (a) (i) In the event the Corporation shall at any time after the Record
    Date (A) declare a dividend on the Preferred Shares payable in Preferred
    Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
    outstanding Preferred Shares into a smaller number of Preferred Shares or
    (D) issue any shares of its capital stock in a reclassification of the
    Preferred Shares (including any such reclassification in connection with a
    consolidation or merger in which the Corporation is the continuing or
    surviving corporation), except as otherwise provided in this Section 11(a),
    the Purchase Price in effect at the time of the record date for such
    dividend or of the effective date of such subdivision, combination or
    reclassification, and the number and kind of shares of capital stock
    issuable on such date, shall be proportionately adjusted so that the holder
    of any Right exercised after such time shall be entitled to receive the
    aggregate number and kind of shares of capital stock which, if such Right
    had been exercised immediately prior to such date and at a time when the
    Preferred Shares transfer books of the Corporation were open, such holder
    would have owned upon such exercise and been entitled to receive by virtue
    of such dividend, subdivision, combination or reclassification; provided,
    however, that in no event shall the consideration to be paid upon the
    exercise of one Right be less than the aggregate

                                       21

    par value of the shares of capital stock of the Corporation issuable upon
    exercise of one Right.

              (ii) (A) Subject to clause (B) of this subparagraph (ii) and
         Section 24 of this Agreement, in the event any Person becomes an
         Acquiring Person, each registered holder of a Right shall thereafter
         have a right to receive, upon exercise thereof at a price equal to the
         then current Purchase Price multiplied by the number of one
         one-hundredths of a Preferred Share for which a Right is then
         exercisable, in accordance with the terms of this Agreement and in lieu
         of such number of Preferred Shares for which a Right is then
         exercisable, such number of shares of Common Stock as shall equal the
         result obtained by (x) multiplying the then current Purchase Price by
         the number of one one-hundredths of a Preferred Share for which a Right
         is then exercisable and dividing that product by (y) 50% of the then
         current per share market price of the shares of Common Stock
         (determined pursuant to Section 11(d) hereof) on the date of the
         occurrence of such event. In the event that any Person shall become an
         Acquiring Person and the Rights shall then be outstanding, the
         Corporation shall not take any action which would eliminate or diminish
         the benefits intended to be afforded by the Rights.

                   (B) From and after the occurrence of the event described in
              clause (A) of this subsection (ii), any Rights that are or were
              acquired or

                                       22

              beneficially owned by any Acquiring Person (or any Associate or
              Affiliate of such Acquiring Person) shall be void and any holder
              of such Rights shall thereafter have no right to exercise such
              Rights under any provision of this Agreement. No Right Certificate
              shall be issued pursuant to Section 3 hereof that evidences Rights
              beneficially owned by an Acquiring Person (or any Associate or
              Affiliate of such Acquiring Person) whose Rights would be void
              pursuant to the preceding sentence and any Right Certificate
              evidencing Rights beneficially owned by any such Acquiring Person
              (or any Associate or Affiliate of such Acquiring Person) shall be
              void. No Right Certificate shall be issued at any time upon the
              transfer of any Rights to an Acquiring Person (or any Associate or
              Affiliate of such Acquiring Person) whose Rights would be void
              pursuant to the second preceding sentence or to any nominee of
              such Acquiring Person, Associate or Affiliate; and any Right
              Certificate delivered to the Rights Agent for transfer to an
              Acquiring Person (or any Associate or Affiliate of such Acquiring
              Person) whose Rights would be void pursuant to the second
              preceding sentence shall be canceled.

              (iii) In the event that there shall not be sufficient shares of
         Common Stock issued but not outstanding or authorized but unissued to
         permit the exercise in full of the Rights in accordance with the
         foregoing

                                       23

         subparagraph (ii), the Corporation shall take all such action as may be
         necessary to authorize additional shares of Common Stock for issuance
         upon exercise of the Rights. In the event the Corporation shall, after
         good faith effort, be unable to take all such action as may be
         necessary to authorize such additional shares of Common Stock, the
         Corporation shall substitute, for each share of Common Stock that would
         otherwise be issuable upon exercise of a Right, a number of Preferred
         Shares or fraction thereof such that the current per share market price
         of one Preferred Share multiplied by such number or fraction is equal
         to the current per share market price of one share of Common Stock as
         of the date of issuance of such Preferred Shares or fraction thereof.

         (b) In case the Corporation shall fix a record date for the issuance of
    rights, options or warrants to all holders of Preferred Shares entitling
    them (for a period expiring within 45 calendar days after such record date)
    to subscribe for or purchase Preferred Shares (or shares having the same
    rights, privileges and preferences as the Preferred Shares ("equivalent
    preferred shares")) or securities convertible into Preferred Shares or
    equivalent preferred shares at a price per Preferred Share or equivalent
    preferred share (or having a conversion price per share, if a security
    convertible into Preferred Shares or equivalent preferred shares) less than
    the then current per share market price of the Preferred Shares on such
    record date, the Purchase Price to be in effect after such record date shall
    be

                                       24

    determined by multiplying the Purchase Price in effect immediately prior to
    such record date by a fraction, the numerator of which shall be the number
    of Preferred Shares outstanding on such record date plus the number of
    Preferred Shares which the aggregate offering price of the total number of
    Preferred Shares and/or equivalent preferred shares so to be offered (and/or
    the aggregate initial conversion price of the convertible securities so to
    be offered) would purchase at such current market price and the denominator
    of which shall be the number of Preferred Shares outstanding on such record
    date plus the number of additional Preferred Shares and/or equivalent
    preferred shares to be offered for subscription or purchase (or into which
    the convertible securities so to be offered are initially convertible);
    provided, however, that in no event shall the consideration to be paid upon
    the exercise of one Right be less than the aggregate par value of the shares
    of capital stock of the Corporation issuable upon exercise of one Right. In
    case such subscription price may be paid in a consideration part or all of
    which shall be in a form other than cash, the value of such consideration
    shall be as determined in good faith by the Board of Directors of the
    Corporation, whose determination shall be described in a statement filed
    with the Rights Agent and shall be binding on the Rights Agent and the
    holders of the Rights. Preferred Shares owned by or held for the account of
    the Corporation shall not be deemed outstanding for the purpose of any such
    computation. Such adjustment shall be made successively whenever such a
    record date is fixed; and in the event that such rights, options or

                                       25

    warrants are not so issued, the Purchase Price shall be adjusted to be the
    Purchase Price which would then be in effect if such record date had not
    been fixed.

         (c) In case the Corporation shall fix a record date for the making of a
    distribution to all holders of the Preferred Shares (including any such
    distribution made in connection with a consolidation or merger in which the
    Corporation is the continuing or surviving corporation) of evidences of
    indebtedness or assets (other than a regular quarterly cash dividend or a
    dividend payable in Preferred Shares) or subscription rights or warrants
    (excluding those referred to in Section 11(b) hereof), the Purchase Price to
    be in effect after such record date shall be determined by multiplying the
    Purchase Price in effect immediately prior to such record date by a
    fraction, the numerator of which shall be the then current per share market
    price of the Preferred Shares on such record date, less the fair market
    value (as determined in good faith by the Board of Directors of the
    Corporation, whose determination shall be described in a statement filed
    with the Rights Agent and shall be binding on the Rights Agent and the
    holders of the Rights) of the portion of the assets or evidences of
    indebtedness so to be distributed or of such subscription rights or warrants
    applicable to one Preferred Share and the denominator of which shall be such
    current per share market price of the Preferred Shares; provided, however,
    that in no event shall the consideration to be paid upon the exercise of one
    Right be less than the aggregate par value of the shares of capital stock of
    the Corporation issuable upon exercise

                                       26

    of one Right. Such adjustments shall be made successively whenever such a
    record date is fixed; and in the event that such distribution is not so
    made, the Purchase Price shall be adjusted to be the Purchase Price which
    would then be in effect if such record date had not been fixed.

         (d) (i) For the purpose of any computation hereunder, the "current per
    share market price" of any security (a "Security" for the purpose of this
    Section 11(d)(i)) on any date shall be deemed to be the average of the daily
    closing prices per share of such Security for the 30 consecutive Trading
    Days (as such term is hereinafter defined) immediately prior to but not
    including such date; provided, however, that in the event that the current
    per share market price of the Security is determined during a period
    following the announcement by the issuer of such Security of (A) a dividend
    or distribution on such Security payable in shares of such Security or
    securities convertible into such shares, or (B) any subdivision, combination
    or reclassification of such Security and prior to the expiration of 30
    Trading Days after but not including the ex-dividend date for such dividend
    or distribution, or the record date for such subdivision, combination or
    reclassification, then, and in each such case, the current per share market
    price of the Security shall be appropriately adjusted to reflect the current
    market price per share equivalent of such Security; and provided, further,
    that in the event that the current per share market price of the shares of
    Common Stock is determined as of a date prior to the expiration of 30
    Trading Days following the Record Date, the

                                       27

    current per share market price of the shares of Common Stock shall be deemed
    to be the average of the daily closing prices per share of Common Stock for
    the period of Trading Days commencing with the Record Date and ending
    immediately prior to such date. The closing price of a Security for each day
    shall be the last sale price, regular way, or, in case no such sale takes
    place on such day, the average of the closing bid and asked prices, regular
    way, in either case as reported in the principal consolidated transaction
    reporting system with respect to securities listed or admitted to trading on
    the New York Stock Exchange or, if the Security is not listed or admitted to
    trading on the New York Stock Exchange, as reported in the principal
    consolidated transaction reporting system with respect to securities listed
    on the principal national securities exchange on which the Security is
    listed or admitted to trading or, if the Security is not listed or admitted
    to trading on any national securities exchange, the last quoted price or, if
    not so quoted, the average of the high bid and low asked prices in the
    over-the-counter market, as reported by the Nasdaq Stock Market, Inc.
    National Market System ("Nasdaq") or such other system then in use, or, if
    on any such date the Security is not quoted by any such organization, the
    average of the closing bid and asked prices as furnished by a professional
    market maker making a market in the Security selected by the Board of
    Directors of the Corporation. The term "Trading Day" shall mean a day on
    which the principal national securities exchange on which the Security is
    listed or admitted to trading is open for the

                                       28

    transaction of business or, if the Security is not listed or admitted to
    trading on any national securities exchange, a Business Day.

              (ii) For the purpose of any computation hereunder, the "current
         per share market price" of the Preferred Shares shall be determined in
         accordance with the method set forth in Section 11(d)(i). If the
         Preferred Shares are not publicly traded, the "current per share market
         price" of the Preferred Shares shall be conclusively deemed to be the
         current per share market price of the shares of Common Stock as
         determined pursuant to Section 11(d)(i) (appropriately adjusted to
         reflect any stock split, stock dividend or similar transaction
         occurring after the date hereof), multiplied by one hundred. If neither
         the shares of Common Stock nor the Preferred Shares are publicly held
         or so listed or traded, "current per share market price" shall mean the
         fair value per share as determined in good faith by the Board of
         Directors of the Corporation, whose determination shall be described in
         a statement filed with the Rights Agent and shall be binding on the
         Rights Agent and the holders of the Rights.

         (e) No adjustment in the Purchase Price shall be required unless such
    adjustment would require an increase or decrease of at least 1% in the
    Purchase Price; provided, however, that any adjustments which by reason of
    this Section 11(e) are not required to be made shall be carried forward and
    taken into account in any subsequent adjustment. All calculations under this
    Section 11 shall be

                                       29

    made to the nearest cent or to the nearest one one-millionth of a Preferred
    Share or one ten-thousandth of any other share or security as the case may
    be. Notwithstanding the first sentence of this Section 11(e), any adjustment
    required by this Section 11 shall be made no later than the earlier of (i)
    three years from the date of the transaction which requires such adjustment
    or (ii) the date of the expiration of the right to exercise any Rights.

         (f) If as a result of an adjustment made pursuant to Section 11(a)
    hereof, the holder of any Right thereafter exercised shall become entitled
    to receive any shares of capital stock of the Corporation other than
    Preferred Shares, thereafter the number of such other shares so receivable
    upon exercise of any Right shall be subject to adjustment from time to time
    in a manner and on terms as nearly equivalent as practicable to the
    provisions with respect to the Preferred Shares contained in Section 11(a)
    through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with
    respect to the Preferred Shares shall apply on like terms to any such other
    shares.

         (g) All Rights originally issued by the Corporation subsequent to any
    adjustment made to the Purchase Price hereunder shall evidence the right to
    purchase, at the adjusted Purchase Price, the number of one one-hundredths
    of a Preferred Share purchasable from time to time hereunder upon exercise
    of the Rights, all subject to further adjustment as provided herein.

                                       30

         (h) Unless the Corporation shall have exercised its election as
    provided in Section 11(i), upon each adjustment of the Purchase Price as a
    result of the calculations made in Sections 11(b) and (c), each Right
    outstanding immediately prior to the making of such adjustment shall
    thereafter evidence the right to purchase, at the adjusted Purchase Price,
    that number of one one-hundredths of a Preferred Share (calculated to the
    nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
    (x) the number of one one-hundredths of a share covered by a Right
    immediately prior to this adjustment by (y) the Purchase Price in effect
    immediately prior to such adjustment of the Purchase Price and (ii) dividing
    the product so obtained by the Purchase Price in effect immediately after
    such adjustment of the Purchase Price.

         (i) The Corporation may elect on or after the date of any adjustment of
    the Purchase Price to adjust the number of Rights, in substitution for any
    adjustment in the number of one one-hundredths of a Preferred Share
    purchasable upon the exercise of a Right. Each of the Rights outstanding
    after such adjustment of the number of Rights shall be exercisable for the
    number of one one-hundredths of a Preferred Share for which a Right was
    exercisable immediately prior to such adjustment. Each Right held of record
    prior to such adjustment of the number of Rights shall become that number of
    Rights (calculated to the nearest one ten-thousandth) obtained by dividing
    the Purchase Price in effect immediately prior to adjustment of the Purchase
    Price by the Purchase Price in effect immediately

                                       31

    after adjustment of the Purchase Price. The Corporation shall make a public
    announcement and give prompt notice to the Rights Agent of its election to
    adjust the number of Rights, indicating the record date for the adjustment,
    and, if known at the time, the amount of the adjustment to be made. This
    record date may be the date on which the Purchase Price is adjusted or any
    day thereafter, but, if the Right Certificates have been issued, shall be at
    least 10 days later than the date of the public announcement. If Right
    Certificates have been issued, upon each adjustment of the number of Rights
    pursuant to this Section 11(i), the Corporation shall, as promptly as
    practicable, cause to be distributed to registered holders of Rights on such
    record date Right Certificates evidencing, subject to Section 14 hereof, the
    additional Rights to which such holders shall be entitled as a result of
    such adjustment, or, at the option of the Corporation, shall cause to be
    distributed to such registered holders in substitution and replacement for
    the Right Certificates held by such holders prior to the date of adjustment,
    and upon surrender thereof, if required by the Corporation, new Right
    Certificates evidencing all the Rights to which such holders shall be
    entitled after such adjustment. Right Certificates so to be distributed
    shall be issued, executed and countersigned in the manner provided for
    herein and shall be registered in the names of the registered holders of the
    Rights on the record date specified in the public announcement.

                                       32

         (j) Irrespective of any adjustment or change in the Purchase Price or
    the number of one one-hundredths of a Preferred Share issuable upon the
    exercise of the Rights, the Right Certificates theretofore and thereafter
    issued may continue to express the Purchase Price and the number of one
    one-hundredths of a Preferred Share which were expressed in the initial
    Right Certificates issued hereunder.

         (k) Before taking any action that would cause an adjustment reducing
    the Purchase Price below one one-hundredth of the then par value, if any, of
    the Preferred Shares issuable upon exercise of the Rights, the Corporation
    shall take any corporate action which may, in the opinion of its counsel, be
    necessary in order that the Corporation may validly and legally issue fully
    paid and nonassessable Preferred Shares at such adjusted Purchase Price.

         (l) In any case in which this Section 11 shall require that an
    adjustment in the Purchase Price be made effective as of a record date for a
    specified event, the Corporation may elect to defer (and shall promptly
    notify the Rights Agent of any such elections) until the occurrence of such
    event the issuing to the registered holder of any Right exercised after such
    record date of the Preferred Shares and other capital stock or securities of
    the Corporation, if any, issuable upon such exercise over and above the
    Preferred Shares and other capital stock or securities of the Corporation,
    if any, issuable upon such exercise on the basis of the Purchase Price in
    effect prior to such adjustment; provided, however, that the Corporation
    shall deliver to such holder a due bill or other appropriate instrument

                                       33

    evidencing such holder's right to receive such additional shares upon the
    occurrence of the event requiring such adjustment.

         (m) Anything in this Section 11 to the contrary notwithstanding, the
    Corporation shall be entitled to make such reductions in the Purchase Price,
    in addition to those adjustments expressly required by this Section 11, as
    and to the extent that it in its sole discretion shall determine to be
    advisable in order that any consolidation or subdivision of the Preferred
    Shares, issuance wholly for cash of any Preferred Shares at less than the
    current market price, issuance wholly for cash of Preferred Shares or
    securities which by their terms are convertible into or exchangeable for
    Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
    or issuance of rights, options or warrants referred to hereinabove in
    Section 11(b), hereafter made by the Corporation to holders of its Preferred
    Shares shall not be taxable to such stockholders.

         (n) In the event that at any time after the Record Date and prior to
    the Distribution Date, the Corporation shall (i) declare or pay any dividend
    on the Common Stock payable in shares of Common Stock or (ii) effect a
    subdivision, combination or consolidation of the Common Stock (by
    reclassification or otherwise than by payment of dividends in shares of
    Common Stock) into a greater or lesser number of shares of Common Stock,
    then in any such case (A) the number of one one-hundredths of a Preferred
    Share purchasable after such event upon proper exercise of each Right shall
    be determined by multiplying the

                                       34

    number of one one-hundredths of a Preferred Share so purchasable immediately
    prior to such event by a fraction, the numerator of which is the number of
    shares of Common Stock outstanding immediately before such event and the
    denominator of which is the number of shares of Common Stock outstanding
    immediately after such event, and (B) each share of Common Stock outstanding
    immediately after such event shall have issued with respect to it that
    number of Rights which each share of Common Stock outstanding immediately
    prior to such event had issued with respect to it. The adjustments provided
    for in this Section 11(n) shall be made successively whenever such a
    dividend is declared or paid or such a subdivision, combination or
    consolidation is effected.

                                       35

         Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computations accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Stock or the Preferred Shares a copy of such certificate and (c) mail
a brief summary thereof to each registered holder of a Right in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no duty
with respect to and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such a certificate.

         Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (a) the Corporation shall consolidate with, or
merge with and into, any other Person, (b) any Person shall consolidate with the
Corporation, or merge with and into the Corporation and the Corporation shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Corporation)
or cash or any other property, or (c) the Corporation shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Corporation and its Subsidiaries (taken as a
whole)

                                       36

to any other Person other than the Corporation or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper provision shall
be made so that (i) each registered holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person (including
the Corporation as successor thereto or as the surviving corporation) as shall
equal the result obtained by (A) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Corporation pursuant to this
Agreement; (iii) the term "Corporation" shall thereafter be deemed to refer to
such issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.

                                       37

The Corporation shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Corporation and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. The Corporation shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.

         Section 14. Fractional Rights and Fractional Shares. (a) The
Corporation shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if

                                       38

the Rights are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Corporation. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Corporation shall be used.

         (b) The Corporation shall not be required to issue fractions of
    Preferred Shares (other than fractions which are integral multiples of one
    one-hundredth of a Preferred Share) upon exercise of the Rights or to
    distribute certificates which evidence fractional Preferred Shares (other
    than fractions which are integral multiples of one one-hundredth of a
    Preferred Share). Fractions of Preferred Shares in integral multiples of one
    one-hundredth of a Preferred Share may, at the election of the Corporation,
    be evidenced by depositary receipts, pursuant to an appropriate agreement
    between the Corporation and a depositary selected by it; provided, that such
    agreement shall provide that the holders of such depositary

                                       39

    receipts shall have all the rights, privileges and preferences to which they
    are entitled as beneficial owners of the Preferred Shares represented by
    such depositary receipts. In lieu of fractional Preferred Shares that are
    not integral multiples of one one-hundredth of a Preferred Share, the
    Corporation shall pay to the registered holders of Rights at the time such
    Rights are exercised as herein provided an amount in cash equal to the same
    fraction of the current market value of one Preferred Share. For the
    purposes of this Section 14(b), the current market value of a Preferred
    Share shall be the closing price of a Preferred Share (as determined
    pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
    Day immediately prior to the date of such exercise.

         (c) The holder of a Right by the acceptance of the Right expressly
    waives such holder's right to receive any fractional Rights or any
    fractional shares upon exercise of a Right (except as provided above).

         Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action expressly given to the Rights Agent
under this Agreement, are vested in the respective registered holders of the
Rights and any registered holder of any Right, without the consent of the Rights
Agent or of the holder of any other Right, may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Corporation to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights registered in such
holder's name in the manner provided in the Right Certificates

                                       40

and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.

         Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:

         (a) prior to the Distribution Date, the Rights will be transferable
    only in connection with the transfer of the shares of Common Stock;

         (b) after the Distribution Date, the Rights are transferable only on
    the registry books of the Rights Agent upon surrender of the Right
    Certificates evidencing such Rights at the Designated Office of the Rights
    Agent, duly endorsed or accompanied by a proper instrument of transfer; and

         (c) the Corporation and the Rights Agent shall deem and treat the
    Person in whose name the Right is registered as the absolute owner thereof
    (notwithstanding any notations of ownership or writing on the Right
    Certificates evidencing such Rights or any certificate for the associated
    Common Stock made by anyone other than the Corporation or the Rights Agent)
    for all purposes whatsoever, and neither the Corporation nor the Rights
    Agent shall be affected by any notice to the contrary, except as required by
    law.

                                       41

         Section 17. Right Holder Not Deemed a Stockholder. No holder, as such,
of any Right shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other securities of the
Corporation which may at any time be issuable on the exercise of such Rights,
nor shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right, as such, any of the rights of a stockholder
of the Corporation or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until such Right
or Rights shall have been exercised in accordance with the provisions hereof.

         Section 18. Concerning the Rights Agent. The Corporation agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the execution,
delivery, administration and amendment of this Agreement and the exercise and
performance of its duties hereunder. The Corporation also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement, cost or expense,
incurred without gross negligence, bad faith or willful misconduct (as each is
finally determined by a court of competent jurisdiction) on the part of the
Rights Agent, for any action taken, suffered or omitted by the Rights Agent in

                                       42

connection with the acceptance and administration of this Agreement, including,
without limitation, the costs and expenses of defending against any claim of
liability. Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, indirect, consequential or incidental loss
or damage of any kind whatsoever (including, without limitation, lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage. The indemnity, exculpation and compensation provided for in this
Agreement shall survive the termination of this Agreement, the termination and
expiration of the Rights, and the resignation or removal of the Rights Agent.

