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Ormat Technologies, Inc. – ‘10-Q’ for 3/31/18 – ‘EX-10.2’

On:  Tuesday, 6/19/18, at 5:30pm ET   ·   For:  3/31/18   ·   Accession #:  1437749-18-12087   ·   File #:  1-32347

Previous ‘10-Q’:  ‘10-Q/A’ on 6/19/18 for 9/30/17   ·   Next:  ‘10-Q’ on 8/8/18 for 6/30/18   ·   Latest:  ‘10-Q’ on 5/10/24 for 3/31/24   ·   4 References:   By:  Ormat Technologies, Inc. – ‘10-K’ on 2/23/24 for 12/31/23 By:  Ormat Technologies, Inc. – ‘10-K’ on 2/24/23 for 12/31/22 By:  Ormat Technologies, Inc. – ‘10-K’ on 2/25/22 for 12/31/21 By:  Ormat Technologies, Inc. – ‘10-K’ on 2/26/21 for 12/31/20 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 6/19/18  Ormat Technologies, Inc.          10-Q        3/31/18   69:82M                                    RDG Filings/FA

Document/Exhibit                   Description                      Pages   Size 

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                Period Unaudited)                                                
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                (Details Textual)                                                
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                Effect of Revision on Balance Sheet Line Items                   
                (Details)                                                        
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                Adoption (Details)                                               
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                (Details)                                                        
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                (Details Textual)                                                
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                Unconsolidated Investments Mainly in Power Plants                
                (Details)                                                        
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                (Details Textual)                                                
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                Financial Assets and Liabilities at Fair Value                   
                (Details)                                                        
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                Not Designated as Hedges (Details)                               
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                Fair Value of Long-term Debt Approximates Its                    
                Carrying Amount, Exceptions (Details)                            
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                Fair Value of Financial Instruments (Details)                    
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                Textual)                                                         
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                Interest Expense (Details)                                       
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                Calculate Earnings Per Share (Details)                           
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                (Details)                                                        
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                Information Between Reportable Segments and                      
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                Textual)                                                         
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68: XML         IDEA XML File -- Filing Summary                      XML    120K 
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Exhibit 10.2 

FINANCE AGREEMENT

between

GEOTÉRMICA PLATANARES, S.A. DE C.V.

and

OVERSEAS PRIVATE INVESTMENT CORPORATION

Dated as of April 30, 2018

OPIC/ 9000003553

TABLE OF CONTENTS

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TABLE OF CONTENTS

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SCHEDULES

TABLE OF CONTENTS

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EXHIBITS

FINANCE AGREEMENT

THIS FINANCE AGREEMENT (this “Agreement”), dated as of April 30, 2018 (the “Effective Date”), is made by and between GEOTÉRMICA PLATANARES, S.A. DE C.V., a sociedad anónima de capital variable organized and existing under the laws of the Republic of Honduras (the “Borrower”), and OVERSEAS PRIVATE INVESTMENT CORPORATION, an agency of the United States of America (“OPIC”).

The Borrower intends to implement the Project and has requested that OPIC provide a credit facility pursuant to Section 234(b) of the Foreign Assistance Act of 1961, as amended, which OPIC is willing to do on the terms and conditions set forth herein. Accordingly, in consideration of the foregoing and of the agreements contained herein, it is agreed as follows:

ARTICLE I
DEFINITIONS AND INTERPRETATION

SECTION 1.01.     Definitions and Interpretation.

In this Agreement, including the Exhibits and Schedules hereto, (a) capitalized terms used but not otherwise defined have the meanings set forth in the attached Schedule X, and (b) the rules of interpretation set forth in Schedule X apply.

ARTICLE II
AMOUNT AND TERMS OF THE LOAN

SECTION 2.01.     Amount and Disbursement.

(a)     Commitment. Subject to the terms and conditions hereof, OPIC agrees to make, and the Borrower agrees to accept, a Loan for the Project in a principal amount not to exceed $124,700,000.

(b)     Disbursement; Term. During the Commitment Period, the Borrower may request a Disbursement by delivering to OPIC a Disbursement Request not less than twenty (20) Business Days prior to the applicable Closing Date. Each Disbursement shall be evidenced by (i) a Note under New York law and (ii) a pagaré under Honduran law, dated the Closing Date, in the principal amount of the Disbursement and maturing on the Note Maturity Date. The Loan shall not exceed the amount of the Commitment, and Loan amounts repaid or prepaid may not be reborrowed.

(c)     Number and Amount of Disbursements. There shall be no more than one (1) Disbursement in each fiscal quarter and no more than three (3) total Disbursements. Each Disbursement shall be in an amount of not less than $10,000,000 and in multiples of $100,000 in excess thereof. Notwithstanding anything to the contrary, (i) no Disbursement prior to the True-Up Date shall be in an amount that, together with all then previous Disbursements made, exceeds $114,700,000; and (ii) no Disbursement on or following the True-Up Date, shall be in amount that, together with all then previous Disbursements made, exceeds $124,700,000.

SECTION 2.02.     Interest; Default Interest.

(a)     Payment of Interest; OPIC Note Interest Rate. On each Payment Date, beginning on the first Payment Date immediately following the first Closing Date and ending on the Note Maturity Date, the Borrower shall pay to the order of OPIC interest in arrears on the daily outstanding principal balance of each Note, less any amount of principal on which interest is payable at the Default Rate pursuant to Section 2.02(b), accrued at a rate per annum, subject to Section 2.02(c), equal to the sum of the following (subject to Section 2.02(c), the “OPIC Note Interest Rate” with respect to each Note):

(i)     The Certificate Interest Rate; and

(ii)     The OPIC Guaranty Fee;

provided, that if the Payment Date immediately following any Closing Date occurs within fifteen (15) Business Days of such Closing Date, the Borrower shall make its first interest payment under the related Note on the second Payment Date following such Closing Date.

(b)     Default Rate. If the Borrower fails to pay when due any amount due to OPIC under any Financing Document, such unpaid amount shall bear interest at the Default Rate from the date such amount is due until the date on which such amount is paid in full.

(c)     Adjustment to OPIC Note Interest Rate. If OPIC shall have made payment of any principal, interest or other guaranteed amount on account of a defaulted payment under any Note pursuant to OPIC’s guaranty under the Funding Documents (an “OPIC Guaranty Payment”), then, with respect to the amount of such OPIC Guaranty Payment, the OPIC Note Interest Rate from the date of such OPIC Guaranty Payment to the date of payment in full to OPIC of the amount of such OPIC Guaranty Payment may, at OPIC’s option, be converted to a fixed per annum rate of interest equal to the sum of the following:

(i)     the highest Certificate Interest Rate set forth in any Note then outstanding (or, at OPIC’s option, the U.S. Treasury Cost); and

(ii)     the OPIC Guaranty Fee,

and the Borrower shall, on demand, pay to OPIC the amount of such OPIC Guaranty Payment, together with interest thereon at the Default Rate, adjusted as provided in this Section 2.02(c).

SECTION 2.03.     Repayment of the Loan.

The Borrower shall repay the Loan in fifty-eight (58) approximately equal quarterly installments (collectively, the “Principal Installments”) beginning on June 20, 2018 as set forth in Schedule 2.03.

SECTION 2.04.     Voluntary Prepayment.

Subject to the requirements of the Funding Documents, including payment of any Redemption Premium payable thereunder, on any Designated Prepayment Date following the last day of the Commitment Period, the Borrower may, upon not less than forty-five (45) days’ nor more than sixty (60) days’ prior notice to OPIC, prepay the Loan, in whole or in part, in a minimum partial prepayment amount of $5,000,000, together with the payment to OPIC of (a) interest accrued to the date of prepayment on the portion of the principal amount of each Note that is to be prepaid in the case of a prepayment on a Payment Date or a prepayment in whole, and (b) a premium (the “Prepayment Premium”), calculated as a percentage of the Loan amount prepaid, in accordance with the following schedule:

All voluntary prepayments shall be applied in accordance with the terms of the OPIC Funding Agreement, or, if not provided for in the OPIC Funding Agreement, then as OPIC may otherwise determine.

SECTION 2.05.     Mandatory Prepayment.

Subject to the requirements of the Funding Documents, including payment of any Redemption Premium payable thereunder, on any Designated Prepayment Date the Borrower shall, upon not less than forty-five (45) days and not more than sixty (60) days’ prior notice to OPIC, prepay the Loan in the event that and in the amount (net of the Borrower’s best estimate as of the date of such notice of the documented and reasonable costs, expenses and Taxes to be incurred or paid by the Borrower in connection with the collection and conversion, if in a currency other than Dollars, of such amount) by which (and only to the extent any of the following arise, accrue or are incurred on or after the Effective Date):

(a)     Insurance Proceeds or other compensation proceeds for loss or damage to asset(s) received by the Borrower during any Fiscal Year that are not applied or committed to the repair or replacement of assets insured thereby or otherwise reinvested in the Project in a manner satisfactory to OPIC within one hundred-eighty (180) days after receipt by the Borrower, in an amount equal to the amount by which such unapplied or uncommitted proceeds, in the aggregate, exceed one million Dollars ($1,000,000);

(b)     compensation or damages are received by the Borrower following a dispute that results in a material adverse change to the ENEE PPA;

(c)     compensation or damages, other than payments in the nature of delay liquidated damages, paid to the Borrower pursuant to any Project Document (other than as described in clause (b) above), in an amount equal to the amount by which such compensation or damages, in the aggregate, exceed $350,000;

(d)     the Borrower receives any Termination Payment or Expropriation Proceeds, in the amount equal to the lesser of (i) the Secured Obligations and (ii) such Termination Payment or Expropriation Proceeds, as the case may be; and

(e)     Sale Proceeds resulting from one or more Dispositions in any year of all or any part of the Property of the Borrower received by the Borrower (except as permitted pursuant to Section 7.06(a)), in an amount equal to the amount by which such Sale Proceeds, in the aggregate, exceed $350,000.

Prepayments made pursuant to this Section 2.05 shall be subject to any Redemption Premium or other amounts payable pursuant to the Funding Documents and shall be applied in the same manner as if made pursuant to Section 2.04 (except that no Prepayment Premium shall be due). For purposes of Section 2.05(a), the prepayment shall be applied against payments due to OPIC taking into account the Redemption Premium, if payable pursuant to the Funding Documents in connection with such prepayment.

SECTION 2.06.     Loan Fees and Cancellation.

(a)     Commitment Fee. During the Commitment Period, the Borrower shall pay to OPIC, in arrears, on each Payment Date beginning on the first Payment Date after the Effective Date and on the last day of the Commitment Period, or, if earlier, the date this Agreement is terminated, a commitment fee (the “Commitment Fee”), accruing on a daily basis at the rate of half of one percent (0.50%) per annum, calculated for each day during the Commitment Period, on the amount of the Commitment.

(b)     Cancellation Fee. The Borrower may cancel all or any part of the Commitment at any time upon written notice and payment to OPIC of a cancellation fee (the “Cancellation Fee”) equal to one percent (1%) of the amount of the Commitment canceled, provided, always, that the Borrower demonstrates to OPIC’s satisfaction that there are sufficient funds available, to operate the Project. Any part of the Commitment not disbursed at the end of the Commitment Period or that is terminated for any reason shall be deemed to have been canceled, and such Cancellation Fee shall be payable with respect thereto.

(c)     Facility Fee. The Borrower shall pay OPIC a facility fee (the “Facility Fee”) in an amount equal to one percent (1%) of the amount of the Commitment on or prior to the first Closing Date.

(d)     Maintenance Fee. The Borrower shall pay to OPIC an annual maintenance fee to cover OPIC’s administrative costs and expenses, including, but not limited to, systems infrastructure costs (the “Maintenance Fee”), which Maintenance Fee shall include an annual fee in the amount of forty-five thousand Dollars ($45,000), payable to OPIC on the first anniversary of the Payment Date immediately following the first Closing Date and on each anniversary of such Payment Date for so long as any portion of the Loan remains outstanding.

(e)     Modification Fee. In the event that the Borrower requests an amendment to, waiver of, or consent under, any provision of this Agreement or any other Financing Document, OPIC will consider such a request on its merits upon payment by the Borrower, at the time of such request, of a fee which, in OPIC’s determination, shall be commensurate with the complexity and timing constraints of such amendment, waiver or consent (the “Modification Fee”); provided, however, that no Modification Fee will be payable if the amendment, waiver or consent is necessary, in OPIC’s determination: (i) to correct an error or omission in any Financing Document, or (ii) to improve the operations of the Project without materially altering the risks undertaken by OPIC. OPIC is under no obligation to agree to any amendment or waiver or to grant any consent. The Borrower acknowledges that OPIC may request a Modification Fee in connection with providing its consent to, or any amendment or waiver required for, (a) restructurings of any kind, (b) any prepayment requiring releases of collateral (other than prepayment in full of all obligations secured thereby) or (c) other similar actions by OPIC.

SECTION 2.07.     Tax Gross-Up; Stamp Duties; Proper Legal Form.

(a)     All sums payable by the Borrower hereunder and under any other Financing Document shall be paid in full, free of any deductions or withholdings of any and all present and future Taxes. If the Borrower is required by Applicable Law to deduct any Taxes from or to withhold any Taxes in respect of any amount payable to OPIC hereunder or under any Financing Document, then the Borrower shall pay such additional amount as may be necessary so that the actual amount received by OPIC after such deductions or withholdings equals the full amount under the Financing Documents it would have received had no such deductions or withholdings been required.

(b)     In addition to the obligations set forth in Section 6.02(c), the Borrower shall pay before they become overdue any and all present and future Taxes payable on or in connection with the execution, delivery, registration, or notarization, or for the legality, validity, or enforceability of this Agreement or any other Transaction Document directly to the Governmental Authority responsible for collecting such Taxes, except for any Taxes that the Borrower is contesting in good faith by appropriate proceedings and for which adequate reserves have been set aside in accordance with Accounting Standards; provided, that the Borrower hereby indemnifies OPIC and holds OPIC harmless from and against any and all liabilities, fees, or additional expenses with respect to or resulting from any delay in paying, or omission to pay, any such Taxes. Within thirty (30) days after payment by the Borrower of any such Taxes, the Borrower shall furnish OPIC with the original or a Certified copy of the receipt evidencing payment thereof, together with any other information OPIC may reasonably request. OPIC shall have the right, but not the obligation, to pay any such Taxes not paid by the Borrower, and the Borrower shall, upon OPIC’s demand, promptly reimburse OPIC in full for all such payments.

(c)     As of each Closing Date, the Borrower shall take all action to ensure that each signature to each of the Financing Documents that has been executed by such Closing Date has been duly legalized for use in Honduras, so that no further action will be required for the enforceability of such Financing Document in Honduras.

SECTION 2.08.     Miscellaneous.

(a)     Payment or Reimbursement of Expenses. OPIC may retain such consultants as determined by OPIC to be necessary, including U.S. and local legal counsel, at any time until the Loans are indefeasibly repaid in full. Upon request, the Borrower shall promptly pay or reimburse OPIC for all of OPIC’s reasonable and documented costs and expenses incurred in connection with the negotiation, preparation, execution, delivery, notarization, recordation and implementation of the Financing Documents (and other documents, instruments and approvals required to be delivered thereunder), including (i) the fees and expenses of outside U.S., Cayman and Honduran legal counsel and business consultants, and (ii) the costs of communications, preparation of any documents, authentication, registration, and recordation of any of the Financing Documents, preparation of a monitoring memorandum for OPIC’s use, and preparation of bound volumes or an electronic closing set of the Financing Documents for OPIC’s use, and the creation, perfection and termination of the Liens created pursuant to the Security Documents and any filings prepared in connection therewith. The Borrower shall also reimburse OPIC, upon demand, for all costs and expenses (A) (including attorneys’ fees and expenses and costs of travel) incurred by OPIC in preserving in full force and effect, or enforcing its rights under, any of the Financing Documents and (B) (including reasonable and documented attorneys’ fees and expenses and costs of travel) incurred by OPIC in addition to the Modification Fee, in connection with any amendment, waiver or consent related to any provision of any Financing Document.

(b)     Currency and Place of Payment. All payments to OPIC shall be made in Dollars by wire transfer in immediately available funds without counterclaim, offset, or deduction. Unless instructed otherwise by OPIC, wires should be sent to OPIC’s account with the U.S. Treasury Department in New York by either Fedwire transfer or international electronic funds transfer, and any such wire must include the required information set forth in Schedule 2.08(b). Whenever any payment would otherwise fall due on a day that is not a Business Day, the due date for payment shall be the immediately succeeding Business Day, and interest and fees shall be computed through such immediately succeeding Business Day in accordance with Section 2.08(c); provided, however, that the last payment shall include interest through the actual date of receipt of such payment.

(c)     Computation of Interest on Notes and of Certain Fees. Except as otherwise provided herein, in the Funding Documents or in any Note:

(i)     interest on any Note (including interest calculated at any OPIC Note Interest Rate or the Default Rate) and default interest calculated at the Default Rate due on any unpaid amount of Redemption Premium, if any, shall accrue on a daily basis and shall be computed as provided therein; and

(ii)     the Commitment Fee and any default interest calculated at the Default Rate on any amounts past due other than amounts described in Section 2.08(c)(i) above shall accrue on a daily basis and shall be computed on the basis of three hundred sixty (360)-day years composed of twelve (12) thirty (30)-day months.

(d)     Application of Payments to OPIC. Except as otherwise provided herein, in the Funding Documents or in any Note, payments received by OPIC under any of the Financing Documents shall be applied to amounts due to OPIC in such manner as OPIC in its sole discretion may determine.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

SECTION 3.01.     Representations and Warranties.

The Borrower represents and warrants to OPIC that:

(a)     Existence and Power. The Borrower (i) is a sociedad anónima de capital variable duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization; (ii) is duly authorized to do business in each jurisdiction in which it conducts business; and (iii) has the power to own its properties, carry on its business and the Project, borrow money, create Liens on its properties, and execute, deliver, and perform each of the Borrower Documents.

(b)     Authority. The Borrower’s execution, delivery, and performance of each of the Borrower Documents to which the Borrower is a party at the time this representation is made: (i) have been duly authorized by all necessary corporate action; (ii) will not violate any (x) Corrupt Practices Laws, Environmental Laws or Worker Rights Requirements or (y) any other Applicable Law; and (iii) will not breach, or result in the imposition of any Lien upon any of its assets (except as permitted by Section 7.01) under, any of its Charter Documents or any agreement or other requirement by which it or any of its properties may be bound or affected. Each of the Borrower Documents has been duly executed and delivered by the Borrower, and is a legal, valid, and binding obligation of the Borrower, enforceable in accordance with its terms. As of each Closing Date, each of the Borrower Documents executed and delivered by such Closing Date has been duly legalized for use in Honduras with no further action required for the enforceability of such Borrower Documents in Honduras.

(c)     Financial Condition. The Borrower’s audited Financial Statements, dated December 31, 2016, which have been furnished to OPIC and any other Financial Statements that have been furnished to OPIC pursuant to Section 6.05, are complete and correct and fairly present its financial condition and results of its operations for the period then ended. Except for obligations incurred in the ordinary course of business, the Borrower has no obligation, contingent or otherwise, of any kind except as disclosed in such Financial Statements. Since the Effective Date, no dividend, Restricted Payment or Shareholder Payment has been declared or paid to the Shareholders or any other Person, except as permitted in Section 7.04.

(d)     Capitalization. (i) The Borrower’s authorized capital and issued stock is as set forth on Schedule 3.01(d). All such capital stock has been duly authorized and validly issued and is fully paid and nonassessable. Other than pursuant to the Project Structuring Agreement (but subject to the terms of the Security Documents), there are no rights or claims of any character that restrict the transfer of, require the issuance of, or otherwise relate to any class of the Borrower’s capital stock.

