NOTE

— COMMITMENTS AND CONTINGENCIES

●

Following the announcement of the Company’s acquisition of USG, a number of putative shareholder class action complaints were initially filed on behalf of USG shareholders between

March 8, 2018

and

March 30, 2018

against USG and the individual members of the USG board of directors. All of the purported class action suits filed in Federal Court in Idaho have been voluntarily dismissed. The single remaining class action complaint is a purported class action filed in the Delaware Chancery Court, entitled Riche v. Pappas, et al., Case

No.

2018

0177

(Del. Ch.,

Mar. 12, 2018).

An amended complaint was filed on

May 24, 2018

under seal, under a confidentiality agreement that was executed by the plaintiff (the “Amended Complaint”). The Amended Complaint alleges state law claims for breach of fiduciary duty against former USG directors and seeks post-closing damages.

●

February 18, 2018,

Western Watersheds Project (“WWP”) filed a notice of appeal and petition with the U.S. Department of the Interior Board of Land Appeals for standing with respect to the

January 16, 2018

Bureau of Land Management (“BLM”) decision approving Addendum

to Operation Plan & Utilization Plan for the McGinness Hills Geothermal Project. The appeal alleges that the

January 2018

BLM decision authorizing construction and operation of Phase

of the McGinness Hills Geothermal Project causes harm to WWP and its members by allowing degradation of the wildlife habitat of the greater sage-grouse in that area. The Company has filed a motion to intervene as an interested party in support of the BLM decision. The litigation was resolved and the settlement was approved by the Interior Board of Land appeals.

●

August 5, 2016,

George Douvris, Stephanie Douvris, Michael Hale, Cheryl Cacocci, Hillary E. Wilt and Christina Bryan, acting for themselves and on behalf of all other similarly situated residents of the lower Puna District, filed a complaint in the Third Circuit Court for the State of Hawaii (the “Third Circuit Court”) seeking certification of a class action for preliminary and permanent injunctive relief, consequential and punitive damages, attorney’s fees and statutory interest against Puna Geothermal Venture (“PGV”) and other presently unknown defendants. On

December 12, 2016,

the District Court granted plaintiffs motion for joinder of HELCO as a co-defendant. The amended complaint purports that injuries and other damages in an undisclosed amount were caused to the plaintiffs as a result of an alleged toxic release by PGV in the wake of Hurricane Iselle in

August 2014.

June 14, 2017,

the Third Circuit Court denied HELCO’s motion to discuss the complaint against itself which it had filed On

March 25, 2017.

Discovery is underway. The Company believes that it has valid defenses under law and intends to defend itself vigorously. On

June 19, 2018,

PGV filed a motion for leave to serve a

third

-party complaint for damages against

third

party defendants Valve Service & Supply Inc. and Curtiss-Wright Flow Control Corporation, who are, respectively, the distributor and manufacturer of the pressure release valve that failed to reseat during the Hurricane Iselle. The claim is for recovery of damages to PGV due to the supply of a defective pressure valve to PGV, which defect was the cause for any alleged toxic or unpermitted release of Hydrogen Sulfide. HELCO subsequently filed a motion of

objection to the PGV filing.

	●	On March 29, 2016, a former local sales representative in Chile, Aquavant, S.A. (“Aquavant”), filed a claim on the basis of unjust enrichment against Ormat’s subsidiaries in the 27th Civil Court of Santiago, Chile. The claim requests that the court order Ormat to pay Aquavant $4.6 million in connection with its activities in Chile, including the EPC contract for the Cerro Pabellon project and various geothermal concessions, plus 3.75% of Ormat geothermal products sales in Chile over the next 10 years. Pursuant to various motions submitted by the defendants and the plaintiffs to various courts, including the Court of Appeals of Santiago, Chile, the case was removed from the original court and then refiled before the 11th Civil Court of Santiago (the “Civil Court”). Preliminary defenses have been filed by the Company, which are under consideration by the Civil Court. The Company believes that it has valid defenses under law and intends to defend itself vigorously.

	●	Jon Olson and Hilary Wilt, together with Puna Pono Alliance filed a complaint on February 17, 2015 in the Third Circuit Court, requesting declaratory and injunctive relief requiring that PGV comply with an ordinance that the plaintiffs allege will prohibit PGV from engaging in night drilling operations at its KS- 16 well site. On May 17, 2015, the original complaint was amended to add the county of Hawaii and the State of Hawaii Department of Land and Natural Resources as defendants to the case. On October 10, 2016, the Third Circuit Court issued its decision in response to each of the plaintiffs’ and defendants’ motions for summary judgment, denying plaintiffs’ motion and granting defendant PGV's and the County of Hawaii’s cross motions for summary judgment, effectively rendering the plaintiffs’ action moot. On January 23, 2017, the plaintiffs filed motion requesting the Intermediate Court of Appeals for the State of Hawaii to address appellate jurisdiction, which was denied by the court on April 20, 2017 as premature.

●

May 21, 2018,

a motion to certify a class action was filed in Tel Aviv District Court against the Company and

of its officers and directors. The alleged class is defined as "All persons who purchased Ormat shares on the Tel Aviv Stock Exchange between

August 3, 2017

and

May 13, 2018.

The motion alleges that the Company violated Sections

(a)(

) and

38C

of the Israeli Securities Law because it allegedly: (

) misled investors by stating in its financial statements that it maintains effective internal controls over its accounting policies and procedures, however the Company's internal controls had material weaknesses which led to erroneous accounting in its

2017

unaudited quarterly reports that had to be restated, including adjustments to the Company’s net income and shareholders’ equity; and (

) failed to issue an immediate report in Israel until

May 16, 2018,

analogous to the report that was released in the United States on

May 11, 2018

stating, inter alia, that the errors in its financial reports affected its balance sheet and would be remedied in its

2017

annual report. The proceedings in Israel were stayed by the district court until a final decision in the U.S. case described below (Mac Costas) is adjudicated.

●

June 11, 2018,

a putative class action on behalf of alleged shareholders that purchased or acquired the Company's ordinary shares between

August 8, 2017

and

May 15, 2018

was commenced in the United States District Court for the District of Nevada against the Company and its Chief Executive Officer and Chief Financial Officer. The complaint asserts claims against all defendants pursuant to Section

(b) of the Exchange Act, as amended, and Rule

10b

thereunder and against its officers pursuant to Section

(a) of the Exchange Act. The complaint alleges that the Company's Form

-K for the years ended

December 31, 2016

and

2017,

and Form

-Qs for each of the quarters in the

nine

months ended

September 30, 2017

contained material misstatements or omissions, among other things, with respect to the Company’s tax provisions and the effectiveness of its internal control over financial reporting, and that, as a result of such alleged misstatements and omissions, the plaintiffs suffered damages. The Company has

not

yet responded to the complaints. The Company believes that it has valid defenses under law and intends to defend itself vigorously.

In addition, from time to time, the Company is named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of our business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will

not

be material to the Company’s consolidated financial statements as a whole.