         The Rights Agent shall be authorized to rely on, shall be protected and
shall incur no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Corporation, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
instruction, notice, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the opinion of counsel as set forth in Section 20 hereof.

         Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or

                                       43

consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any Person succeeding to the stock transfer or corporate trust powers
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases the Rights evidenced by such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.

         In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases the Rights evidenced

                                       44

by such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

         Section 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Corporation and the holders
of Rights, by their acceptance thereof, shall be bound:

         (a) The Rights Agent may consult with legal counsel (who may be legal
    counsel for the Corporation), and the opinion of such counsel shall be full
    and complete authorization and protection to the Rights Agent, and the
    Rights Agent shall incur no liability for or in respect of any action taken,
    suffered or omitted by it in good faith and in accordance with such opinion.

         (b) Whenever in the performance of its duties under this Agreement the
    Rights Agent shall deem it necessary or desirable that any fact or matter be
    proved or established by the Corporation prior to taking, suffering or
    omitting any action hereunder, such fact or matter (unless other evidence in
    respect thereof be herein specifically prescribed) may be deemed to be
    conclusively proved and established by a certificate signed by any one of
    the Chief Executive Officer, any Vice President, the Treasurer or the
    Secretary of the Corporation and delivered to the Rights Agent; and such
    certificate shall be full authorization and protection to the Rights Agent,
    and the Rights Agent shall incur no liability for or in respect of

                                       45

    any action taken, suffered or omitted in good faith by it under the
    provisions of this Agreement in reliance upon such certificate.

         (c) The Rights Agent shall be liable hereunder to the Corporation and
    any other Person only for its own gross negligence, bad faith or willful
    misconduct (as each is finally determined by a court of competent
    jurisdiction).

         (d) The Rights Agent shall not be liable for or by reason of any of the
    statements of fact or recitals contained in this Agreement or in the Right
    Certificates (except its countersignature thereof) or be required to verify
    the same, but all such statements and recitals are and shall be deemed to
    have been made by the Corporation only.

         (e) The Rights Agent shall not have any liability nor be under any
    responsibility in respect of the validity of this Agreement or the execution
    and delivery hereof (except the due execution hereof by the Rights Agent) or
    in respect of the validity or execution of any Right Certificate (except its
    countersignature thereof); nor shall it be responsible or liable for any
    breach by the Corporation of any covenant or condition contained in this
    Agreement or in any Right Certificate; nor shall it be responsible or liable
    for any change in the exercisability of the Rights (including the Rights
    becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the
    terms of the Rights (including the manner, method or amount thereof)
    provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
    existence of facts that would require any such

                                       46

    change or adjustment (except with respect to the exercise of Rights
    evidenced by Right Certificates after actual notice that such change or
    adjustment is required); nor shall it by any act hereunder be deemed to make
    any representation or warranty as to the authorization or reservation of any
    Preferred Shares to be issued pursuant to this Agreement or any Right
    Certificate or as to whether any Preferred Shares will, when issued, be
    validly authorized and issued, fully paid and nonassessable.

         (f) The Corporation agrees that it will perform, execute, acknowledge
    and deliver or cause to be performed, executed, acknowledged and delivered
    all such further and other acts, instruments and assurances as may
    reasonably be required by the Rights Agent for the carrying out or
    performing by the Rights Agent of the provisions of this Agreement.

         (g) The Rights Agent is hereby authorized and directed to accept
    instructions with respect to the performance of its duties hereunder from
    any one of the Chief Executive Officer, any Vice President, the Secretary or
    the Treasurer of the Corporation, and to apply to such officers for advice
    or instructions in connection with its duties, and such advice or
    instructions shall be full authorization and protection to the Rights Agent
    and the Rights Agent shall incur no liability for or in respect of any
    action taken, suffered or omitted by it in good faith in accordance with the
    advice or instructions of any such officer or for any delay in acting while
    waiting for those instructions.

                                       47

         (h) The Rights Agent and any stockholder, Affiliate, director, officer
    or employee of the Rights Agent may buy, sell or deal in any of the Rights
    or other securities of the Corporation or become pecuniarily interested in
    any transaction in which the Corporation may be interested, or contract with
    or lend money to the Corporation or otherwise act as fully and freely as
    though it were not Rights Agent under this Agreement. Nothing herein shall
    preclude the Rights Agent from acting in any other capacity for the
    Corporation or for any other Person.

         (i) The Rights Agent may execute and exercise any of the rights or
    powers hereby vested in it or perform any duty hereunder either itself or by
    or through its attorneys or agents, and the Rights Agent shall not be
    answerable, accountable or liable for any act, default, neglect or
    misconduct of any such attorneys or agents or for any loss to the
    Corporation or any other Person resulting from any such act, default,
    neglect or misconduct, provided reasonable care was exercised in the
    selection and continued employment thereof.

         (j) No provision of this Agreement shall require the Rights Agent to
    expend or risk its own funds in the performance of any of its duties
    hereunder or in the exercise of its rights if it reasonably believes in good
    faith that repayment of such funds as required by this Agreement is not
    reasonably assured to it.

         (k) If, with respect to any Rights Certificate surrendered to the
    Rights Agent for exercise or transfer, the certificate contained in the form
    of assignment or the form of election to purchase set forth on the reverse
    thereof, as the case

                                       48

    may be, has not been completed to certify the holder is not an Acquiring
    Person (or an Affiliate or Associate thereof), the Rights Agent shall not
    take any further action with respect to such requested exercise or transfer
    without first consulting with the Corporation.

         Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the shares of Common Stock or the Preferred Shares by registered or
certified mail, and to the registered holders of the Rights by first-class mail.
The Corporation may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the shares of Common
Stock or the Preferred Shares by registered or certified mail, and to the
registered holders of the Rights by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
shall fail to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the registered holder of a Right (which holder shall, with such notice, submit
such holder's Right Certificate, if any, or such holder's certificate, if any,
for the associated shares of Common Stock for inspection by the Corporation),
then the registered holder of any Right Certificate may apply to any court

                                       49

of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by such a court,
shall be a Person, or an Affiliate of such a Person, organized and doing
business under the laws of the United States or of the State of New York (or of
any other state of the United States so long as such Person is authorized to do
business as a banking institution in the State of New York), in good standing,
having an office in the State of New York, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed. The predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent, or, if no
successor Rights Agent is appointed within 30 days after the predecessor Rights
Agent has given or received notice of resignation or removal to or from the
Corporation, as the case may be, to the Corporation, any property at the time
held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose and thereafter the predecessor Rights
Agent shall have no further duties or obligations as Rights Agent under this
Agreement (it being understood that the foregoing is not intended to release the
Rights Agent from any liability resulting from the Rights Agent's gross
negligence, bad faith or willful misconduct (as each is finally determined by a
court of competent

                                       50

jurisdiction) while acting as Rights Agent hereunder). Not later than the
effective date of any such appointment the Corporation shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
shares of Common Stock or the Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Rights. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

         Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Right Certificates to the contrary,
the Corporation may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable upon exercise of a Right made
in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the earlier of the Redemption Date and the Final Expiration
Date, the Corporation (a) shall with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement in existence prior to the Distribution Date, or upon the exercise,
conversion or exchange of securities, notes or debentures (pursuant to the terms
thereof) issued by the Corporation and in existence prior to the Distribution
Date, and (b) may, in any other case, if deemed necessary or appropriate by the
Board of Directors of

                                       51

the Corporation, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) the
Corporation shall not be obligated to issue any such Right Certificates if, and
to the extent that, the Corporation shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Corporation or the Person to whom such Right Certificate would be issued or
would create a significant risk of such options or employee plans or
arrangements failing to qualify for otherwise available special tax treatment,
and (ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

         Section 23. Redemption. (a) The Board of Directors of the Corporation
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.001 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors of the
Corporation may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Corporation in its sole discretion
may establish.

         (b) Immediately upon the action of the Board of Directors of the
    Corporation ordering the redemption of the Rights pursuant to paragraph (a)
    of this Section 23, and without any further action and without any notice,
    the right to

                                       52

    exercise the Rights will terminate and the only right thereafter of the
    holders of Rights shall be to receive the Redemption Price. The Corporation
    shall promptly give public notice and notice to the Rights Agent of any such
    redemption; provided, however, that the failure to give, or any defect in,
    any such notice shall not affect the validity of such redemption. Within 10
    days after such action of the Board of Directors of the Corporation ordering
    the redemption of the Rights, the Corporation shall mail a notice of
    redemption to all the registered holders of the then outstanding Rights at
    their last addresses as they appear upon the registry books of the Rights
    Agent or, prior to the Distribution Date, on the registry books of the
    transfer agent for the shares of Common Stock. Any notice which is mailed in
    the manner herein provided shall be deemed given, whether or not the holder
    receives the notice. Each such notice of redemption will state the method by
    which the payment of the Redemption Price will be made. Neither the
    Corporation nor any of its Affiliates or Associates may redeem, acquire or
    purchase for value any Rights at any time in any manner other than that
    specifically set forth in this Section 23 or in Section 24 hereof, and other
    than in connection with the purchase of shares of Common Stock prior to the
    Distribution Date.

         Section 24. Exchange. (a) The Board of Directors of the Corporation
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights

                                       53

that have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted pursuant to Section 11(i) to reflect any stock
split, stock dividend or similar transaction occurring after the Record Date
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Corporation shall
not be empowered to effect such exchange at any time after the Record Date if
any Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan of Ormat Industries, the Corporation or any such
Subsidiary, or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.

         (b) Immediately upon the action of the Board of Directors of the
    Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
    this Section 24 and without any further action and without any notice, the
    right to exercise such Rights shall terminate and the only right thereafter
    of a holder of such Rights shall be to receive that number of shares of
    Common Stock equal to the number of such Rights held by such holder
    multiplied by the Exchange Ratio. The Corporation shall

                                       54

    promptly give public notice and notice to the Rights Agent of any such
    exchange; provided, however, that the failure to give, or any defect in,
    such notice shall not affect the validity of such exchange. The Corporation
    shall promptly mail a notice of any such exchange to all of the registered
    holders of such Rights at their last addresses as they appear upon the
    registry books of the Rights Agent. Any notice which is mailed in the manner
    herein provided shall be deemed given, whether or not the holder receives
    the notice. Each such notice of exchange will state the method by which the
    exchange of the shares of Common Stock for Rights will be effected and, in
    the event of any partial exchange, the number of Rights which will be
    exchanged. Any partial exchange shall be effected pro rata based on the
    number of Rights (other than Rights which have become void pursuant to the
    provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

         (c) In the event that there shall not be sufficient shares of Common
    Stock issued but not outstanding or authorized but unissued to permit any
    exchange of Rights as contemplated in accordance with this Section 24, the
    Corporation shall take all such action as may be necessary to authorize
    additional shares of Common Stock for issuance upon exchange of the Rights.
    In the event the Corporation shall, after good faith effort, be unable to
    take all such action as may be necessary to authorize such additional shares
    of Common Stock, the Corporation shall substitute, for each share of Common
    Stock that would otherwise be issuable upon exchange of a Right, a number of
    Preferred Shares or fraction thereof such that the current per share market
    price of one Preferred Share multiplied by such number or fraction is equal
    to the current per share

                                       55

    market price of one share of Common Stock as of the date of issuance of such
    Preferred Shares or fraction thereof.

         (d) The Corporation shall not be required to issue fractions of shares
    of Common Stock or to distribute certificates which evidence fractional
    shares of Common Stock. In lieu of such fractional shares of Common Stock,
    the Corporation shall pay to the registered holders of the Rights with
    regard to which such fractional shares of Common Stock would otherwise be
    issuable an amount in cash equal to the same fraction of the current market
    value of a whole share of Common Stock. For the purposes of this paragraph
    (d), the current market value of a whole share of Common Stock shall be the
    closing price of a share of Common Stock (as determined pursuant to the
    second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
    prior to the date of exchange pursuant to this Section 24.

         Section 25. Notice of Certain Events. (a) In case at any time after the
Record Date the Corporation shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to

                                       56

effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Corporation, or (vi) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Corporation shall give to each
registered holder of a Right and the Rights Agent, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

         (b) In case the event set forth in Section 11(a)(ii) hereof shall
    occur, then the Corporation shall as soon as practicable thereafter give to
    each registered

                                       57

    holder of a Right and the Rights Agent, in accordance with Section 26
    hereof, a notice of the occurrence of such event, which notice shall
    describe such event and the consequences of such event to holders of Rights
    under Section 11(a)(ii) hereof.

         Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right to or on the
Corporation shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:

                  Ormat Technologies, Inc.
                  980 Greg Street
                  Sparks, Nevada 89431

                  Attention: Connie Stechman

                  with a copy to:

                  Ormat Technologies, Inc.
                  c/o Ormat Industries Ltd.
                  Industrial Area, P.O. Box 68
                  Yavneh 8100 Israel

                  Attention: Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right to or on the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Corporation) as follows:

                                       58

                  American Stock Transfer & Trust Company
                  59 Maiden Lane
                  New York, New York 10038

                  Attention: Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Corporation or the registry books of the holders of the Rights maintained by the
Rights Agent after the Distribution Date as herein provided. Any notice or
demand given prior to the Distribution Date by the Corporation or the Rights
Agent to the holders of the Rights shall also be given to any registered pledgee
of any uncertificated Common Share by first-class mail, postage prepaid,
addressed to such registered pledgee at the address of such registered pledgee
as shown on the registry books of the Corporation.

         Section 27. Supplements and Amendments. The Corporation may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights or
in regard to matters or questions arising hereunder which the Corporation may
deem necessary or desirable, any such supplement or amendment to be evidenced by
a writing signed by the Corporation and the Rights Agent; provided, however,
that nothing herein shall obligate the Rights Agent

                                       59

to execute such a supplement or amendment if such supplement or amendment
changes or increases the rights, duties or obligations of the Rights Agent; and
further provided that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights. Without limiting the
foregoing, the Corporation may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) to not less than the greater of (i) the sum of
..001% and the largest percentage of the outstanding shares of Common Stock then
known by the Corporation to be beneficially owned by any Person (other than the
Corporation, any Subsidiary of the Corporation, any employee benefit plan of
Ormat Industries, the Corporation or any Subsidiary of the Corporation, or any
entity holding shares of Common Stock for or pursuant to the terms of any such
plan) and (ii) 10%. Upon the delivery of a certificate from an appropriate
officer of the Corporation which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment.

         Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.

         Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the

                                       60

registered holders of the Rights any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Corporation, the Rights Agent and the registered holders of the
Rights.

         Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

         Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

         Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

         Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                       61

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

                                         ORMAT TECHNOLOGIES, INC.

                                         By
                                           -------------------------------------

                                         AMERICAN STOCK TRANSFER & TRUST
                                           COMPANY, as Rights Agent

                                         By
                                           -------------------------------------

                                       62

                                                                       Exhibit A

                            Form of Right Certificate

Certificate No. R-                                                  _____ Rights

              NOT EXERCISABLE AFTER [      ], 2014 OR EARLIER IF REDEMPTION OR
              EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
              RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
              AGREEMENT.

                                Right Certificate

                            ORMAT TECHNOLOGIES, INC.

         This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of [ ], 2004 (the "Rights Agreement"), between Ormat
Technologies, Inc., a Delaware corporation (the "Corporation"), and American
Stock Transfer & Trust Company, a New York banking corporation, as Rights Agent
(the "Rights Agent"), to purchase from the Corporation at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., New York City time, on [ ], 2014 at the Designated Office (as such
term is defined in the Rights Agreement of the Rights Agent, or at the office of
its successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.001 per
share (the "Preferred Shares"), of the Corporation, at a purchase price of
$[___] per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of __________, 2004, based on
the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of

                                       A-1

the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Rights. Copies of the
Rights Agreement are on file at the principal executive offices of the
Corporation and the above-mentioned offices of the Rights Agent.

         This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If the
Rights evidenced by this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Corporation at a redemption
price of $.001 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares or the Corporation's Common Stock, par value $.001 per share.

         No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Corporation, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.

         No holder of Rights evidenced by this Right Certificate shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Corporation which may at
any time be issuable on the exercise thereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder of any
Rights evidenced hereby, as such, any of the rights of a stockholder of the
Corporation or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive

                                       A-2

dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.

         This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

         WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.

Dated as of ____________.

ATTEST:                                   ORMAT TECHNOLOGIES, INC.

                                          By:
------------------------------------         -----------------------------------
Countersigned:

AMERICAN STOCK TRANSFER
  & TRUST CORPORATION, as Rights Agent

By:
   ---------------------------------
         Authorized Signature

                                       A-3

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
   holder desires to transfer the Rights evidenced by this Right Certificate.)

         FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto ___________________
________________________________________________________
      (Please print name and address of transferee)

______________________ Rights evidenced by this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint __________________ attorney, to transfer the said Rights on the
books of the within-named Corporation, with full power of substitution.

Dated:
      -------------------------

                                                 -------------------------------
                                                 Signature
Signature Guaranteed:

         Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., a commercial bank or trust Corporation or other eligible institution,
in each case, participating in a Medallion program approved by the Securities
Transfer Association, Inc.

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

         The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                                 -------------------------------
                                                 Signature

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

                                       A-4

             Form of Reverse Side of Right Certificate -- continued
                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise
                   Rights evidenced by the Right Certificate.)

To:  Ormat Industries, Inc.

         The undersigned hereby irrevocably elects to exercise
___________________ Rights evidenced by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:

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

Please insert social security
or other identifying number
                                      ------------------------------------------

--------------------------------------------------------------------------------
                         (Please print name and address)

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

         If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:

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

Please insert social security
or other identifying number
                                      ------------------------------------------

--------------------------------------------------------------------------------
                         (Please print name and address)

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

Dated:
      ----------------------------

                                                 -------------------------------
                                                 Signature

Signature Guaranteed:

                                       A-5

Form of Reverse Side of Right Certificate -- continued

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

         Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., a commercial bank or trust Corporation or other eligible institution,
in each case, participating in a Medallion program approved by the Securities
Transfer Association, Inc.

                  The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                                 -------------------------------
                                                 Signature

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

                                     NOTICE

         The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.

         In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

                                       A-6Exhibit 10.1.16

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

                       LETTER OF CREDIT AND LOAN AGREEMENT

                                     BETWEEN

                               ORMAT NEVADA INC.,

                                  AS BORROWER,

                                       AND

                               HUDSON UNITED BANK,

                                    AS LENDER

                            DATED AS OF JUNE 30, 2004

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

                                TABLE OF CONTENTS

   SECTION 1.1          General Definitions.......................................................................1
   SECTION 1.2          Accounting Terms and Determinations......................................................10
   SECTION 1.3          Other Terms; Headings....................................................................10

ARTICLE II THE CREDIT FACILITIES.................................................................................10

   SECTION 2.1          Letters of Credit and Loans..............................................................10
   SECTION 2.2          Term.....................................................................................13
   SECTION 2.3          Evidence of Debt; Account Statements.....................................................13
   SECTION 2.4          Amortization of Loans; Post-Default Cash Collateralization of Letters of Credit..........13
   SECTION 2.5          Maximum Amount of the Facility; Mandatory Prepayments; Optional Prepayments..............14
   SECTION 2.6          Payment Procedures.......................................................................14
   SECTION 2.7          Payments.................................................................................15

ARTICLE III INTEREST, FEES AND EXPENSES..........................................................................15

   SECTION 3.1          Interest.................................................................................15
   SECTION 3.2          Interest After Event of Default..........................................................16
   SECTION 3.3          Commitment Fee...........................................................................16
   SECTION 3.4          Unused Line Fee..........................................................................16
   SECTION 3.5          Letter of Credit Fees....................................................................16
   SECTION 3.6          Calculations.............................................................................16
   SECTION 3.7          Indemnification in Certain Events........................................................17

ARTICLE IV CONDITIONS PRECEDENT..................................................................................17

   SECTION 4.1          Conditions to Initial Letter of Credit...................................................17
   SECTION 4.2          Conditions Precedent to Issuance of Each Letter of Credit................................19
   SECTION 4.3          Determinations Under Section 4...........................................................19

ARTICLE V REPRESENTATIONS AND WARRANTIES.........................................................................20

   SECTION 5.1          Representations and Warranties of the Borrower...........................................20

ARTICLE VI COVENANTS OF THE BORROWER.............................................................................25

   SECTION 6.1          Affirmative Covenants....................................................................25
   SECTION 6.2          Negative Covenants.......................................................................31

ARTICLE VII FINANCIAL COVENANTS..................................................................................33

   SECTION 7.1          Tangible Net Worth.......................................................................33
   SECTION 7.2          Leverage Ratio...........................................................................33
   SECTION 7.3          Minimum Coverage Ratio...................................................................33

                                                        -i-

AMENDED AND RESTATED

ARTICLE VIII EVENTS OF DEFAULT...................................................................................33

   SECTION 8.1          Events of Default........................................................................33
   SECTION 8.2          Acceleration and Cash Collateralization..................................................35

ARTICLE IX GENERAL PROVISIONS....................................................................................36

   SECTION 9.1          GOVERNING LAW............................................................................36
   SECTION 9.2          SUBMISSION TO JURISDICTION...............................................................36
   SECTION 9.3          SERVICE OF PROCESS.......................................................................36
   SECTION 9.4          JURY TRIAL...............................................................................36
   SECTION 9.5          LIMITATION OF LIABILITY..................................................................37
   SECTION 9.6          Delays; Partial Exercise of Remedies.....................................................37
   SECTION 9.7          Notices..................................................................................37
   SECTION 9.8          Assignments and Participations...........................................................37
   SECTION 9.9          Indemnification; Reimbursement of Expenses of Collection.................................37
   SECTION 9.10         Right of Setoff..........................................................................38
   SECTION 9.11         Amendments and Waivers...................................................................38
   SECTION 9.12         Nonliability of Lender...................................................................39
   SECTION 9.13         Counterparts; Telecopied Signatures......................................................39
   SECTION 9.14         Severability.............................................................................39
   SECTION 9.15         Maximum Rate.............................................................................39
   SECTION 9.16         ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS.................................................40
   SECTION 9.17         References to Ormat Technologies.........................................................40

SCHEDULES

Schedule 5.1(e)                   Consents and Filings
Schedule 5.1(f)                   Material Transactions
Schedule 5.1(h)                   Joint Ventures or Partnerships
Schedule 5.1(o)                   Taxes and Tax Returns
Schedule 5.1(p)                   Judgments or Litigation
Schedule 5.1(s)                   ERISA
Schedule 5.1(x)                   Contracts, Orders, etc.
Schedule 9.10                     Excluded Accounts

EXHIBITS

Exhibit A                    Promissory Note
Exhibit B                    Subordination Agreement
Exhibit C                    Letter of Credit Request
Exhibit D                    Opinion of Counsel
Exhibit E                    Compliance Certificate

AMENDED AND RESTATED

                                                        -ii-

         THIS LETTER OF CREDIT AND LOAN AGREEMENT is entered into as of JUNE 30,
2004, between ORMAT NEVADA INC., a Delaware corporation having its chief
executive office and principal place of business at 980 Greg Street, Sparks,
Nevada 89431 (the "Borrower"), and HUDSON UNITED BANK, a bank organized under
the laws of the State of New Jersey having an office at 87 Post Road East,
Westport, Connecticut 06880 (the "Lender").