(ii) (A) The Sponsor holds the direct legal and beneficial title to OII’s share capital; (B) OII holds the direct legal and beneficial title to Ormat Holding Corp.’s share capital; (C) Ormat Holding Corp. holds the direct legal and beneficial title to the Intermediate Shareholder’s share capital; (D) the Intermediate Shareholder holds the direct legal and beneficial title to OrPower 19’s share capital; (E) OrPower 19 holds the direct legal and beneficial title to the Borrower’s ordinary capital stock (excluding the Preferred Nonvoting Share); and (F) Elcosa holds the direct legal and beneficial title to the Borrower’s Preferred Nonvoting Share, in each case in the percentage amounts set forth next to their names on Schedule 3.01(d). Except as provided in this Section 3.01(d), no Person holds direct or indirect legal or beneficial title to the Borrower’s capital stock, and the Borrower does not own or otherwise control any voting stock of, or have any ownership interest in, any other Person.

(iii) No transfer of (a) the Borrower’s assets or the ordinary shares of the Borrower, except for the transfer of assets and shares into the trusts governed by the Honduran Asset Trust Agreement, the Administration and Guaranty Trust Agreement and the Honduran Share Trust Agreement, or (b) the shares of OrPower 19, except for the pledges of shares under the Cayman Pledge Agreements, has been made to Elcosa or any other party.

(e)     Liens. The Security Documents are, or upon filing and registration will be, effective to create in favor of OPIC legal, valid, and enforceable first priority Liens, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, on all of the Borrower’s assets intended to be covered thereby. The Borrower does not have outstanding, nor is it contractually bound to create, any Lien on or with respect to any of its assets, rights, or revenues, except for Permitted Liens.

(f)     Taxes and Reports. The Borrower has filed all tax returns and reports required by Applicable Law to be filed and has paid (or provided adequate reserves for) all Taxes due.

(g)     Defaults. No Default or Event of Default has occurred and is continuing other than any failure of ENEE to make payments in accordance with the ENEE PPA but which payments are nonetheless made within the applicable grace period, provided, that, in the case of any Default or Event of Default with respect to any party other than the Borrower or any of the Ormat Parties, such representation is limited to the Knowledge of the Borrower and the Ormat Parties. Neither the Borrower nor, to the Knowledge of the Borrower and the Ormat Parties, any other party is in breach of any provision of any contract to which the Borrower is a party, which breach could be a Material Adverse Effect.

(h)     Litigation. No action, suit, other legal or arbitral proceeding, or investigation is pending by or before any domestic or foreign court or Governmental Authority or in any arbitral or other forum or is threatened in writing, that (i) relates to any of the transactions contemplated by any Transaction Document, or (ii) if adversely determined, could be a Material Adverse Effect.

(i)     Compliance with Law; Corrupt Practices; Anti-Money Laundering.

(i)     The Borrower has conducted and is conducting its business in compliance with (A) Corrupt Practices Laws, Environmental Laws and Worker Rights Requirements and (B) in all material respects, all other Applicable Laws and its Charter Documents.

(ii)     Without limiting the effect of clause (i), the Borrower and its officers, directors, employees, and agents have complied with applicable Corrupt Practices Laws in obtaining all Consents in respect of the Borrower’s business and the Project and are otherwise conducting the Project and the Borrower’s business in compliance with applicable Corrupt Practices Laws. The Borrower’s internal management and accounting practices and controls are sufficient to provide reasonable assurances of compliance with applicable Corrupt Practices Laws and the prevention of Prohibited Payments. Neither the Borrower nor, to the Knowledge of the Borrower and the Ormat Parties, any Person acting on behalf of the Borrower has made any Prohibited Payment.

(vi)     The Borrower is in compliance with the applicable requirements of (A) the Anti-Money Laundering Laws, (B) OFAC Regulations, and (C) all other applicable export control, anti-boycott and economic sanctions laws of the U.S. and other jurisdictions relating to its business and facilities.

(vii)     None of the Borrower, its directors, members of senior management, or the Persons listed on Schedule 3.01(d) is a Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations.

(j)     Status of Consents.

(i)     As of the Effective Date and the date of first Disbursement, Schedule 4.04 lists (and as of any other date on which this representation is given or deemed repeated, such Schedule 4.04, as updated in writing prior to the time of such representation, lists) each Consent necessary for: (x) the conduct of the Borrower’s business and the implementation of the Project; (y) the due execution, delivery, validity and enforceability of, and performance by the Borrower of its obligations under, the Borrower Documents, including Financing Documents, the incurrence of Indebtedness thereunder and the payment of amounts due or to become due with respect thereto (including Consents necessary for such amounts to be free of withholding Taxes and Consents necessary to permit the exemptions from other applicable Taxes assumed by the Financial Model); and (z) the due execution, delivery, validity and enforceability of, and performance by any Shareholder of its obligations under, any Transaction Documents to which it is a party; in each case, other than (A) Consents of a routine nature that are not yet required based on the then-current stage of the Project and which the Borrower reasonably expects to obtain in the ordinary course of business without materially delaying the Project or exceeding the costs set forth in the Financial Plan and (B) such other Consents that may become required in the future for the Project as a result of a change in Applicable Law.

(ii)     As of the Effective Date and the date of first Disbursement, all Consents specified in Part A of Schedule 4.04 have been obtained and are in full force and effect. As of any other date on which this representation is given or deemed repeated, all Consents specified in Part A of Schedule 4.04 and all other Consents provided to OPIC through such date pursuant to Section 6.02 are in full force and effect.

(iii)     As of the Effective Date and the date of first Disbursement, the Borrower and its agents or designees have applied (or are making arrangements to apply) or will apply (or cause third parties to apply) for all Consents specified in Part B of Schedule 4.04. As of the Effective Date and the date of first Disbursement, the status of such Consents is accurately described in such Part B. As of any other date on which this representation is given or deemed repeated, the status of such Consents is accurately described in such Part B of such Schedule 4.04, as updated in writing prior to the time of such representation, and the Borrower has obtained all such Consents by the time required based on the then-current stage of the Project.

(k)     Good Title, Use of Site; Easements, Property Interests, Utilities, Etc. The Borrower either (a) owns and has good, legal and marketable title to, and, in respect of real property, a lawful and valid ownership title in all property that it purports to own, including in those parcels of land comprising the Site, or (b) has a lawful, valid, exclusive and irrevocable right of use of those parcels of land comprising the Site, in each case free and clear of all Liens (other than Permitted Liens). The Borrower does not own any parcel of land comprising the Site that is not subject to a valid, effective and first-priority Lien created by means of the Administration and Guaranty Trust Agreement. The Borrower has a lawful, valid, exclusive and irrevocable right of use and a possessory interest in all necessary easements and other rights of ingress to and egress from the Site and lawfully possesses a valid and subsisting leasehold estate in and to all of its leased property (if any) in each case free and clear of all Liens (other than Permitted Liens). Other than the rights referred to in the preceding sentences, no property rights (including easements or other rights of ingress or egress) are required or can reasonably be expected to be necessary for the design, development, construction, supply, start-up, commissioning, testing, financing, implementation, operation or maintenance of the Project in accordance with Applicable Law and the Transaction Documents. All utility and other services, means of transportation, facilities, other materials, and other rights that are or can reasonably be expected to be necessary for the Project in accordance with Applicable Law and the Transaction Documents have been procured or are commercially available to the Project. No material licenses (other than those granted pursuant to the Warranty Agreement) relating to intellectual property, trademarks, patents, or other similar agreements are necessary for the Project nor are there any payments owed due or accruing to the Sponsor or any of its Affiliates with respect to the usage of any intellectual property, trademarks, copyrights or patents related to the Project.

(l)     Environmental, Health and Safety Matters.

(i)     The Borrower has duly complied, and its business, operations, and assets, and the Project, are in compliance with all Applicable Law regarding the environment, health and safety and social performance, including Applicable Law related to labor management and worker rights.

(ii)     All Consents with respect to air emissions, discharges to surface water or ground water, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes, or other environment, health and safety and social performance matters required as of the current stage of development or operation under Applicable Law for the Project have been issued.

(iii)     The Borrower and its contractors have taken commercially reasonable measures to address the risks identified in the Social Risk Assessment of Platanares Geothermal Project conducted by Social Capital Group in October 2016 and there have not been any security incidents, displacements of persons or chance archeological finds associated with the Project.

(iv)     Except as described in Schedule 3.01(l), the Borrower has not received any written complaint, order, directive, claim, citation, or notice by any Governmental Authority, or any written complaint or claim from any Person seeking damages, contribution, indemnification, cost recovery, compensation, modification of the Project or the Borrower’s practices or other injunctive relief.

(v)     Since the Effective Date, the Borrower has duly complied, and its business, operations, and assets, and the Project, are in compliance, with the Environmental and Social Requirements, it being understood that the Borrower will be able to assess and confirm compliance with the noise standards contained within IFC 2007 Environmental, Health, and Safety General Guidelines only upon completion of the noise assessment referenced in Section 3.1 of the ESAP.

(m)     Project Status. At the time of its application for the Loan dated November 21, 2016, the Borrower’s estimate of total Project Costs (including contingencies) was the equivalent of $180,000,000, of which up to $45,000,000 has been contributed in cash and/or assets satisfactory to OPIC as equity or subordinated debt, based on the financial plan set forth on Schedule 3.01(m) (the “Financial Plan”).

(n)     Disclosure.

(i)     All documents, reports, and other written information that have been furnished to OPIC are true and correct in all material respects and do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained herein or therein, taken as a whole, not materially misleading in light of the circumstances in which the same were made at the time such statements were made; provided, however, that with respect to any information that is in the nature of projections or estimates of future performance, including without limitation any information relating to the performance of the geothermal reservoir, the Borrower represents and warrants only that such projections and such other information were prepared and provided in good faith based on assumptions that are reasonable, but makes no representation or warranty as to the accuracy of such projections. There is no fact known to the Borrower the existence of which could reasonably be expected to be a Material Adverse Effect. No event, development, or circumstance has arisen since the application for the Loan dated November 21, 2016 that has or could be a Material Adverse Effect.

(ii)     Except for events occurring after the Effective Date disclosed in writing to OPIC, no force majeure event as the same may be defined in the ENEE PPA, the Warranty Agreement or any other Project Document that has a force majeure event has occurred and is continuing thereunder.

(o)     Accounts. The Borrower does not own or maintain any accounts with a bank or other financial institution other than the Accounts.

(p)     Suspension and Debarment. No event has occurred and no condition exists that is likely to result in the debarment or suspension of the Borrower from contracting with the U.S. Government or any agency or instrumentality thereof, and the Borrower is not now and has not been subject to any such debarment or suspension.

(q)     ERISA and Employees. Neither the Borrower nor any ERISA Affiliate sponsors, maintains, administers, contributes to, participates in, or has any obligation to contribute to or any liability or potential liability under, any Guaranteed Pension Plan or Multiemployer Plan and neither the Borrower nor any ERISA Affiliate has ever sponsored, maintained, administered, contributed to, participated in, or had any obligation to contribute to or any liability or potential liability under, any Guaranteed Pension Plan or Multiemployer Plan. The Borrower does not sponsor, maintain, administer, contribute to, participate in, or have any obligation to contribute to or any liability or potential liability under, any Employee Benefit Plan.

(r)     Investment Company Act.

(i) The Borrower is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

(ii) The Borrower does not own, directly or indirectly, any other Person.

(s)     Margin Regulation. No part of the proceeds of the Loan will be used for “buying” or “carrying” any margin stock within the meaning of Regulation U, or for any purpose that violates any regulation of the Board of Governors of the Federal Reserve System.

(t)     Regulation of Indebtedness. The Borrower is not subject to regulation under any Applicable Law (including, without limitation, any United States Federal or state law) that limits or impairs its ability to incur or guarantee Indebtedness or to comply with any of its obligations under the Financing Documents or that otherwise subjects the financing transactions contemplated by the Financing Documents to regulation by a Governmental Authority.

(u)     Material Project Documents.

(i)     Except for services, materials, licenses, or rights that can reasonably be expected to be available on commercially reasonable terms at the time required, the Material Project Documents required to be executed by the relevant Closing Date in accordance with the terms hereof, constitute all contracts, agreements, leases, or other documents or instruments that (x) contain warranties or contemplate the payment of liquidated damages, (y) are necessary for the construction, completion, operation, and ownership of the Project as of such date or (z) are necessary for the conduct of the business of the Borrower as contemplated by the Transaction Documents and the Financial Plan.

(ii)     The Borrower has not entered into any power purchase agreements except for the ENEE PPA and the MINOSA PPA.

(iii)     Other than the Material Project Documents, the MINOSA PPA and the Consents listed in Schedule 4.04, there are no agreements that are material to the construction and operation of the Project, including any that contain warranties or contemplate the payment of liquidated damages.

(iv)     Other Parties; Transaction Documents. (i) To the Borrower’s knowledge, each of the Transaction Documents constitutes the legal, valid and binding obligation of each party thereto (other than the Borrower and OPIC) enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights and general principles of equity.

(v)      Following the Effective Date, none of the Transaction Documents to which the Borrower is a party has been amended, modified or terminated, except in accordance with this Agreement or as disclosed to OPIC and consented to in writing by OPIC.

(w)     Inverted Domestic Corporation. The Borrower is not an Inverted Domestic Corporation and it is not a Subsidiary Of An Inverted Domestic Corporation.

(x)     Payment of Contractors and Subcontractors. All contractors and suppliers performing Works before the Cut-Off Date have been paid in full or will be paid in full for such Works with the proceeds of the first Disbursement or adequate cash reserves have been made for such payments, except for amounts (i) that are, in the aggregate, less than one hundred thousand dollars ($100,000) and (ii) that the failure to pay could not reasonably be expected to have a Material Adverse Effect on, or materially impair, the operation of the Project. Part A of Schedule 3.01(x) sets forth a complete list of all contractors and suppliers that, since the Cut-Off Date have performed Works. All such Works have been paid in full except as set forth in Part B of Schedule 3.01(x). Part B of Schedule 3.01(x) sets forth a complete list of all contractors and suppliers that, since December 31, 2016, have performed or will perform Works and all amounts remaining to be paid (or projected to be paid) to each such contractor and supplier that, since the Cut-Off Date, is performing or will perform Works.

(y)      Ranking. The payment obligations hereunder and under the Notes constitute unconditional and unsubordinated Indebtedness of the Borrower and rank at all times at least pari passu in priority of payment with all other present and future unsubordinated Indebtedness of the Borrower.

(z)     Notice of Committed Power Capacity for Third Parties. The Borrower has not, without prior consent of OPIC, which consent shall not be unreasonably conditioned, given written notice to ENEE of any Committed Power Capacity for Third Parties (as that term is defined in the ENEE PPA) or self-consumption.

(aa)     Repetition of Representations and Warranties. Each of the foregoing representations and warranties in this Section 3.01 shall be deemed to be made as of the Effective Date and as of each Closing Date (except to the extent expressly made only as of a specified earlier date, in which case as of such earlier date). To the extent that any schedule referred to in this Section 3.01 shall need to be updated in order to permit such representation to be true and correct when made or deemed to be made, the Borrower shall provide OPIC with such updated schedule in writing prior to the date such representation is deemed made and shall request that this Agreement be amended in accordance with Section 9.06, provided that no Modification Fee shall be due and payable by the Borrower for any such update that is immaterial unless consideration of such update results in other modifications to, or consents or waivers under, a Financing Document. Unless this Agreement is amended to reflect the changes in any such schedule, no change shall be deemed to have been made.

ARTICLE IV
CONDITIONS PRECEDENT TO FIRST DISBURSEMENT

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make the first Disbursement is subject to the prior fulfillment or written waiver, to OPIC’s satisfaction in its sole discretion, of the following conditions precedent as of the date that is ten (10) days prior to the first Closing Date and to their continued fulfillment on the first Closing Date.

SECTION 4.01.     Transaction Documents.

OPIC shall have received the following documents, each of which shall be satisfactory to OPIC in form and substance and, if applicable, shall have been duly executed by the parties thereto and shall be in full force and effect in accordance with its terms without default:

(a)     originals of the following documents (the “Loan Documents”):

(b)     originals (or, at OPIC’s election, Certified copies) of the following documents (the “Security Documents”):

(c)     Certified copies of the following documents (the “Material Project Documents”, and all such contracts, together with any other contract required for the construction or operation of the Project and any power purchase agreement entered into by the Borrower, including the MINOSA PPA, that is entered into with respect to the Borrower or the Project subsequent to the date hereof, the “Project Documents”):

(d)     Originals (or, at OPIC’s election, Certified copies) of each of the Funding Documents.

The Loan Documents, the Funding Documents, and the Security Documents, together with any other agreements or instruments entered into in connection with any of the foregoing or pursuant to which the Loan is made, are collectively referred to herein as the “Financing Documents.” The Financing Documents and the Project Documents, together with any other agreements or instruments entered into in connection with any of the foregoing or pursuant to which the Loan is made, are collectively referred to herein as the “Transaction Documents.”

SECTION 4.02.     Authorization.

OPIC shall have received a certificate of an Authorized Officer of the Borrower dated as of the first Closing Date, substantially in the form of Exhibit C-1 and of each Shareholder, dated as of the first Closing Date, substantially in the form of Exhibit C-2.

SECTION 4.03.     Ownership.

OPIC shall have received evidence satisfactory to it, which evidence shall include Certified copies of relevant stock certificates for the entities identified in subclauses (a)(i), (ii) and (iii) below and original stock certificates for the entities identified in subclauses (a)(iv) and (v) below, that (a) (i) the Sponsor holds the direct legal and beneficial title to OII’s share capital; (ii) OII holds the direct legal and beneficial title to Ormat Holding Corp.’s share capital; (iii) Ormat Holding Corp. holds the direct legal and beneficial title to the Intermediate Shareholder’s share capital; (iv) the Intermediate Shareholder holds the direct legal and beneficial title to OrPower 19’s share capital; and (v) OrPower 19 holds the direct legal and beneficial title to the Borrower’s ordinary share capital; and (b) Elcosa holds the direct legal and beneficial title to the Preferred Nonvoting Share, in each case in the percentage amounts set forth next to their names on Schedule 3.01(d).

SECTION 4.04.     Consents.

OPIC shall have received Certified copies of all Consents listed in Part A of Schedule 4.04.

SECTION 4.05.     Site.

OPIC shall have received evidence in form and substance satisfactory to it that the Borrower, holds lawful, valid, exclusive and irrevocable title of ownership or other real property rights and lawful and valid use of the entire Site, together with lawful, valid, exclusive and irrevocable right of use and a possessory interest in all necessary easements and other rights of ingress and egress for the development, construction, operation and maintenance of the Project free and clear of any Liens other than Permitted Liens, and that such Site (together with such easements and rights of ingress and egress) is sufficient for the Borrower to develop, construct, operate and maintain the Project as contemplated by the Transaction Documents.

SECTION 4.06.     Security Interest.

(a)     Each Lien created by the Security Documents shall be of first priority, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, and (i) to the extent it arises or attaches under the Uniform Commercial Code enacted in any jurisdiction in the U.S., shall be perfected, and (ii) in all other cases, shall be enforceable against the Borrower and third parties (including any holder of a subsequently established Lien). Each of the Security Documents shall be in full force and effect and (i) in the case of the Administration and Guaranty Trust Agreement, as soon as possible but no later than one-hundred twenty (120) days after execution thereof, (ii) in the case of the Share Pledge Agreement, the Honduran Share Trust Agreement and all other Security Documents, no later than the first Closing Date, shall have been duly filed, stamped, registered and recorded in every jurisdiction in which such filing, stamping, registration or recording is necessary to make valid and effective the Liens intended to be created thereby and the rights of OPIC thereunder, and OPIC shall have received evidence satisfactory to it that such filing, stamping, registration or recording has been made. In addition, the Borrower shall have executed all such other agreements or documents, or taken any actions that, in the opinion of counsel to OPIC, are required to secure the payment of all amounts due or to become due hereunder and under the Notes with valid, enforceable, first-priority Liens, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, on all of the Borrower’s assets, all of the shares of stock of the Borrower (other than the Preferred Nonvoting Share), the shares of capital stock of OrPower 19 and all other assets described in the applicable Security Documents.