                              W I T N E S S E T H :

         WHEREAS, the Borrower has requested the Lender to provide a letter of
credit and term loan facility upon the terms and subject to the conditions
herein set forth; and

         WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lender is willing to issue, and to use its best efforts to cause to be
issued by Fronting Banks, letters of credit for the account of the Borrower and
wholly owned Subsidiaries of the Borrower and to make term loans to the Borrower
to fund payment of the reimbursement obligations arising from such letters of
credit that have not been paid by the Borrower;

         NOW, THEREFORE, in consideration of the mutual covenants and
undertakings and the terms and conditions contained herein, the Borrower and the
Lender hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1 General Definitions. As used herein, the following terms
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):

         "Adjusted Consolidated Cash Flow" means, for any Person, for any
period, the sum of (i) Unrestricted Adjusted Consolidated Net Income of such
Person and its consolidated Subsidiaries and Consolidated Persons with respect
to such first Person for such period plus (ii) the aggregate amount of all
non-cash charges deducted in arriving at such Unrestricted Adjusted Consolidated
Net Income less (iii) principal payments made or required to be made on account
of Indebtedness during such period.

         "Affiliate" means, as to any Person, any other Person who directly or
indirectly controls, is under common control with, is controlled by or is a
director or officer of such Person. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common control
with") means possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership of voting
securities or partnership or other ownership interests, by contract or
otherwise).

         "Agreement" means this Letter of Credit and Loan Agreement, as amended,
supplemented or otherwise modified from time to time.

AMENDED AND RESTATED

         "Auditors" means PricewaterhouseCoopers LLP, another "Big Four" firm of
independent public accountants, or another nationally-recognized firm of
independent public accountants selected by the Borrower and satisfactory to the
Lender in its reasonable discretion.

         "Availability Expiration Date" means the earlier of (i) the Initial
Availability Expiration Date, as such date may be extended from time to time
under Section 2.2, and (ii) the date of termination of the Lender's obligation
to issue, or use its best efforts to cause to be issued, Letters of Credit or to
make Loans

         "Base Rate" means as of any date the higher of (i) the prime, base or
equivalent rate of interest announced from time to time by Citibank, N.A. or any
successor thereto (which may not be the lowest rate of interest charged by such
bank) and (ii) the published annualized rate for ninety-day dealer commercial
paper that appears in the "Money Rates" Section of the Wall Street Journal (U.S.
Edition).

         "Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York or Reno, Nevada are required or
permitted by law to close. When used in connection with the LIBOR Rate or any
Interest Period, a Business Day shall also exclude any day on which commercial
banks are not open for dealings in Dollar deposits in the London interbank
market.

         "Capital Expenditures" means expenditures (or commitments to make
expenditures that are required to be recorded as capital expenditures in
accordance with GAAP) for the acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful life of
more than one year, and shall include all such commitments and payments in
respect of expenditures for any fixed assets or improvements, replacements,
substitutions or additions of or to Facilities covered by Capitalized Lease
Obligations, operating leases and leasehold improvements.

         "Capitalized Lease Obligations" means any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the lessee,
taken at the amount thereof accounted for as indebtedness (net of interest
expense) in accordance with GAAP.

         "Change of Control" means one or more of the following events:

              (i) the shareholder of the Borrower shall approve any plan or
         proposal for the liquidation or dissolution of the Borrower; or

              (ii) the shareholder of the Borrower shall approve any plan or
         proposal for a merger or consolidation to which the Borrower is a party
         and as a result of which either

                   (A)  the Tangible Net Worth of the survivor or successor
                        entity is less than that required under Section 7.1, or

                   (B)  the shareholder of the Borrower ceases to own a
                        sufficient amount of the voting stock of the Borrower
                        with rights to elect

                                      -2-

AMENDED AND RESTATED

                        a majority of the members of the Borrower's board of
                        directors.

         "Closing Date" means the date of execution and delivery of this
Agreement.

         "Code" has the meaning specified in Section 1.3.

         "Commitment" means the Lender's commitment to issue Letters of Credit,
and to use its best efforts to cause Letters of Credit to be issued, reissued
and renewed by Fronting Banks and to make Loans in an aggregate outstanding
amount up to the Maximum Amount of the Facility, as such amount may be decreased
from time to time in accordance with Section 2.1(g).

         "Confidential Information" means information that the Borrower or any
of its Affiliates furnishes to the Lender that is designated by the Borrower or
such Affiliate as being confidential, but does not include any such information
that (i) is or becomes generally available to the public or (ii) is or becomes
available to the Lender from a source other than the Borrower or such Affiliate
which is not known at such time by the Lender to be subject to a confidentiality
restriction until such time as it is known by the Lender to be subject to a
confidentiality restriction.

         "Consolidated Person" means any Person that is required to be accounted
for on the financial statements of another Person under FASB FIN 46,
Consolidation of Variable Interest Entities.

         "Default" means any of the events specified in Section 8.1, whether or
not any of the requirements for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

         "Dollars" and the sign "$" mean freely transferable lawful currency of
the United States.

         "Electric Utility" means a public utility, an electric utility or an
electric utility holding company or a Subsidiary of any thereof or an Affiliate
of an electric utility holding company, as those terms are used in PUHCA, PURPA,
the rules or regulations implementing PUHCA or PURPA or under any other
Requirement of Law.

         "Environmental Laws" means all federal, state and local statutes, laws
(including, without limitation, common or case law), rulings, regulations or
governmental, administrative or judicial policies, directives, orders or
interpretations applicable to the business or property of the Borrower relating
to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act, the Resource Conservation
and Recovery Act and all other laws and regulations relating to emissions,
discharges, releases or threatened releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of any Hazardous Materials.

                                      -3-

AMENDED AND RESTATED

         "ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. ss.ss. 1000 et seq., as amended, successor statutes and regulations or
guidelines promulgated thereunder.

         "ERISA Affiliate" means any Person required to be aggregated with the
Borrower under Section 414(b), (c), (m) or (o) of the Internal Revenue Code.

         "Event of Default" means the occurrence of any of the events specified
in Section 8.1.

         "Facility" means a power plant, industrial power generation
infrastructure asset, or other alternative energy plant and related facilities
owned or leased by the Borrower or any of its Subsidiaries, in each case with
related rights under power purchase contracts, sales and service agreements,
leases, easements, permits and similar contractual rights.

         "Federal Reserve Board" has the meaning specified in Section 5.1(n).

         "FERC" means the Federal Energy Regulatory Commission and any Person
succeeding to the functions thereof.

         "Financial Covenants" means those covenants set forth in Article VII.

         "Financial Statements" means the consolidated balance sheets and
statements of cash flow, profits and losses and shareholders' equity of the
Borrower and its Subsidiaries and Consolidated Persons for the period specified,
prepared in accordance with GAAP and consistently with prior practices.

         "Foreign Plan" has the meaning specified in Section 6.1(k).

         "Fronting Bank" means HSBC Bank USA or a U.S. federal chartered bank
with offices located in any of the twenty largest cities in the United States
whose combined capital and surplus is at least $1,000,000,000 and whose
long-term unsecured debt is rated A or better by Standard & Poor's Corporation
and A3 or better by Moody's Investors Service, Inc.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.

         "Governing Documents" means the certificate of incorporation and
by-laws or other organizational or governing documents of the Borrower or Ormat
Technologies.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions thereof or
pertaining thereto.

                                      -4-

AMENDED AND RESTATED

         "Hazardous Materials" means any and all pollutants and contaminants and
any and all toxic, caustic, radioactive or hazardous materials, substances or
wastes that are regulated under any Environmental Laws.

         "Indebtedness" means as of the date of determination thereof (without
duplication), (i) all obligations of a Person for borrowed money of any kind or
nature, including, without limitation, funded debt, and net amounts payable
under currency and interest rate hedging or swap agreements or arrangements
therefor, regardless of whether the same is evidenced by any note, debenture,
bond or other instrument, (ii) all obligations of a Person to pay the deferred
purchase price of property or services (other than current trade accounts
payable under normal trade terms and which arise in the ordinary course of
business and are not delinquent), (iii) the then outstanding amount of
withdrawal or termination liability incurred under ERISA, (iv) all Indebtedness
of others secured by a Lien on any asset of a Person whether or not the
Indebtedness is assumed by such Person, (v) all Indebtedness of others to the
extent guaranteed by a Person and (vi) all obligations of a Person in respect of
letters of credit, bankers acceptances or similar instruments issued or accepted
by banks or other financial institutions for the account of such Person.

         "Initial Availability Expiration Date" means June 30, 2007.

         "Insolvency Event" means, with respect to any Person, the occurrence of
any of the following: (i) such Person shall be adjudicated insolvent or
bankrupt, or shall generally fail to pay or admit in writing its inability to
pay its debts as they become due, (ii) such Person shall seek dissolution or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or business
or to effect a plan or other arrangement with its creditors, (iii) such Person
shall make a general assignment for the benefit of its creditors, or consent to
or acquiesce in the appointment of a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business, (iv) such Person
shall file a voluntary petition under any bankruptcy, insolvency or similar law,
(v) such Person shall take any corporate or similar act in furtherance of any of
the foregoing or (vi) such Person, or a substantial portion of its property,
assets or business shall become the subject of an involuntary proceeding or
petition for (A) its dissolution or reorganization or (B) the appointment of a
receiver, trustee, custodian or liquidator, and (I) such proceeding shall not be
dismissed or stayed within sixty days or (II) such receiver, trustee, custodian
or liquidator shall be appointed; provided, however, that the Lender shall have
no obligation to make any Advance during the pendency of any sixty-day period
described in clauses (A) and (B).

         "Interest Period" means the initial period commencing on the Closing
Date and terminating on June 30, 2004, and each subsequent three-month period
determined in accordance with Section 3.1(b); provided, however, that (i) an
Interest Period may not end after the Maturity Date; and (ii) whenever the last
day of an Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, except that, if such extension would cause the last day
of such Interest Period to occur in the next following calendar month, then the
last day of such Interest Period shall occur on the next preceding Business Day.

         "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, any successor statute and any regulations or guidelines promulgated
thereunder.

                                      -5-

AMENDED AND RESTATED

         "Internal Revenue Service" or "IRS" means the United States Internal
Revenue Service and any successor agency.

         "L/C Cash Collateral Account" means an interest-bearing cash collateral
account established by the Borrower with the Lender in the name of the Borrower,
but under the sole dominion and control of the Lender, subject to the terms of
this Agreement.

         "Letter of Credit Request" has the meaning specified in Section 2.1(c).

         "Letters of Credit" means all letters of credit issued under Section
2.1(a) hereof for the account of the Borrower or, at the Borrower's request, for
the account of any of the Borrower's wholly owned Subsidiaries.

         "Leverage Ratio" means at any time, the ratio of (i) all Indebtedness
of the Borrower to (ii) the Tangible Net Worth of the Borrower.

         "Liabilities" of a Person as of the date of determination thereof means
the liabilities of such Person on such date as determined in accordance with
GAAP. Liabilities to Affiliates shall be treated as Liabilities except where
eliminated by consolidation in financial statements prepared in accordance with
GAAP or as otherwise provided herein.

         "LIBOR Rate" means, with respect to each Interest Period, the rate
determined by the Lender to be (i) the per annum rate for deposits in Dollars
for a period of one month that appears on the Dow Jones Market Service (formerly
Telerate) Page 3750 Screen as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of an Interest Period (rounded upwards, if
necessary, to the nearest 1/100th of 1%); or (ii) if such rate does not appear
on the Dow Jones Market Service Page 3750 Screen, the reserve adjusted rate per
annum equal to the one-month London Interbank Offered Rate that appears in the
"Money Rates" section of The Wall Street Journal (U.S. Edition) on the first day
of such Interest Period; or (iii) if such rate does not appear on the Dow Jones
Market Service Page 3750 Screen and The Wall Street Journal (U.S. Edition) no
longer publishes such one-month London Interbank Offered Rate, the per annum
rate for deposits in U.S. Dollars for a period of one month that appears on the
Reuters Screen ISDA Page as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of an Interest Rate Period (rounded
upwards, if necessary, to the nearest 1/100th of 1%). As used under this
definition, "Dow Jones Market Service Page 3750 Screen" means the display
designated as "Page 3750" on the Dow Jones Market Service (or such other page as
may replace Page 3750 on that service or such other service as may be nominated
by the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).

         "Lien" means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title or other encumbrance or preferential arrangement having
substantially the same economic effect as any of the foregoing, whether
voluntary or imposed by law.

         "Loan" has the meaning specified in Section 2.1(d).

                                      -6-

AMENDED AND RESTATED

         "Loan Documents" means this Agreement, the Note, the Subordination
Agreement and all other documents and instruments delivered or to be delivered
by the Borrower or any Affiliate under or in connection with this Agreement and
designated therein as a "Loan Document," as each of the same may be amended,
supplemented or otherwise modified from time to time.

         "Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature before the Availability Expiration
Date, whether singly or in conjunction with any one or more other events, acts,
conditions or occurrences, whether or not related, (i) a material and adverse
effect on the business, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrower individually, or the
Borrower and its Subsidiaries in the aggregate and taken as a whole, which could
reasonably be expected to render the Borrower unable to repay the outstanding
Loans and to reimburse or, to the extent required by the terms of this
Agreement, cash collateralize all the obligations of the Borrower with respect
to the Letters of Credit.

         "Material Contract" means any long term power purchase agreement to
which the Borrower or any of its Subsidiaries is a party in each case for which
breach, nonperformance, cancellation or failure to renew could have a Material
Adverse Effect.

         "Maximum Amount of the Facility" means Fifteen Million Dollars
($15,000,000) less the amount of any reduction of the Commitment under Section
2.1(g) less the amount of any Letter of Credit issued by a Fronting Bank that is
not re-issued, extended or renewed upon its expiration following the Borrower's
request for such re-issuance, extension or renewal (if the beneficiary of such
Letter of Credit will not accept a Letter of Credit issued by the Lender).

         "Minimum Coverage Ratio" means, at any time, the ratio of (i) Adjusted
Consolidated Cash Flow for any calendar quarter or calendar year, as applicable,
to (ii) the aggregate amount of all principal and interest payable by the
Borrower and its Subsidiaries on account of Indebtedness during such calendar
quarter or calendar year.

         "Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate has
contributed within the past six years or with respect to which the Borrower or
any ERISA Affiliate may incur any liability.

         "Note" means a promissory note of the Borrower payable to the order of
the Lender, substantially in the form of Exhibit A hereto, as amended,
supplemented or otherwise modified from time to time.

         "Obligations" means all loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Lender of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, which may arise under, out of, or in connection
with this Agreement, the Note, the other Loan Documents, whether or not for the
payment of money, whether arising by reason of an extension of credit, opening,
guaranteeing or confirming of a letter of credit (including, but not limited to,
the Letters of Credit), loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including, without limitation, those acquired by
assignment, purchase, discount or otherwise), whether absolute or contingent,
due or to become due, and however acquired. The term includes, without
limitation, all interest (including interest accruing on or after an Insolvency
Event, whether or not an allowed claim),

                                      -7-

AMENDED AND RESTATED

charges, expenses, commitment, facility, unused line, closing, letter of credit
or other fees, reasonable attorneys' fees, and any other sum properly chargeable
to the Borrower under this Agreement, the Note, or the other Loan Documents.

         "Ormat Funding" means Ormat Funding Corp., a Delaware corporation.

         "Ormat Technologies" means Ormat Technologies, Inc., a Delaware
corporation.

         "PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.

         "Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) which the
Borrower or any ERISA Affiliate sponsors or maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time within the immediately preceding five years.

         "Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
joint stock company, association, corporation, institution, entity, party or
government (including, without limitation, any division, agency or department
thereof) or any other legal entity, whether acting in an individual, fiduciary
or other capacity, and, as applicable, the successors, heirs and assigns of
each.

         "Plan" means any employee benefit plan, as defined in Section 3(3) of
ERISA, maintained or contributed to by the Borrower or any ERISA Affiliate with
respect to which any of them may incur liability.

         "Prohibited Transaction" has the meaning specified in Section
5.1(s)(v).

         "Property" means any real property owned, leased or controlled by the
Borrower.

         "Pro Rata Share" means, on any date, a fraction (expressed as a
percentage) (i) the numerator of which is the sum of the amount of all undrawn
Letters of Credit and the outstanding amount of the Loans on such date and (ii)
the denominator of which is the aggregate unsecured Indebtedness of the Borrower
with respect to which the Borrower has any obligation to make payments of
principal or interest or to create segregated cash reserves or deposit cash
collateral, in each case during the twelve-month period following such date
including, without limitation, the amount of all undrawn Letters of Credit and
the outstanding amount of the Loans on such date.

         "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended, any successor statute and any regulations or guidelines promulgated
thereunder.

         "PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended, any successor statute and regulations or guidelines promulgated
thereunder.

         "Reportable Event" means any of the events described in Section 4043 of
ERISA and the regulations thereunder, other than a reportable event for which
the thirty-day notice requirement to the PBGC has been waived.

                                      -8-

AMENDED AND RESTATED

         "Requirement of Law" means (i) the Governing Documents, (ii) any law,
treaty, rule or regulation or determination of an arbitrator, court or other
Governmental Authority applicable to the Borrower or Ormat Technologies, or
(iii) any franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, or other right or approval binding on the
Borrower or any of its property.

         "Responsible Officer" means (i) the President, the Chief Executive
Officer, the Chief Financial Officer or the Chief Operating Officer of the
Borrower, (ii) either of Rany Raviv or Connie Stechman in his or her capacity as
an Authorized Representative appointed by the Board of Directors of the Borrower
or (iii) any other executive officer of the Borrower approved by the Lender from
time to time.

         "Solvent" means, when used with respect to any Person, that as of the
date as to which such Person's solvency is to be measured:

              (i) the fair saleable value of its assets is in excess of the
         total amount of its liabilities (including, without limitation,
         contingent liabilities as valued in accordance with applicable law) as
         they become absolute and matured;

              (ii) it has sufficient capital to conduct its business; and

              (iii) it is able to meet its debts as they mature.

         "Subordination Agreement" means the subordination agreement between
Ormat Technologies and the Lender, substantially in the form of Exhibit B
hereto, as amended, supplemented or otherwise modified from time to time.

         "Subsidiary" means, as to any Person, a corporation or other entity in
which that Person directly or indirectly owns or controls the shares of stock or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or appoint other managers of such corporation or other
entity and whose accounts are consolidated with the accounts of such Person in
such Person's financial statements.

         "Tangible Net Worth" means, as at any date for the determination
thereof, with respect to any Person, (i) total assets determined under GAAP less
(ii) intangible assets including, without limitation, goodwill, patents, patent
rights, trademarks, trade names, copyrights, design rights, franchises, bond
discounts, underwriting expenses, treasury stock, organization expenses, and
other similar items (other than the value of power purchase agreements, FERC
licensing costs, geothermal leases and other agreements that contribute to the
value of the Facilities), less (iii) total Liabilities determined under GAAP
(other than liabilities that are subordinated to the Obligations under the
Subordination Agreement).

         "Termination Event" means (i) a Reportable Event with respect to any
Pension Plan or Multiemployer Plan, (ii) the withdrawal of the Borrower or any
ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), (iii) the
providing of notice of intent to terminate a Pension Plan in a distress
termination (as described in Section 4041(c) of ERISA), (iv) the institution by
the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan, (v)
any event or condition

                                      -9-

AMENDED AND RESTATED

(A) which is reasonably likely to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan, or (B) that is reasonably likely to result
in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, or
(vi) the partial or complete withdrawal, within the meaning of Sections 4203 and
4205 of ERISA, of the Borrower or any ERISA Affiliate from a Multiemployer Plan.

         "Unrestricted Adjusted Consolidated Net Income" means, for any period,
the aggregate net income (or loss) of any Person and its consolidated
Subsidiaries and Consolidated Persons with respect to such first Person for such
period determined in conformity with GAAP and that is not restricted for use by
such Person under any Requirement of Law or contract or agreement.

         SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
defined or specified herein, all accounting terms used in this Agreement shall
be construed in accordance with GAAP, applied on a basis consistent in all
material respects with the Financial Statements delivered to the Lender on or
before the Closing Date. All accounting determinations for purposes of
determining compliance with Articles VI, VII and VIII shall be made in
accordance with GAAP as in effect on the Closing Date and applied on a basis
consistent in all material respects with the Financial Statements delivered to
the Lender on or before the Closing Date. The Financial Statements required to
be delivered hereunder from and after the Closing Date, and all financial
records, shall be maintained in accordance with GAAP. If GAAP shall change from
the basis used in preparing the Financial Statements delivered to the Lender on
or before the Closing Date, the certificates required to be delivered pursuant
to Section 6.1(i)(ii) demonstrating compliance with the covenants contained
herein shall include calculations setting forth the adjustments necessary to
demonstrate whether the Borrower is in compliance with the financial covenants
based upon GAAP as in effect on the Closing Date.

         SECTION 1.3 Other Terms; Headings. Terms used herein that are defined
in the Uniform Commercial Code, as in effect from time to time in the State of
New York (the "Code") shall have the meanings given in the Code. Each of the
words "hereof," "herein," and "hereunder" refer to this Agreement as a whole. An
Event of Default shall "continue" or be "continuing" unless and until such Event
of Default has been waived in accordance with Section 9.11 or cured. References
to Articles, Sections, Annexes, Schedules and Exhibits are internal references
to this Agreement, and to its attachments, unless otherwise specified. The
headings and the Table of Contents are for convenience only and shall not affect
the meaning or construction of any provision of this Agreement.

                                   ARTICLE II

                              THE CREDIT FACILITIES

         SECTION 2.1 Letters of Credit and Loans.

         (a) Subject to the terms and conditions set forth in this Agreement, on
and after the Closing Date until (but excluding) the Availability Expiration
Date, the Lender, upon receipt of a Letter of Credit Request, shall issue, or if
so requested by the Borrower from time to time, use its

                                      -10-

AMENDED AND RESTATED

best efforts to cause a Fronting Bank to issue, reissue or renew, Letters of
Credit for the account of the Borrower or, at the Borrower's request, for the
account of any wholly owned Subsidiary of the Borrower. Each Letter of Credit
shall be requested in accordance with the Borrower's ordinary business
requirements in the ownership, operation and development of Facilities to
support the obligations of the Borrower or its wholly owned Subsidiaries under
power purchase or other material project agreements or Ormat Funding's debt
reserve requirements with respect to Ormat Funding's 8 1/4% Senior Secured Notes
due 2020, each with a tenor and containing terms acceptable to the Borrower, the
Lender and, if applicable, the Fronting Bank, and in a face amount of not less
than $1,000,000. The Lender shall not be required to issue, or use its best
efforts to cause the issuance of, any Letter of Credit if, after giving effect
thereto, the maximum aggregate amount of (i) all Letters of Credit and Loans
outstanding at such time would exceed the Maximum Amount of the Facility or (ii)
the aggregate outstanding amount of Letters of Credit from Fronting Banks would
exceed $6,000,000. Notwithstanding any provision of this Agreement or any other
Loan Document, no Subsidiary of the Borrower shall be liable for any
reimbursement obligation with respect to any Letter of Credit.

         (b) Unless otherwise previously agreed in writing by the Borrower and
the Lender, the initial term of any Letter of Credit shall not exceed one
calendar year from the date of issuance, subject to automatic renewal unless
notice to the contrary is given by the Lender or the Fronting Bank, as the case
may be, to the beneficiary of such Letter of Credit in writing at least thirty
days before the then effective expiration date of such Letter of Credit or
before the end of such longer period before the then effective expiration date
as may be specified in such Letter of Credit. Each Letter of Credit shall state
that, except as otherwise provided therein, such Letter of Credit is governed by
the UCP 500 Uniform Customs and Practice for Documentary Credits. Each Letter of
Credit issued, at the Borrower's request, for the account of a wholly owned
Subsidiary of the Borrower shall be deemed issued for the account of the
Borrower and the obligations arising in connection therewith shall be part of
the Obligations.

         (c) Whenever the Borrower desires the issuance of a Letter of Credit,
the Borrower shall deliver to the Lender a written notice no later than 2:00
P.M. New York City time at least five Business Days (or such shorter period as
may be agreed to by the Lender) in advance of the proposed date of issuance of a
letter of credit request in substantially the form attached as Exhibit C (a
"Letter of Credit Request"). The transmittal by the Borrower of each Letter of
Credit Request shall be deemed to be a representation and warranty by the
Borrower that the Letter of Credit may be issued in accordance with and will not
violate any of the requirements of this Section 2.1. Prior to the date of
issuance of each Letter of Credit, the Borrower shall provide to the Lender a
precise description of the documents and the text of any certificate to be
presented by the beneficiary of such Letter of Credit which, if presented by
such beneficiary on or prior to the expiration date of such Letter of Credit,
would require the Lender (in its capacity as issuing bank) or the Fronting Bank,
as the case may be, to make payment under such Letter of Credit. The Lender, in
its reasonable judgment, may require changes in any such documents and
certificates. A Letter of Credit Request may be given in writing or
electronically with prompt written confirmation. Any electronic Letter of Credit
Request shall be deemed to have been prepared by, or under the supervision of, a
Responsible Officer.

         (d) If any request for drawing under any Letter of Credit is presented
to the Lender or a Fronting Bank by the beneficiary thereof prior to the
Availability Expiration Date,

                                      -11-

AMENDED AND RESTATED

(i) the Borrower shall be deemed to have requested a loan (a "Loan") on the date
on which such drawing is honored in an amount equal to the amount of such
drawing and (ii) without regard to the satisfaction of the applicable conditions
specified in Section 5.2 and the other terms and conditions of borrowing
hereunder, the Lender shall, on the date of such drawing, make a Loan in the
amount of such drawing, the proceeds of which shall be applied directly by the
Lender to repay the reimbursement obligation owed to the Lender or the Fronting
Bank, as the case may be, for the amount of such drawing. Each Loan shall be
payable in full, with all interest accrued thereon, on the earlier of (i) twelve
months after the date on which such Loan was made under Section 2.1(d) and (ii)
the Availability Expiration Date.

         (e) As between the Borrower, on the one hand, and the Lender (including
in its capacity as an account party of a Fronting Bank), on the other hand, the
Borrower assumes all risks of the acts and omissions of the Lender other than
the Lender's gross negligence or willful misconduct or of the misuse of the
Letters of Credit by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Lender shall not be
responsible (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under such Letters of
Credit even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged, (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason, (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, telecopy or
otherwise, (v) for errors in interpretation of technical terms, (vi) for any
loss or delay in the transmission or otherwise of any document required to make
a drawing under any such Letter of Credit, or of the proceeds thereof, (vii) for
the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing honored under such Letter of Credit, (viii) any failure
of the Lender to cause a Fronting Bank to re-issue, extend or renew a Letter of
Credit despite the Lender's best efforts to cause the same and (ix) for any
consequences arising from causes beyond the control of the Lender. None of the
above shall affect, impair, or prevent the vesting of any of the Lender's rights
or powers hereunder. Any action taken or omitted to be taken by the Lender under
or in connection with any Letter of Credit, if taken or omitted in the absence
of gross negligence or willful misconduct, shall not create any liability of the
Lender to the Borrower.

         (f) The obligations of the Borrower to reimburse the Lender for
drawings honored under the Letters of Credit shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of this Agreement, any
Letter of Credit or any other agreement or instrument relating thereto, (ii) the
existence of any claim, setoff, defense or other right which the Borrower or any
Affiliate of the Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for which any such
beneficiary or transferee may be acting), the Lender or any other Person,
whether in connection with this Agreement, the other Loan Documents, the
transactions contemplated herein or therein or any unrelated transaction, (iii)
any draft, demand, certificate or other documents presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect, (iv) the
surrender or

                                      -12-

AMENDED AND RESTATED

impairment of any security for the performance or observance of any of the terms
of any of the Loan Documents, (v) payment by the Lender or a Fronting Bank under
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit,
(vi) failure of any drawing under a Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of any drawing, or (vii) the
fact that a Default or Event of Default shall have occurred and be continuing.
Any action taken or omitted to be taken by the Lender or a Fronting Bank in
connection with any payment under a Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create any
liability of the Lender or a Fronting Bank to the Borrower.

         (g) Upon not less than three Business Days' prior notice from the
Borrower to the Lender, the Borrower may reduce the Commitment permanently, in
whole or in part, provided that (i) any partial reduction shall be in an
integral multiple of $1,000,000 and (ii) any such notice shall be irrevocable
once given.

         SECTION 2.2 Term. The Commitment shall commence on the Closing Date and
extend through the Initial Availability Expiration Date, unless sooner
terminated by the terms hereof, provided that the Availability Expiration Date
shall be extended for successive one-year periods beyond the then-effective
expiration date unless the Borrower notifies the Lender, or the Lender notifies
the Borrower, in writing at least one hundred twenty days and no more than one
hundred fifty days prior to the then effective Availability Expiration Date that
it does not wish to extend the Availability Expiration Date.

         SECTION 2.3 Evidence of Debt; Account Statements. The Lender shall
maintain in its records one or more accounts evidencing the Obligations and the
amount of the Loans made by the Lender and of principal and interest payable and
paid to the Lender from time to time under this Agreement. In any legal action
or proceeding in respect of this Agreement, the Lender's records shall be prima
facie evidence of the existence and amounts of the Obligations, absent manifest
error. The Lender shall provide the Borrower with statements of the accounts
maintained by it hereunder promptly following the making of each Loan, the
receipt of each payment to the Lender under this Agreement, any other
adjustments made by the Lender to such accounts from time to time and any other
information relating to such accounts as the Borrower may reasonably request
from time to time.

         SECTION 2.4 Amortization of Loans; Post-Default Cash Collateralization
of Letters of Credit.

         (a) The Borrower shall pay to the Lender in four consecutive quarterly
installments, commencing on the last Business Day of the calendar quarter
immediately following the making of each Loan under Section 2.1(d), and on the
last Business Day of each of the three calendar quarters thereafter, the Pro
Rata Share of the Adjusted Consolidated Cash Flow for such calendar quarter (not
to exceed, so long as no Event of Default has occurred and is continuing, the
outstanding balance of the Loans including accrued and unpaid interest and fees
and expenses payable to the Lender at such time), which payments shall be
applied to the principal outstanding amount of such Loan and any accrued and
unpaid interest thereon, and, if an Event of Default has occurred and is
continuing, the cash collateralization in full of the undrawn amount of all
outstanding Letters of Credit; provided, however, that the amount of each Loan
shall be repaid in

                                      -13-

AMENDED AND RESTATED

full, and all amounts of Adjusted Consolidated Cash Flow shall be available for
such repayment, on the earlier of (i) twelve months after the date on which such
Loan was made and (ii) the Availability Expiration Date.

         (b) All payments received by the Lender under subsection (a) hereof
shall be applied first to any accrued and unpaid interest on the Loans and then
to the outstanding principal amount of the Loans, provided that, if an Event of
Default has occurred and is continuing, the Lender shall have the right to apply
all payments and other amounts received by it on account of the Obligations to
such of the Obligations and in such order as it shall elect in its sole
discretion.

         SECTION 2.5 Maximum Amount of the Facility; Mandatory Prepayments;
Optional Prepayments.

         (a) In no event shall (i) the sum of the aggregate outstanding
principal balances of the Loans and the aggregate undrawn amount of all
outstanding Letters of Credit exceed the Maximum Amount of the Facility or (ii)
the amount of Letters of Credit issued by Fronting Banks exceed $6,000,000.

         (b) In addition to any prepayment required as a result of an Event of
Default hereunder, the Borrower shall immediately upon discovery by or notice to
the Borrower that the lending limit specified in Section 2.5(a) has been
exceeded, prepay to the Lender an amount sufficient to reduce the outstanding
balances to the applicable maximum allowed amount, or, in the case of Letters of
Credit, to cash collateralize such excess amount, without the necessity of a
demand by the Lender.

         (c) The Borrower shall have the right at any time to make prepayments
of the Loans without premium or penalty, upon irrevocable notice given to the
Lender prior to 4:00 P.M., New York City time, at least two Business Days prior
to the date of such prepayment, specifying the date and amount thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of the Loans under this
Section shall be applied as reasonably specified by the Borrower in such notice
or, if an Event of Default has occurred and is continuing, as the Lender shall
elect in its sole discretion.

         (d) The entire outstanding principal amount of the Loans, together with
all accrued and unpaid interest thereon and fees related thereto, shall become
due and payable on the Availability Expiration Date.

         SECTION 2.6 Payment Procedures.

         (a) The Borrower hereby authorizes the Lender to charge the Borrower
with the amount of all interest, fees, reasonable expenses and other payments to
be made hereunder and under the other Loan Documents by adding such amount to
the Obligations. The Lender may, but shall not be obligated to, discharge the
Borrower's payment obligations hereunder by so increasing the amount of the
Obligations.

         (b) Whenever any payment or other transfer of funds to be made
hereunder shall be stated to be due or made on a day that is not a Business Day,
such payment or transfer may, except as provided in the proviso to the
definition of "Interest Period," be made on the next

                                      -14-

AMENDED AND RESTATED

succeeding Business Day, and, if applicable, such extension of time shall be
included in the computation of the amount of interest due hereunder.

         SECTION 2.7 Payments.

         The Borrower shall make each payment hereunder not later than 4:00 P.M.
(New York time) on the day when due, in Dollars, to the Lender by wire transfer
in immediately available funds to the Lender's office in Mahwah, New Jersey,
Account No. 270600002201, ABA No. 021201503, Reference: Ormat, Attention: Rose
Diaz.

                                   ARTICLE III

                           INTEREST, FEES AND EXPENSES

         SECTION 3.1 Interest.

         (a) The Borrower shall pay to the Lender interest on the Loans at an
interest rate per annum equal to the LIBOR Rate plus 4.00%, payable quarterly in
arrears on the last Business Day of each calendar quarter and on the
Availability Expiration Date.

         (b) The initial Interest Period for each Loan shall commence on the
date such Loan is made under Section 2.1(d) and a new Interest Period shall
automatically commence on the day following the last day of the initial Interest
Period (and on the day following the last day of each subsequent Interest
Period) and end in each case on the first day of the following month.

         (c) Anything in subsections (a) and (b) hereof to the contrary
notwithstanding,

              (i) If the last day of an Interest Period is less than one month
         prior to the Maturity Date, the Loans will bear interest for the period
         from the last day of such Interest Period to the Maturity Date at a
         fluctuating rate per annum equal to the Base Rate plus 1.50%, each
         change in such fluctuating rate to take effect simultaneously with the
         corresponding change in the Base Rate.

              (ii) If, at least one Business Day before the last day of an
         Interest Period, the introduction of or any change in or in the
         interpretation of any law or regulation makes it unlawful, or any
         central bank or other Governmental Authority asserts that it is
         unlawful, for the Lender or any of its Affiliates to perform its
         obligations hereunder to continue any Loan as a loan bearing interest
         with reference to the LIBOR Rate, the Lender shall promptly give
         written notice of such circumstance, and the Loans shall not thereafter
         bear interest with reference to the LIBOR Rate until such circumstances
         no longer exist, and the Loans shall thereafter during such period bear
         interest at a fluctuating rate per annum equal to the Base Rate plus
         1.50%, each change in such fluctuating rate to take effect
         simultaneously with the corresponding change in the Base Rate.

              (iii) If, at least one Business Day before the last day of any
         Interest Period, the LIBOR Rate cannot be determined pursuant to any of
         clause (i), (ii) or (iii) of the definition of such term in Section 1.1
         due to a disruption in the market over which

                                      -15-

AMENDED AND RESTATED

         the Lender has no control, the Lender shall promptly give written
         notice of such circumstance, and the Loans shall not thereafter bear
         interest with reference to the LIBOR Rate until such circumstances no
         longer exist, and the Loans shall thereafter during such period bear
         interest at a fluctuating rate per annum equal to the Base Rate plus
         1.50%, each change in such fluctuating rate to take effect
         simultaneously with the corresponding change in the Base Rate.

              (iv) All interest payable by reference to the Base Rate under this
         subsection (c) shall be payable quarterly, in arrears, on the first
         Business Day of each calendar quarter and on the Maturity Date.

         SECTION 3.2 Interest After Event of Default. Upon the occurrence and
during the continuance of an Event of Default, interest on the Loans shall be
payable on demand at a rate per annum equal to the rate in effect under Section
3.1 plus 2%.

         SECTION 3.3 Commitment Fee. The Borrower shall pay to the Lender on the
Closing Date a non-refundable commitment fee in the amount of $300,000.

         SECTION 3.4 Unused Line Fee. The Borrower shall, for the period from
the Closing Date through the Availability Expiration Date, pay in arrears to the
Lender on the last Business Day of each calendar quarter, commencing June 2004
and on the Availability Expiration Date, in arrears, an unused line fee equal to
..10% per annum of the difference between (a) the Maximum Amount of the Facility,
and (b) the average daily outstanding amount of (i) the Loans and (ii) the
aggregate undrawn amount of all outstanding Letters of Credit during such
quarter or portion thereof.

         SECTION 3.5 Letter of Credit Fees. The Borrower shall pay to the Lender
a non-refundable fee in the amount of 2.50% per annum (in the case of a Letter
of Credit issued, re-issued, extended (whether by automatic extension or
otherwise) or renewed by the Lender) and 2.75% per annum (in the case of a
Letter of Credit issued, re-issued, extended (whether by automatic extension or
otherwise) or renewed by a Fronting Bank) of (a) the weighted monthly average
amount stated to be available for drawing under such Letter of Credit during the
year following the issuance, re-issuance, extension or renewal thereof, which
shall be payable at the time of issuance, re-issuance, extension or renewal of
such Letter of Credit and (b) any increase in such weighted monthly average
amount resulting from amounts actually drawn under such Letter of Credit, which
shall be payable at the time of each such increase (such weighted monthly
average amount, including any such increase, being referred to herein as the "LC
Weighted Average"). The Borrower shall also pay or reimburse the Lender for all
advising and confirming bank fees, not to exceed 0.25% per annum of the LC
Weighted Average of the applicable Letter of Credit, actually charged by the
confirming bank in connection with the issuance, re-issuance, extension or
renewal of any Letter of Credit that has been issued by the Lender and confirmed
by such confirming bank.

         SECTION 3.6 Calculations. All calculations of interest and fees
hereunder shall be made by the Lender, on the basis of a year of 360 days for
the actual number of days elapsed in the period for which such interest or fees
are payable. Each determination by the Lender of an interest rate, fee or other
payment hereunder shall be final, conclusive and binding for all purposes,
absent manifest error.

                                      -16-

AMENDED AND RESTATED

         SECTION 3.7 Indemnification in Certain Events.

         (a) If after the Closing Date, (i) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to the Lender or
any other banking or financial institution from which the Lender borrows funds
or obtains credit, (ii) the Lender complies with any future guideline or request
from any central bank or other Governmental Authority or (iii) the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has the effect described below, or the
Lender complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, and in the case of any event set forth in this clause (iii),
such adoption, change or compliance has the direct effect of reducing the rate
of return on the Lender's capital as a consequence of its obligations hereunder
to a level below that which the Lender would have achieved but for such
adoption, change or compliance (taking into consideration the Lender's policies
with respect to capital adequacy) by a material amount, and any of the foregoing
events described in clauses (i), (ii) and (iii) increases the Lender's cost of
funding or maintaining the Loans, or reduces the amount receivable in respect
thereof by the Lender, then the Borrower shall, after written request by the
Lender and receipt by the Borrower of a certificate from an officer of the
Lender specifying the cause, amount and calculation of such increase or
reduction, as applicable, pay to the Lender additional amounts sufficient to
indemnify the Lender against such increase in cost or reduction in amount
receivable.

         (b) The Borrower agrees to indemnify the Lender against any loss, cost
or expense incurred by the Lender as a result of the making of a payment or
prepayment on account of a Loan on a day which is not the last day of an
Interest Period with respect thereto, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund such Loan.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         SECTION 4.1 Conditions to Initial Letter of Credit. The obligation of
the Lender to issue or to use its best efforts to cause a Fronting Bank to issue
the initial Letter of Credit is subject to the satisfaction of the following
conditions prior to or concurrent with the issuance of such initial Letter of
Credit:

         (a) The Lender shall have received the following, each dated the date
of the initial Letter of Credit or as of such earlier date acceptable to the
Lender, in form and substance satisfactory to the Lender:

              (i)  the Note, duly executed by the Borrower;

              (ii) the Subordination Agreement, duly executed by Ormat
         Technologies;

                                      -17-

AMENDED AND RESTATED

              (iii) (A) the audited Financial Statements for the fiscal year
         ended December 31, 2003 certified by the Auditors and (B) a certificate
         executed by a Responsible Officer certifying that since December 31,
         2003, except for the transactions specified in Schedule 5.1(f), no
         change, event, occurrence or development or event involving a
         prospective change in the business, prospects, operations, results of
         operations, assets, liabilities or condition (financial or otherwise)
         of the Borrower has occurred which has had or could reasonably be
         expected to have a Material Adverse Effect, and that all information
         provided by or on behalf of the Borrower to the Lender hereunder or in
         connection herewith is true and correct in all material respects;

              (iv) the opinion of counsel for the Borrower, substantially in the
         form of Exhibit D hereto, which the Borrower hereby requests its
         counsel to provide;

              (v) a copy of the Governing Documents of the Borrower and the
         resolutions of the board of directors of the Borrower authorizing the
         execution, delivery and performance of this Agreement, the other Loan
         Documents and the transactions contemplated hereby and thereby,
         attached to which is a certificate of the Secretary or an Assistant
         Secretary of the Borrower certifying (A) that such copies of the
         Governing Documents and resolutions are true, complete and accurate
         copies thereof, have not been amended or modified since the date of
         such certificate and are in full force and effect and (B) the
         incumbency, names and true signatures of the officers of the Borrower
         authorized to sign the Loan Documents to which it is or is to be a
         party;

              (vi) a copy of the Governing Documents of Ormat Technologies and
         the resolutions of the board of directors of the Ormat Technologies
         authorizing the execution, delivery and performance of the
         Subordination Agreement attached to which is a certificate of the
         Secretary or an Assistant Secretary of Ormat Technologies certifying
         (A) that such copies of the Governing Documents and resolutions are
         true, complete and accurate copies thereof, have not been amended or
         modified since the date of such certificate and are in full force and
         effect and (B) the incumbency, names and true signatures of the
         officers of Ormat Technologies authorized to sign the Subordination
         Agreement;

              (vii) a certified copy of the certificate of the Secretary of
         State of the State of Delaware, dated within fifteen days of the
         Closing Date, listing the certificate of incorporation of the Borrower
         and any amendment thereto on file in such official's office and
         certifying that any such amendments are the only amendments to such
         certificate of incorporation on file in that office; and

              (viii) a good standing certificate from the Secretary of State of
         each state in which the Borrower is incorporated or qualified as a
         foreign corporation, each dated within fifteen days of the Closing
         Date.

         (b) There shall be no pending or threatened litigation, proceeding,
inquiry or other action seeking an injunction or other restraining order,
damages or other relief with respect to

                                      -18-

AMENDED AND RESTATED

the transactions contemplated by this Agreement, the other Loan Documents, or
the transactions contemplated hereby or thereby or the Borrower's business,
prospects, operations, assets, liabilities or conditions (financial or
otherwise), except where such litigation, proceeding, inquiry or other action
could not reasonably be expected to have a Material Adverse Effect.

         (c) The Borrower shall have paid all accrued fees and reasonable
expenses of the Lender in connection with the negotiation, preparation,
execution and delivery of the Loan Documents (including the reasonable fees and
expenses of counsel to the Lender) and all other fees required to be paid by the
Borrower on or before the Closing Date under Article III.

         (d) No consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other Person shall be required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby or the continuing operations of the
Borrower or any of its Subsidiaries following the consummation of such
transactions that have not been obtained.

         (e) The Borrower shall be in compliance in all material respects with
all Requirements of Law and Material Contracts.

         (f) There shall exist no Default, and the representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct immediately prior to, and after giving effect to, any Letter of
Credit to be issued on the Closing Date.

         (g) The Financial Covenants shall have been satisfied for the year
ended December 31, 2003 and the calendar quarter ended March 31, 2004.

         SECTION 4.2 Conditions Precedent to Issuance of Each Letter of Credit.
The obligation of the Lender to issue and to use its best efforts to cause a
Fronting Bank to issue any Letter of Credit, other than the initial Letter of
Credit, is subject to the following conditions precedent:

         (a) all representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct on and as of the date of
issuance of such Letter of Credit as if then made, other than representations
and warranties that expressly relate solely to an earlier date, in which case
they shall be true and correct as of such earlier date;

         (b) no Default shall have occurred and be continuing or would result
from the issuance of such Letter of Credit; and

         (c) except for the transactions specified in Schedule 5.1(f), no
Material Adverse Effect shall have occurred or shall be reasonably likely to
occur after giving effect to the issuance of such Letter of Credit.