(b)     The Honduran Asset Trust Agreement shall have been amended and restated to create the Administration and Guaranty Trust Agreement in form and substance satisfactory to OPIC.

SECTION 4.07.     Insurance.

OPIC shall have received all certificates of insurance and other documentation required pursuant to Section 6.03 and Schedule 6.03, to confirm that the Insurance Policies (and reinsurance, as applicable) required by such provisions are issued in accordance with such provisions, are in full force and effect without default, and show OPIC’s endorsement as additional insured and additional loss payee (other than to the extent explicit exceptions to those requirements are provided in such Schedule 6.03 for documents then in place and such other documents as are not yet required pursuant to Schedule 6.03), and such evidence shall have been reviewed by the Insurance Advisor and satisfactory to OPIC.

SECTION 4.08.     Auditors.

OPIC shall have received evidence that the Borrower has irrevocably instructed its auditors to communicate directly with OPIC regarding the Borrower’s accounts and operations pursuant to Section 6.05, provided, that, OPIC shall provide the Borrower with copies of its communications to the auditors, including notices and requests for information, and will provide the Borrower with reasonable prior written notice of any discussions or meetings and a reasonable opportunity to participate in the same.

SECTION 4.09.     Legal Opinions.

OPIC shall have received acceptable written opinions, dated the Closing Date, satisfactory to OPIC in form and substance, of (a) Matamoros Batson & Asociados, its legal counsel in the Project Country, (b) Aguilar Castillo Love, legal counsel to the Borrower and the Ormat Parties in the Project Country, (c) Freshfields Bruckhaus Deringer US LLP, its legal counsel in the United States, with respect to OPIC funding matters, (d) Norton Rose Fulbright US LLP, legal counsel to the Borrower and the Ormat Parties, (e) Ogier, its legal counsel in the Cayman Islands, (f) Maples and Calder, legal counsel to the Borrower and the Ormat Parties in the Cayman Islands and (g) in-house counsel, or other acceptable counsel, to (i) the Supplier, (ii) Elcosa and (iii) ENEE; provided, that the written opinion of counsel to ENEE may be provided in the form of written certifications from ENEE’s in-house counsel.

SECTION 4.10.     Appointment of Agent.

OPIC shall have received evidence that the agent for service of process (a) referred to in Section 8.04(c) with relation to the Borrower and (b) required to be appointed by any other party pursuant to the Financing Documents has been duly appointed and holds such appointment without reservation until six (6) months after the Loan Maturity Date, together with evidence of the prepayment in full of the fees of such agent.

SECTION 4.11.     Accounts; Offshore Well Reserve Account.

Each of the Accounts shall have been established and, if applicable, funded in accordance with the Accounts Agreement or, if applicable, the Accounts Administration and Retention Agreement. OPIC shall have received evidence satisfactory to it that the Offshore Well Reserve Account is funded in an amount at least equal to $2,000,000 or will be funded to such level with proceeds of the first Disbursement.

SECTION 4.12.     Financial Projections.

OPIC shall have received financial projections for the Project through March 31, 2033, including projected financial statements prepared in English and in Dollars, which shall be satisfactory to OPIC in form and substance.

SECTION 4.13.     Construction COD Reports.

(a)     OPIC shall have received a copy of the Commercial Operation Start Certificate delivered as required under the ENEE PPA.

(b)     OPIC shall have received one or more certificate(s) from the Borrower, to OPIC’s satisfaction in its sole discretion (in consultation with the Independent Engineer), on the construction, completion, commissioning, testing and start-up of the Project, which shall include, among other things, confirmation that: (i) all Works have been completed except those listed in Schedule 4.13(b)(i) and paid for on commercially reasonable terms, except those listed in Schedule 4.13(b)(ii); (ii) all Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standards 1, 3, 4, 5, 6 and 8 (January 1, 2012) and (iii) all Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standard 2 (January 1, 2012), except as listed in Annex 1 to such certificate.

(c)     In connection with preparation and review of reports or certificates from the Independent Engineer, including those contemplated in Section 5.13, the Borrower shall have provided to the Independent Engineer and OPIC, as applicable, such information, documents, reports and certificates as may be necessary or reasonably requested to assess the management during construction of environmental issues, worker rights and protections, health and safety, community engagement and consultation and cultural heritage management.

SECTION 4.14.     Environmental and Social Requirements.

The Borrower shall deliver all of the Environmental and Social Plans, each of which shall be prepared in accordance with the Environmental and Social Requirements.

SECTION 4.15.     ESAP.

The Borrower shall have satisfied the conditions specified in the ESAP that are applicable at the time of the first Disbursement.

SECTION 4.16.     Due Diligence.

OPIC shall have completed to its satisfaction its due diligence investigation of the Borrower, the Shareholders, the Project, and all other matters relating thereto, and the results of such investigations shall be satisfactory to OPIC.

SECTION 4.17.     Lien Waivers.

With respect to all Project Costs incurred in connection with the Works after the Cut-Off Date but before the first Disbursement, the Borrower shall obtain Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor related to such Works, or a no lien certificate from the local registries, as applicable), and deliver them prior to the first Disbursement as required by Section 5.16.

SECTION 4.18.     Advisor Reports.

OPIC shall have received the final report of (a) the Independent Engineer, (b) the Insurance Advisor, (c) the Environmental and Social Consultants, and (d) OPIC’s Financial Model Auditor, each in form and substance satisfactory to OPIC.

SECTION 4.19.      Geothermal Resource.

The Borrower shall be in compliance with the Drilling Program and be in compliance with the Reservoir Monitoring Plan.

SECTION 4.20.      Equity Contributions; Subordinated Loans.

Equity contributions and subordinated loans from the Shareholders shall have been made directly or indirectly, including through Ormat Holding Corp., in an amount no less than $41,608,000, and otherwise in accordance with the Financial Plan, and each such contribution shall have been verified to the satisfaction of OPIC.

SECTION 4.21.      Funding Arrangements.

Suitable arrangements shall have been made for funding the Loan (all agreements and documents required in connection with such funding arrangements are collectively referred to herein as the “Funding Documents”), which funding arrangements and Funding Documents shall be satisfactory to OPIC in form and substance, including without limitation satisfaction by the Borrower of all conditions precedent to the obligations of any other party to the Funding Documents and performance by the Borrower of all other obligations on its part to be performed prior to the making of the first Disbursement pursuant to any Financing Document.

SECTION 4.22.      Notices to SERNA and MINOSA.

OPIC shall have received evidence that the Borrower shall have provided written notice to SERNA and MINOSA of (a) the transactions contemplated by this Agreement and (b) the collateral assignment by the Borrower of the Borrower’s rights in the Operation Contract (in the case of SERNA) and the MINOSA Cooperation Agreement and the MINOSA PPA (in the case of MINOSA), to the trust described in the Administration and Guaranty Trust Agreement, which notice shall be in substantially the form of (x) with respect to SERNA, Exhibit H-1 and (y) with respect to MINOSA, Exhibit H-2.

ARTICLE V
CONDITIONS PRECEDENT TO EACH DISBURSEMENT

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make each Disbursement (including the first Disbursement) is subject to the prior fulfillment or written waiver, to OPIC’s satisfaction in its sole discretion, of the following conditions precedent as of the date that is ten (10) days prior to such Closing Date and to their continued fulfillment on such Closing Date.

SECTION 5.01.     Disbursement Request.

The Borrower shall have delivered a Disbursement Request in accordance with Section 2.01(b). As part of the Disbursement Request, the Borrower shall have provided to OPIC (a) its U.S. Taxpayer Identification Number or (b) an explanation as to why it does not have or need a U.S. Taxpayer Identification Number.

SECTION 5.02.     Representations and Defaults.

Each of the representations and warranties of the Borrower and each Shareholder set forth in this Agreement and in each of the other Financing Documents to which either is a party shall be true and correct in all material respects (except with respect to any provision including the word “material” or words of similar import, with respect to which such representations and warranties shall be true and correct) on such Closing Date as if made on such Closing Date after giving effect to such Disbursement or if any such representation relates exclusively to an earlier date, as of such earlier date, and on such Closing Date no Default or Event of Default shall have occurred and be continuing or will result from the making of such Disbursement or from the application of the proceeds thereof.

SECTION 5.03.     No Event of Default; Change in Circumstances.

Both before and after giving effect to the Disbursement, no Default or Event of Default shall have occurred or be continuing and as of such Closing Date, nothing shall have occurred and be continuing that, in the reasonable judgment of OPIC, could be a Material Adverse Effect.

SECTION 5.04.     Notes.

The Borrower shall have furnished OPIC with the executed Notes to be issued in connection with such Disbursement in accordance with Section 2.01(b).

SECTION 5.05.     Closing Certificate.

The Borrower shall have furnished OPIC with a certificate of an Authorized Officer, dated the Closing Date, substantially in the form of Exhibit D, which shall include Certified copies of all Material Project Documents entered into subsequent to the immediately preceding Closing Date (if any).

SECTION 5.06.     Financial Information and Project Progress.

(a)     Not less than ten (10) Business Days before such Closing Date, OPIC shall have received all Financial Statements, reports, and other information that the Borrower, pursuant to Section 6.05, would otherwise be required to furnish to OPIC on or before such Closing Date, and the Borrower shall have satisfied any conditions specified in the ESAP that are required to be fulfilled on or before such Closing Date.

(b)     Not more than ten (10) Business Days before such Closing Date, OPIC shall have received a certificate from the Borrower, satisfactory to OPIC in form and substance, confirming that, with respect to each report delivered pursuant to clause (a), such report is true and correct in all material respects as of such date or, if there has been a change in the matters set forth therein, updating the relevant information.

SECTION 5.07.     Payment or Reimbursement of Expenses.

All Fees and other amounts due, payable or reimbursable by the Borrower with respect to the Loan on or prior to such Closing Date shall have been paid in full.

SECTION 5.08.     Central Bank Registration; Consents.

OPIC shall have received evidence satisfactory to it, as may be required by Applicable Law with respect to each Disbursement other than the first Disbursement, that each such Disbursement does not require any registration or recordation with the central bank of the Project Country, and that the Borrower has taken all other steps necessary to obtain any Consents necessary with respect to such Disbursement or otherwise required as of or prior to such Disbursement, including those indicated in Part B of Schedule 4.04 to the extent they are then required for the then-current stage of the Project. OPIC shall have received Certified copies of such Consents or copies of such certificates, legal opinions, or other documents, satisfactory to OPIC in form and substance, as OPIC shall have requested to evidence such Consents.

SECTION 5.09.     DSR Requirement.

With respect to any Disbursement, OPIC shall have received evidence that funds or assets on deposit in the Offshore Debt Service Reserve Account are at least equal to the DSR Requirement.

SECTION 5.10.     Debt to Equity Ratio.

After giving effect to such Disbursement, OPIC shall have received evidence satisfactory to it that the Debt to Equity Ratio shall be no greater than 75:25.

SECTION 5.11.     Reservoir Monitoring Report.

With respect to any Disbursement, OPIC shall have received the Reservoir Monitoring Report most recently required to be delivered pursuant to Section 6.01(g) hereof, and evidence satisfactory to it that the Borrower is in compliance with such Reservoir Monitoring Report.

SECTION 5.12.     Project Costs.

OPIC shall have (a) in consultation with the Independent Engineer, received, reviewed and approved the milestones reached and invoices received in respect of Project Costs incurred (i) after the Cut-Off Date, in connection with the first Disbursement, and (ii) since the previous Disbursement, in connection with any subsequent Disbursement and (b) received written confirmation from the Borrower’s auditor confirming that the Project Costs incurred through the end of the fiscal quarter most recently ended prior to such Disbursement are in accordance with the accounting records of the Borrower.

SECTION 5.13.     Independent Engineer Certificate.

OPIC shall have received from the Independent Engineer, no later than ten (10) Business Days prior to a Disbursement Request, a certificate in the form of Exhibit E and otherwise in form and substance satisfactory to OPIC.

SECTION 5.14.     Funding.

Suitable arrangements shall have been made for funding such Disbursement in accordance with the Funding Documents, which funding arrangements and Funding Documents shall be satisfactory to OPIC in form and substance, including without limitation satisfaction by the Borrower of all conditions precedent to the obligations of any other party to the Funding Documents and performance by the Borrower of all other obligations on its part to be performed prior to the making of such Disbursement pursuant to any Transaction Document.

SECTION 5.15.     Insurance.

OPIC shall have received certificates of insurance and reinsurance or binders and other documents required for OPIC to confirm, in consultation with the Insurance Advisor, that all Insurance Policies as are then required pursuant to Section 6.03 and Schedule 6.03 are in full force and effect.

SECTION 5.16.     Lien Waivers.

If Project Costs are incurred in connection with the Works in an amount greater than the amount set forth in the then current Annual Operating Budget, then OPIC shall have received copies of all Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor, or a no lien certificate from the local registries, as applicable), related to the Works required to be obtained pursuant to Section 6.01(f) hereof.

SECTION 5.17.     Other Documents.

OPIC shall have received any document required to have been delivered pursuant to Article VI and any such other certificates, opinions, agreements, and documents, and translations of any of the foregoing, and evidence of stamping or other local law formalities required, in each case customary for transactions of the type contemplated by this Agreement, each satisfactory to OPIC in form and substance, as it may reasonably request.

ARTICLE VI
AFFIRMATIVE COVENANTS

Unless OPIC otherwise agrees in writing, so long as the Commitment remains outstanding or until all amounts due and to become due hereunder and under the Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

SECTION 6.01.     Company Operations.

(a)     The Borrower shall duly and punctually perform its obligations under each of the Borrower Documents.

(b)     The Borrower shall in accordance with and subject to the terms of the ENEE PPA, the MINOSA PPA, the Consents set forth in Part A of Schedule 4.04 (Consents), the Consents set forth in Part B of Schedule 4.04 (Consents), in each case, to the extent then applicable to the Project, applicable legal requirements and Good Industry Practice, promptly remedy defects in the Works in accordance with Good Industry Practice.

(c)     The Borrower shall comply with the Reservoir Monitoring Plan and maintain the geothermal resource of the Project, the wells and the surface facilities related thereto at all times in compliance with its obligations under the ENEE PPA and in accordance with Good Industry Practice.

(d)     The Borrower shall conduct its business and operations in accordance with (i) Good Industry Practice and on an arm’s-length basis, with due diligence and efficiency and under the supervision of qualified and experienced management, (ii) the conditions to the Borrower’s warranties under the ENEE PPA, (iii) the terms and conditions of all Insurance Policies, (iv) all requirements of Applicable Law, all Consents set forth in Part A of Schedule 4.04 (Consents) and all Consents set forth in Part B of Schedule 4.04 (Consents) to the extent then applicable to the Project, and (v) the terms of the Material Project Documents (in respect of the Warranty Agreement, only to the extent there are obligations outstanding), the MINOSA PPA and its Charter Documents, in the case of the MINOSA PPA, to the extent necessary to avoid a Material Adverse Effect and, in the case of each of the other foregoing cases, in all material respects. The Borrower shall repair, replace, and protect each of its assets (ordinary wear and tear excepted) so that its business and the Project can be conducted in accordance with the Material Project Documents and Good Industry Practice.

(e)     Except as otherwise expressly permitted under this Agreement, the Borrower shall (i) maintain and preserve its existence as a sociedad anónima de capital variable under the laws of Honduras and all rights, privileges and franchises necessary in the normal conduct of its business, and necessary to perform all of its obligations, and exercise all rights, discretion and remedies available to it, under or in connection with all Transaction Documents with due diligence in accordance with Good Industry Practices, and (ii) engage in activities related to the ownership, construction, exploration and development of the Project’s geothermal resource and the erection, installation, commissioning, testing, operation and maintenance of the Project.

(f)     If Project Costs are incurred in connection with the Works after the first Disbursement in an amount greater than the amount set forth in the then current Annual Operating Budget, then the Borrower shall obtain Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor, or a no lien certificate from the local registries, as applicable), related to such Works within seven (7) days of payment for any substantial portion of such Work. Any contractor or supplier performing Works after the Cut-Off Date shall be listed in Part A of Schedule 3.01(x) and an estimate of all amounts owed or owing to such contractor or supplier shall be listed in Part B of Schedule 3.01(x), in each case as required pursuant to Section 3.01(x).

(g)     (i) Within thirty (30) days of the end of each fiscal quarter following the Effective Date until the True-Up Date, and (ii) semi-annually, on each April 30 and October 31 following the True-Up Date until the Loan Maturity Date, the Borrower shall provide a Reservoir Monitoring Report to OPIC.

SECTION 6.02.     Maintenance of Rights and Compliance with Laws.

The Borrower shall: (a) obtain, maintain in full force and effect, and renew or cause to be obtained, maintained and renewed all Consents, leases and other rights in land, and franchises necessary for the conduct of its business and the performance of its obligations hereunder and under the other Transaction Documents as of such time as they are needed for the then-current stage of the Project or Borrower’s operations; (b) conduct its business in compliance with all Environmental Laws, Corrupt Practices Laws, Worker Rights Requirements, Consents and with its Charter Documents and with all other Applicable Laws and Consents; and (c) duly pay before they become overdue all Taxes levied or imposed in any jurisdiction upon its property, earnings, or business that, if not paid, could be a Material Adverse Effect, and all Indebtedness and other liabilities in a timely manner in accordance with normal business practices and with the terms governing the same, except amounts being contested in good faith by appropriate proceedings diligently pursued for which adequate reserves shall have been set aside in accordance with Accounting Standards. The Borrower shall promptly deliver to OPIC a Certified copy of any other Consent obtained after the date of first Disbursement.

SECTION 6.03.     Maintenance of Insurance.

The Borrower shall:

(a)      deliver to OPIC all certificates of insurance and reinsurance, binders and copies of Insurance Policies on or prior to the time when such documents are required pursuant to part 5 of Schedule 6.03;

(b)     maintain or cause to be maintained in effect at all times insurance, with respect to the Project, against such risks and hazards, in such amounts, and in such form, as is usually carried by companies of a similar size that are engaged in the same or a similar business and that own similar properties in the same or similar geographic area as the Project, and in any event in compliance with the minimum insurance requirements set out in Schedule 6.03;

(c)     apply all Insurance Proceeds in accordance with the terms of the Accounts Agreement and, if applicable, the Accounts Administration and Retention Agreement;

(d)     enforce its rights under the Material Project Documents and the MINOSA PPA, to the extent that it has such rights, so as to ensure that any Person (other than the Borrower) required to provide insurance obtains and maintains Insurance Policies as required thereby; and

(e)     observe and comply with each other obligation and agreement set forth in Schedule 6.03.

SECTION 6.04.     Accounting and Financial Management.

(a)     The Borrower shall (i) comply with Corrupt Practices Laws; (ii) maintain adequate accounting, management information and cost control systems; (iii) prepare its Financial Statements in accordance with Accounting Standards; (iv) engage PricewaterhouseCoopers, or other independent internationally recognized accountants satisfactory to OPIC, as its regular independent auditors; (v) notify OPIC of any change in such accountants and the reason therefor; and (vi) instruct such accountants to communicate directly with OPIC regarding the Borrower’s accounts and operations. Without limiting the foregoing, the Borrower shall maintain the systems described in clause (ii) and related management and accounting policies and controls that are sufficient to provide reasonable assurances of compliance with applicable Corrupt Practices Laws and the prevention of Prohibited Payments.

(b)     The Borrower shall comply with the applicable requirements of (i) the Anti-Money Laundering Laws, (ii) OFAC Regulations, and (iii) all other applicable export control, anti-boycott and economic sanctions laws of the U.S. and other jurisdictions relating to its business and facilities.

SECTION 6.05.     Financial Statements and Other Information.

At its cost, the Borrower shall furnish to OPIC each of the following:

(a)     within forty-five (45) days after the end of each of the first three fiscal quarters of each Fiscal Year, its unaudited Financial Statements, all Certified by a Financial Officer as being true and complete and fairly presenting in all material respects the financial position, results of operations and cash flows of the Borrower as of the dates indicated and for the periods specified, subject to the absence of disclosures normally made in footnotes and to customary year-end adjustments, together with such officer’s certificate substantially in the form of Exhibit F (i) that his or her review has not disclosed the existence of any Default or Event of Default, or, if any such Default or Event of Default then exists, specifying the nature and period of existence thereof and what action the Borrower has taken or proposes to take with respect thereto and (ii) demonstrating in reasonable detail the Borrower’s compliance with the financial ratios set forth in Section 6.10 and the basis for such calculations;

(b)     within one-hundred twenty (120) days after the end of each Fiscal Year, its audited Financial Statements, together with (i) an auditor’s report in accordance with the Accounting Standards and (ii) a statement from the Borrower’s auditors to the effect that based on their examination, as of the date of the audited financial statements, the Borrower was in compliance with the financial ratios under Section 6.10;

(c)     within forty-five (45) days after the end of each fiscal quarter, a Certified report setting forth in reasonable detail all transactions between the Borrower, on the one hand, and any of the Shareholders or any Affiliate of any such Shareholder, on the other hand;

(d)     semi-annually, beginning on the first to occur of June 30 or December 31, an Operating Report substantially in the form set out in Schedule 6.05(d) (Operating Report);

(e)     not later than June 30 of each year, beginning on the first June 30 to occur following the first anniversary of the first Closing Date, the Self-Monitoring Questionnaire;

(f)     on or prior to the True-Up Date, a certification (expected to be included in the request for final Disbursement) that the Borrower has completed the noise assessment referenced in Section 3.1 of the ESAP and is in compliance with the noise standards contained within IFC 2007 Environmental, Health, and Safety General Guidelines;

(g)     within six (6) months of the end of the Commitment Period, a certificate of an Authorized Officer of the Borrower, setting forth in reasonable detail the Project Costs to which the proceeds of the final Disbursement were applied, substantially in the form of Exhibit G; and

(h)     copies of all other annual or interim reports and management letters submitted to the Borrower by its independent accountants, and such other information and data with respect to the Borrower’s or the Shareholders’ operations, condition (financial or otherwise), assets, and prospects (including supporting information as to compliance with this Agreement) as OPIC may reasonably request from time to time.

SECTION 6.06.     Annual Operating Budget.

(a)     As soon as it is available, but in any event at least thirty (30) days prior to the commencement of each Fiscal Year, the Borrower shall submit to OPIC for approval by OPIC the Annual Operating Budget for such Fiscal Year prepared by the Borrower. Each Annual Operating Budget shall be consistent with the Financial Model and be accompanied by a certificate of an Authorized Officer of the Borrower certifying that the budget is a reasonable estimate for the period covered thereby and is in compliance with the requirements of this Section 6.06.

(b)     A proposed Annual Operating Budget shall become effective on the later of (i) the first day of the relevant Fiscal Year and (ii) the date OPIC advises the Borrower that OPIC has approved such Annual Operating Budget. If OPIC does not approve an Annual Operating Budget, OPIC shall advise the Borrower of the items that are disapproved and the reason for such disapproval.

(c)     With respect to those aspects of any Annual Operating Budget that are not approved, the Borrower and OPIC shall continue to discuss such aspects in good faith and the Annual Operating Budget for the preceding Fiscal Year related to such disapproved items shall be applicable and shall for all purposes hereof be deemed to be part of the approved Annual Operating Budget for the current Fiscal Year until such time as such aspects of the Annual Operating Budget for the current Fiscal Year have been approved in writing by OPIC.

SECTION 6.07.     Access to Records; Inspection; Meetings.

The Borrower shall, upon OPIC’s reasonable prior request, give, or cause to be given, to any representatives of OPIC access, during business hours, to the Project, the Site and the Borrower’s business and permit them to (a) examine, copy, and make extracts from, any and all records and documents in the possession or subject to the control of the Borrower relating to its operations and financial affairs, (b) inspect any of its facilities or properties, and (c) communicate with employees, agents, or contractors of the Borrower who have or may have knowledge of matters with respect to which OPIC seeks information. If an Event of Default shall have occurred and be continuing and if OPIC so requests, the Borrower shall give OPIC not less than five (5) Business Days’ notice of, and shall permit an OPIC representative to attend (either in person, telephonically or by other electronic means), as a non-voting observer, each formal meeting of the Borrower’s shareholders and of its directors. In conducting any visit or inspection under this Section 6.07, OPIC and its representatives shall abide by and comply with all applicable health, safety and environmental policies and insurance requirements relating to the Project of which the Borrower notifies OPIC in writing reasonably in advance of such visit or inspection.

SECTION 6.08.     Notice of Default and Other Matters.

The Borrower shall notify OPIC promptly, but in any event within two (2) Business Days in general and within 24 hours when required pursuant to Section 6.11(c), of (i) the occurrence, to its knowledge, of any Default, (ii) the occurrence of any Event of Default that is continuing and any steps the Borrower is taking to remedy such situation, (iii) any legal or arbitral proceedings against the Borrower or any Shareholder or, to its Knowledge, any Material Project Party involving claims that either (x) relate to the Project and individually or in the aggregate at any given time exceed the equivalent of $500,000 or (y) otherwise could reasonably be expected to be a Material Adverse Effect and (iv) the occurrence of any other condition or event (including action by any Governmental Authority) that could reasonably be expected to be a Material Adverse Effect and any steps the Borrower is taking to remedy such situation.

SECTION 6.09          Security Documents.

(a)     The Borrower, at its own cost, shall take all actions necessary to maintain each of the Security Documents in full force and effect and enforceable in accordance with its terms and to preserve OPIC’s security, including (i) maintaining all filings and recordations, (ii) paying fees and other charges, (iii) issuing supplemental documentation and continuation statements, (iv) discharging all Liens or other claims adversely affecting the rights of OPIC in the property subject to any Security Document other than Permitted Liens, (v) publishing or otherwise delivering notice to third parties, (vi) delivery of title documents, and (vii) taking all actions necessary to ensure that all after-acquired property of the Borrower is subject to a valid and enforceable, perfected first priority Lien, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, in favor of OPIC within one-hundred twenty (120) days after the acquisition of any real property and thirty (30) days after the acquisitions of any equipment or movable goods.

(b)     Without limiting the generality of subsection (a) above, in the event that any Governmental Authority issues or adopts any new Applicable Law relating to the creation, preservation, registration, perfection, protection or enforcement of security interests in assets of the same character as those covered by the Security Documents, or issues any clarifications of any existing Applicable Law relating to the same, the Borrower shall, at its own cost, execute and deliver all such additional amendments, assignments, certificates, instruments, notifications, or other documents and give further assurances and do all such other acts and things as OPIC shall reasonably request or as may be provided for in such new Applicable Law or any clarifications of any existing Applicable Law, to create, preserve, register, perfect, protect or enforce the security interest provided for in the Security Documents. All actions to be performed by the Borrower shall be taken by the Borrower within (i) one-hundred twenty (120) in the case of the Administration and Guaranty Trust Agreement, and (ii) fifteen (15) days in the case of the Share Pledge Agreement and Honduran Share Trust Agreement after the issuance and applicability of such Applicable Law or clarification to OPIC’s security interest as provided in the preceding sentence (whether by the receipt of notice from OPIC or otherwise).

SECTION 6.10.     Financial Ratios; DSR Requirement; Well Reserve Requirement.

(a)     The Borrower shall maintain at all times following COD, but calculated at the end of the first full fiscal quarter occurring thereafter, (i) a ratio of Cash Flow for the most recently completed four (4) consecutive full fiscal quarters (or the number of full fiscal quarters completed after COD), taken as a single accounting period, to Debt Service for the most recently completed four (4) consecutive full fiscal quarters (or lesser number of quarters if fewer quarters have been completed as contemplated above), taken as a single accounting period, of not less than 1.1 to 1 (such ratio, the “Historic DSCR”); and (ii) a ratio of Cash Flow for the next succeeding four (4) consecutive full fiscal quarters, taken as a single accounting period, to Debt Service for the next succeeding four (4) consecutive full fiscal quarters of not less than 1.1 to 1 (such ratio, the “Projected DSCR”).

(b)     At all times after the establishment of the Offshore Debt Service Reserve Account pursuant to Accounts Agreement, the Borrower shall maintain funds or assets on deposit in the Offshore Debt Service Reserve Account with a market value at least equal to the DSR Requirement.

(c)     At all times following the first Disbursement until the True-Up Date, the Borrower shall maintain funds or assets on deposit in the Offshore Well Reserve Account with a market value at least equal to $2,000,000.      

SECTION 6.11.     Environmental, Health and Safety Compliance.

(a)     The Borrower shall comply with, and shall conduct its business and operations, and maintain its assets, equipment, property, leaseholds, and other facilities in compliance with (i) the Environmental and Social Requirements, and (ii) all Applicable Laws regarding the environment, health and safety, and social performance. In cases in which land is not voluntarily purchased from existing land owners at market rates, the Borrower shall follow international best practices described in the International Finance Corporation’s Performance Standard Number 5 for Land Acquisition and Involuntary Resettlement. The Borrower shall maintain or cause to be maintained all Consents required for the Project under Applicable Law or the Environmental and Social Requirements relating to: (A) air emissions; (B) discharges to surface water or ground water; (C) noise emissions (it being understood that the Borrower will be able to assess and confirm compliance with applicable noise standards only upon completion of the noise assessment referenced in Section 3.1 of the ESAP); (D) solid or liquid waste disposal; (E) the use, generation, storage, transportation, or disposal of toxic or hazardous substances or wastes; and (F) other environment, health and safety, and social performance matters.

(b)     The Borrower shall implement and comply at all times with the Environmental and Social Plans and the requirements of the ESAP (it being understood that the Borrower will be able to assess and confirm compliance with applicable noise standards only upon completion of the noise assessment referenced in Section 3.1 of the ESAP). The Borrower shall not amend the Environmental and Social Plans without OPIC’s prior written consent.

(c)     The Borrower shall notify OPIC immediately, and in no event later than twenty-four (24) hours after the Borrower becomes aware, through the exercise of reasonable due diligence and care, of any accident directly or indirectly caused by the Project, occurring at the Site or affecting any Worker engaged in their official duties that results in the loss of life or that has, or that could reasonably be foreseen to have a material adverse impact on the environment. The Borrower shall submit to OPIC within thirty (30) days after the occurrence of such event a summary report thereof.

(d)     The Borrower shall require each Project Contractor, with respect to itself and any of its Project Subcontractors, to comply with the requirements described in Sections 6.11(a), 6.11(b) and 6.11(c).

(e)     The Borrower shall follow international best practices described in International Finance Corporation’s Performance Standard Number 5 – Land Acquisition and Involuntary Resettlement where the Project results in physical and/or economic displacement of any person(s).

(f)     The Borrower shall deliver to OPIC within ninety (90) days of the end of the calendar year on which this Agreement is executed, and annually thereafter within such ninety (90) day period, a report in form and substance satisfactory to OPIC summarizing the Project’s compliance with the Environmental and Social Requirements over the preceding twelve (12) months. Each report shall include:

(i) measures taken to operate the Project in a manner consistent with the Environmental and Social Requirements;

(ii) results of all environmental monitoring or sampling activity (including noise, wastewater discharge, water use, water quality and air emissions) required to be submitted to any Governmental Authority pursuant to Applicable Law or that may be required or requested by OPIC under the Financing Documents;

(iii) summary of training provided to employees;

(iv) material accidents impacting the environment or workers, including significant spills, lost time incidents and corrective actions implemented to address these accidents;

(v) emergency response incidents;

(vi) any recommended revisions to the ESMS;

(vii) any compliance actions taken by the host country or local government;

(viii) summary of stakeholder engagement activities and of community development activities undertaken by the Borrower;

(ix) listing of stakeholder grievances and resolutions, and of worker grievances and resolutions; and

(x) security incidents.

(g)     All plans, procedures, notices, reports and other deliverables required under Section 4.15 and this Section 6.11 shall be delivered electronically to eia@opic.gov and copied to notices@opic.gov.

SECTION 6.12.     Worker Rights.

(a)     The Borrower shall:

(i)      not take any actions to prevent Workers from lawfully exercising their right of association and their right to organize and bargain collectively, or take any actions, or otherwise interfere with, coerce, or penalize, on the basis of the right of association or on the basis of organization and collective bargaining activities or membership, that may result in any form of retaliation, including, but not limited to, the termination, suspension, demotion, blacklisting, or transfer of any Worker by the Borrower, or by an officer, agent, or representative thereof;

(ii)      observe Applicable Laws relating to a minimum age for employment of children, acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety;

(iii)      not use forced or compulsory labor, including, but not limited to any form of slavery or bonded labor;

(iv)      explain, document, and make available in writing and orally to each Worker, information regarding all of their working conditions and terms of employment, including their entitlement to wages and any benefits and the Worker Rights Requirements, prior to the later of (A) thirty (30) days after the date hereof or (B) each Worker commencing work;

(v)      not employ persons, formally or informally, under the age of fifteen (15) for general work or under the age of eighteen (18) for work involving hazardous activity, which is work that by its nature or the circumstances in which it is carried out is likely to harm the health, safety, or morals of those persons;

(vi)     not make employment decisions or discriminate with respect to aspects of the employment relationship on the basis of personal characteristics unrelated to inherent job requirements, including gender, race, religion, nationality, political opinion, or social or ethnic origin;

(vii)     not require hourly or quota-based wage Workers to work more than 48 standard hours of work per week and that all Workers shall be guaranteed a weekly 24-hour rest period;

(viii)     pay all wages, including all legally-mandated bonus pay and premium pay for overtime work, in full, in legal tender, and in a timely fashion, to Workers except when Workers have agreed otherwise;

(ix)     ensure that Workers have the right to remove themselves from hazardous situations without jeopardizing their continued employment;

(x)     with respect to security personnel and security arrangements, be guided by the principles of proportionality and good international practice in relation to hiring, rules of conduct, training, equipping, and monitoring of such Workers and by applicable law, and engage such personnel in a manner consistent with the International Finance Corporation’s Performance Standard 4 paragraphs 12-14;

(xi)     implement and comply at all times with the Worker Rights Action Plan set forth in Schedule 6.12; and

(xii)     require each Project Contractor, with respect to itself and any of its Project Subcontractors, to comply with the foregoing requirements; provided, that if any Applicable Law, or collective bargaining agreement, imposes a requirement that is more protective of worker rights than any of the foregoing requirements, the Borrower shall, and shall cause the Project Contractor(s) and Project Subcontractor(s) to, observe such Applicable Law or collective bargaining agreement (the requirements set forth in this Section 6.12(a), collectively, the “Worker Rights Requirements”).

(b)     In the event that information concerning non-compliance or potential non-compliance with the Worker Rights Requirements (a “Worker Rights Non-Compliance”) comes to the attention of a responsible officer of the Borrower, the Borrower shall give prompt notice thereof to OPIC’s Director of Labor and Human Rights by email to the following address labor@opic.gov. The Borrower shall use all reasonable efforts, including remediation, to cure or to cause the relevant Project Contractor or Project Subcontractor to cure, or prevent the recurrence of, any Worker Rights Non-Compliance.

(c)     Notwithstanding the foregoing, the Borrower shall not be responsible for any Worker Rights Non-Compliance resulting from the actions of a government.

SECTION 6.13.     Additional Project Documents.

The Borrower shall promptly deliver to OPIC a Certified copy of any Project Document entered into after the first Closing Date, or any amendment to any Project Document pursuant to Section 7.03, which Project Document shall be in form and substance satisfactory to OPIC.

SECTION 6.14.     Drilling Program.

The Borrower shall comply with the provisions of the Drilling Program and shall use commercially reasonable efforts to complete the Drilling Program, and confirm the completion thereof to OPIC, by the date on which the True-Up Confirmation is provided.

SECTION 6.15.     SERNA Direct Agreement.

The Borrower shall, within six (6) months of the first Closing Date, deliver to OPIC the SERNA Direct Agreement, duly executed by SERNA and the Borrower.

ARTICLE VII
NEGATIVE COVENANTS

Unless OPIC otherwise agrees in writing, so long as the Commitment remains outstanding or until all amounts due and to become due hereunder and under the Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

SECTION 7.01.     Liens.

The Borrower shall not, directly or indirectly, create, assume, or otherwise permit to exist any Lien on any of its assets, whether now owned or hereafter acquired, or in any proceeds or income therefrom, except for the following Liens (collectively, the “Permitted Liens”):

(a)     the Liens created under the Security Documents or pursuant to any other Financing Documents;

(b)     tax, mechanic’s, worker’s or other like Liens arising by mandatory provision of law securing obligations incurred in the ordinary course of business that are not yet overdue or that are being contested or litigated in good faith and for which reserves in an amount equal to or exceeding the amount of the Liens for Taxes, assessments or charges have been made in accordance with Accounting Standards;

(c)     any Liens that are created in order to continue an administrative or judicial proceeding in which the Borrower is a party and wishes in good faith to present a defense in accordance with Applicable Law and which do not constitute an Event of Default, provided, that (i) at all times there is a stay of execution, (ii) bonds or other security have been provided in an amount equivalent to the value of the property attached and (iii) the Borrower is diligently proceeding with its defense;

(d)     any minor easements, rights of way and other similar encumbrances incurred in the ordinary course of business that, in each case, do not and will not adversely impact the value of the Project or give any Person the right to interfere with the construction, operation, ownership and maintenance of the Project and do not and will not create, in any respect, rights preferred to those legally or contractually held by the Borrower; and

(e)     the Liens listed on Schedule 7.01.

SECTION 7.02.     Indebtedness.

The Borrower shall not incur, assume, guarantee, or permit to exist, or otherwise become liable for Indebtedness except:

(a)     the Loan;

(b)     Indebtedness fully subordinated to the Loan on terms satisfactory to OPIC;

(c)     Indebtedness consisting of suppliers of goods or services incurred in connection with the construction and operation of the Project, provided, that, such Indebtedness is expressly included in the Annual Operating Budget or otherwise approved by OPIC;

(c)    Indebtedness consisting of trade credit from suppliers of goods or services incurred in the ordinary course of business in an aggregate amount not to exceed $250,000 and on terms requiring payment in full in not more than ninety (90) days;

(d)     Indebtedness consisting of unsecured short-term credit facilities not exceeding $250,000, in the aggregate, from commercial banks requiring repayment in not more than one hundred and eighty (180) days;

(e)     the Priority Fee and the Remainder Fee; and

(f)     Indebtedness (other than to any of the Ormat Parties or any Affiliate thereof) listed on Schedule 7.02;

provided, that in no event shall any Indebtedness described above, when incurred, cause the Borrower to fail to meet the financial ratios set forth in Section 6.10.

SECTION 7.03.     No Alteration or Assignment of Agreements.

(a)     The Borrower shall not terminate, amend, grant any waiver of, or assign any of the respective duties or obligations under, any provision of any Borrower Document or any Consent (other than amendments or waivers, either to correct manifest error or which are of a stylistic, minor, or purely technical nature and do not change materially any Person’s rights or obligations; provided, that the Borrower shall promptly give OPIC notice, and provide OPIC with a copy, of such amendment or waiver).

(b)     The Borrower shall not make any changes to the assumptions in the Financial Model for the Project without OPIC’s prior written consent.

(c)     The Borrower shall not compromise or settle any claim against any Person, the compromise or settlement of which in the manner contemplated by the Borrower would materially reduce the amount of any payment due to the Borrower or could reasonably be expected to adversely affect the Borrower’s ability to perform its obligations under the Transaction Documents.

SECTION 7.04.     Restricted Payments and Shareholder Payments.