         SECTION 4.3 Determinations Under Section 4.1. For purposes of
determining compliance with the conditions specified in Section 4.1, the Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or to be acceptable or satisfactory to the Lender unless

                                      -19-

AMENDED AND RESTATED

the Borrower shall have received written notice from the Lender prior to the
initial Loan or Letter of Credit specifying its objection thereto.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         SECTION 5.1 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:

         (a) Organization, Good Standing and Qualification. The Borrower (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has the power and authority to own its
properties and assets and to conduct the business in which it now is, or
proposes to be, engaged and (iii) is duly qualified, authorized to do business
and in good standing in each jurisdiction where it now is, or proposes to be,
engaged in business.

         (b) Authority. The Borrower has the requisite corporate power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents. All corporate action necessary for the execution, delivery and
performance by the Borrower of the Loan Documents (including the consent of its
shareholder where required) has been taken.

         (c) Enforceability. This Agreement is and, when executed and delivered,
each other Loan Document to which the Borrower is a party will be, the legal,
valid and binding obligation of the Borrower enforceable in accordance with its
terms, except as enforceability may be limited by (i) bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) general principles
of equity.

         (d) No Conflict. The execution, delivery and performance of each Loan
Document by the Borrower do not and will not contravene (i) any of the Governing
Documents of the Borrower, (ii) any Requirement of Law or (iii) any Material
Contract, and will not result in the imposition of any Liens upon any of its
properties.

         (e) Consents and Filings. No consent, authorization or approval of, or
filing with or other act by, any Governmental Authority or other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Loan Document or the consummation
of the transactions contemplated hereby or thereby, except those that have been
obtained or made and are specified in Schedule 5.1(e).

         (f) Financial Data. The Borrower has provided to the Lender complete
and accurate copies of audited Financial Statements for the fiscal year ended
December 31, 2003. Such statements have been prepared in accordance with GAAP
consistently applied throughout the period involved and fairly present the
results of operations and profits and losses of the Borrower for the period
covered. Since December 31, 2003, except as specified in Schedule 5.1(f), (i)
there has been no change, occurrence, development or event which has had or
could reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower and (ii) none of the capital stock of the Borrower
has been redeemed, retired, purchased or otherwise acquired for value by the
Borrower.

                                      -20-

AMENDED AND RESTATED

         (g) Accuracy and Completeness of Information. All data, reports and
information heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Lender for purposes of or in connection with this
Agreement or any other Loan Document, or any transaction contemplated hereby or
thereby, are true and accurate in all material respects on the date as of which
such data, reports and information are dated or certified and not incomplete by
omitting to state any material fact necessary to make such data, reports and
information not misleading at such time. There are no facts now known to any
executive officer of the Borrower which individually or in the aggregate could
reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower and which have not been specified herein, in the
Financial Statements, or in any certificate, opinion or other written statement
made or furnished by the Borrower to the Lender.

         (h) No Joint Ventures or Partnerships. As of the Closing Date, the
Borrower is not engaged in any joint venture or partnership with any other
Person except as specified in Schedule 5.1(h).

         (i) Corporate and Trade Name. During the past five years, the Borrower
has not been known by or used any corporate, trade or fictitious name other than
Ormat Nevada, Inc.

         (j) No Actual or Pending Material Modification of Business. There
exists no actual or, to the best of the Borrower's knowledge, threatened
termination, cancellation, limitation, modification or change in or of the
business relationship of the Borrower with any customer or group of customers
whose purchases individually or in the aggregate could reasonably be expected to
have a material adverse effect on the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower.

         (k) No Broker's or Finder's Fees. No broker or finder brought about the
obtaining, making or closing of the financial accommodations afforded hereunder
or in connection herewith by the Lender. No broker's or finder's fees or
commissions will be payable by the Borrower to any Person in connection with the
transactions contemplated by this Agreement.

         (l) Investment Company. The Borrower is not an "investment company," or
an "affiliated Person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.

         (m) Public Utility.

              (i) Neither the Borrower nor any of its Subsidiaries (by reason of
         any action or inaction or by reason of the ownership or operation by it
         or any Affiliate of any Facility or otherwise) is subject to any type
         of financial, organizational or rate regulation as an Electric Utility
         or to be regulated as a "public utility company" or a company which is
         a "holding company" of a "public utility company" subject to
         registration with the Securities and Exchange Commission or to
         regulation under PUHCA.

              (ii) Neither the Lender nor any of its Affiliates will, solely
         (i.e., without regard to any other activity or operation) by reason of
         this Agreement and the other

                                      -21-

AMENDED AND RESTATED

         Loan Documents and the consummation of the transactions contemplated
         hereby and thereby, be or deemed to be, or be subject to regulation as,
         a "public utility company" or a company which is a "holding company" of
         a "public utility company" subject to registration with the Securities
         and Exchange Commission or to regulation under PUHCA or any other
         Requirement of Law regulating utilities or independent power producers.

              (iii) Each Facility owned by the Borrower or any of its Affiliates
         on the Closing Date is (A) a "qualifying facility" within the meaning
         of the PURPA regulations, eligible for the benefit of the exemptions
         provided by 18 C.P.R. ss. 292.601, (B) an "exempt wholesale generator"
         under the National Energy Policy Act of 1992 or (C) exempt from all
         regulation under PUHCA.

         (n) Margin Stock. The Borrower does not own any "margin stock" as that
term is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") and the proceeds of Loans will be used only
for the purposes contemplated hereunder.

         (o) Taxes and Tax Returns.

              (i) To the best of the Borrower's knowledge after due inquiry, the
         Borrower has properly completed and timely filed all income tax
         returns, if any, it is required to file up to and including for the
         year ended December 31, 2003. To the best of the Borrower's knowledge
         after due inquiry, the information filed is complete and accurate in
         all material respects. To the best of the Borrower's knowledge, after
         due inquiry, all deductions taken in such income tax returns are
         appropriate and in accordance with applicable laws and regulations.

              (ii) To the best of the Borrower's knowledge after due inquiry,
         except as specified in Schedule 5.1(o), all taxes, assessments, fees
         and other governmental charges for periods beginning prior to the date
         hereof have been timely paid (or, if not yet due, adequate reserves
         therefor have been established) and the Borrower has no liability for
         taxes in excess of the amounts so paid or reserves so established.

              (iii) To the best of the Borrower's knowledge after due inquiry,
         except as specified in Schedule 5.1(o), (A) no deficiencies for taxes
         have been claimed, proposed or assessed by any taxing or other
         Governmental Authority against the Borrower and no tax Liens have been
         filed and (B) there are no pending or threatened audits, investigations
         or claims for or relating to any liability of the Borrower for taxes
         and there are no matters under discussion with any Governmental
         Authority which could result in an additional liability of the Borrower
         for taxes beyond amounts reserved therefor in accordance with GAAP.
         Except as is required solely for the use by the Borrower of net
         operating loss carryforwards, no extension of a statute of limitations
         relating to taxes, assessments, fees or other governmental charges is
         in effect as of the Closing Date with respect to the Borrower.

                                      -22-

AMENDED AND RESTATED

              (iv) As of the Closing Date, the Borrower is not a party to and
         has no obligations under any written tax sharing agreement or agreement
         regarding payments in lieu of taxes.

         (p) No Judgments or Litigation. Except as specified in Schedule 5.1(p),
no judgments, orders, writs or decrees are outstanding against the Borrower or
any of its Subsidiaries or otherwise involving any Facility, nor is there
pending or, to the best of the Borrower's knowledge, threatened any litigation,
contested claim, investigation, arbitration, or governmental proceeding by or
against the Borrower or any of its Subsidiaries or otherwise involving any
Facility that (i) individually or in the aggregate could reasonably be expected
to have a material adverse effect on the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower or (ii) purports to affect the legality, validity or enforceability of
this Agreement, the Note or any other Loan Document or the consummation of the
transactions contemplated hereby or thereby.

         (q) Title to Property. The Borrower has (i) good and marketable fee
simple title to or valid leasehold interests in or other relevant rights in all
of its real property and (ii) good and marketable title to all of its other
property.

         (r) No Defaults. After giving effect to the closing of the transactions
contemplated herein, neither the Borrower nor any of its Subsidiaries is in
default under any term of any Material Contract or Requirement of Law, which
default could reasonably be expected to have a material adverse effect on the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower or otherwise cause an Event of Default
to occur, nor has the Borrower or any of its Subsidiaries received notice of any
such default.

         (s) ERISA.

              (i) Except as specified in Schedule 5.1(s), as of the Closing
         Date, the Borrower does not maintain or contribute to any Plan.

              (ii) The Borrower and, to the best of the Borrower's knowledge,
         each ERISA Affiliate have fulfilled all contribution obligations for
         each Plan (including obligations related to the minimum funding
         standards of ERISA and the Internal Revenue Code) as they have become
         due, and, to the best of the Borrower's knowledge, no application for a
         funding waiver or an extension of any amortization period pursuant to
         Sections 303 and 304 of ERISA or Section 412 of the Internal Revenue
         Code has been made with respect to any Plan.

              (iii) To the best of the Borrower's knowledge no Termination Event
         has occurred nor has any other event occurred that is likely to result
         in a Termination Event. Neither the Borrower or, to the best of the
         Borrower's knowledge, any ERISA Affiliate, nor any fiduciary of any
         Plan, is subject to any direct or indirect liability with respect to
         any Plan under any Requirement of Law or agreement which could
         reasonably be expected to have a Material Adverse Effect.

              (iv) Neither the Borrower nor, to the best of the Borrower's
         knowledge, any ERISA Affiliate is required to or reasonably expects to
         be required to provide

                                      -23-

AMENDED AND RESTATED

         security to any Plan under Section 307 of ERISA or Section 401(a)(29)
         of the Internal Revenue Code.

              (v) The Borrower is in compliance in all respects with any
         applicable provisions of ERISA with respect to all Plans except where
         such noncompliance could not reasonably be expected to have a Material
         Adverse Effect. To the best of the Borrower's knowledge, there has been
         no prohibited transaction as defined in Section 406 of ERISA or Section
         4975 of the Internal Revenue Code (a "Prohibited Transaction") with
         respect to any Plan or any Multiemployer Plan. The Borrower and, to the
         best of the Borrower's knowledge, each ERISA Affiliate have made when
         due any and all payments required to be made under any agreement
         relating to a Multiemployer Plan or any Requirement of Law pertaining
         thereto. With respect to each Plan and Multiemployer Plan, the Borrower
         and each ERISA Affiliate have not incurred any liability to the PBGC
         and have not had asserted against them any penalty for failure to
         fulfill the minimum funding requirements of ERISA.

              (vi) Each Plan which is intended to qualify under Section 401(a)
         of the Internal Revenue Code has received a favorable determination
         letter from the IRS and no event has occurred which would cause the
         loss of such qualification except where the loss of such qualification
         could not reasonably be expected to have a Material Adverse Effect.

              (vii) Neither the Borrower nor, to the best of the Borrower's
         knowledge, any ERISA Affiliate has instituted or intends to institute
         proceedings to terminate any Plan.

         (t) Labor Matters. There are no collective bargaining agreements to
which the Borrower or any of its Subsidiaries is a party as of the Closing Date.
There are no existing or threatened strikes, lockouts or other disputes relating
to any collective bargaining or similar agreement to which the Borrower or any
of its Subsidiaries is a party which, individually or in the aggregate, taken as
a whole, could reasonably be expected to have a material adverse effect on the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower.

         (u) Compliance with Environmental Laws. The Borrower (i) is not the
subject of a judicial or administrative proceeding or investigation relating to
the violation of any Environmental Law or asserting potential liability arising
from the release or disposal by any Person of any Hazardous Materials, (ii) has
not filed or received any notice under any Environmental Law concerning the
treatment, storage, disposal, spill or release or threatened release of any
Hazardous Materials at, on, beneath or adjacent to property owned or leased by
it, or the release or threatened release at any other location of any Hazardous
Material generated, used, stored, treated, transported or released by or on
behalf of the Borrower and (iii) has no knowledge of any contingent liability of
the Borrower for any release of any Hazardous Materials, in each case which
proceedings, investigations notices and liabilities involve an amount in excess
of $1,000,000 in the aggregate and could reasonably be expected to have a
Material Adverse Effect.

                                      -24-

AMENDED AND RESTATED

         (v) Licenses and Permits. The Borrower has obtained, and holds in full
force and effect, all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals, in each case which are material to and necessary for the operation of
its business as now conducted and as proposed to be conducted.

         (w) Business and Properties. The business of the Borrower or any of its
Subsidiaries is not presently affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, 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 on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower.

         (x) Contracts, Orders, etc. Set forth on Schedule 5.1(x) is a complete
and accurate list of all indentures, loan or credit agreements, lease finance
agreements, guarantees, mortgages, security agreements, bonds, notes and other
similar agreements or instruments, and all orders, writs, judgments, awards,
injunctions and decrees, which materially affect the Borrower's right to borrow
money or to incur its obligations under this Agreement.

                                   ARTICLE VI

                            COVENANTS OF THE BORROWER

         SECTION 6.1 Affirmative Covenants. Until the satisfaction of all
Obligations in full, the termination of the Commitment and the expiration or, to
the extent required under the terms of this Agreement, full cash
collateralization of all Letters of Credit:

         (a) Corporate Existence. The Borrower shall (i) maintain its corporate
existence, (ii) qualify to transact business as a foreign corporation where the
nature or extent of its business or the ownership of its property requires it to
be so qualified and (iii) maintain in full force and effect all licenses, bonds,
franchises, leases, trademarks and qualifications to do business, and all
patents, contracts and other rights and privileges necessary to the conduct of
its businesses or the performance of its obligations under this Agreement and
the other Loan Documents, except to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

         (b) Maintenance of Property. The Borrower shall keep all property
useful, necessary and material to its business in good working order and
condition (ordinary wear and tear excepted) as may be required or appropriate,
except to the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect.

         (c) Taxes and other Claims. The Borrower shall pay and discharge when
due (i) all federal, state and local tax assessments and other governmental
charges and levies imposed against the Borrower or any of its property; and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that any such tax assessment, charge, levy or claim need not
be paid if it is being contested, in good faith, by appropriate proceedings
diligently conducted and if an adequate reserve or other appropriate provision
shall have been made therefor as required in accordance with GAAP.

                                      -25-

AMENDED AND RESTATED

         (d) Government Regulations. The Borrower shall comply with all
applicable federal, state, local or foreign laws and regulations, including,
without limitation, those relating to environmental matters, employee matters
(including the collection, payment and deposit of employees' income,
unemployment and social security taxes) and with respect to pension liabilities,
except where the failure to comply would not have a Material Adverse Effect.

         (e) Insurance. The Borrower shall, or, at its option, shall cause one
or more of its Subsidiaries to, maintain adequate insurance on all property and
assets of the Borrower and the Facilities, including fire, theft, burglary,
pilferage, casualty, general liability, worker's compensation, public liability,
business interruption, third party property damage and replacement value
insurance under such policies of insurance, with such insurance companies, in
such amounts and covering such risks as are at all times reasonably satisfactory
to the Lender.

         (f) Books and Records; Inspections. The Borrower shall (i) maintain
adequate books and records (including, without limitation, computer printouts
and programs) in accordance with GAAP and otherwise reflecting all financial
transactions of the Borrower and (ii) provide the Lender and its agents access
to the premises of the Borrower at any reasonable time and from time to time,
during normal business hours and upon reasonable notice under the circumstances,
and at any reasonable time on and after the occurrence of a Default.

         (g) Notification Requirements. The Borrower shall timely give to the
Lender the following notices and other documents:

              (i) Notice of Defaults. Promptly, and in any event within five
         Business Days after becoming aware of the occurrence of a Default, a
         certificate of a Responsible Officer specifying the nature thereof and
         the Borrower's proposed response thereto, each in reasonable detail.

              (ii) Proceedings, Adverse Changes and other Events. Promptly, and
         in any event within ten Business Days after the Borrower becomes aware
         of any of the following, (A) notice of (I) any proceeding being
         instituted or threatened to be instituted by or against the Borrower in
         any federal, state, local or foreign court or before any commission or
         other regulatory body (federal, state, local or foreign) which has or
         could reasonably be expected to have a Material Adverse Effect, (II)
         any order, judgment or decree which has or could reasonably be expected
         to have a Material Adverse Effect being entered against the Borrower or
         any of its properties or assets or (III) any actual change, development
         or event including, without limitation, any investigation or proceeding
         before any Governmental Authority which has had or could reasonably be
         expected to have a Material Adverse Effect, and (B) a written statement
         describing such proceeding, order, judgment, decree, change,
         development or event and the action, if any, being taken with respect
         thereto by the Borrower.

              (iii) ERISA Notices.

                   (A)  Promptly, and in any event no later than ten Business
                        Days after the occurrence of the later of a Termination
                        Event or knowledge by the Borrower that a Termination
                        Event has

                                      -26-

AMENDED AND RESTATED

                        occurred, a written statement of a Responsible Officer
                        describing such Termination Event and any action that is
                        being taken with respect thereto by the Borrower or any
                        ERISA Affiliate, and any action taken or threatened by
                        the Internal Revenue Service, the Department of Labor or
                        the PBGC;

                   (B)  promptly, and in any event no later than ten Business
                        Days after the later of the filing thereof with the
                        Internal Revenue Service or knowledge by the Borrower of
                        such filing of an ERISA Affiliate, a copy of each
                        funding waiver request filed with respect to any Plan
                        subject to the funding requirements of Section 412 of
                        the Internal Revenue Code and all communications
                        received by the Borrower or any ERISA Affiliate with
                        respect to such request;

                   (C)  promptly, and in any event no later than ten Business
                        Days after the later of receipt by the Borrower or
                        knowledge by the Borrower of receipt by any ERISA
                        Affiliate of the PBGC's intention to terminate a Pension
                        Plan or to have a trustee appointed to administer a
                        Pension Plan, a copy of each such notice;

                   (D)  promptly, and in any event no later than ten Business
                        Days after the later of the occurrence thereof or
                        knowledge by the Borrower of the occurrence, notice
                        (including the nature of the event and, when known, any
                        action taken or threatened by the Internal Revenue
                        Service or the PBGC with respect thereto) of:

                        (I)   any Prohibited Transaction which could subject the
                              Borrower or any ERISA Affiliate to a civil penalty
                              assessed pursuant to Section 502(i) of ERISA or a
                              tax imposed by Section 4975 of the Internal
                              Revenue Code in connection with any Plan, or any
                              trust created thereunder and which could
                              reasonably be expected to have a Material Adverse
                              Effect,

                        (II)  any cessation of operations (by the Borrower or
                              any ERISA Affiliate) at a Facility in the
                              circumstances described in Section 4062(e) of
                              ERISA and which could reasonably be expected to
                              have a Material Adverse Effect,

                        (III) a failure by the Borrower or any ERISA Affiliate
                              to make a payment to a Plan required to avoid
                              imposition of a Lien under Section 302(f) of ERISA
                              or

                                      -27-

AMENDED AND RESTATED

                              Section 412(n) of the Internal Revenue Code and
                              which could reasonably be expected to have a
                              Material Adverse Effect,

                        (IV)  the adoption of an amendment to a Plan requiring
                              the provision of security to such Plan pursuant to
                              Section 307 of ERISA or Section 401(a)(29) of the
                              Internal Revenue Code and which could reasonably
                              be expected to have a Material Adverse Effect, or

                        (V)   any change in the actuarial assumptions or funding
                              methods used for any Plan, where the effect of
                              such change is materially to increase or reduce
                              the unfunded benefit liability or obligation to
                              make periodic contributions and which could
                              reasonably be expected to have a Material Adverse
                              Effect;

                   (E)  promptly upon the request of the Lender, each annual
                        report (IRS Form 5500 series) and all accompanying
                        schedules, the most recent actuarial reports, the most
                        recent financial information concerning the financial
                        status of each Plan administered or maintained by the
                        Borrower or any ERISA Affiliate, and schedules showing
                        the amounts contributed to each such Plan by or on
                        behalf of the Borrower or any ERISA Affiliate in which
                        any of its personnel participate or from which such
                        personnel may derive a benefit;

                   (F)  promptly upon the filing thereof or upon knowledge of
                        such filing by the Borrower, copies of any Form 5310, or
                        any successor or equivalent form to Form 5310, filed
                        with the PBGC in connection with the termination of any
                        Plan, and copies of any standard termination notice or
                        distress termination notice filed with the PBGC in
                        connection with the termination of any Pension Plan;

                   (G)  promptly, and in any event no later than ten Business
                        Days after the later of receipt thereof by the Borrower
                        or knowledge by the Borrower of receipt by any ERISA
                        Affiliate, notice and demand for payment of withdrawal
                        liability under Section 4201 of ERISA with respect to a
                        Multiemployer Plan and which could reasonably be
                        expected to have a Material Adverse Effect;

                   (H)  promptly, and in any event no later than ten Business
                        Days after the later of receipt thereof by the Borrower
                        or knowledge by the Borrower of receipt by any ERISA
                        Affiliate, notice by the Department of Labor of any
                        penalty, audit, investigation or

                                      -28-

AMENDED AND RESTATED

                        any purported violation of ERISA with respect to a Plan
                        and which could reasonably be expected to have a
                        Material Adverse Effect;

                   (I)  promptly, and in any event no later than ten Business
                        Days after the later of receipt thereof by the Borrower
                        or knowledge by the Borrower of receipt by any ERISA
                        Affiliate, notice by the Internal Revenue Service or the
                        Treasury Department of any income tax deficiency or
                        delinquency, excise tax penalty, audit or investigation
                        with respect to a Plan and which could reasonably be
                        expected to have a Material Adverse Effect; and

                   (J)  promptly, and in any event no later than ten Business
                        Days after the later of receipt thereof by the Borrower
                        or knowledge by the Borrower of receipt by any ERISA
                        Affiliate, notice of any administrative or judicial
                        complaint, or the entry of a judgment, award or
                        settlement agreement, in either case with respect to a
                        Plan that could have a Material Adverse Effect.

              (iv) Material Contracts. Promptly, and in any event within ten
         Business Days after any Material Contract is terminated or amended
         other than amendments which are ministerial or non-substantive in
         nature.

              (v) Environmental Matters. Promptly, and in any event within ten
         Business Days after receipt by the Borrower thereof, copies of each (A)
         written notice that any violation of any Environmental Law may have
         been committed or is about to be committed by the Borrower, (B) written
         notice that any administrative or judicial complaint or order has been
         filed or is about to be filed against the Borrower alleging violations
         of any Environmental Law or requiring the Borrower to take any action
         in connection with the release of toxic or Hazardous Materials into the
         environment, or (C) written notice from a Governmental Authority or
         other Person alleging that the Borrower may be liable or responsible
         for costs associated with a response to or cleanup of a release of a
         Hazardous Material into the environment or any damages caused thereby,
         in each case which could reasonably be expected to have a Material
         Adverse Effect.