The Borrower shall not make, or incur any obligation to make, any Restricted Payment or any Shareholder Payment; provided, however, that after the Borrower has made at least one (1) Principal Installment, the Borrower may (subject to the mandatory prepayment provisions set forth in Section 2.05(b)) make Restricted Payments and Shareholder Payments if, but only if, after giving effect to each such Restricted Payment or Shareholder Payment, (i)  no Default or Event of Default shall have occurred and be continuing or will occur as a result of such Restricted Payment or Shareholder Payment, and (ii) the Historic DSCR and the Projected DSCR shall not be less than 1.2 to 1. Notwithstanding the foregoing provisions of this Section 7.04, the Borrower may make (w) Shareholder Payments approved pursuant to the then applicable Annual Operating Budget and payments from proceeds of the Disbursement(s) of the Loan to reimburse the Sponsor and the Shareholders for any equity contributions (including shareholder loans) made prior to the date of COD and which were in excess of the amounts required to be contributed by the Sponsor and the Shareholders under the Financing Documents (as confirmed by OPIC in consultation with its consultants), (x) payment of the Priority Fee in accordance with the terms of the Administration and Guaranty Trust Agreement, (y) payment of the Development Fee to the Shareholders and (z) on an annual basis, payments in respect of the Parent Support Services.

SECTION 7.05.     Conduct of Business with Affiliates.

The Borrower shall not conduct any business with or enter into any business transaction involving any Shareholder or any Affiliate of any Shareholder, except on an arm’s-length basis and subject to the reporting requirement set forth in Section 6.05(c).

SECTION 7.06.      No Sale of Assets; Mergers.

The Borrower shall not:

(a)     sell, assign, convey, lease, or otherwise dispose of its assets, except for the sale of power and renewable energy credits (if any) and the replacement of a capital asset with a capital asset of equal or greater utility or value at the time of the disposition and the disposition of inventory in the ordinary course of business or worn-out, obsolete, uneconomic, or surplus property;

(b)     dissolve, liquidate, or otherwise cease to do business; or

(c)     merge or consolidate with any Person.

SECTION 7.07.     Lease Obligations.

The Borrower shall not enter into any agreement or arrangement to acquire by lease the use of any property or equipment of any kind, if the annual rental payable under such lease, when aggregated with the annual rentals payable under all other leases already entered into by the Borrower, would exceed $350,000 or its equivalent in any Fiscal Year with the exception of any leases listed on Schedule 7.07 or otherwise approved by OPIC (including in the Annual Operating Budget).

SECTION 7.08.     Ordinary Conduct of Business.

The Borrower shall not:

(a)     engage in any business other than the Project;

(b)     change the Project or the Site in any material respect;

(c)     change its Charter Documents (other than for amendments or modifications, either to correct manifest error or which are of a stylistic, minor, or purely technical nature and do not change the Charter Documents in any material respect; provided, that the Borrower shall promptly give OPIC notice, and provide OPIC with a copy, of such amendment or modification);

(d)     change its name or take any action that might adversely affect the Liens created by the Security Documents;

(e)     enter into any partnership, profit-sharing or royalty agreement, or other similar arrangement whereby the Borrower’s income or profits are, or might be, shared with any other Person;

(f)     (i) create any subsidiaries, (ii) acquire by purchase or otherwise any of the shares of share capital, other equity interests, or assets of another Person, or (iii) make or permit to exist any loans or advances to, or assume, guarantee, endorse, or otherwise become directly or contingently liable for, any obligation or Indebtedness of, any Person other than the endorsement of negotiable instruments for collection in the ordinary course of business and the prudent investment of idle surplus funds in readily marketable Dollar-denominated debt securities;

(g)     fail to maintain its corporate existence and its right to carry on its operations; or

(h)     adopt, establish, maintain, sponsor, administer, contribute to, participate in, or incur any liability under or obligation to contribute to, any Employee Benefit Plan, Guaranteed Pension Plan, or Multiemployer Plan or incur any liability to provide post-retirement welfare benefits, except such liability to provide post-retirement welfare benefits as may be required by Applicable Law or other non-material post-retirement welfare benefits.

SECTION 7.09.     OFAC Compliance.

(a)     The Borrower shall ensure that none of the Borrower, Borrower’s directors, members of senior management or the Shareholders or Elcosa shall be a Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations.

(b)     The Borrower shall not, and shall ensure that none of its directors, officers, employees, Affiliates, agents, or Persons acting on its behalf will, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of proceeds of the Loan to fund any trade, business, or other activities (i) involving or for the benefit of any Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations, or (ii) that could result in any Person (including OPIC) being in breach of OFAC Regulations, becoming included in any OFAC List, or otherwise becoming subject to sanctions under OFAC Regulations.

SECTION 7.10.     Prohibited Payments.

Neither the Borrower nor any Person acting on behalf of the Borrower shall make any Prohibited Payment.

SECTION 7.11.     Accounts.

The Borrower shall not establish or maintain any account with a bank or other financial institution other than the Accounts and the Citi Onshore O&M Account, provided that the latter account is used solely for the purpose of funding expenses of the Borrower denominated in Lempiras and (a) deposits to the Citi Onshore O&M Account shall not exceed the aggregate amount requested by the Borrower prior to any quarter in respect of such expenses reasonably anticipated for such quarterly period and approved in writing by OPIC.

SECTION 7.12          Project; Site.

The Borrower shall not use, maintain, operate, or occupy, or allow the use, maintenance, operation, or occupancy of, any portion of the Site or the Project, other than in accordance with the Transaction Documents and pursuant to the Project. Without limiting the foregoing, the Borrower shall not exercise any rights or options to acquire real property, whether under the MINOSA Cooperation Agreement or otherwise, without the prior written consent of OPIC.

SECTION 7.13          Project Documents.

The Borrower shall not, without OPIC’s prior written consent, do any of the following: (a) enter into any Project Documents other than the Material Project Documents and any other Project Documents consented to in writing by OPIC, (b) consent to or otherwise accept or approve any replacement of the Joint Guarantee, (c) commence delivery of power under the MINOSA PPA, (d) deliver notice to ENEE as to any Committed Power Capacity for Third Parties under the ENEE PPA, (e) deliver notice to MINOSA stating that the conditions precedent have been fulfilled to the Borrower’s satisfaction or that the Borrower has been exempted in writing from fulfilling them or (f) supply or consent to supply to MINOSA more than 3 MWe of power in any month; provided that for the foregoing clauses (c), (d) and (e), such prior written consent from OPIC shall not be unreasonably conditioned.

ARTICLE VIII
DEFAULTS AND REMEDIES

SECTION 8.01.     Events of Default.

Each of the following events or circumstances shall constitute an “Event of Default”:

(a)     Payment Default. The Borrower fails to pay when due any amount payable to OPIC pursuant to this Agreement, any Note, or any other Financing Document.

(b)     Cross-Default. (i) The Borrower fails to pay any amount due on any of its Indebtedness (including principal, interest and any premium or fee thereon, but excluding Indebtedness evidenced by this Agreement and the Notes) (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) having an aggregate principal amount (including undrawn revolving or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $350,000, and such failure continues beyond the applicable cure period, if any, (ii) a default occurs under any agreement or instrument evidencing, or under which the Borrower has outstanding at the time, any such Indebtedness and such default is continuing beyond the applicable cure period, if any, if the effect of such default is to accelerate or to permit the acceleration of the maturity of such Indebtedness, or (iii) any such Indebtedness shall be declared to be due and payable, or required to be prepaid, prior to the stated maturity thereof as a result of a default or other similar adverse event.

(c)     Representation Default. Any representation or warranty made or deemed made by or on behalf of the Borrower or any Shareholder in any Financing Document proves to have been incorrect in any material respect when made or deemed made.

(d)     Covenant Default. The Borrower fails to comply with any covenant or provision set forth in Sections 6.08, 6.09, 6.10, 6.11 (except as provided in Section 8.01(f)) or 6.12 (except as provided in Section 8.01(e)) or Article VII.

(e)     Worker Rights Non-Compliance. With respect to any Worker Rights Non-Compliance caused by a Project Contractor or Project Subcontractor, the Borrower fails to cause the relevant Project Contractor or Project Subcontractor to cure, or prevent the recurrence of, any Worker Rights Non-Compliance and such failure continues for ninety (90) days after the first occurrence of such Worker Rights Non-Compliance.

(f)      Approvals Default. Any Consent necessary for the execution, delivery, or performance of any Transaction Document or for the validity or enforceability of any of the Borrower’s or any Shareholder’s obligations under any of the Transaction Documents is not effected or given or is withdrawn or ceases to remain in full force and effect and (unless the lack of such Consent could have a Material Adverse Effect) such Consent remains not effected or given or is withdrawn or ceases to remain in full force and effect for a period of thirty (30) days or more.

(g)     Obligation Default. The Borrower fails to comply with or perform any agreement or covenant contained herein other than those referred to in Sections 8.01(a), (b), (c), (d), (e) or (f) above and such failure continues for thirty (30) days after the occurrence thereof; provided, that, if (i) the Borrower has diligently sought to remedy such breach or default but through its good faith efforts has been unable to do so, and (ii) such breach or default is capable of cure within sixty (60) days, then such thirty (30) day period shall be extended to such date, not to exceed a total of sixty (60) days, as shall be necessary for the Borrower to cure such breach or defaults.

(h)     Transaction Document Default. Any Transaction Document at any time for any reason (i) ceases to be in full force and effect (other than upon expiration in accordance with its terms when fully performed or upon termination and replacement, which termination or replacement shall be with OPIC’s prior written consent if such Transaction Document is a Material Project Document or the MINOSA PPA), (ii) is declared to be void or is repudiated, (iii) is suspended or revoked, or terminated (other than upon expiration in accordance with its terms when fully performed or upon termination and replacement with OPIC’s prior written consent), (iv) the validity or enforceability thereof is at any time contested in writing by the Borrower, any Shareholder or any other counter-party (other than OPIC), (v) ceases to give or provide the respective rights, titles, remedies, powers, or privileges intended to be created thereby, or (vi) with respect to the Ormat Guaranty only, any amendment, deletion or other modification takes effect without the prior written consent of OPIC; provided that there shall be no Event of Default hereunder in respect of any Material Project Document referred to in Sections 4.01(c)(ix) and (xi) or any other Project Document that is not a Material Project Document (each, a “Replaceable Project Document”) if any such Replaceable Project Document is restored or replaced with an equivalent Project Document (together with any replacement Direct Agreement if applicable) with the original counterparty to such Replaceable Project Document or another Person of similar or superior creditworthiness and experience as such original counterparty at the time of such replacement, in each case, on terms reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

(i)     Security Default. (i) Any Security Document, once executed and delivered, ceases at any time for any reason to provide the Liens, rights, titles, interests, remedies, powers or privileges created thereby, (ii) any Lien created in any portion of the collateral pledged pursuant to the Security Documents shall cease to be effective or fail to have the priority originally created under the Security Documents, (iii) the validity of the Security Documents or the applicability thereof to the obligations of the Borrower hereunder or any part thereof, shall be disaffirmed in writing by or on behalf of the Borrower, or (iv) OPIC’s security interest or other rights in any portion of the collateral pledged pursuant to the Security Documents shall terminate in any manner other than that contemplated by the Financing Documents.

(j)     Other Agreements Default. The Borrower, any Shareholder or any party to a Material Project Document fails to comply with or perform any of its material obligations or undertakings set forth in any Transaction Document to which it is a party (other than this Agreement or the Notes) and such failure continues beyond the applicable cure period, if any; provided that there shall be no Event of Default with respect to a Material Project Party under a Replaceable Project Document if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.     

(k)     Expropriation Default. Any Governmental Authority condemns, nationalizes, seizes, or otherwise expropriates any substantial portion of the assets or the capital stock of the Borrower or takes any action that would prevent the Borrower from carrying on any material part of its business or operations.

(l)     Voluntary Bankruptcy Default. The Borrower or any Material Project Party (other than ENEE or SERNA) (i) applies for, or consents to the appointment of, a receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a substantial part of its assets, (ii) files a voluntary petition in bankruptcy, admits in writing that it is unable to pay its debts as they become due, or generally fails to pay its debts as they become due, (iii) makes a general assignment for the benefit of creditors, (iv) files a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, or insolvency laws, (v) files an answer admitting the material allegations of, or consents to, or defaults in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding where such action or failure to act will result in a determination of bankruptcy or insolvency against it, or (vi) takes any corporate action to authorize any of the foregoing; provided that in the case of a Material Project Party, there shall be no Event of Default if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

(m)     Involuntary Bankruptcy Default. Without its application, approval, or consent, a proceeding is instituted in any court of competent jurisdiction or by or before any government or governmental agency of competent jurisdiction, seeking in respect of the Borrower or any Material Project Party (other than ENEE or SERNA) adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of Indebtedness, the appointment of a trustee, receiver, liquidator, or the like of it or of all or any substantial part of its property or assets, or other like relief in respect of it under any bankruptcy, reorganization, or insolvency law; and, if such proceeding is being contested by it in good faith, the same continues undismissed for a period of sixty (60) days; provided that there shall be no Event of Default with respect to a Material Project Party under a Replaceable Project Document if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

(n)     Final, Non-Appealable Judgment Default. A final and non-appealable judgment or litigation settlement for the payment of money in an aggregate amount in excess of $1,000,000 (with respect to the Borrower) or $5,000,000 (with respect to any Shareholder or Elcosa) or the equivalent of such amount in another currency is rendered against, or entered into by, any of the Borrower, the Shareholders or Elcosa, and such judgment is not satisfied or discharged within ten (10) days of entry; provided that in the case of Elcosa, the Sponsor and OII, any such judgment could reasonably be expected to have a material and adverse effect on the performance of any obligations it may have under the Transaction Documents to which it is a party or otherwise with respect to the Project.

(o)     Judgment Default. A judgment for the payment of money in an aggregate amount in excess of $1,000,000 (with respect to the Borrower) or $5,000,000 (with respect to OrPower 19, the Intermediate Shareholder or Elcosa) or the equivalent of such amount in another currency is rendered against, or entered into by, any of the Borrower, OrPower 19, the Intermediate Shareholder or Elcosa, and such judgment is not appealed in a timely manner and, in any case, within ninety (90) days; provided that in the case of Elcosa, OrPower 19 and the Intermediate Shareholder, any such judgment could reasonably be expected to have a material and adverse effect on the performance of any obligations it may have under the Transaction Documents to which it is a party or otherwise with respect to the Project; and provided, always, that such appeal must have the effect of staying the enforcement of such judgment pending the relevant appeal.

(p)     Material Adverse Effect Default. Any event, development or circumstance shall have occurred that, in the reasonable determination of OPIC, has or could reasonably be expected to have a Material Adverse Effect.

(q)     Political Violence Default. Any acts of war (whether declared or undeclared), revolution, insurrection, civil war, strife of a lesser degree, terrorism, or sabotage occur that cause the destruction, disappearance or physical damage of a substantial portion of the assets of the Borrower or prevent the Borrower from carrying on any material part of its business or operations.

(r)     U.S. Persons Default. At any time prior to the end of the Commitment Period, U.S. Persons acceptable to OPIC shall cease to retain an ultimate beneficial ownership interest in the Borrower of at least twenty-five percent (25%).

(s)     Change of Control Default. Any Change of Control of the Borrower occurs without the prior approval of OPIC.

(t)     Right to Site Default. Except pursuant to the Security Documents, the Borrower ceases to have the right to possess and use, or shall be prevented from possessing or using, the Site or any material portion thereof for the purpose of owning, constructing, maintaining and operating the Project in the manner contemplated by the Transaction Documents, and such loss of right is or could reasonably be expected to be a Material Adverse Effect.

(u)     Abandonment Default. The Borrower voluntarily Abandons the Project.

SECTION 8.02.     Remedies upon Event of Default.

(a)     Except as otherwise provided in Section 8.02(b), if any Event of Default has occurred and is continuing, OPIC may at any time do any one or more of the following (i) suspend or terminate the Commitment, (ii) declare, by written demand for payment, any portion or all of the Loan to be due and payable, whereupon such portion or all of the Loan, together with interest accrued thereon and all other amounts due under the Financing Documents, shall immediately mature and become due and payable, without any other presentment, demand, diligence, protest, notice of acceleration, or other notice of any kind, all of which the Borrower hereby expressly waives, or (iii) except as required by Applicable Law, without notice of default or demand, proceed to protect and enforce its rights and remedies by appropriate proceedings or actions, whether for damages or the specific performance of any provision of any Financing Document, or in aid of the exercise of any power granted in any Financing Document, or by law, or may proceed to enforce the payment of any Note. In addition, upon the occurrence of an Event of Default referred to in Section 8.01(e), OPIC may require the Borrower to terminate, or cause the relevant Project Contractor to terminate, such Project Contractor’s or Project Subcontractor’s Project Contract, as the case may be.

(b)     Upon the occurrence of an Event of Default referred to in Sections 8.01(m) or (n), (i) the Commitment shall automatically terminate, and (ii) the Loan, together with interest accrued thereon and all other amounts due under the Financing Documents, shall immediately mature and become due and payable, without any other presentment, demand, diligence, protest, notice of acceleration, or other notice or action of any kind, all of which the Borrower hereby expressly waives.

SECTION 8.03.     Arbitration.

(a)     Any Dispute shall be settled by arbitration in accordance with the Rules; provided, however, that this agreement to arbitrate Disputes shall not include the arbitration of (i) any Excluded Claims; and (ii) any Disputes that are subject to a pending action, suit or proceeding brought by OPIC in accordance with Section 8.04.

(b)     Arbitration pursuant to this Section 8.03 is not a waiver of and shall not impair the enforcement rights of OPIC with respect to any Lien or the right of OPIC to exercise any other similar remedy under this Agreement or any other Financing Document to which the Borrower is a party, pursuant to Section 8.04(a) or otherwise, and such enforcement by OPIC shall not be deemed to be inconsistent with or a violation of the arbitration provisions of this Section 8.03.

(c)     Any awards issued by the Arbitral Tribunal shall be final and binding on the Arbitration Parties; any orders so issued shall be binding on the Arbitration Parties. Judgment upon any award issued by the Arbitral Tribunal may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Arbitration Party or its assets. The Borrower hereby submits to the jurisdiction of the United States District Court for the Southern District of New York for the limited purpose of enforcing this agreement to arbitrate.

            (d)     The Arbitral Tribunal shall have no jurisdiction to grant any interim measure that limits or prevents, or seeks to limit or prevent, OPIC from exercising any enforcement right with respect to any Lien or enforcing any similar remedy under this Agreement or any other Financing Document to which the Borrower is a party, including without limitation any enforcement action pursuant to Section 8.04. The Borrower covenants and agrees not to seek any such interim measure, either in any arbitration pursuant to this Section 8.03 or otherwise.

(e)     Notwithstanding Section 9.03, this Section 8.03 and any arbitration pursuant thereto shall be governed by Title 9 (Arbitration) of the United States Code.

SECTION 8.04.     Borrower Consent to Suit; Exclusive Forum for Certain Actions.

(a)     Notwithstanding Section 8.03, OPIC in its sole discretion shall have the option at any time and from time to time to bring against the Borrower any action, suit or proceeding in respect of any Dispute, in any of (i) the courts of the State of New York in the County of New York or the United States District Court for the Southern District of New York, or (ii) the courts in any other jurisdiction where the Borrower or any of its property may be found; provided, however, with regard to any Dispute that has been referred to arbitration pursuant to Section 8.03 by the Borrower, OPIC may, in its discretion, initiate an action, suit or proceeding as provided herein in lieu of such arbitration and in respect of such Dispute, so long as OPIC exercises its option to do so prior to the last day on which OPIC’s statement of defense (or equivalent submission) in respect of such Dispute is to be submitted.

(b)     The Borrower hereby: (i) irrevocably waives any present or future objection to the venue of any such action, suit or proceeding, and irrevocably consents and submits unconditionally to the non-exclusive jurisdiction of any such court for itself and in respect of any of its property; (ii) irrevocably waives any claim in any such court that any such action, suit, or proceeding brought therein has been brought in an inconvenient forum; (iii) agrees that final judgment against it in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment or otherwise, a certified or exemplified copy of which shall be conclusive evidence of the fact and of the amount of its obligation; and (iv) covenants and agrees not to resist enforcement of any such final judgment in any jurisdiction where OPIC commences enforcement proceedings.

(c)     Prior to the first Disbursement, the Borrower shall irrevocably designate and appoint an agent satisfactory to OPIC for service of process in the County of New York, New York under this Agreement and any other Financing Document governed by the laws of the State of New York, with respect to any action or proceeding in New York, as its authorized agent to receive, accept, and confirm receipt of, on its behalf, service of process in any such proceeding, and shall provide OPIC with evidence of the prepayment in full of the fees of such agent until six (6) months after the Loan Maturity Date. The Borrower agrees that service of process, writ, judgment or other notice of legal process upon said agent shall be deemed and held in every respect to be effective personal service upon it. The Borrower shall maintain such appointment (or that of a successor satisfactory to OPIC) continuously in effect at all times while the Borrower is obligated under this Agreement or any Note. Nothing herein shall affect OPIC’s right to effect service of process in any other manner permitted by Applicable Law.

(d)     Any enforcement action, suit, or other judicial, administrative or arbitral proceeding by the Borrower against OPIC (or the United States government) in respect of an Excluded Claim shall be brought exclusively in a United States federal court of competent jurisdiction in the District of Columbia.

SECTION 8.05.     Judgment Currency.

This is an international loan transaction in which the specification of Dollars is of the essence and such currency shall be the currency of account in all events. The payment obligations of the Borrower to OPIC under any Financing Document shall only be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent of the amount in Dollars received by OPIC (after any premium and costs of exchange) on the prompt conversion to Dollars in the U.S. of the amount so paid in another currency under normal banking procedures. In the event that any payment by the Borrower in another currency, whether pursuant to a judgment or otherwise, upon conversion and transfer, does not result in the payment of the amount of Dollars then due at the place such amount is due, OPIC shall be entitled to demand immediate payment of and shall have a separate cause of action against the Borrower for the additional amount necessary to yield the amount of Dollars then due. In the event that OPIC upon the conversion of a payment in another currency into Dollars receives an amount greater than that to which it was entitled, the Borrower shall be entitled to prompt reimbursement of the excess amount.

SECTION 8.06.     No Immunity.

The Borrower represents and warrants that it is subject to civil and commercial law with respect to its obligations under each of the Borrower Documents, that the making and performance of such Borrower Documents and the borrowings by the Borrower pursuant hereto constitute private and commercial acts rather than governmental or public acts, and that neither the Borrower nor any of its properties or revenues has any right of immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment, or from any other legal process with respect to its obligations under such Borrower Documents. To the extent that the Borrower may hereafter be entitled, in any jurisdiction in which judicial or arbitral proceedings may at any time be commenced with respect to any Borrower Document, to claim for itself or its revenues or assets any such immunity, and to the extent that in any such jurisdiction there may be attributed to the Borrower such an immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity. The foregoing waiver of immunity shall have effect under the United States Foreign Sovereign Immunities Act of 1976.

ARTICLE IX
MISCELLANEOUS

SECTION 9.01.     Notices.

Except as provided in Sections 6.11(g) and 6.12(b), each notice, demand, or other communication relating to this Agreement shall be in writing, shall be hand-delivered or sent prepaid by mail or overnight delivery service or e-mail (with a copy by mail to follow, receipt of which copy shall not be required to effect notice), and shall be deemed duly given when sent to the following addresses:

To the Borrower:

Geotérmica Platanares, S.A. de C.V.

Plaza Saavedra, Modulo #20 y 21

Bo. Mercedes, 1a Calle NE 3a Av NE, Frente a Hotel VIP Copan

Santa Rosa de Copán, Honduras, Centroamerica

HONDURAS

Attn.:   Elio Orozco

E-mail: eorozco@ormat.com

Phone: 504-2662-1066

with a copy to:

Ormat Technologies, Inc.

6225 Neil Road

Reno, Nevada 89511

Attn: Chief Financial Officer

To OPIC:

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

United States of America

Attn.: Vice President, Structured Finance and Insurance

And attn.: Managing Director, Portfolio Management Division

E-mail:     notices@opic.gov

Re: Platanares Geothermal Project (Honduras) Transaction No. 9000003553

Either party may, by written notice to the other, change the address to which such notices, demands, or other communications should be sent to it. No notice to OPIC, including notices delivered pursuant to Sections 6.11(g) and 6.12(b), shall be effective unless such notice includes the project name and number, as listed above, and, prior to the first Disbursement, attention to Vice President, Structured Finance and Insurance and, subsequent to the first Disbursement, attention to Managing Director, Portfolio Management Division.

SECTION 9.02.     English Language.

All documents to be furnished or communications made under each of the Financing Documents shall be in English or, if in another language, shall be accompanied by a Certified translation into English, which translation shall govern between the Borrower and OPIC.

SECTION 9.03.     Governing Law.

THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.

SECTION 9.04.     Succession; Assignment; Benefit.

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto; provided, however, that the Borrower shall not, without the prior written consent of OPIC, assign or delegate all or any part of its interest herein or obligations hereunder. This Agreement is for the sole benefit of the Borrower and OPIC, and no other Person (other than the Indemnified Persons and permitted successors or assigns of the parties hereto) shall be a direct or indirect beneficiary of, be entitled to rely hereon, or have any direct or indirect cause of action or claim in connection with this Agreement or any of the Transaction Documents.

SECTION 9.05.     Survival of Agreements.

Each agreement, representation, warranty, and covenant contained or referred to in this Agreement shall survive any investigation at any time made by OPIC and shall survive all disbursements of the Loan, except for changes permitted hereby, and, except as otherwise provided in this Section, shall terminate only when all amounts due or to become due under the Financing Documents are indefeasibly paid in full. Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.07, 2.08(a), and 9.10 shall survive the payment in full of principal and interest hereunder and under the Notes.

SECTION 9.06.     Integration; Amendments.

This Agreement, including the Exhibits and Schedules hereto, and the agreements referred to herein embody the entire understanding of the parties and supersede all prior negotiations, understandings, and agreements between them with respect to the subject matter hereof. The provisions of this Agreement may be waived, supplemented, or amended only by an instrument in writing signed by the parties hereto.

SECTION 9.07.     Severability.

If any provision of this Agreement is prohibited or held to be invalid, illegal, or unenforceable in any jurisdiction, the parties hereto agree to the fullest extent permitted by law that it shall not affect the validity, legality, and enforceability of the other provisions of this Agreement and shall not render such provision prohibited, invalid, illegal, or unenforceable in any other jurisdiction. If, and to the extent that, any obligation of the Borrower (including that under Section 9.10) is unenforceable for any reason it agrees, independently of any other obligation hereunder, to make the maximum contribution to the payment and satisfaction thereof as is permissible under Applicable Law.

SECTION 9.08.     No Waiver.

(a)     No failure or delay by OPIC in exercising any right, power, or remedy shall operate as a waiver thereof or otherwise impair any of its rights, powers, or remedies. No single or partial exercise of any such right, power, or remedy shall preclude any other or further exercise thereof or the exercise of any other legal right, power or remedy. No waiver of any such right, power, or remedy shall be effective unless given in writing.

(b)     The rights, powers, or remedies provided for herein are cumulative and are not exclusive of any other rights, powers or remedies provided by law. The assertion or employment of any right, power or remedy hereunder, or otherwise, shall not prevent the concurrent assertion of any other right, power or remedy.

SECTION 9.09.     WAIVER OF JURY TRIAL.

THE BORROWER AND OPIC EACH IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM ESTABLISHED BY ANY FINANCING DOCUMENT.

SECTION 9.10.     Indemnity.

The Borrower shall, at all times, indemnify OPIC and its directors, officers, employees, and agents (each, an “Indemnified Person”) against, and hold each Indemnified Person harmless from, any losses, claims, damages, liabilities, penalties, judgments, or other costs (including costs, fees, and expenses incurred by or imposed on any Indemnified Person in defending, analyzing, settling, or resolving any of the foregoing, and the expenses associated with the making of any affirmative claim in connection therewith) of any nature whatsoever to which an Indemnified Person may become subject (“Loss”) arising out of, in connection with, or related to the Loan (including any actual or proposed use of the proceeds of the Loan), this Agreement, any other Financing Document, the Project, or any actual or prospective litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Person is a party thereto (the “Borrower Indemnity”). The Borrower Indemnity shall not apply to the extent that a court or arbitral tribunal with jurisdiction over the Loss and each Indemnified Person who has a Loss in connection therewith renders a final determination that the Loss resulted from (a) the gross negligence or willful misconduct of the Indemnified Person, or (b) OPIC’s failure to perform any act required of it relating to the Loan including under any Financing Document. The Borrower Indemnity is independent of and in addition to (i) any rights of any party hereto in connection with any Loss, and (ii) any other agreement, and shall survive the execution, modification, and amendment of this Agreement and the other Financing Documents, the expiration, cancellation, or termination of the Commitment, the disbursement and repayment of the Loan, and the provisions of any other indemnity. Any exclusion of an obligation to pay any amount under this Section shall not affect the requirement to pay such amount under any other Section hereof or under any other agreement. OPIC and each Indemnified Person shall have the right to control its, his, or her defense; provided, however, that each Indemnified Person shall: (A) notify the Borrower in writing as soon as practicable of any Loss and (B) keep the Borrower reasonably informed of material developments with respect thereto. In exercising the right and power to control his, her, or its actions in connection with a Loss, including a decision to settle any such Loss, each Indemnified Person shall, taking into account the nature and policies of such Indemnified Person (I) consult with the Borrower, and (II) act as such Indemnified Person would act if the Loss or settlement were to be paid by such Indemnified Person. The Borrower acknowledges and agrees that each Indemnified Person is an express, third-party beneficiary of the Borrower’s obligations under this Section 9.10.

SECTION 9.11.     Cooperation; Loan Servicing.

At its sole cost, OPIC may assign or delegate all or part of the responsibility for monitoring, managing, administrating or servicing the Loan to a Person that shall act as OPIC’s agent and asset manager in addressing such matters as may be required in connection with the servicing of the Loan. Any Person who so acquires the right to monitor, manage, administrate or service the Loan shall benefit from the indemnity set forth in Section 9.10 (as if the name of such Person had been stated in such provision).

SECTION 9.12.     Further Assurances.

The Borrower shall execute and deliver to OPIC such additional documents and take such additional action as OPIC may require to carry out the purposes of the Financing Documents, to cause the Financing Documents to be duly registered, legalized, notarized, and stamped in any applicable jurisdiction, and to preserve and protect OPIC’s rights as contemplated herein or therein.

SECTION 9.13.     Counterparts.

This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original and all of which together shall constitute one and the same instrument.

SECTION 9.14.     Waiver of Litigation Payments.

In the event that any action or lawsuit is initiated by or on behalf of OPIC against the Borrower or any other party to any Transaction Document, the Borrower, to the fullest extent permissible under Applicable Law, irrevocably waives its right to, and agrees not to request, plead, or claim that OPIC and its successors, transfers, and assigns (any such Person, an “OPIC Plaintiff”) post, pay, or offer, any cautio judicatum solvi bond, litigation bond, or any other bond, fee, payment, or security measure provided for by any provision of law applicable to such action or lawsuit (any such bond, fee, payment, or measure, a “Litigation Payment”), and the Borrower further waives any objection that it may now or hereafter have to an OPIC Plaintiff’s claim that such OPIC Plaintiff should be exempt or immune from posting, paying, making, or offering any such Litigation Payment.

Section 9.15.      Conflict of Terms.

 Except as otherwise provided in this Agreement or any of the other Financing Documents by specific reference to the applicable provisions of this Agreement, if any provision contained in this Agreement conflicts with any provision in any of the other Financing Documents, the provision contained in this Agreement shall govern and control.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered on its behalf by its authorized representative as of the date first above written.

)

) ss:

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I, ______________________, a notary public in and for ___________________, DO HEREBY CERTIFY that ______________________, the ________________ of Geotérmica Platanares, S.A. de C.V. (the “Borrower”), personally appeared before me in said ___________________, is personally known to me and known by me to be the person who executed on behalf of the Borrower the Finance Agreement annexed hereto, and who acknowledged the same to be his or her own free act and deed and the free act and deed of the Borrower.

Given under my hand and notarial seal this _____ day of __________, 20___.

)

) ss:

)

I, ______________________, a notary public in and for ___________________, DO HEREBY CERTIFY that ______________________, the ________________ of OVERSEAS PRIVATE INVESTMENT CORPORATION (“OPIC”), personally appeared before me in said ___________________, is personally known to me and known by me to be the person who executed on behalf of the Borrower the Finance Agreement annexed hereto, and who acknowledged the same to be his or her own free act and deed and the free act and deed of the Borrower.

Given under my hand and notarial seal this _____ day of __________, 20___.

SCHEDULE X

Defined Terms and Rules of Interpretation

1.     Defined Terms. As used in this Agreement, including the Exhibits and Schedules hereto, the following terms shall have the following meanings.

“Abandon” means (a) cease to have the right to possess and use the Site for the Project in the manner contemplated in the Transaction Documents or (b) voluntarily suspend all or substantially all of its activities in connection with the Project, in each case for a period of thirty (30) or more consecutive days (other than for force majeure, maintenance, government order or as required by Applicable Law).

“Account Control Agreement” means the account control agreement by and among OPIC, MUFG Union Bank, N.A., and the Borrower, in form and substance satisfactory to OPIC.

“Accounting Standards” means GAAP, unless OII is required to modify its accounting standards in accordance with SEC rules and regulations.

“Accounts” means, collectively, the Offshore Accounts, the Onshore Accounts and any other of the Borrower’s bank accounts, if any, that are pledged to OPIC, including pursuant to the Administration and Guaranty Trust Agreement.

“Accounts Administration and Retention Agreement” means the agreement for the administration of the Onshore Accounts (other than the Citi Onshore O&M Account) (Contrato de Administración y Retención de Cuentas) entered into, or to be entered into, in form and substance satisfactory to OPIC, among the Onshore Administration and Guaranty Trustee, the Borrower, and OPIC.

“Accounts Agreement” means the agreement to be entered into by and among the Borrower, OPIC and MUFG Union Bank, N.A., relating to control and administration of the Offshore Accounts.

“Act of Political Violence” means any act of war (whether declared or undeclared), revolution, insurrection, civil war, strife of a lesser degree, terrorism, or sabotage.

“Actual Equity Contribution” has the meaning set forth in the Share Retention Agreement.

“Administration and Guaranty Trust Agreement” means the trust agreement (Contrato de Fideicomiso de Administración y Garantía Enmendado y Reexpresado), dated as of November 27, 2013, among the Borrower, OrPower 19 and the Onshore Administration and Guaranty Trustee, to be amended and restated by the parties thereto and Elcosa on or prior to the first Closing Date.

“Affiliate” means, with respect to any Person, (a) any other Person that is directly or indirectly controlled by, under common control with, or controlling such Person; (b) any other Person owning beneficially or controlling five percent (5%) or more of the equity interest in such Person; (c) any officer or director of such Person; or (d) any spouse or relative of such Person. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of partnership interests or voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the preamble.

“Annual Operating Budget” means, for any Fiscal Year, the operating budget (including the then required levels of maintenance capital expenditures) and operating plan for such Fiscal Year prepared by the Borrower in the form of Schedule 6.06, submitted by the Borrower to OPIC and approved by OPIC.

“Anti-Money Laundering Laws” means (a) the Bank Secrecy Act, as amended by, inter alia, the USA PATRIOT Act of 2001, (Pub. L. No. 107-56) and (b) any other law, regulation, order, decree or directive of any relevant jurisdiction having the force of law and relating to anti-money laundering.

“Applicable Law” means, with respect to a given Person on a given date, any constitution, statute, law, rule, regulation, ordinance, judgment, order, decree, Consent of a Governmental Authority, or any published directive, guideline, requirement or other governmental restriction that has the force of law, or any determination by, or interpretation of any of the foregoing by, any judicial authority, that is binding on such Person whether in effect as of the date hereof or as of any date thereafter.

“Arbitral Tribunal” means the arbitral tribunal constituted in accordance with the Rules.

“Arbitration Parties” means each of (i) OPIC, (ii) the Borrower and (iii) any other party to an arbitration pursuant to Section 8.04; and “Arbitration Party” means any of them, as the context requires.

“Authorized Officer” means, with respect to any Person, any officer designated in such Person’s Charter Documents or otherwise in writing as having been authorized to execute and deliver any of the Transaction Documents.

“Board of Governors of the Federal Reserve System” means the Board of Governors of the Federal Reserve System, which is an agency of the United States of America responsible for the analysis of domestic and international financial and economic developments, and for regulating the operations of the Federal Reserve Banks and payment systems.

“Borrower” has the meaning set forth in the preamble to this Agreement.

“Borrower Documents” means each of the Transaction Documents to which the Borrower is or will be a party.

“Borrower Indemnity” has the meaning set forth in Section 9.10.

“Business Day” means any day other than (a) a Saturday, Sunday, or day on which commercial banks are authorized by law to close in the City of New York or Washington, D.C., United States of America, (b) with respect to any communication to OPIC, a day on which OPIC is not open for business, and (c) with respect to any Disbursement or payment to OPIC, a day on which OPIC or the United States Department of the Treasury is not open for business.

“Cancellation Fee” has the meaning set forth in Section 2.06(b).

“Cash Flow” of the Borrower, for any period, means the amount resulting from (a) its Net Income for such period, plus (b) all interest expense, any expense for any Fees, and depreciation, amortization, deferred income taxes, and other non-cash expenses for such period (but only to the extent deducted in determining Net Income), minus (c) the amount of net increase or net decrease in Working Capital between the first day of such period and the last day of such period, minus (d) any capital expenditure (excluding any expenditure prior to COD to the extent such expenditure was financed with the proceeds of the Loan, equity contributions or paid from reserves) incurred in such period for repair or replacement of a capital asset.

“Cayman Pledge Agreements” means (a) the Equitable Mortgage Over Shares in OrPower 19, Inc. to be executed on or before the first Closing Date between Intermediate Shareholder and OPIC and (b) the Amended and Restated Equitable Mortgage Over Shares in OrPower 19, Inc., to be executed on or before the first Closing Date between Intermediate Shareholder and Elcosa.

“Certificate Interest Rate” has the meaning set forth in the OPIC Funding Agreement.

“Certified” means, in respect of any document, that such document is being delivered accompanied by a certification from an Authorized Officer that it is true and complete (or a true and complete copy, as the case may be), including all amendments to date, and, if applicable, is in full force and effect in accordance with its terms as of the date of such certification.

“Change of Control” means:

(a)     before the Closing Date on which the final Disbursement is made, (i) the failure of the Sponsor to be listed on the New York Stock Exchange; (ii) the failure of the Sponsor, directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of OII; (iii) the failure of OII, directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of Ormat Holding Corp.; (iv) the failure of Ormat Holding Corp., directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of the Intermediate Shareholder; (v) the failure of the Intermediate Shareholder to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of OrPower 19; or (vi) the failure of OrPower 19 to own one hundred percent (100%) of the issued and outstanding ordinary capital stock (excluding the Preferred Nonvoting Share) and one hundred percent (100%) of the economic interests of the Borrower (provided that OrPower 19’s transfer of its shares in the Borrower pursuant to the Honduran Share Trust Agreement shall not be deemed a Change of Control); and

(b)     at all times from and after the Closing Date on which the final Disbursement is made, the failure of the Sponsor, directly or indirectly (including through assignment of shares in the Borrower pursuant to the Honduran Share Trust Agreement), to own at least 50.1% of the issued and outstanding share capital and economic interests of, and to exercise control over, the Borrower.