         (h) Casualty Loss. The Borrower shall (i) provide written notice to the
Lender, within ten Business Days, of any damage to, the destruction of or any
other loss to any material asset or material property owned or used by the
Borrower or any condemnation, confiscation or other taking, in whole or in part,
or any use that otherwise diminishes so as to render impracticable or
unreasonable the use of such asset or property owned or used by the Borrower
together with the amount of the damage, destruction, loss or diminution in
value, in each case if the amount involved exceeds $5,000,000 (a "Casualty
Loss") and (ii) diligently file and prosecute its claim or claims for any award
or payment in connection with a Casualty Loss.

         (i) Financial Reporting. The Borrower shall deliver to the Lender the
following:

                                      -29-

AMENDED AND RESTATED

              (i) Annual Financial Statements. As soon as available, but not
         later than one hundred twenty days after the end of each fiscal year of
         the Borrower, beginning with the fiscal year ending December 31, 2004,
         (A) the Borrower's annual audited Financial Statements; (B) to the
         extent not included in the Financial Statements delivered pursuant to
         clause (A) above, a comparison in reasonable detail to the prior year's
         Financial Statements in form satisfactory to the Lender; and (C) the
         Auditors' unqualified opinion on the Borrower's annual audited
         Financial Statements for such fiscal year.

              (ii) Quarterly Financial Statements. As soon as available, but not
         later than sixty days after the end of the first three quarters of each
         fiscal year of the Borrower, commencing with the first fiscal quarter
         ending June 30, 2004, quarterly Financial Statements as at the end of
         such quarter, certified by a Responsible Officer, together with a
         compliance certificate signed by a Responsible Officer, substantially
         in the form of Exhibit E hereto, with an attached schedule of
         calculations demonstrating compliance with the Financial Covenants.

         (j) Punctual Payment. The Borrower shall timely pay the principal and
interest and any other amount due under this Agreement and the other Loan
Documents.

         (k) ERISA. The Borrower shall (i) maintain each Plan intended to
qualify under Section 401(a) of the Internal Revenue Code so as to satisfy the
qualification requirements thereof, except when the failure to so comply could
not reasonably be expected to have a Material Adverse Effect; (ii) contribute,
or require that contributions be made, in a timely manner (A) to each Plan in
amounts sufficient (I) to satisfy the minimum funding requirements of Section
302 of ERISA or Section 412 of the Internal Revenue Code, if applicable, (II) to
satisfy any other Requirements of Law and (III) to satisfy the terms and
conditions of each such Plan, and (B) to each Foreign Plan in amounts sufficient
to satisfy the minimum funding requirements of any applicable law or regulation,
without any application for a waiver from any such funding requirements, in each
case, except when the failure to so comply could not reasonably be expected to
have a Material Adverse Effect; (iii) cause each Plan or Foreign Plan to comply
in all material respects with applicable law (including, without limitation, all
applicable statutes, orders, rules and regulations); and (iv) pay in a timely
manner, in all material respects, all required premiums to the PBGC. As used in
this Section, "Foreign Plan" means a plan that provides retirement or health
benefits and that is maintained by, or otherwise contributed to, the Borrower
for the benefit of employees outside the United States.

         (l) Environmental Matters. The Borrower shall conduct its business so
as to comply in all respects with all applicable Environmental Laws in all
jurisdictions in which it is doing business including, without limitation,
compliance with the terms and conditions of all permits and governmental
authorizations, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

         (m) Payment of Dividends and Distributions. Subject to applicable
Requirements of Law and to contractual restrictions applicable to the Borrower
or to Subsidiaries of the Borrower that are in effect from time to time, the
Borrower shall cause each of its Subsidiaries (i) to declare and pay cash
dividends, partnership, limited liability company or similar distributions, or
similar

                                      -30-

AMENDED AND RESTATED

forms of payment made on account of equity interests, as the case may be, so as
to maximize the amount of cash distributable to the Borrower from time to time.

         (n) Solvency. The Borrower shall remain Solvent at all times.

         (o) Further Assurances. The Borrower shall take all such further
actions and execute all such further documents and instruments as the Lender may
at any time determine in its reasonable discretion to be necessary to carry out
and consummate the transactions contemplated by the Loan Documents.

         SECTION 6.2 Negative Covenants. Until the satisfaction of all
Obligations in full, the termination of the Commitment and the expiration or, to
the extent required under the terms of this Agreement, full cash
collateralization of all Letters of Credit:

         (a) Consolidation and Merger. The Borrower will not wind up, liquidate
or dissolve its affairs or enter into any transaction of merger or
consolidation, or agree to do any of the foregoing at any future time, except a
transaction of merger or consolidation if the Borrower shall be the continuing
or surviving corporation and its Tangible Net Worth shall, immediately after
giving effect to such merger or consolidation, not be reduced as a result
thereof.

         (b) Corporate Changes, etc. Except to the extent otherwise expressly
permitted under this Agreement, the Borrower will not amend, alter or modify its
Governing Documents or its corporate or capital structure or status in a manner
that could reasonably be expected to have a Material Adverse Effect.

         (c) Change of Business. The Borrower will not make any material change
in the nature of its business as carried on at the date hereof or enter into any
new type of business outside the energy industry.

         (d) Sales, etc. of Assets. The Borrower will not, directly or
indirectly, sell, lease, transfer or otherwise dispose of all or substantially
all its assets.

         (e) Fiscal Year. The Borrower will not change its fiscal year from a
year ending on December 31.

         (f) Accounting Changes. The Borrower will not at any time make or
permit any change in accounting policies or reporting practices, except as
required or permitted by GAAP.

         (g) No Prohibited Transactions Under ERISA. The Borrower will not,
directly or indirectly:

              (i) engage in any prohibited transaction which could reasonably be
         expected to result in a civil penalty or excise tax described in
         Section 406 of ERISA or 4975 of the Internal Revenue Code for which a
         statutory or class exemption is not available or a private exemption
         has not been previously obtained from the Department of Labor and which
         could reasonably be expected to have a Material Adverse Effect;

                                      -31-

AMENDED AND RESTATED

              (ii) permit to exist with respect to any Pension Plan any
         accumulated funding deficiency (as defined in Sections 302 of ERISA and
         412 of the Internal Revenue Code), whether or not waived;

              (iii) terminate any Pension Plan where such event would result in
         any liability of the Borrower or any ERISA Affiliate under Title IV of
         ERISA;

              (iv) fail to make any required contribution or payment to any
         Multiemployer Plan if such failure could reasonably be expected to have
         a Material Adverse Effect;

              (v) fail to pay any required installment or any other payment
         required under Section 412 of the Internal Revenue Code on or before
         the due date for such installment or other payment if such failure
         could reasonably be expected to have a Material Adverse Effect;

              (vi) amend a Pension Plan resulting in an increase in current
         liability for the plan year such that the Borrower or any ERISA
         Affiliate is required to provide security to such Plan under Section
         307 of ERISA or Section 401(a)(29) of the Internal Revenue Code if such
         amendment could reasonably be expected to have a Material Adverse
         Effect; or

              (vii) withdraw from any Multiemployer Plan where such withdrawal
         is reasonably likely to result in any liability of any such entity
         under Title IV of ERISA and which could reasonably be expected to have
         a Material Adverse Effect.

         (h) Payment of Subordinated Debt and Amendments of Material Contracts.
The Borrower will not make any payment in violation of the Subordination
Agreement. The Borrower will not, and will not permit any of its Subsidiaries
to, amend, modify, cancel or terminate, or permit the amendment, modification,
cancellation or termination of, any of the Material Contracts, except in the
event that any such amendment, modification, cancellation or termination could
not reasonably be expected to have a Material Adverse Effect.

         (i) Use of Proceeds. The Borrower will not use any portion of the
proceeds of any Letter of Credit or any Loan in violation of Section 2.1 or for
the purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U of the Federal Reserve Board) in any manner which violates the
provisions of Regulation T, U or X of such Board or for any other purpose in
violation of any applicable statute or regulation, or of the terms and
conditions of this Agreement.

         (j) Limitation on Actions Affecting Public Utility Regulation.

              (i) The Borrower will not, and will not permit any of its
         Subsidiaries to, take or fail to take any action if, as a direct
         consequence thereof, the Borrower or any of its Subsidiaries would be,
         or be deemed to be, subject to any financial, organizational or rate
         regulation as an Electric Utility or to be regulated as a "public
         utility company" or a company which is a "holding company" or a "public
         utility

                                      -32-

AMENDED AND RESTATED

         company" subject to registration with the Securities and Exchange
         Commission or to regulation under PUHCA.

              (ii) The Borrower will not, and will not permit any of its
         Subsidiaries to, take or fail to take any action if, as a sole result
         of such action or inaction, the Lender would be "a public utility
         company" or a company which is a "holding company" of a "public utility
         company" or otherwise be subject to registration with the Securities
         and Exchange Commission or to regulation under PUHCA or any other
         Requirement of Law regulating utilities or independent power producers,
         provided that it shall not be a violation of this Section if as a
         result of the exercise of its remedies hereunder or under applicable
         law the Lender obtains control of any Facility and thus becomes subject
         to regulation as the owner of a "qualifying facility" as defined under
         the PURPA regulations, or as an "exempt wholesale generator" as defined
         under the National Energy Policy Act of 1992.

                                   ARTICLE VII

                               FINANCIAL COVENANTS

         Until the satisfaction of all Obligations in full, the termination of
the Commitment and the expiration or, to the extent required under the terms of
this Agreement, full cash collateralization of all Letters of Credit:

         SECTION 7.1 Tangible Net Worth. The Tangible Net Worth of the Borrower
shall not be less than $85,000,000 at any time.

         SECTION 7.2 Leverage Ratio. The Leverage Ratio shall not be greater
than 4.00 to 1.00 at any time.

         SECTION 7.3 Minimum Coverage Ratio. The Minimum Coverage Ratio shall
not be less than 1.25 to 1.00 for any calendar quarter or any calendar year.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

         SECTION 8.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":

         (a) the Borrower shall fail to pay any principal, interest, fees,
reasonable expenses or other Obligations within thirty days of the date when
due, except with respect to the last payments of principal, interest or fees due
hereunder (including, without limitation, upon acceleration), which shall be
payable on the date when due (or on the date of acceleration); or

         (b) the Borrower shall fail to perform or observe:

              (i) any term, condition, covenant or agreement contained in
         Section 6.1(f) or (j) or Section 6.2;

                                      -33-

AMENDED AND RESTATED

              (ii) any covenant contained in Section 6.1(g) or Article VII more
         than ten days after the earlier of (A) the date on which any
         Responsible Officer of the Borrower knew or reasonably should have
         known of such failure in the ordinary course of his or her
         responsibilities and (B) the date on which the Lender notified the
         Borrower in writing of such failure; or

              (iii) any term, condition, covenant or agreement contained in this
         Agreement or any other Loan Document to which it is a party (except as
         provided in Section 8.1(a) or (b)(i) or (ii)) more than thirty days
         after the earlier of (A) the date on which any Responsible Officer of
         the Borrower knew or reasonably should have known of such failure in
         the ordinary course of his or her responsibilities and (B) the date on
         which the Lender notified the Borrower in writing of such failure;
         provided, however, that if such failure is susceptible of cure but
         cannot reasonably be expected to be cured within such thirty-day
         period, and provided further that the Borrower shall have commenced to
         cure such failure within such thirty-day period and thereafter
         diligently and expeditiously proceeds to cure the same, such thirty-day
         period shall be extended for one additional thirty-day period; or

         (c) the Borrower shall dissolve, wind up or otherwise cease to conduct
its business except as permitted under Section 6.2(a); or

         (d) the Borrower shall become the subject of an Insolvency Event; or

         (e) the Borrower (i) shall fail to make any payment in respect of
Indebtedness of the Borrower in an amount in excess of $5,000,000 when due
(whether at scheduled maturity or by acceleration, demand or otherwise) or (ii)
shall otherwise be in breach or default in any of its obligations under any
agreement with respect to any such Indebtedness of the Borrower, if the effect
of such breach or default is to cause such Indebtedness to become due or
redeemed or permit, after giving effect to all applicable grace periods and cure
rights, the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to declare such Indebtedness due or require
such Indebtedness to be redeemed prior to its stated maturity; or

         (f) any representation or warranty made by the Borrower under or in
connection with any Loan Document, Financial Statement or certificate delivered
in connection therewith shall prove to have been incorrect in any material
respect when made or deemed made; or

         (g) one or more federal tax liens for more than $1,000,000 shall be
filed of record against the Borrower and shall not be stayed, bonded or
discharged within thirty days; or

         (h) a Change of Control shall have occurred; or

         (i) one or more judgments or orders for the payment of money in excess
of $2,500,000 in the aggregate (other than judgments and orders that are fully
covered by insurance and with respect to which the insurance company has
accepted liability) shall be rendered against the Borrower or any of its
Subsidiaries and shall not be stayed, vacated, bonded or discharged within
thirty days; or

                                      -34-

AMENDED AND RESTATED

         (j) any covenant, agreement or obligation of the Borrower referred to
in Section 8.1(a) or (b)(i) shall cease to be enforceable; or

         (k) the occurrence of any event that could reasonably be expected to
have a Material Adverse Effect if such event continues to exist more than
forty-five days after the date on which the Lender notified the Borrower in
writing of such event; provided, however, that if such event is susceptible of
reversal but cannot reasonably be expected to be reversed within such
forty-five-day period, and provided further that the Borrower shall have
commenced to reverse such event within such forty-five-day period and thereafter
diligently and expeditiously proceeds to reverse such event, such forty-five-day
period shall be extended for one additional forty-five-day period.

         SECTION 8.2 Acceleration and Cash Collateralization. Upon the
occurrence and during the continuance of an Event of Default, the Lender may:

         (a) Acceleration. Declare all Obligations immediately due and payable
by written notice to the Borrower (except with respect to any Event of Default
specified in (i) Section 8.1(d), in which case the Obligations shall
automatically become immediately due and payable, and (ii) Section 8.1(e)(ii),
in which case the Lender may not, solely based on such Event of Default, declare
the Obligations immediately due and payable if the holder or holders of the
Indebtedness with respect to which there is a breach or default have not
declared such Indebtedness due or required such Indebtedness to be redeemed)
without presentment, demand, protest or any other action or obligation of the
Lender except as stated in this subsection.

         (b) Termination of Commitment. Declare the Commitment immediately
terminated (except with respect to any Event of Default specified in Section
8.1(d), in which case the Commitment shall automatically terminate) and, at all
times thereafter, any Letter of Credit issued or caused to be issued by the
Lender and any Loan made by the Lender pursuant to this Agreement shall be in
the Lender's sole and absolute discretion.

         (c) Cash Collateralization. With respect to all Letters of Credit
outstanding at the time of an Event of Default, require the Borrower to make
deposits in the L/C Cash Collateral Account in accordance with Section 2.4(a) up
to an amount equal to 105% of the aggregate then undrawn amount of the
outstanding Letters of Credit. While the Event of Default continues, amounts
held in the L/C Cash Collateral Account shall be under the sole dominion and
control of the Lender and shall be applied by the Lender to the payment of
drafts drawn under such Letters of Credit, and the balance, if any, in the L/C
Cash Collateral Account, after all such Letters of Credit shall have expired or
been fully drawn upon, shall be applied to repay the other Obligations. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Obligations in respect of Letters of Credit shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in the L/C
Cash Collateral Account shall be returned to the Borrower. If the Event of
Default is cured, waived or otherwise ceases, any amounts then on deposit in the
L/C Cash Collateral Account shall be returned to the Borrower within ten
Business Days.

         (d) Excess Cash Collateral. If at any time the balance in the L/C Cash
Collateral Account exceeds 105% of the aggregate then undrawn amount of the
outstanding Letters of Credit, then such excess amounts shall be returned to the
Borrower within ten Business Days of the date on which such excess arose.

                                      -35-

AMENDED AND RESTATED

         (e) Security Interest. The Lender shall have, and the Borrower hereby
grants to the Lender, a security interest in the L/C Cash Collateral Account
which security interest shall attach and become effective at the time the L/C
Cash Collateral Account is established.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         SECTION 9.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER
SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF
NEW YORK.

         SECTION 9.2 SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN THE
BORROWER AND THE LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN;
PROVIDED, HOWEVER, THAT THE LENDER SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN ANY
LOCATION REASONABLY SELECTED BY THE LENDER IN GOOD FAITH TO ENABLE THE LENDER TO
REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF THE LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH THE LENDER HAS COMMENCED A PROCEEDING, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON
CONVENIENS.

         SECTION 9.3 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY
DESIGNATES CT CORPORATION, 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011, AS THE
DESIGNEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE
BORROWER, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL BE PROMPTLY FORWARDED BY MAIL
TO THE BORROWER, BUT THE FAILURE OF THE BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

         SECTION 9.4 JURY TRIAL. THE BORROWER AND THE LENDER EACH HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A

                                      -36-

AMENDED AND RESTATED

TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY
WAY RELATING TO (I) THIS AGREEMENT, (II) ANY OTHER LOAN DOCUMENT OR OTHER
PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN THE BORROWER AND THE LENDER,
OR (III) ANY CONDUCT, ACT OR OMISSION OF THE BORROWER, THE LENDER OR ANY OF
THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN
EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE.

         SECTION 9.5 LIMITATION OF LIABILITY. THE BORROWER HEREBY WAIVES ALL
FUTURE CLAIMS AGAINST THE LENDER FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES UNLESS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE LENDER.

         SECTION 9.6 Delays; Partial Exercise of Remedies. No delay or omission
of the Lender to exercise any right or remedy hereunder shall impair any such
right or operate as a waiver thereof. No single or partial exercise by the
Lender of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy.

         SECTION 9.7 Notices. Except as otherwise provided herein, all notices
and correspondence hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, by overnight delivery service, with
all charges prepaid, or by telecopier followed by a hard copy sent by regular
mail, if to the Lender, then to United Capital, c/o Hudson United Bank, 87 Post
Road East, Westport, Connecticut 06880, Telecopy: (203) 328-9339, Attention: Mr.
Jerome P. Peters, Jr., Senior Vice President, with a copy to Luskin, Stern &
Eisler LLP, 330 Madison Avenue, New York, New York 10017, Telecopy: (212)
293-2705, Attention: Nathan M. Eisler, Esq., and if to the Borrower, then to
Ormat Nevada Inc., 980 Greg Street, Sparks, Nevada 89431, Telecopy: (775)
356-9039, Attention: President, or, in each case, to such other address
specified by either party in writing to the other party in the manner required
under this Section. All such notices and correspondence shall be deemed given
(i) if sent by certified or registered mail, three Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at the
above stated addresses or when delivery is refused and (iii) if sent by
telecopier transmission, when such transmission is confirmed.

         SECTION 9.8 Assignments and Participations.

         (a) Borrower Assignment. The Borrower shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Lender.

         (b) Lender Assignment. The Lender, with the prior written consent of
the Borrower which shall not be unreasonably withheld or delayed, may assign to
one or more banks or other financial institutions all or a portion of its rights
and obligations under this Agreement, the Note and the other Loan Documents.

         SECTION 9.9 Indemnification; Reimbursement of Expenses of Collection.

         (a) The Borrower hereby indemnifies and agrees to defend and hold
harmless the Lender and its directors, officers, agents, employees and counsel
(each, an "Indemnified Party") from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or

                                      -37-

AMENDED AND RESTATED

expenses incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct) arising out of or by reason of (i) any litigations,
investigations, claims or proceedings which arise out of or are in any way
related to (A) this Agreement, any other Loan Document or the transactions
contemplated hereby or thereby, (B) any actual or proposed use by the Borrower
of the Letters of Credit or the proceeds of the Loans or (C) the Lender's
entering into this Agreement, the other Loan Documents or any other agreement or
document relating hereto, including, without limitation, amounts paid in
settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing and
(ii) any remedial or other action taken by the Borrower or the Lender in
connection with compliance by the Borrower, or any of its properties, with any
federal, state or local Environmental Laws. In addition, the Borrower shall,
upon demand, pay to the Lender all reasonable costs and expenses incurred by the
Lender (including, without limitation, recording costs and the reasonable fees
and disbursements of counsel and other professionals) in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents, and, upon the occurrence and during the continuance of an
Event of Default, pay to the Lender all reasonable costs and expenses
(including, without limitation, the reasonable fees and disbursements of counsel
and other professionals) paid or incurred by the Lender in (A) enforcing or
defending its rights under or in respect of this Agreement, the other Loan
Documents or any other document or instrument now or hereafter executed and
delivered in connection herewith, (B) collecting the Obligations, and (C)
obtaining any legal, accounting or other advice reasonably required in
connection with any of the foregoing. If and to the extent that the Obligations
of the Borrower hereunder are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
Obligations which is permissible under applicable law.

         (b) The Borrower's obligations under this Section 9.9 shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution of, any
of its other obligations set forth in this Agreement.

         SECTION 9.10 Right of Setoff. In addition to and not in limitation of
all rights of offset that the Lender or any of its Affiliates may have under
applicable law, and whether or not the Lender has made any demand or the
Obligations of the Borrower have matured, the Lender and its Affiliates shall
have the right to appropriate and apply to the payment of the Obligations of the
Borrower all (i) deposits of the Borrower or any of its Affiliates held by the
Lender or any of its Affiliates other than deposits in any of the accounts
specified in Schedule 9.10 or any successor or other special account held by the
Lender or any of its Affiliates as a depository for funds on deposit to secure
or support financings provided by other Persons to the Borrower or its
Affiliates and (ii) other obligations then or thereafter owing by the Lender or
any of its Affiliates to the Borrower or any of its Affiliates.

         SECTION 9.11 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document shall be effective unless
in writing and signed by the party to be charged thereby.

                                      -38-

AMENDED AND RESTATED

         SECTION 9.12 Nonliability of Lender. The relationship between the
Borrower and the Lender shall be solely that of borrower and lender. The Lender
shall not have any fiduciary responsibilities to the Borrower. The Lender
undertakes no responsibility to the Borrower to review or inform the Borrower of
any matter in connection with any phase of the Borrower's business or
operations.

         SECTION 9.13 Counterparts; Telecopied Signatures. This Agreement and
any waiver or amendment hereto may be executed in counterparts and by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but both of which shall together constitute one
and the same instrument. This Agreement may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original counterpart.