“Charter Documents” means, in respect of any Person, such Person’s founding act, charter, articles of incorporation and by-laws, memorandum and articles of association, statute, or similar instrument.

“Citi Onshore Account Pledge Agreement” means the account pledge agreement (Contrato de Control y Administración de Cuentas) in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by the Borrower and OPIC, creating a pledge over the Citi Onshore O&M Account.

“Citi Onshore O&M Account” has the meaning set forth in the Accounts Agreement.

“Closing Date” for any Disbursement means the Business Day on which a Disbursement is made.

“COD” means achievement of the Fecha de Inicio de Operación Comercial, as such term is defined in the ENEE PPA.     

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute and all rules and regulations promulgated thereunder.

“Commercial Operation Start Certificate” means the Certificado de Inicio de Operación Comercial under the ENEE PPA.

“Commitment” means OPIC’s commitment to lend an amount up to $124,700,000 less (a) the portion thereof that pursuant to Section 2.06(b) has been canceled or has been deemed canceled, and (b) any amounts disbursed pursuant to Section 2.01.

“Commitment Fee” has the meaning set forth in Section 2.06(a).

“Commitment Letter” means the commitment letter, dated as of November 21, 2016, by OPIC in favor of the Borrower and the Sponsor.

“Commitment Period” means the period commencing on the date of execution of this Agreement, and ending on the earliest of (a) the first date on which the amount of the Loan equals the amount of the Commitment, (b) the second (2^nd) anniversary of the date of execution of this Agreement, provided, however, if the first Disbursement has not occurred on or before the first anniversary of the date of execution of this Agreement or the eighth (8^th) anniversary of the date of the Commitment Letter, the Commitment Period shall end on the date of such first or eighth anniversary, as applicable, and (c) the date the Commitment has otherwise been terminated in accordance with this Agreement.

“Congressional Approval of the La Bufa Lease” means the Decree of the National Congress of Honduras required under numeral 19 of Article 205 of the Constitution of Honduras approving the Municipality of La Union, Department of Copan’s, grant of the La Bufa Land Lease Agreement for the full term of such lease agreement, approved through Decree 125-2017 dated January 18, 2018 and published in the Official Gazette on April 13, 2018.

“Consents” means any registration, declaration, filing, consent, license, right, approval, authorization, or permit.

“Corrupt Practices Laws” means (a) the Foreign Corrupt Practices Act of 1977 (Pub. L. No. 95-213, §§101-104), as amended, and (b) any other Applicable Law relating to bribery, kick-backs, or similar business practices.

“Current Assets” means assets of the Borrower treated as current assets under Accounting Standards, which, for the avoidance of doubt, does not include amounts that may be on deposit in the Offshore Debt Service Reserve Account or otherwise held to satisfy the DSR Requirement.

“Current Liabilities” means liabilities of the Borrower treated as current liabilities under Accounting Standards.

“Cut-Off Date” means the period beginning on July 1, 2017 through the last date of the period covered by the review performed by the Independent Engineer with respect to Project Costs incurred prior to such date pursuant to Section 4.18.

“Debt Service” means, for any period, the sum of all payments of principal, interest, and fees made or required to be made by the Borrower in respect of its Indebtedness (excluding any Indebtedness owed to any Shareholder and any other Indebtedness that is fully subordinated to the Loan on terms acceptable to OPIC) during such period.

“Debt to Equity Ratio” means, as of any date of determination, the ratio of (i) the principal amount of the Loan then outstanding to (ii) the aggregate amount of Actual Equity Contributions made on or prior to such date.

“Default” means an event or condition that, with the passage of time or the giving of notice, or both, could constitute an Event of Default.

“Default Rate” means at the time any amount due to OPIC under any Financing Document is not paid when due (a) with respect to amounts due under a Note, an amount equal to the sum of (i) the applicable OPIC Note Interest Rate (as such rate may be adjusted as provided in Section 2.02(c)) and (ii) two percent (2%) per annum, and (b) with respect to any other amounts due, an amount equal to the sum of (i) the highest OPIC Note Interest Rate set forth in any Note then outstanding (as such rate may be adjusted as provided in Section 2.02(c)) and (ii) two percent (2%) per annum.

“Designated Prepayment Date” has the meaning set forth in the OPIC Funding Agreement.

“Development Fee” means the development fee payable by the Borrower to the Shareholders as reflected in the Financial Model and approved by OPIC.

“Direct Agreements” means (i) the Elcosa Direct Agreement, (ii) the ENEE Direct Agreement, (iii) the consent and agreement, dated on or before the first Disbursement, among OPIC, the Supplier and the Borrower, (iv) the SERNA Direct Agreement and (v) each of the notices described in Section 4.22.

“Disbursement” means any disbursement of the Commitment.

“Disbursement Request” means a request for disbursement of the Commitment substantially in the form of Exhibit B.

“Disposition” means, with respect to any Property, any sale, license, assignment, exchange, conveyance, liquidation or lease or other transfer or disposition thereof, whether by agreement, operation of law or otherwise (and the verb “Dispose” shall be construed accordingly).

“Dispute” means any dispute, controversy or claim arising out of, relating to, or in connection with this Agreement, the Notes or any other Financing Document to which the Borrower or OPIC is a party, including any dispute, controversy or claim relating to the formation, existence, validity, interpretation, enforceability, breach, performance or termination of thereof.

“Dollars” or “$” means U.S. dollars.

“Drilling Program” means the drilling program set forth in Schedule 4.19-A hereto.

“DSR Requirement” means, for any date, an aggregate Dollar amount equal to the aggregate amount of Debt Service with respect to the Loan for the immediately succeeding six-month period.

“Effective Date” has the meaning set forth in the preamble to this Agreement.

“Elcosa” means Electricidad de Cortés, S. de R.L. de C.V., a Honduran sociedad de responsabilidad limitada de capital variable.

“Elcosa Direct Agreement” means the consent and agreement, dated on or before the first Disbursement, among Elcosa, Bidle Trading, Inc., OPIC, the Borrower, OrPower 19, OII, the Intermediate Shareholder and Inversiones Representaciones Electromecánicas, S.A. de C.V.

“Elcosa Lien” means the first priority security interest in the assets described in the Elcosa Lien Documents.

“Elcosa Subordination Agreement” means the Elcosa subordination agreement, dated on or before the first Disbursement, among Elcosa, Bidle Trading, Inc., OPIC, the Borrower, OrPower 19, OII, the Intermediate Shareholder and Inversiones Representaciones Electromecánicas, S.A. de C.V.

“Employee Benefit Plan” means any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower that is subject to ERISA, other than a Guaranteed Pension Plan or a Multiemployer Plan.

“ENEE” means the Empresa Nacional de Energía Eléctrica.

“ENEE Direct Agreement” means (i) the consent and agreement, dated on or before the first Disbursement, among ENEE, OPIC and the Borrower and (ii) the operative committee resolutions, dated on or before the first Disbursement, by ENEE’s operative committee.

“ENEE PPA” means that certain power purchase agreement (Contrato No. 086-2010 Suministro de Potencia y su Energía Asociada Generada con Recursos Renovables) dated as of June 3, 2010 entered into by the Borrower and ENEE, as amended.

“Environmental and Social Consultants” means Social Capital Group.

“Environmental and Social Plans” means the following, which shall be prepared in accordance with the Environmental and Social Requirements: (a) an overarching policy statement of environmental and social objectives and principles appropriate to the size and nature of the Project and of the Borrower’s organization that will be used to permit the Project to achieve sound and sustainable environmental and social performance; (b) a grievance mechanism appropriate to the size and nature of the Project and of the Borrower’s organization for the Borrower to receive and facilitate resolution of concerns and grievances about the environmental and social performance of the Project and the Borrower’s organization; and (c) the ESAP.

“Environmental and Social Requirements” means (a) all Applicable Laws in Honduras regarding environmental, health, and safety requirements; (b) International Finance Corporation’s Performance Standards 1, 2, 3, 4, 5, 6 and 8 (January 1, 2012); (c) applicable provisions of the International Finance Corporation’s April 30, 2007 General Environmental and Health and Safety Guidelines; (d) International Finance Corporation’s Environmental, Health, and Safety Guidelines for Geothermal Power Generation (April 30, 2007); (e) International Finance Corporation’s Environmental, Health, and Safety Guidelines for Electric Power Transmission and Distribution (April 30, 2007) and (f) the applicable provisions of the ESPS of OPIC.

“Environmental Laws” means, with respect to any Person, any and all laws applicable to such Person relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time, and all rules and regulations promulgated thereunder.

“ERISA Affiliate” shall mean any Person that is treated as a single employer with the Borrower under §414 of the Code.

“ESAP” shall mean the environmental and social action plan set forth in Schedule 4.15.

“ESMS” means the Environmental and Social Management System to be developed by the Borrower, delivered in writing to OPIC, and implemented by the Borrower, all in accordance with the ESAP.

“ESPS” means the Environmental and Social Policy Statement dated as of October 15, 2010, which is posted on OPIC’s website at http://www.opic.gov/environment.

“Event of Default” has the meaning set forth in Section 8.01.

“Event of Loss” means, with respect to any Property of the Borrower, any loss of, destruction of or damage to, such Property (including any such loss, destruction or damage resulting from an Act of Political Violence).

“Excluded Claim” means any dispute, controversy or claim (including any counterclaim, defense or set-off) against OPIC, the United States of America, or any instrumentality or agency of the United States of America sounding in tort or other non-contractual basis for liability.

“Expropriation Event” means (a) any condemnation, nationalization, seizure or expropriation by a Governmental Authority of all or a substantial portion of the Project or the Property of the Borrower or of its shares, (b) any assumption by a Governmental Authority of control of all or a substantial portion of the Property, assets or business operations of the Borrower or of its shares, (c) any taking of any action by a Governmental Authority for the dissolution or disestablishment of the Borrower, or (d) any taking of any action by a Governmental Authority that would prevent the Borrower from carrying on its business or operations or a substantial part thereof for a period of thirty (30) or more consecutive days.

“Expropriation Proceeds” means, with respect any Expropriation Event, any condemnation awards or other compensation, awards, damages and other payments or relief paid or payable by a Governmental Authority with respect to such Expropriation Event.

“Facility Fee” has the meaning set forth in Section 2.06(c).

“Fees” means the Commitment Fee, the Cancellation Fee, the Facility Fee, the Maintenance Fee and the Modification Fee (if applicable).

“Financial Model” means a financial model prepared by the Borrower setting forth financial projections for the Project through March 31, 2032.

“Financial Officer” means the chief financial officer, chief operating officer, president, principal accounting officer, treasurer, controller or asset manager of the Borrower or an Affiliate of the Borrower, to the extent such officer is responsible for overseeing the financial operations of the Borrower.

“Financial Plan” has the meaning set forth in Section 3.01(m).

“Financial Statements” means, with respect to any Person, its quarterly or annual consolidating and consolidated balance sheet and statements of income, retained earnings, and sources and uses of funds for such fiscal period, together with all notes thereto and with comparable figures for the corresponding period of its previous Fiscal Year, each prepared in or translated into English and in Dollars in accordance with Accounting Standards.

“Financing Documents” has the meaning set forth in Section 4.01.

“Fiscal Year” means, with respect to the Borrower, the period beginning on January 1 and ending on December 31 of each year.

“Fixed Rate Note” means any promissory note issued by the Borrower pursuant to this Agreement substantially in the form of Exhibit A-1 of the OPIC Funding Agreement.

“Funding Documents” has the meaning set forth in Section 4.21.

“GAAP” means generally accepted accounting principles in the United States of America (as amended, supplemented or re-issued from time to time), applied on a consistent basis both as to classification of items and amounts.

“Good Industry Practice” means any of the practices, methods, standards and acts employed by, engaged in or approved by a significant portion of the international geothermal power industry and related installation business with respect to the engineering, design, construction, operation and maintenance of geothermal power infrastructure of the type to be incorporated into the Works and which practices, methods and standards shall conform to the requirements of the equipment suppliers and manufacturers of the plant and materials used in the Works, or any of the practices, methods, standards and acts that, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Industry Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be practices, methods, or acts generally accepted in the industry.

“Governmental Authority” means any national, state, county, city, town, village, municipal or other local governmental department, commission, board, bureau, agency, authority or instrumentality of the Project Country or the U.S., as applicable, or any political subdivision thereof, and any person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any of the foregoing entities, having jurisdiction over the Persons or matters in question.

“Guaranteed Pension Plan” means any employee pension benefit plan within the meaning of §3(2) of ERISA which is maintained or contributed to by the Borrower or any ERISA Affiliate, the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

“Hedge Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate insurance, currency swap agreement, currency option, futures contract, forward contract or any other similar agreement or arrangement with respect to interest rates and currency exchange rates, currencies, commodities or indices or to the hedging of assets or liabilities.

“Historic DSCR” has the meaning set forth in Section 6.10(a).

“Honduran Asset Trust Agreement” means the trust agreement (Contrato de Fideicomiso), dated as of November 27, 2013, among the Borrower, OrPower 19 and Banco del País, S.A., a Honduran sociedad anónima de capital variable in favor of Elcosa.

“Honduran Share Trust Agreement” means the share trust agreement (Contrato de Fideicomiso de Garantía sobre Acciones), in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by OrPower 19 and the Onshore Share Trustee, providing for Security over 100% of the common shares issued and outstanding of the Borrower, in favor of OPIC.

“Honduras” means the Republic of Honduras.

“Indebtedness” means, with respect to any Person at any date, total liabilities as defined by Accounting Standards and any obligation created, issued, incurred, or assumed by such Person for borrowed money or arising out of any credit facility, financial accommodation or Hedge Agreement or for the deferred purchase price of goods or services, including, any credit to such Person under any conditional sale or other title retention agreement, all guaranties by such Person of liabilities or Indebtedness of any other Person, liabilities or Indebtedness of any other Person secured by any assets or revenue of such Person, and the net aggregate rentals under any lease by such Person as lessee that under Accounting Standards would be capitalized on the books of the lessee or that is the substantial equivalent of the financing of the property so leased.

“Indemnified Person” has the meaning set forth in Section 9.10.

“Independent Engineer” means Lummus Consultants International, Inc.

“Indirect Shareholders” means OII, the Sponsor and the Intermediate Shareholder.

“Insurance Advisor” means INDECS Consulting Limited.

“Insurance Policy” means each policy, contract or other instrument of insurance or reinsurance of any kind which is or is required to be taken out by or on behalf of any Obligor or any Project Subcontractor pursuant to Section 6.03 and Schedule 6.03 (Minimum Insurance Requirements) hereof and in which the Borrower has any interest (including any of the foregoing taken out by or on behalf of the Borrower under the ENEE PPA).

“Insurance Proceeds” means, with respect to any Event of Loss relating to any Property of the Borrower, any insurance or reinsurance (and any other amounts received pursuant to any Insurance Policy), with respect to such Event of Loss (excluding, in each case, if any, the proceeds of general liability insurance, employers’ liability insurance, automobile liability insurance, marine cargo consequential loss insurance, advance loss of profits insurance, delay in start-up insurance and business interruption insurance, Expropriation Proceeds and political risk insurance proceeds of the Shareholders).

“Intermediate Shareholder” means OrPower 20, Inc., an exempted company incorporated under the laws of the Cayman Islands.

“Inverted Domestic Corporation” means an entity formed outside of the United States which is treated as an inverted domestic corporation under 6 U.S.C. 395(b).

“Joint Guarantee” means, collectively, the support letter (Acuerdo de Apoyo para el cumplimiento del Platanares) and the joint guarantee (Aval Solidario del Estado de Honduras) from the Ministry of Finance of Honduras (la Secretaría de Estado en el Despacho de Finanzas) dated June 14, 2011.

“Key Contractor” means the Supplier, Geodrill LLC and Ormat Holding Corp.

“Knowledge” of a Person that is an organization means the actual knowledge that a responsible officer of such Person has or would have after such inquiry, including through diligent inspection of relevant records and inquiry of relevant employees or such inquiry as may be requested by OPIC, in each case as is practicable and commercially reasonable under the circumstances.  For purposes hereof, responsible officer means, for any Person, an officer, director or employee of such Person that is in a position of senior management or policy making for such Person.

“La Bufa Comfort Letter” means the comfort letter from Elcosa and Inversiones y Representaciones Electromecanicas, S. de R.L. de C.V., a Honduran sociedad de responsabilidad limitada de capital variable, in favor of the Ormat Parties, dated as of November 27, 2013.

“La Bufa Land Lease Agreement” means the land lease agreement (Contrato de Arrendamiento de Terreno Ejidal) by the municipality of La Union, Copan in favor of the Borrower, dated as of May 15, 2012.

“Lempiras” means the lawful currency of Honduras.

“Lien” means any lien, pledge, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention, or other encumbrance on or with respect to, or any preferential arrangement having the practical effect of constituting a security interest with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind.

“Litigation Payment” has the meaning set forth in Section 9.14.

“Loan” means, on any date, the aggregate of the outstanding unpaid principal amounts of the Notes then outstanding.

“Loan Documents” has the meaning set forth in Section 4.01(a).

“Loan Maturity Date” means the earlier of (a) the Note Maturity Date and (b) the Business Day before the transfer of the Borrower’s assets, the ordinary shares of the Borrower, or the shares of OrPower 19 to Elcosa or another third party.

“Long-term Indebtedness” means, in accordance with Accounting Standards, any Indebtedness, the final maturity of which, by its terms or by the terms of any agreement related to it, falls due more than one year after the date of its incurrence.

“Loss” has the meaning set forth in Section 9.10.

“Maintenance Fee” has the meaning set forth in Section 2.06(d).

“Material Adverse Effect” means any event, development, or circumstance having a material adverse effect on (a) the Project, (b) the business, operations, prospects, condition (financial or otherwise), or property of the Borrower, OII, the Intermediate Shareholder, (c) the ability of the Borrower or any other Material Project Party to perform in a timely manner its payment obligations or other material obligations under any of the Transaction Documents, (d) the validity or enforceability of any material provision of any Transaction Document, (e) the rights and remedies of OPIC under any of the Financing Documents, or (f) the Liens provided to OPIC under the Security Documents.

“Material Project Documents” has the meaning set forth in Section 4.01(c).

“Material Project Party” means ENEE, Elcosa, the Supplier, SERNA, any Affiliate party to any Project Document and any other counterparty (other than MINOSA under the MINOSA Cooperation Agreement and the MINOSA PPA) under any Material Project Document that remains an executory contract after the Effective Date that is an Affiliate of the Borrower or of any Shareholder.

“MINOSA” means Minerales de Occidente S.A. de C.V.

“MINOSA Cooperation Agreement” means the cooperation agreement to be entered into between the Borrower and MINOSA.

“MINOSA PPA” means the power purchase agreement dated as of May 5, 2007 between the Borrower and MINOSA.

“Modification Fee” has the meaning set forth in Section 2.06(e).

“Multiemployer Plan” means any multiemployer plan within the meaning of §3(37) of ERISA which is maintained or contributed to by the Borrower or any ERISA Affiliate and subject to Title IV of ERISA.

“Net Income” means, with respect to the Borrower, for any period, the net income (loss) of the Borrower for such period, as determined in accordance with Accounting Standards, provided, that there shall be excluded in such determination (a) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period, (b) any aggregate net gain during such period arising from the sale, conversion, exchange, or other disposition of capital assets, (c) any gains resulting from the write-up of any assets, (d) any net gain arising from the extinguishment, under Accounting Standards, of any Indebtedness of the Borrower, and (e) any net income or gain during such period resulting from (i) any change in accounting principles in accordance with Accounting Standards, (ii) any prior period adjustments resulting from any change in accounting principles in accordance with Accounting Standards, (iii) any extraordinary items, and (iv) any discontinued operations or the disposition thereof.

“New York Security Agreement” means the Security Agreement, to be executed on or before the first Closing Date, between the Borrower and OPIC.

“Note Maturity Date” means September 20, 2032.

“Notes” means (i) any Fixed Rate Note issued by the Borrower pursuant to this Agreement and the Funding Documents substantially in the form of Exhibit A-1 and (ii) any pagaré issued by the Borrower pursuant to this Agreement substantially in the form of Exhibit A-2.

“O&M Support Agreement” means the operations and maintenance service support agreement, to be executed on or before the first Closing Date, between the Borrower and Ormat Nevada Inc., a Delaware corporation.

“Obligor” means each of the Borrower, the Shareholder, each other Person that owns equity interests in the Borrower, the Intermediate Shareholder and the Sponsor (without duplication).

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury, which administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted individuals, organizations, and foreign countries and regimes.

“OFAC List” means the Specially Designated Nationals and Blocked Persons List and any other lists administered or enforced by OFAC, including but not limited to the Palestinian Legislative Council list and the Part 561 list, in each case as published by OFAC from time to time and available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx or any official successor website.

“OFAC Regulations” means (a) the rules and regulations promulgated by OFAC, as may be published in Chapter 31, Part 500 of the Code of Federal Regulations from time to time, and (b) any Executive orders administering or imposing economic sanctions on individuals, organizations or foreign countries and regimes.

“Official” means any officer of a political party or candidate for political office in the Project Country or the U.S. or any officer or employee (a) of the government of the Project Country or the U.S. (including any Governmental Authority of the Project Country or the U.S.) or (b) of a public international organization.

“Offshore Accounts” has the meaning set forth in the Accounts Agreement.

“Offshore Debt Service Reserve Account” has the meaning set forth in the Accounts Agreement.

“Offshore Well Reserve Account” has the meaning set forth in the Accounts Agreement.

“OII” means Ormat International, Inc., a Delaware Corporation.

“Onshore Accounts” has the meaning set forth in the Accounts Agreement.

“Onshore Administration and Guaranty Trustee” means Banco del País, S.A., a Honduran sociedad anónima acting solely in its capacity as trustee under the Administration and Guaranty Trust Agreement, or any successor thereto.

“Onshore Share Trustee” means Banco del País, S.A., a Honduran sociedad anónima acting solely in its capacity as trustee under the Honduran Share Trust Agreement, or any successor thereto.

“Operating Report” means a report in the form set forth in Schedule 6.05(d) (Operating Report).

“Operation Contract” means that certain operations agreement (Contrato de Operación para la Generación, Transmisión y Comercialización de Energía Eléctrica) dated as of January 6, 2009 entered into by the Borrower and SERNA.

“OPIC” has the meaning set forth in the preamble to this Agreement.

“OPIC’s Financial Model Auditor” means BDO Ziv Haft Consulting and Management Ltd.

“OPIC Funding Agreement” means the Funding and OPIC Guaranty Agreement dated on or before the first Disbursement, among the Borrower, the Paying Agent, the Placement Agent and OPIC.

“OPIC Guaranty Fee” has the meaning set forth in the Funding Documents.

“OPIC Guaranty Payment” has the meaning set forth in Section 2.02(c).

“OPIC Note Interest Rate” has the meaning set forth in Section 2.02(a), as adjusted pursuant to Section 2.02(c).

“OPIC Plaintiff” has the meaning set forth in Section 9.14.

“Ormat Guaranty” means the Guaranty, dated as of November 27, 2013, by OII in favor of Elcosa.

“Ormat Parties” means OII, the Intermediate Shareholder and OrPower 19.

“Ormat Parties Subordination Agreement” means the Subordination Agreement, to be executed on or before the first Closing Date by and between the Ormat Parties and any Affiliate thereof providing Indebtedness to the Borrower, and OPIC.

“OrPower 19” means OrPower 19, Inc., a Cayman Islands corporation owned by the Intermediate Shareholder.

“Parent Support Services” means services provided to the Borrower by its Affiliates for (i) reservoir monitoring and performance assessment of key components, including downhole pumps, turbines and heat exchangers services and (ii) other general services in an amount not to exceed in the aggregate $400,000 on an annual basis, in each case as approved pursuant to the then-applicable Annual Operating Budget.

“Paying Agent” means U.S. Bank National Association, or any successor or successors thereto designated as Paying Agent under the Funding Documents.

“Payment Date” means the 20^th day of each March, June, September and December of each year after the date hereof until the Loan and all amounts due hereunder or under the Notes are paid in full, unless such Payment Date is not a Business Day, in which case the Payment Date will be the next succeeding Business Day.

“PBGC” means the Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

“Permitted Lien” has the meaning set forth in Section 7.01.

“Person” means an individual, a legal entity, including, a partnership, a joint venture, a corporation, a trust, and an unincorporated organization, and a government or any department or agency thereof.

“Placement Agent” means Raymond James & Associates, Inc., or any successor or successors thereto designated as Placement Agent under the Funding Documents.

“Preferred Nonvoting Share” has the meaning set forth in the Project Structuring Agreement.

“Prepayment Premium” has the meaning set forth in Section 2.04.

“Principal Installments” has the meaning set forth in Section 2.03.

“Priority Fee” means 3% of the Gross Revenues (as defined in the Project Structuring Agreement) received by the Borrower pursuant to Section 2.2(a)(i) of the Project Structuring Agreement, which amount is payable as a Project operating cost by the Borrower to Elcosa pursuant to the Elcosa Direct Agreement.

“Prohibited Payment” means the giving or making by any Person (such Person, the “Payor”) of any offer, gift, payment, promise to pay or authorization of the payment of any money or anything of value, directly or indirectly, to or for the use or benefit of any Official (including to or for the use or benefit of any other Person if the Payor knows, or has reasonable grounds for believing, that the other Person would use such offer, gift, payment, promise or authorization of payment for the benefit of any such Official), for the purpose of influencing any act or decision or omission of any Official in order to obtain, retain or direct business to, or to secure any improper benefit or advantage for, the Borrower or the Project, or any other Person; provided that any such offer, gift, payment, promise or authorization of payment shall not be considered a Prohibited Payment if it (a) is expressly permitted by Applicable Law or (b) is made for the purpose of expediting or securing the performance of a routine governmental action (as such term is construed under Applicable Law).

“Project” means the development, construction and operation of 38 MWe geothermal power plant located in western Honduras.

“Project Contractor” means any Person that is a party to a Project Contract with the Borrower.

“Project Contracts” means any contract related to the development, construction or operation of the Project between the Borrower and a Project Contractor or between a Project Contractor and a Project Subcontractor.

“Project Costs” means all costs incurred by the Borrower on or after the date hereof to finance and construct the Project, including, but not limited to (a) amounts payable under the Project Contracts, (b) interest, fees and expenses payable with respect to the Loan, (c) expenses incurred to obtain use of the Site, (d) costs and expenses of legal, engineering, accounting, construction management, and other advisors incurred in connection with the Project, (e) insurance premiums, (f) funding of the Offshore Debt Service Reserve Account and of the Offshore Well Reserve Account, (g) general and administrative costs such as Working Capital, payroll, utilities, office equipment and supplies, vehicles, communications expenses, and travel expenses, and (h) Taxes.

“Project Country” means Honduras.

“Project Documents” has the meaning set forth in Section 4.01(c).

“Project Structuring Agreement” means the Project Structuring Agreement among, inter alios, Elcosa and the Shareholders dated November 27, 2013.

“Project Subcontractor” means any Person, other than the Borrower or a Project Contractor, which is a party to a Project Contract with a Project Contractor.

“Projected DSCR” has the meaning set forth in Section 6.10(a).          

“Property” means any present or future right or interest in, to or under any assets, equipment, facilities, contracts, leaseholds, business, receivables, revenues, accounts or other property of any kind whatsoever, whether real, personal, mixed and whether tangible or intangible.

“Redemption Premium” has the meaning set forth in the Funding Documents.

“Remainder Fee” means the additional royalty payments payable by the Borrower to Elcosa, after the Borrower’s payment of the Priority Fee, pursuant to the Project Structuring Agreement.

“Replaceable Project Document” has the meaning set forth in Section 8.01(h) hereof.     

“Reservoir Monitoring Plan” means the Borrower’s reservoir monitoring plan set forth in Schedule 4.19-B hereto.

“Reservoir Monitoring Report” means the reservoir monitoring report prepared by the Borrower in the form set forth in Schedule 4.19-C hereto.

“Restricted Payment” means any of the following made directly or indirectly by the Borrower: (a) any dividend or distribution on any share of capital stock of the Borrower, including any reduction of capital; (b) any payment of principal or interest on any Indebtedness of the Borrower to or for the benefit of any Shareholder or any Affiliate of the Borrower, other than accounts payable for goods or services provided on an arm’s-length basis; (c) any payments to Elcosa or in respect of the Remainder Fee or otherwise; and (d) any purchase, redemption, acquisition, or retirement of any shares of capital stock of the Borrower or any Indebtedness of the Borrower held by any Shareholder or any Affiliate of the Borrower.

“Rules” means the International Arbitration Rules of the American Arbitration Association in effect as of the date of the Notice of Arbitration, except as modified by Section 8.03 and Schedule 8.03 or as may be modified by mutual agreement of the Arbitration Parties.

“Sale Proceeds” shall mean proceeds from any Disposition of all or any part of any Property of the Borrower, the enforcement of remedies under the Security Documents or otherwise, but excluding any such proceeds (a) included in any Termination Payment, (b) included in any Expropriation Proceeds or Insurance Proceeds, (c) from the sale of electricity and green attributes, if any, or (d) to the extent used in the ordinary course of business to replace the Property so disposed of, or, if not in the ordinary course of business, to the extent used to replace the Property so disposed of or to reinvest in the Project as approved by OPIC in its sole discretion.

“Secured Obligations” means all obligations owing to OPIC by the Borrower under or in connection with the Financing Documents including any liability in respect of further advances made under the Financing Documents whether present or future, actual or contingent and whether incurred by the Borrower alone or jointly and whether as principal or surety or in some other capacity. Without limitation, the Secured Obligations shall include interest that accrues, or that would accrue but for the operation of an automatic stay or similar provision, after the filing of a petition initiating any proceeding referred to in Sections 8.01(l) or (m) hereof.

“Security Documents” has the meaning set forth in Section 4.01(b).

“Self-Monitoring Questionnaire” means the Annual Self-Monitoring Questionnaire used by OPIC to monitor compliance with OPIC’s policy requirements, a copy of which is available and which may be completed online at http://smq.opic.gov.

“SERNA” means the Secretaría de Estado en los Despachos de Energía, Recursos Naturales, Ambiente y Minas of Honduras.

“SERNA Direct Agreement” means the consent and agreement to be executed within six (6) months of the first Closing Date by and among the Borrower, SERNA and OPIC, in substantially the form attached as Exhibit I.

“Share Pledge Agreement” means the share pledge agreement (Contrato de Prenda Sobre Acciones) in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by Elcosa and OPIC, creating a pledge upon the single Preferred Nonvoting Share issued and outstanding of the Borrower in the benefit of OPIC.

“Share Retention Agreement” means the Share Retention Agreement, to be executed on or before the first Closing Date by and among the Borrower, the Sponsor, OII, the Intermediate Shareholder and OPIC.

“Shareholder Payment” means any payment by the Borrower to, or on behalf of, any Shareholder or any Affiliate of any Shareholder other than a Restricted Payment, including any payment in respect of compensation, fees, salaries, bonuses, or commissions or any payment made on behalf of any Shareholder or any Affiliate of any Shareholder that is for the benefit of such party.

“Shareholders” means the OrPower 19 and the Indirect Shareholders.

“Site” means the land required for the Project including, but not limited to, the power plant, well pads, roads, gathering system piping, and transmission line.

“Sponsor” means Ormat Technologies, Inc. (“Ormat”), a publicly-traded Delaware Corporation.

“Subordination Agreements” means the Elcosa Subordination Agreement and the Ormat Parties Subordination Agreement.

“Subsidiary Of An Inverted Domestic Corporation” means an entity that is more than fifty percent (50%) owned (a) directly by an Inverted Domestic Corporation, or (b) through another entity that is more than fifty percent (50%) owned by an Inverted Domestic Corporation.

“Supplier” means Ormat Nevada Inc., a fully owned Affiliate of the Sponsor incorporated under the laws of Delaware.

“Taxes” means all taxes, charges, fees, levies or other assessments, including without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value added, turnover, transfer, franchise, profits, license, withholding, payroll, employment, excise, estimated, severance, stamp duties, occupation, property or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority and any political subdivision, instrumentality, agency or similar body of any taxing authority.

“Termination Payment” means any indemnity or other payment received by the Borrower or any Affiliate thereof from any counterparty other than OPIC under or in connection with any termination of a Project Document (in respect of the Warranty Agreement, only to the extent they arise or accrue after the Effective Date) or a Consent, including pursuant to the ENEE PPA or any Direct Agreement.

“Transaction Documents” has the meaning set forth in Section 4.01.

“True-Up Confirmation” means a certificate, in form and substance reasonably satisfactory to OPIC, from the Independent Engineer based on operational data and the Reservoir Monitoring Report(s) covering at least six (6) months of commercial operations for the purposes of allowing the Well Reserve Disbursement to be released and disbursing an amount pursuant to the Accounts Agreement that, together with all then previous Disbursements made, would exceed $114,700,000.

“True-Up Date” means the date of the True-Up Confirmation.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State of New York or in any other applicable jurisdiction.

“U.S.” means the United States of America.

“U.S. Government” means the government of the United States of America and its agencies and instrumentalities.

“U.S. Person” means a:

(a) U.S. citizen or U.S. lawful permanent resident;

(b) for-profit corporation, partnership, or other entity or association created under the laws of the U.S. or any state or territory thereof, or the District of Columbia, and more than twenty-five percent (25%) beneficially owned by U.S. citizens or U.S. lawful permanent residents;

(c) for-profit corporation, partnership, or other entity or association created under the laws of a foreign jurisdiction, and more than fifty percent (50%) beneficially owned by U.S. citizens or U.S. lawful permanent residents;

(d) non-profit corporation, partnership, or other entity or association created under the laws of the U.S. or any state or territory thereof, or the District of Columbia; or

(e) non-profit corporation, partnership, or other entity or association created under the laws of a foreign jurisdiction and where more than fifty percent (50%) of the members of its board of directors or similar governing body are U.S. citizens or U.S. lawful permanent residents.

“U.S. Taxpayer Identification Number” means an identification number used by the Internal Revenue Service, an agency of the United States of America, in the administration of tax laws, which is issued either by the Social Security Administration, an agency of the United States of America, or the Internal Revenue Service.

“U.S. Treasury Cost” has the meaning set forth in the OPIC Funding Agreement.

“Warranty Agreement” means the warranty agreement between the Borrower and the Supplier, dated on or before the first Disbursement.

“Water Contract” means the contract between the Borrower and SERNA, dated as of March 25, 2011 (and which entered into force by order of the National Congress of Honduras as of September 13, 2012).

“Well Reserve Disbursement” has the meaning set forth in the Accounts Agreement.

“Well Reserve Requirement” has the meaning set forth in the Accounts Agreement.

“Worker Rights Non-Compliance” has the meaning set forth in Section 6.12(b).

“Worker Rights Requirements” has the meaning set forth in Section 6.12(a)(xii).

“Workers” means, collectively, (a) individuals that are employed directly by the Borrower, and (b) individuals that, under a Project Contract, perform continuous on-site work that is either (i) of substantial duration or (ii) material to the primary operations of the Project.

“Working Capital” means the amount resulting from Current Assets (excluding cash) minus Current Liabilities (excluding Debt Service for the Loan and for all other Long-term Indebtedness).     

“Works” means the Completed Work (as defined in the Warranty Agreement), the Resource Works (as defined in the Warranty Agreement) and any other engineering, procurement, construction, drilling, commissioning or testing required to achieve COD.

2.     Rules of Interpretation.

In this Agreement, including Exhibits and Schedules hereto, unless otherwise indicated or required by the context: (a) reference to and the definition of any document (including this Agreement) shall be deemed a reference to such document as it may be amended, supplemented, revised, or modified from time to time; (b) all references to an “Article,” “Section”, “Schedule,” or “Exhibit” are to an Article or Section of this Agreement or to a Schedule or an Exhibit attached thereto and shall be deemed to have been made a part thereof; (c) the table of contents and article and section headings and other captions are for the purpose of reference only and do not limit or affect the meaning of the terms and provisions thereof; (d) defined terms in the singular include the plural and vice versa, and the masculine, feminine and neuter gender include all genders; (e) accounting terms not defined in this Schedule X have the meanings given to them under Accounting Standards; (f) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (g) the words “include,” “includes,” and “including” mean include, includes and including “without limitation” and “without limitation by specification”; (h) terms capitalized for other than grammatical purposes that are defined in (i) the preamble, (ii) the recitals, or (iii) the Sections of this Agreement have the meanings ascribed to them therein; (i) phrases such as “satisfactory to OPIC”, “in such manner as OPIC may determine,” “in OPIC’s determination,” “to OPIC’s satisfaction,” “acceptable to OPIC”, “at OPIC’s election”, and phrases of similar import authorize and permit OPIC to approve, disapprove, act or decline to act in its sole discretion; and (j) the words “reasonable”, “reasonably”, “unreasonably”, and words of similar import, when applied to OPIC’s satisfaction, acceptance, determination, consent, discretion or approval, take into account any special consideration affecting decisions of OPIC in its capacity as a governmental entity or its responsibilities as such.

SCHEDULE 2.03

AMORTIZATION SCHEDULE

OPIC Platanares Amortization

Schedule 2.03 - 1

OPIC Platanares Amortization

Schedule 2.03 - 2

OPIC Platanares Amortization

Schedule 2.03 - 3

OPIC Platanares Amortization

Schedule 2.03 - 4

OPIC Platanares Amortization

Schedule 2.03 - 5

SCHEDULE 2.08(b)

Wire Instructions for remittance of payments to OPIc

Schedule 2.08(b) - 2

Schedule 2.08(b) - 3

SCHEDULE 3.01(d)

Capitalization

Schedule 3.01(d) - 1

SCHEDULE 3.01(l)

COMPLAINTS

The Borrower received a letter dated July 11, 2017, from an attorney representing the National Human Rights Commission (Comisionado Nacional de los Derechos Humanos or “CONADEH”).  The letter quotes a complaint by a neighbor of the Project alleging that the Project has caused damage to three homes in the area as well as their families’ health due to auditory contamination.  The neighbor claims that two notes have been provided to an engineer who works for the Project requesting assistance, but that no response has been received to date. 

A note was delivered by hand on May 15, 2017 to security guards at the Project site containing similar complaints alleging auditory contamination from machinery and property damage to homes in the area.  Representatives of the Borrower attempted twice to contact the initial complainant (once on May 16, 2017, and again later in the week), Ms. Jessica Peña, but were told by neighbors that she does not reside at the house she owns.

In response to the complaint letter, a meeting was held in the municipality of La Unión Copán, attended by representatives of the Borrower, CONADEH, the municipality and the complaining residents.  The Borrower agreed at the meeting to hire a specialist to conduct a sonometric study, witnessed by representatives of CONADEH and the complaining residents, in order to determine the effect of the generated noise. An initial study was conducted on December 6, 2017, following encapsulation work of the turbines and motors intended to reduce noise levels, and a follow-up study was conducted with noise measurements taken from inside the plant on January 19, 2018 and continuous noise measurements taken from outside the plant January 16 – 18, 2018.  The work and studies were completed and the studies are attached to this Schedule 3.01(l) as Attachment A.  The initial study includes an observation claiming that the complainant was approached and indicated that she was no longer bothered by the noise (see observacion #2 on page 7 of Attachment A).  The Borrower plans to implement a mechanism to address similar complaints received during operations.

Ormat has provided to OPIC written evidence in the form of a letter from CONADEH dated January 16, 2018 that CONADEH has closed the case opened as a result of the complaint.

Schedule 3.01(l) - 1

ATTACHMENT A TO SCHEDULE 3.01(l)