         SECTION 9.14 Severability. In case any provision in or obligation under
this Agreement, the Note or any other Loan Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

         SECTION 9.15 Maximum Rate. Notwithstanding anything to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Borrower and the Lender hereby agree that all agreements among them under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Lender for the use, forbearance, or detention of the money loaned to the
Borrower and evidenced hereby or thereby or for the performance or payment of
any covenant or obligation contained herein or therein, exceed the maximum
non-usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations, under
the laws of the State of New York (or the law of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Agreement and the other Loan Documents), or under applicable federal laws which
may presently or hereafter be in effect and which allow a higher maximum
non-usurious interest rate than under New York (or such other jurisdiction's)
law, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Agreement
and the other Loan Documents, and any available exemptions, exceptions and
exclusions (the "Highest Lawful Rate"). If due to any circumstance whatsoever,
fulfillment of any provisions of this Agreement or any of the other Loan
Documents at the time performance of such provision shall be due shall exceed
the Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest to
the Highest Lawful Rate, and if from any such circumstance the Lender should
ever receive anything of value deemed interest by applicable law which would
exceed the Highest Lawful Rate, such excessive interest shall be applied to the
reduction of the principal amount then outstanding hereunder or on account of
any other then outstanding Obligations and not to the payment of interest, or if
such excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall be
refunded to the Borrower. All sums paid or agreed to be paid to the Lender for
the use, forbearance, or detention of the Obligations and other Indebtedness of
the Borrower to the Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread

                                      -39-

AMENDED AND RESTATED

throughout the full term of such Indebtedness, until payment in full thereof, so
that the actual rate of interest on account of all such Indebtedness does not
exceed the Highest Lawful Rate throughout the entire term of such Indebtedness.
The terms and provisions of this Section shall control every other provision of
this Agreement and all agreements between the Borrower and the Lender.

         SECTION 9.16 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE
BORROWER AND THE LENDER IN RESPECT OF THE SUBJECT MATTER HEREOF, SUPERSEDE ANY
PRIOR WRITTEN AND VERBAL AGREEMENTS BETWEEN THEM IN RESPECT OF THE SUBJECT
MATTER HEREOF, AND SHALL BIND AND BENEFIT THE BORROWER AND THE LENDER AND THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS.

         SECTION 9.17 References to Ormat Technologies. No reference to Ormat
Technologies in this Agreement or any of the other Loan Documents shall be
deemed to create any liability of Ormat Technologies for the Obligations,
provided that the Lender hereby reserves any claims it may have against Ormat
Technologies for liability under laws relating to undercapitalization, fraud or
any other acts that could result in liability of a shareholder for the
obligations of its subsidiary.

                                      -40-

AMENDED AND RESTATED

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

                                             ORMAT NEVADA INC.

                                             By: /s/ Connie Stechman
                                                 ----------------------------
                                                 Connie Stechman
                                                 Authorized Representative

                                             HUDSON UNITED BANK

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

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(e)

                              CONSENTS AND FILINGS

                                      None.

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(f)

                              MATERIAL TRANSACTIONS

         Each of the following has occurred since December 31, 2003:

1.       The acquisition by ORNI 8 LLC, a subsidiary of the Borrower, of 100% of
         the interests in CE Puna Limited Partnership, a Maryland general
         partnership and Puna Geothermal Venture, a Hawaii general partnership,
         pursuant to the Purchase and Sale Agreement, dated as of April 22,
         2004, by and among Constellation Power, Inc., a Maryland corporation,
         as seller, COSI Puna, Inc., a Maryland corporation, ORNI 8 LLC, a
         Delaware limited liability company, as purchaser, and Borrower, as
         purchaser's parent.

2.       The acquisition by ORNI 11 LLC and ORNI 12 LLC, each a subsidiary of
         the Borrower, of 100% of the general and limited partnership interests
         of Yankee Caithness Joint Venture, L.P., a Delaware limited
         partnership, pursuant to the Purchase and Sale Agreement, dated as of
         May 20, 2004, by and among Nevada Power Holdings, LLC, a Delaware
         limited liability company, and Steamboat Finance Holdings, LLC, a
         Delaware limited liability company, as sellers, and ORNI 11 LLC, a
         Delaware limited liability company, and ORNI 12 LLC, a Delaware limited
         liability company, as purchasers.

3.       The application of the Financial Accounting Standards Board's
         guidelines, FASB FIN 46, Consolidation of Variable Interest Entities,
         to the Borrower and the Borrower's Affiliates.

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(h)

                         JOINT VENTURES OR PARTNERSHIPS

                                      None.

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(o)

                              TAXES AND TAX RETURNS

                                      None.

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(p)

                             JUDGMENTS OR LITIGATION

                                      None.

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(s)

                                      ERISA

Ormat Nevada Inc., a Delaware corporation, maintains or contributes to the
following plans:

1. Ormat 401(k) Plan

2. Short Term Disability Plan

3. Long Term Disability Plan

4. Group Term Life Insurance

5. Guardian Dental

6. VSP Vision Care Benefits

7. CBSA Group Medical Plan

AMENDED AND RESTATED

                                                                 SCHEDULE 5.1(x)

                             CONTRACTS, ORDERS, ETC.

                                      None.

AMENDED AND RESTATED

                                                                 SCHEDULE 9.10

                                EXCLUDED ACCOUNTS

--------------------------------------------------------------------------------
                              Name of Account                    Account Number
--------------------------------------------------------------------------------
OrCal Geothermal Revenue Account                                   2897400361
--------------------------------------------------------------------------------
OrCal Geothermal O&M Account                                       2897400370
--------------------------------------------------------------------------------
OrCal Geothermal Debt Service Reserve Account                      2897400389
--------------------------------------------------------------------------------
OrCal Geothermal Lease Suspense Account                            2897400398
--------------------------------------------------------------------------------
OrCal Geothermal Capital Expenditures Payment Account              2897400405
--------------------------------------------------------------------------------
OrCal Geothermal Distribution Suspense Account                     2897400414
--------------------------------------------------------------------------------
OrCal Geothermal Loss Proceeds Account                             2897400423
--------------------------------------------------------------------------------
OrCal Geothermal Funding Account                                   2897400432
--------------------------------------------------------------------------------
Ormesa Revenue Account                                             2897400272
--------------------------------------------------------------------------------
Ormesa Debt Service Reserve Account                                2897400281
--------------------------------------------------------------------------------
Ormesa Restoration Sub-Account                                     2897400316
--------------------------------------------------------------------------------
Ormesa Loss Proceeds Account                                       2897400307
--------------------------------------------------------------------------------
Ormesa O&M Account                                                 2897400290
--------------------------------------------------------------------------------

AMENDED AND RESTATED

                                                                       EXHIBIT A

                                 PROMISSORY NOTE

                                                              New York, New York

                                                                   ---- --, ----

         FOR VALUE RECEIVED, Ormat Nevada Inc., a Delaware corporation having
its chief executive office and principal place of business at 980 Greg Street,
Sparks, Nevada 89431 (the "Borrower"), hereby unconditionally promises to pay to
the order of Hudson United Bank, a bank organized under the laws of the State of
New Jersey (the "Lender"), at the Lender's office at 87 Post Road East,
Westport, Connecticut 06880 or at such other location as the Lender may from
time to time designate in writing, in lawful money of the United States of
America and in immediately available funds, the principal amount of each Loan
made by the Lender to the Borrower under Section 2.1(d) of the Credit Agreement
(as defined below) in four consecutive quarterly installments, commencing on the
last Business Day of the calendar quarter immediately following the making of
such Loan in accordance with Section 2.4(a) of the Credit Agreement, provided
that the amount of each Loan shall be repaid in full on the earlier of (i)
twelve months after the date on which such Loan was made and (ii) the
Availability Expiration Date. The Borrower further promises to pay interest in
like money and funds to the Lender at the aforementioned address (or at such
other location as the Lender may from time to time designate in writing) on the
unpaid principal amount of each Loan from time to time outstanding from and
including the date hereof until paid in full at the rates and on the dates
determined in accordance with Sections 3.1 and 3.2 of the Credit Agreement. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Letter of Credit and Loan Agreement of
even date herewith (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") between the Borrower and the Lender.

         This Note is the Note referred to in the Credit Agreement and shall be
entitled to the benefit of all terms and conditions of, and the security of all
security interests, liens and rights granted under or in connection with, the
Credit Agreement and the other Loan Documents, and is subject to optional and
mandatory prepayment as provided in the Credit Agreement. Upon the occurrence of
any one or more of the Events of Default specified in the Credit Agreement, all
amounts then remaining unpaid on this Note may be declared to be or may
automatically become immediately due and payable as provided in the Credit
Agreement.

         The Borrower acknowledges that the holder of this Note may assign,
transfer or sell all or a portion of its rights and interests in, to and under
this Note to one or more Persons as provided in the Credit Agreement and that
such Persons shall thereupon become vested with all of the rights and benefits
of the Lender in respect hereof as to all or that portion of this Note which is
so assigned, transferred or sold.

         In the event of any conflict between the terms hereof and the terms and
provisions of the Credit Agreement, the terms and provisions of the Credit
Agreement shall control.

         The Borrower waives presentment, demand for payment, protest and notice
of dishonor of this Note and authorizes the holder hereof, without notice, to
increase or decrease the

rate of interest on any amount owing under this Note in accordance with the
Credit Agreement. The Borrower shall make all payments hereunder without setoff,
recoupment, deduction or counterclaim. No failure to exercise and no delay in
exercising any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights. This Note may not be changed or modified orally, but
only by an agreement in writing, which is signed by the party or parties against
whom enforcement of any waiver, change or modification is sought.

         THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS NOTE AND ANY
DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS
(AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.

         EACH OF THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE LENDER HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO
THIS NOTE OR ANY CONDUCT, ACTS OR OMISSIONS OF THE BORROWER, THE LENDER OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER
AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR
OTHERWISE.

                                                 ORMAT NEVADA INC.

                                                 By:
                                                    ----------------------------
                                                    Connie Stechman
                                                    Authorized Representative

                                       2

                                                                       EXHIBIT B

                             SUBORDINATION AGREEMENT

         SUBORDINATION AGREEMENT dated as of ____ __, ____ (this "Agreement")
between Ormat Technologies, Inc., a Delaware corporation (together with its
successors and assigns, the "Junior Lender"), and Hudson United Bank, a bank
organized under the laws of the State of New Jersey (together with its
successors and assigns, "Hudson United").

                              W I T N E S S E T H :

         WHEREAS, Ormat Nevada Inc., a Delaware corporation ("Ormat Nevada"), is
a wholly owned Subsidiary of the Junior Lender and has intercompany indebtedness
to the Junior Lender which is evidenced by the Credit Facility dated December
18, 2003 in an amount up to $80,000,000 (as amended, supplemented or otherwise
modified from time to time, the "Junior Credit Facility") from Ormat Nevada in
favor of the Junior Lender; and

         WHEREAS, it is a condition precedent to the effectiveness of the Letter
of Credit and Loan Agreement of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "HUB Credit Agreement") between Ormat
Nevada and Hudson United that the Junior Lender and Ormat Nevada shall have
executed and delivered this Agreement subordinating the Junior Lender's rights
with respect to the Junior Obligations (as defined below) to the rights of
Hudson United with respect to the HUB Obligations (as defined below);

         NOW, THEREFORE, in consideration of the promises contained herein and
to induce Hudson United to enter into the HUB Credit Agreement and to issue, or
cause to be issued, letters of credit and to make term loans thereunder, the
Junior Lender agrees as follows:

         SECTION 1. DEFINITIONS.

         (a) "Pro Rata Share", as used herein, means, at any time, a fraction
(expressed as a percentage) (i) the numerator of which is the sum of the amount
of all undrawn Letters of Credit and the outstanding amount of the Loans at such
time and (ii) the denominator of which is the aggregate unsecured Indebtedness
of the Borrower including, without limitation, the amount of all undrawn Letters
of Credit and the outstanding amount of the Loans at such time.

         (b) All other capitalized terms not otherwise defined herein shall have
the meanings set forth in the HUB Credit Agreement, and the rules of usage set
forth therein shall apply hereto.

         SECTION 2. SUBORDINATION.

         (a) All Junior Obligations, and all rights and remedies of the Junior
Lender with respect thereto, are and shall at all times continue to be subject,
subordinate and junior in right of payment in the manner provided herein to the
HUB Obligations including, without limitation, all interest on the HUB
Obligations at the applicable rates stated in the HUB Credit

Agreement from the date of the filing by or against Ormat Nevada of a petition
under any bankruptcy, insolvency or similar law to the date of the indefeasible
payment in full of the HUB Obligations, in each case whether or not such
interest is an allowable claim under any such law or in any case or proceeding
thereunder ("Postpetition Interest"). The term "Junior Obligations," as used in
this Agreement, shall mean the Liabilities of Ormat Nevada to the Junior Lender
under the Junior Credit Facility (including extensions, modifications,
refinancings, renewals and refundings thereof). The term "HUB Obligations," as
used in this Agreement, shall mean the principal amount of and premium, if any,
and interest (including, without limitation, Postpetition Interest) on all
Obligations of Ormat Nevada to Hudson United under the HUB Credit Agreement
together with all fees, costs and expenses relating thereto, whether direct or
contingent, now or hereafter existing, due or to become due to, or held or to be
held by, Hudson United (including extensions, modifications, refinancings,
renewals and refundings thereof).

         (b) The Junior Lender shall not receive or accept any payment on the
Junior Obligations, whether as principal, premium, interest or otherwise
(including by setoff or right of recoupment) if, and for so long as, a Default
has occurred under the HUB Credit Agreement or a Default would occur under the
HUB Credit Agreement as a result of any such payment, unless and until all the
HUB Obligations including, without limitation, all Post-petition Interest have
been paid in full in cash.

         (c) The Pro Rata Share of any amounts received by the Junior Lender as
payment on the Junior Obligations in violation of this Agreement shall be held
in trust for Hudson United and, as soon as possible, turned over to Hudson
United and applied against the HUB Obligations until the Commitment has been
terminated, the HUB Obligations have been paid in full in cash and all Letters
of Credit have (at Ormat Nevada's option or if required by the HUB Credit
Agreement) been fully cash collateralized or have terminated or expired.

         (d) The Junior Lender will not commence any action or proceeding
against Ormat Nevada to recover all or any part of the Junior Obligations or
join with any creditor, unless Hudson United shall also have joined, in bringing
against Ormat Nevada any such proceeding including, without limitation, any
proceeding under any bankruptcy, insolvency or similar law or any other
proceeding the result of which could give rise to an Insolvency Event until the
date on which the Commitment has been terminated, the HUB Obligations have been
paid in full in cash and all Letters of Credit have (at Ormat Nevada's option or
if required by the HUB Credit Agreement) been fully cash collateralized or have
terminated or expired.

         (e) Upon the occurrence of any Insolvency Event of Ormat Nevada or in
the event of a sale of all or substantially all of the assets or any other
marshaling of the assets and liabilities, or any recapitalization, refinancing
or reorganization of Ormat Nevada, the HUB Obligations shall first be paid in
full in cash before the Junior Lender shall be entitled to receive any money,
distributions or other assets in any such proceeding. In any such event, Hudson
United may (without having any obligation to do so), and is hereby irrevocably
authorized and granted an exclusive power (which power is coupled with an
interest), but without imposing any obligation upon Hudson United, to demand,
sue for, collect or receive the Pro Rata Share of every such payment or
distribution of cash, property, stock or obligations, and to give acquittance
therefor, to file claims and proofs of claim in any statutory or nonstatutory
proceeding, to exercise the rights of the Junior Lender arising under or
relating to the Junior

                                       -2-

Credit Facility and to vote the claim under the Junior Credit Facility in its
sole discretion in connection with any such event, including, without
limitation, the right to participate in any composition of creditors and to vote
at creditors' meetings for the election of trustees, acceptances of plans of
reorganization and any other matter upon which the Junior Lender is entitled to
vote, in each case to the extent of the Pro Rata Share of such claims and
rights. In furtherance of the foregoing, at the request of Hudson United, the
Junior Lender shall execute and deliver to Hudson United a power of attorney and
such further powers and instruments as Hudson United may request to enable the
Hudson United to enforce its rights under this subsection.

         (f) Hudson United may, at any time and from time to time, without the
consent of or notice to the Junior Lender, without incurring responsibility or
liability to the Junior Lender and without impairing or releasing any right or
remedy of Hudson United hereunder:

         (i) With the written consent of Ormat Nevada, change the manner, place
    or terms of payment or change or extend the time of payment of, or renew,
    increase or alter the HUB Obligations, amend the HUB Credit Agreement or any
    other Loan Document in any manner or enter into or amend in any manner any
    other agreement relating to the HUB Obligations;

         (ii) Exchange, release, dispose of or otherwise deal with any cash
    collateral or other property by whomsoever at any time pledged to secure, or
    howsoever securing, the HUB Obligations, in each case in accordance with the
    terms of the HUB Credit Agreement or with the written consent of, or at the
    request of, Ormat Nevada;

         (iii) Release any Person liable in any manner for the payment or
    collection of any of the HUB Obligations;

         (iv) Exercise or refrain from exercising any rights against Ormat
    Nevada or any other Person; or

         (v) Apply any sums by whomsoever paid or however realized to the HUB
    Obligations.

         (g) The Junior Lender waives notice of acceptance of this Agreement.

         (h) The Junior Lender will cause the Credit Facility and any other
instrument that evidences any Junior Obligations to bear upon its face a
statement or legend to the effect that such instrument is subordinated to the
HUB Obligations in the manner and to the extent set forth in this Agreement. The
Junior Lender shall reflect on its financial statements that the Junior
Obligations are so subordinated to the Senior Obligations.

         (i) Subject to the payment in full of the HUB Obligations in
immediately available funds, the Junior Lender shall be subrogated to Hudson
United's rights to receive payments or distributions in cash or property
applicable to the HUB Obligations, and no payment or distribution made to Hudson
United by virtue of this Agreement that otherwise would have been made to the
Junior Lender shall be deemed to be a payment by Ormat Nevada

                                       -3-

on account of the Junior Obligations, it being understood that the provisions of
this Section 2 are intended solely for the purpose of defining the relative
rights of the Junior Lender, on the one hand, and Hudson United, on the other
hand.

         (j) The Junior Lender will not sell, assign, transfer or otherwise
dispose of all or any part of the Junior Obligations to any Person without
having first obtained such Person's agreement in writing to be bound as the
Junior Lender's successor by the terms of this Agreement.

         Nothing contained in this Agreement is intended to or shall impair, as
between Ormat Nevada, its creditors (other than Hudson United) and the Junior
Lender, the obligation of Ormat Nevada, which is absolute and unconditional, to
pay to the Junior Lender the principal of and the premium, if any, and the
interest on the Junior Obligations as and when the same shall become due and
payable in accordance with, and subject to, the terms of this Agreement and the
Junior Credit Facility, or to affect the relative rights of the Junior Lender
and the creditors of Ormat Nevada (other than Hudson United).

         Nothing contained in this Agreement is intended to subordinate or shall
be construed as subordinating, to any obligation whatsoever, including the HUB
Obligations, any payment or obligation now or hereafter due and payable from
Ormat Nevada to the Junior Lender, other than the Junior Obligations.

         Hudson United hereby acknowledges that the rights of the Junior Lender
under the Junior Credit Facility may be subordinated in the future to the rights
of other creditors of Ormat Nevada.

         SECTION 3. TERMINATION. This Agreement shall terminate and cease to be
of further effect upon the termination of the Commitment, the payment in full in
cash of the HUB Obligations and the termination or expiration or (at Ormat
Nevada's request or if required by the HUB Credit Agreement) cash
collateralization in full of all Letters of Credit.

         SECTION 4. BENEFIT OF AGREEMENT. Nothing in this Agreement, expressed
or implied, shall give or be construed to give to any Person including, without
limitation, Ormat Nevada (but excluding Junior Lender and Hudson United) any
legal or equitable right, remedy or claim under this Agreement, or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of Hudson United or the Junior Lender, as applicable.

         SECTION 5. NOTICES. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, by overnight delivery service, with
all charges prepaid, or by telecopier followed by a hard copy sent by regular
mail, if to Hudson United, then to Hudson United Bank, 87 Post Road East,
Westport, Connecticut 06880, Telecopy: (203) 328 9339, Attention: Mr. Jerome P.
Peters, Jr., Senior Vice President, with a copy to Luskin, Stern & Eisler LLP,
330 Madison Avenue, New York, New York 10017, Telecopy: (212) 293 2705,
Attention: Nathan M. Eisler, Esq., and if to the Junior Lender or Ormat Nevada,
then to c/o Ormat Technologies, Inc., 980 Greg Street, Sparks, Nevada 89431,
Telecopy: (775) 356-9039, Attention: President,

                                      -4-

or, in each case, to such other address as a party may specify to the other
parties in the manner required hereunder. All such notices and correspondence
shall be deemed given (i) if sent by certified or registered mail, three
Business Days after being postmarked, (ii) if sent by overnight delivery
service, when received at the above stated addresses or when delivery is refused
and (iii) if sent by telecopier transmission, when such transmission is
confirmed.

         SECTION 6. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement, or consent to any departure by the Junior Lender or
Ormat Nevada therefrom, shall in any event be effective unless the same shall be
in writing and signed by the party to be charged thereby.

         SECTION 7. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or omission
of Hudson United to exercise any right or remedy hereunder shall impair any such
right or operate as a waiver thereof. No single or partial exercise by Hudson
United of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy.

         SECTION 8. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement and any
waiver or amendment hereto may be executed in counterparts and by the parties
hereto in 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. This Agreement may be executed and delivered by telecopier or
other facsimile transmission all with the same force and effect as if the same
was a fully executed and delivered original manual counterpart.

         SECTION 9. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

         SECTION 10. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS; CONFLICT. This
Agreement constitutes the entire agreement among the parties in respect of the
subject matter hereof, supersedes any prior written and verbal agreements among
them in respect of the subject matter hereof and shall bind and benefit the
parties (including, without limitation, Hudson United) and their respective
successors and permitted assigns. In the event of any express conflict between
any term, covenant or condition of this Agreement and any term, covenant or
condition of any of the HUB Credit Agreement or the Loan Documents or the Junior
Credit Facility, the provisions of this Agreement shall control.

         SECTION 11. SPECIFIC PERFORMANCE. HUDSON UNITED IS HEREBY AUTHORIZED TO
DEMAND SPECIFIC PERFORMANCE OF THIS AGREEMENT AT ANY TIME WHEN THE JUNIOR LENDER
SHALL HAVE FAILED TO COMPLY WITH ANY OF THE PROVISIONS OF THIS AGREEMENT
APPLICABLE TO IT. THE JUNIOR LENDER HEREBY IRREVOCABLY WAIVES ANY DEFENSE BASED
ON THE ADEQUACY OF A REMEDY AT LAW THAT MIGHT BE ASSERTED AS A BAR TO SUCH
REMEDY OF SPECIFIC PERFORMANCE.

         SECTION 12. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF

                                      -5-

OR IN CONNECTION WITH THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR
EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.

         SECTION 13. SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN THE JUNIOR
LENDER AND HUDSON UNITED ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE RESOLVED
ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, AND THE COURTS
TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT HUDSON UNITED
SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED
AGAINST THE JUNIOR LENDER IN ANY LOCATION REASONABLY SELECTED BY HUDSON UNITED
IN GOOD FAITH TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF HUDSON
UNITED. THE JUNIOR LENDER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH HUDSON UNITED HAS COMMENCED A PROCEEDING CONSISTENT WITH
THIS SECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON FORUM NON CONVENIENS.

         SECTION 14. JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (I) THIS
AGREEMENT OR (II) ANY CONDUCT, ACTS OR OMISSIONS OF THE JUNIOR LENDER, ORMAT
NEVADA, HUDSON UNITED OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN EACH CASE WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE.

                                      -6-

         IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed by its proper and duly authorized officer as of the date first
set forth above.

                                              ORMAT TECHNOLOGIES, INC.

                                              By:
                                                 -------------------------------
                                                 Connie Stechman
                                                 Authorized Representative

                                              HUDSON UNITED BANK

                                              By:
                                                 -------------------------------
                                                 Jerome P. Peters, Jr.
                                                 Senior Vice President

                                      -7-

                                 ACKNOWLEDGEMENT

         Ormat Nevada Inc. hereby acknowledges the provisions of the foregoing
Subordination Agreement and agrees to abide by the terms thereof.

                                               ORMAT NEVADA INC.

                                               By:
                                                  ------------------------------
                                                  Connie Stechman
                                                  Authorized Representative

                                                                       EXHIBIT C

                       [Form of Letter of Credit Request]

                                                                ----------, ----

Hudson United Bank
87 Post Road East
Westport, Connecticut  06880
Attention:  Mr. Jerome P. Peters, Jr.

Ladies and Gentlemen:

         The undersigned, Ormat Nevada Inc. (the "Borrower"), refers to the
Letter of Credit and Loan Agreement dated as of June __, 2004 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement) between the Borrower and Hudson
United Bank (the "Lender"), and hereby irrevocably requests that the Lender
[issue] [use its best efforts to cause a Fronting Bank to issue] a Letter of
Credit for the account of [the Borrower] [_________, a wholly owned Subsidiary
of the Borrower] (the "Proposed Issuance") containing the following terms:

         1.   Date of Issuance:
                               --------------------------

         2.   Face Amount: US$
                              ---------------------------

         3.   Expiration Date:
                              ---------------------------

         4.   Beneficiary: [Name and Address]

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

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

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

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

         The undersigned hereby certifies that the following statements will be
true and correct on the date of the Proposed Issuance:

         (A)  the representations and warranties contained in the Credit
              Agreement and the other Loan Documents are true and correct on and
              as of the date of the Proposed Issuance as if then made, other
              than representations and warranties that expressly relate solely
              to an earlier date (in which case they were true and correct on
              and as of such earlier date);

         (B)  no Default has occurred and is continuing or would result from
              such Proposed Issuance;

         (C)  except for the transactions specified in Schedule 5.1(f) to the
              Credit Agreement, no Material Adverse Effect has occurred or is
              reasonably likely to occur after giving effect to the Proposed
              Issuance; and

         (D)  the Proposed Issuance may be issued in accordance with and will
              not violate any of the requirements of Section 2.1 of the Credit
              Agreement).

                                         ORMAT NEVADA INC.

                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       2

                                                                       EXHIBIT D

                       [Chadbourne & Parke LLP Letterhead]

                                  June __, 2004

Hudson United Bank
87 Post Road East
Westport, Connecticut 06880

Ladies and Gentlemen:

         We have acted as special New York counsel to (a) Ormat Nevada Inc., a
Delaware corporation (the "Borrower") in connection with the preparation,
execution and delivery of the Letter of Credit and Loan Agreement of even date
herewith (the "Credit Agreement") between the Borrower and Hudson United Bank
(the "Lender") and (b) Ormat Technologies, Inc., a Delaware corporation ("Ormat
Technologies") in connection with the preparation, execution and delivery of the
Subordination Agreement of even date herewith (the "Subordination Agreement")
between Ormat Technologies and the Lender. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. This opinion is delivered pursuant to Section 4.1(a)(iv) of
the Credit Agreement.

         In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents, each of which is dated the date hereof unless otherwise noted:

         A.   The Credit Agreement;

         B.   The Note;

         C.   The Subordination Agreement;

         D.   Each of the agreements, instruments, and other documents listed on
Schedule 1 hereto;

         E.   The Certificate of Incorporation of each of the Borrower and Ormat
Technologies (together, the "Corporations"), as amended, certified on June 23,
2004 by the Secretary of State of the State of Delaware, and the By-Laws of each
of the Corporations, as amended, certified as in effect on the date hereof by
the Secretaries of the Corporations, as applicable; and

         F.   The long-form good standing certificate, dated as of June 18,
2004, from the Secretary of State of the State of Delaware for each of the
Corporations.

         The documents referenced in paragraphs A through C above are
hereinafter referred to as the "Loan Documents." The documents referenced in
paragraphs A through F above are hereinafter referred to as the "Examined
Documents."

                                       -2-

         We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements,
documents, and other instruments, and such certificates and comparable documents
of public officials and of officers and representatives of the Corporations, as
we have deemed necessary or appropriate as a basis for the opinions set forth
below.

         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified, conformed, photostatic copies, or
facsimiles. In rendering the opinions set forth below, we have relied, to the
extent we deemed necessary or appropriate as a basis for such opinions, on
certificates, orders, decrees, correspondence, and other documents from public
officials as to the matters stated in such documents. As to questions of fact
material to the opinions set forth below, we have relied, to the extent we
deemed necessary or appropriate as a basis for such opinions, upon the
representations and warranties of the Corporations contained in the Loan
Documents and other certificates of their respective officers and other
representatives, and of public officials.

         In such examination, we have assumed, without investigation, (a) the
due execution and delivery pursuant to due authorization on behalf of each of
the parties to each of the Loan Documents (other than the Corporations), (b)
that each party to each Loan Document (other than the Corporations) is duly
organized or formed, validly existing, and in good standing under the law of the
jurisdiction of its organization or formation and has full power and authority
to enter into and carry out its obligations under such Loan Document, and (c)
that each Loan Document is valid and binding on, and enforceable against, each
party thereto (other than the Corporations).

         Based on the foregoing, having regard for such legal considerations as
we deem relevant, and subject to the qualifications and limitations contained
herein, it is our opinion that:

         1. Each of the Corporations is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.

         2. Neither the execution and delivery of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof, (a) violates the General Corporation Law of the State of
Delaware (the "DGCL") or those laws, rules, and regulations of the State of New
York and the United States of America that, in our experience, are normally
applicable to transactions of the type contemplated by the Loan Documents
(collectively, "Applicable Laws"), (b) violates, results in the breach of, or
constitutes a default under any Examined Document, or (c) results in the
creation or imposition pursuant to the provisions of any Examined Document of
any lien, charge, or encumbrance upon any of the property of any Corporation
(except as specifically contemplated under the Loan Documents). Neither the
issuance of the Letters of Credit nor the making of the Loans and the

                                      -3-

application of the proceeds thereof as provided in the Credit Agreement will
violate Regulations T, U or X of the Board of Governors of the Federal Reserve
System.

         3. No authorization, consent, waiver, approval, or other action or
consideration by, and no notice to or filing with, any governmental or
regulatory authority, body, or instrumentality under New York or federal laws or
the DGCL, is required for the due execution and delivery by each Corporation of
the Loan Documents to which it is a party or the performance by each Corporation
of all of its obligations under the Loan Documents to which it is a party.

         4. Each of the Loan Documents has been duly executed and delivered by
the Borrower, and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms. The
Subordination Agreement has been duly executed and delivered by Ormat
Technologies, and constitutes the legal, valid and binding obligation of Ormat
Technologies, enforceable against Ormat Technologies in accordance with its
terms.

         5. To the best of our knowledge, there is no pending or threatened
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against the Borrower or Ormat Technologies that (i)
individually or in the aggregate could reasonably be expected to have a material
adverse effect on the business, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower or Ormat
Technologies or (ii) purports to affect the legality, validity or enforceability
of the Loan Documents.

         Our opinions contained in paragraph 4 above with respect to the
enforceability of the Loan Documents are subject to the following
qualifications:

              (a) the enforceability of the Loan Documents may be limited by the
    effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
    or other similar laws relating to or affecting the rights of creditors
    generally, including, without limitation, laws relating to fraudulent
    transfers or conveyances, preferences, and equitable subordination;

              (b) the enforceability of the Loan Documents may be limited by
    statutory requirements with respect to good faith, fair dealing, and
    commercial reasonableness, by general principles of equity (regardless of
    whether enforcement is sought in a proceeding in equity or at law) and by
    the effect of judicial decisions that have held that certain provisions are
    unenforceable where their enforcement would violate the implied covenant of
    good faith and fair dealing, or would be commercially unreasonable, or where
    a default is not material;

              (c) certain remedial provisions of the Loan Documents are or may
    be unenforceable in whole or in part under the laws of the State of New
    York, but the inclusion of such provisions does not make the remedies
    afforded by the Loan

                                      -4-

    Documents inadequate for the practical realization of the rights and
    benefits purported to be provided thereby;

              (d) the availability of equitable remedies, including, without
    limitation, specific enforcement and injunctive relief, is subject to the
    discretion of the court before which any proceedings therefor may be
    brought; and

              (e) notwithstanding certain language of the Loan Documents, the
    Lender may be limited to recovering only reasonable compensation for funding
    losses, increased costs, or yield protection.

         In giving the opinions set forth in paragraph 4 above, we express no
opinion as to:

              (a) the enforceability of any provisions contained in the Loan
    Documents that purport to establish (or may be construed to establish)
    evidentiary standards;

              (b) the enforceability of forum selection clauses in federal
    courts;

              (c) the legality, validity, binding effect, or enforceability of
    any provision of any of the Loan Documents insofar as they provide for the
    payment or reimbursement of costs and expenses or indemnification for
    claims, losses, or liabilities in excess of a reasonable amount determined
    by any court or other tribunal;

              (d) the enforceability under certain circumstances of provisions
    indemnifying a party against liability for its own wrongful or negligent
    acts;

              (e) the compliance or non-compliance, or the effect of
    non-compliance, with any financial tests, ratios, or covenants in the Loan
    Documents;

              (f) the effect of the compliance or noncompliance of the Lender
    with any state or federal laws or regulations (including, without
    limitation, any unpublished order, decree, or directive issued by any
    Governmental Authority) applicable to Lender because of its legal or
    regulatory status, the nature of its business, or its authority to conduct
    business in any jurisdiction;

              (g) the enforceability of provisions in the Loan Documents that
    may be rendered unenforceable or ineffective by operation of Sections 9-401
    or 9-409 of the NY-UCC;

              (h) the enforceability of any provision that provides that the
    assertion or employment of any right or remedy shall not prevent the
    concurrent assertion or employment of any other right or remedy, or that
    each and every remedy shall be cumulative and in addition to every other
    remedy or that any delay or omission to

                                      -5-

    exercise any right or remedy shall not impair any other right or remedy or
    constitute a waiver thereof;

         (i) the enforceability of any provisions providing for indemnification
    or contribution to the extent such indemnification or contribution violates
    the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
    as amended, or the securities laws of any state or is against public policy;

         (j) the creation, validity, perfection, the effect of perfection or
    nonperfection, or the priority of any lien or security interest;

         (k) the enforceability under certain circumstances of contractual
    provisions respecting various self-help or summary remedies without notice
    or opportunity for hearing or correction, especially if their operation
    would work a forfeiture or impose a penalty upon the burdened party; or

         (l) the enforceability of (i) restrictions upon non-written
    modifications and waivers, (ii) provisions authorizing or validating
    conclusive or discretionary determinations, (iii) grants of setoff rights,
    (iv) proxies, powers, and trusts, and (v) provisions for liquidated damages,
    default interest, late charges, monetary penalties, prepayment or make-whole
    premiums.

         Our opinion set forth in paragraph 4 regarding the enforceability of
choice-of-law and forum selection provisions in the Loan Documents is rendered
in reliance upon the Act of July 19, 1984, ch. 421, 1984 McKinney's Sess. Laws
of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law Sections 5.1401, 5.1402 (McKinney
1989) and N.Y. CPLR 327(b) (McKinney 1990)) and is subject to the qualifications
that such enforceability may be limited by public policy considerations of any
jurisdiction in which enforcement of such provisions, or of a judgment upon an
agreement containing such provisions, is sought.

         Our opinions set forth in paragraphs 2 and 3 are based on our review of
Applicable Laws (as defined in paragraph 2), without having made any
investigation concerning any other laws, rules, or regulations. Our opinions do
not address (a) ministerial or immaterial filings and registrations required to
be made by the Corporations in the ordinary course of business with any
Governmental Authority, (b) any approval of any federal, state, regional,
county, municipal, or local governmental authority (other than the approvals
required to be obtained by the Corporations for the execution, delivery, and
performance of the Loan Documents), (c) any consents, approvals, notices,
registrations, or governmental approvals by or in respect of any Governmental
Authority in connection with the construction, use, ownership, or operation of
the Facilities, or (d) any laws, rules, or regulations relating to antitrust,
tax, health, safety, or the environment. Furthermore, with respect to our
opinions contained in paragraphs 2 and 3, we give no opinion as to any violation
by any Corporation of any federal, Delaware, or New York court order, writ,
judgment, or decree.

                                      -6-

         When in this opinion we have used the phrase "to the best of our
knowledge", "known to us" or similar phrases we have not made any independent
investigation of the relevant facts for purposes of this opinion, but we have
relied on the representations made in the Loan Documents and in certificates of
public officials and of officers and other agents of the Corporations and the
principal attorneys involved in the review of the Loan Documents are not aware
of any facts inconsistent therewith.

         We do not express any opinion with respect to the law of any
jurisdiction other than the federal law of the United States, the law of the
State of New York, and, in the case of our opinions set forth in paragraphs 1,
2, and 3, the DGCL. Without limiting the generality of the foregoing, we express
no opinion concerning the law of any other jurisdiction in which the Lender may
be located or in which enforcement of the Loan Documents may be sought that
limits the amount of interest that may be legally charged or collected.
Furthermore, we express no opinion as to the effect of any change in law,
circumstance, or the occurrence of any event, after the date hereof.

         This opinion is rendered to you solely in your capacity as the Lender
and may not be relied upon by any other person, other than permitted assignees
of the Lender pursuant to Section 9.8 of the Credit Agreement, or for any other
purpose without our prior written consent. This opinion may be relied upon
solely as of the date hereof, and we undertake no obligation to update or
supplement this opinion after the date hereof.

                                       Very truly yours,

                                                                      SCHEDULE 1

                          ADDITIONAL EXAMINED DOCUMENTS

                                   ORMESA LLC

1.       Credit Agreement, dated as of December 31, 2002, among Ormesa LLC, a
         Delaware limited liability company ("Ormesa"), each of the lenders that
         is a party thereto, United Capital, a division of Hudson United Bank, a
         New Jersey banking corporation ("United"), as Administrative Agent, and
         United, as Collateral Agent (the "Ormesa Credit Agreement").
         Capitalized terms used in this Section of Schedule 1 and not otherwise
         defined herein shall have the meanings ascribed to such terms in
         Schedule I to the Ormesa Credit Agreement.

2.       Initial Term Loan Note, dated December 31, 2002, by Ormesa in favor of
         United.

3.       Borrower Security Agreement, dated as of December 31, 2002, between
         Ormesa and Collateral Agent.

4.       Borrower Equity Interest Pledge, dated as of December 31, 2002, between
         Ormat Funding Corp. and Collateral Agent.

5.       Depositary Agreement, dated as of December 31, 2002, among Ormesa,
         Administrative Agent, Collateral Agent, and Depositary Bank.

6.       Consent to Assignment of Agreement, dated as of December 31, 2002,
         among the Borrower, Collateral Agent, and Ormesa.

7.       Deed of Trust, dated as of December 31, 2002, by Ormesa in favor of the
         Collateral Agent.

                                ORMAT NEVADA INC.

1.       Amended and Restated Bridge Loan Agreement, dated as of October 2,
         2003, between the Borrower and Bank Leumi USA ("Bank Leumi") (the "Bank
         Leumi Loan Agreement"). Capitalized terms used in this Section of
         Schedule 1 and not otherwise defined herein shall have the meanings
         ascribed to such terms in the Bank Leumi Loan Agreement.

2.       Restated Promissory Note (GRID), dated October 2, 2003, by the Borrower
         in favor of Bank Leumi.

                              ORCAL GEOTHERMAL INC.

1.       Credit Agreement, dated as of December 18, 2003, among OrCal Geothermal
         Inc., a Delaware corporation ("OrCal"), each of the financial
         institutions that is a party thereto, and Beal Bank, S.S.B., as
         Administrative Agent (the "OrCal Credit Agreement"). Capitalized terms
         used in this Section of Schedule 1 and not otherwise defined herein
         shall have the meanings ascribed to such terms in Exhibit A to the
         OrCal Credit Agreement.

2.       Note, dated December 18, 2003, by OrCal in favor of Beal Bank, S.S.B.

3.       Depositary Agreement, dated as of December 18, 2003, among OrCal, each
         Guarantor, Administrative Agent, and Depositary Agent.

4.       Joinder Agreement, dated as of December 18, 2003, among HGC, Depositary
         Agent, and Administrative Agent.

5.       Joinder Agreement, dated as of December 18, 2003, among HFC, Depositary
         Agent, and Administrative Agent.

6.       Security Agreement, dated as of December 18, 2003, between OrCal and
         Administrative Agent.

7.       Pledge Agreement, dated as of December 18, 2003, among the Borrower,
         OrCal, and Administrative Agent.

8.       Pledge Agreement, dated as of December 18, 2003, among OrCal, OrHeber
         1, and Administrative Agent.

9.       Pledge Agreement, dated as of December 18, 2003, among OrCal, OrHeber
         1, HFC, HGC, and Administrative Agent.

10.      Consent, dated as of December 18, 2003, among the Borrower, OrHeber 1,
         HGC, HFC, and Administrative Agent.

11.      Subordination Agreement, dated as of December 18, 2003, among the
         Borrower, OrCal, and Administrative Agent.

                               ORMAT FUNDING CORP.

1.       Indenture, dated as of February 13, 2004, among Ormat Funding Corp., a
         Delaware corporation ("Ormat Funding"), Brady Power Partners, a Nevada
         general partnership ("Brady"), Steamboat Development Corp., a Utah
         Corporation ("Steamboat

                                      -2-

         Development"), Steamboat Geothermal LLC, a Delaware limited liability
         company ("Steamboat Geothermal"), OrMammoth Inc., a Delaware
         corporation ("OrMammoth"), ORNI 1 LLC, a Delaware limited liability
         company ("ORNI 1"), ORNI 2 LLC, a Delaware limited liability company
         ("ORNI 2"), ORNI 7 LLC, a Delaware limited liability company ("ORNI
         7"), Ormesa LLC, a Delaware limited liability company ("Ormesa"), and
         Union Bank of California, N.A., as Trustee (the "Ormat Funding
         Indenture"). Capitalized terms used in this Section of Schedule 1 and
         not otherwise defined herein shall have the meanings ascribed to such
         terms in the Ormat Funding Indenture.

2.       Registration Rights Agreement, dated as of February 13, 2004, among
         Ormat Funding and the Guarantors and the other parties named on the
         signature pages thereof.

3.       Note Purchase Agreement, dated as of February 6, 2004, among Ormat
         Funding, the Guarantors, and the Initial Purchaser.

4.       Global Note, dated February 13, 2004, by Ormat Funding in favor of Cede
         & Co.

5.       Regulation S Temporary Global Note, dated February 13, 2004, by Ormat
         Funding in favor of Cede & Co.

6.       Depositary Agreement, dated as of February 13, 2004, among Ormat
         Funding, Brady, Steamboat Geothermal, Steamboat Development, OrMammoth,
         ORNI 1, ORNI 2, ORNI 7, Collateral Agent, and Depositary.

7.       Collateral Agency Agreement, dated as of February 13, 2004, among Ormat
         Funding, ORNI 1, ORNI 2, ORNI 7, Brady, Steamboat Development,
         Steamboat Geothermal, Collateral Agent, and Trustee.

8.       Pledge and Security Agreement, dated as of February 13, 2004, between
         the Borrower and Collateral Agent.

9.       Pledge and Security Agreement, dated as of February 13, 2004, between
         Ormat Funding and Collateral Agent.

10.      Amended and Restated Credit Facility, dated as of December 1, 2003,
         between the Borrower and Ormat Funding, as amended by the First
         Amendment to Amended and Restated Credit Facility, dated as of February
         5, 2004, between the Borrower and Ormat Funding.

11.      Consent and Agreement, dated as of February 13, 2004, among the
         Borrower, Steamboat Development, Steamboat Geothermal, and Collateral
         Agent.

12.      Consent and Agreement, dated as of February 13, 2004, among the
         Borrower, Brady, and Collateral Agent.

                                      -3-

                                                                       EXHIBIT E

                                   CERTIFICATE

         Reference is made to the Letter of Credit and Loan Agreement dated as
of June __, 2004 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement) between Ormat Nevada Inc. (the "Borrower") and Hudson United Bank
(the "Lender"). Pursuant to Section 6.1(i)(ii) of the Credit Agreement, the
undersigned Responsible Officer of the Borrower hereby certifies to the Lender
as follows:

         1. Financial Statements. The Financial Statements attached hereto for
the fiscal quarter ended ____________, ____ have been prepared in accordance
with GAAP and present fairly in all material respects the financial condition
and results of operations of the Borrower and its Subsidiaries and Consolidated
Persons for the period specified (subject to normal year-end audit adjustments
and the absence of footnotes).

         2. Events of Default. As of the date of this Certificate, no Default or
Event of Default has occurred and is continuing [except (describe any Default or
Event of Default and the action which the Borrower proposes to take with respect
thereto)].

         3. Section 7.1. The Tangible Net Worth of the Borrower as of ________,
____, calculated in accordance with the Credit Agreement (which calculation is
attached), was $_________.

         4. Section 7.2. The Leverage Ratio as of __________, ____, calculated
in accordance with the Credit Agreement (which calculation is attached), was
____ to 1.00.

         5. Section 7.3. The Minimum Coverage Ratio for the calendar quarter or
year _________, ____, through _________, ____, calculated in accordance with the
Credit Agreement (which calculation is attached), was ____________ .

                                             -----------------------------------
                                               Name:

Dated:  __________, ____

                                   SCHEDULE 1

                                 [Calculations]

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