LAW OFFICES OF
PIKE & SMITH P.A.
Edward W. Pike IDAHO FALLS OFFICE: Mark J. Miller
Admitted in Idaho and Utah Admitted in Idaho and Nevada
Certified Mediator O.E. Bell Center
151 N. Ridge Ave., Suite 210 Stephanie J. Bonney
Franklin N. Smith P.O. Box 2949 Admitted in Idaho
Admitted in Idaho, Utah and Nevada Idaho Falls, Idaho 83403-2949
Of Counsel: Van Cott, Bagley, Telephone (208) 528-6444 Judith A. Lewis-Frazee
Cornwall & McCarthy Telefax (208) 528-6447 Admitted in Idaho, Wyoming
Salt Lake City, Utah Pennsylvania and Maryland
Of Counsel - Driggs, Idaho Office
February 7, 2005
Ormat Funding Corp.
and the Guarantors listed in
Schedule A hereto
980 Greg Street
Sparks, Nevada 89431
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
RE: STEAMBOAT DEVELOPMENT CORPORATION
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of (i) $190,000,000 aggregate principal amount
of 8 1/4% Senior Secured Notes due 2020 (the "Exchange Notes") of Ormat Funding
Corp. (the "Company") to be issued in exchange for the Company's outstanding
8 1/4% Senior Secured Notes due 2020 pursuant to:
(a) the Indenture, dated as of February 13, 2004, between the Company,
Brady Power Partners, a Nevada general partnership ("Brady Power Partners"),
OrMammoth Inc., a Delaware corporation ("OrMammoth"), ORNI 1 LLC, a Delaware
limited liability company ("ORNI 1"), ORNI 2 LLC, a Delaware limited liability
company ("ORNI 2"), ORNI 7 LLC, a Delaware limited liability company ("ORNI 7"),
Steamboat Development Corp., an Utah corporation ("Steamboat Development"), and
Steamboat Geothermal LLC, a Delaware limited liability company ("Steamboat
Geothermal"), and Union Bank of California, N.A. as trustee (the "Trustee"), as
supplemented by (1) the First Supplemental Indenture dated as of May 14, 2004
between the Company, Brady Power Partners, OrMammoth, ORNI 1, ORNI 2, ORNI 7,
Steamboat Development and Steamboat Geothermal, and the Trustee, (2) the Second
Supplemental Indenture, dated as of December 21, 2004, between the Company,
Brady Power Partners, OrMammoth, ORNI 1, ORNI 2, ORNI 7, Steamboat Development
and Steamboat Geothermal and the Trustee, and (3) the Third Supplemental
Indenture, dated as of December 31, 2004, between the Company, Brady Power
Partners, OrMammoth, ORNI 1, ORNI 2, ORNI 7, Steamboat Development, Steamboat
Geothermal and Ormesa LLC, a Delaware limited
DRIGGS OFFICE:
Outfitters Building, 10 Ashley Ave., Suite 205, Driggs, ID 83422
Telephone (208) 354-3029
2/7/2005
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liability company ("Ormesa"), and collectively with Brady Power Partners,
OrMammoth, ORNI 1, ORNI 2, ORNI 7, Steamboat Development, Steamboat Geothermal
and the Company (collectively, the "Registrants") (as so supplemented, the
"Indenture"), and
(b) the Registration Rights Agreement, dated as of February 13, 2004 (the
"Registration Rights Agreement"), by and among the Company, Brady Power
Partners, Steamboat Development, Steamboat Geothermal, OrMammoth, ORNI 1, ORNI
2, ORNI 7, and Lehman Brothers Inc.,
and (ii) the guarantee of the Company's obligations under the Exchange
Notes by Steamboat Development issued pursuant to the Guarantee, dated as of
February 13, 2004, by Steamboat Development in favor of the Trustee (the
"Guarantee").
We, as special counsel to Steamboat Development, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of rendering our
legal opinion. In particular, we have examined originals, certified copies or
copies verified to our satisfaction of the Articles of Incorporation, Restated
Articles of Incorporation, and Articles of Amendment Adopting Restated Articles
of Incorporation of Steamboat Development, certified by the Division of
Corporations and Commercial Code of the Utah Department of Commerce (the
"Division"), and the Bylaws of Steamboat Development (collectively, the
"Governing Documents"); Certificate of Existence of Steamboat Development issued
by the Division and Letter of Good Standing issued by the Utah State Tax
Commission; Officer's and Incumbency Certificate signed by the President and
Secretary of Steamboat Development and Unanimous Written Consent of the Board of
Directors of Steamboat Development Corp.; and such other documents and
certificates of public officials and representatives of Steamboat Development as
we have deemed necessary as a basis for the opinion expressed herein.
Based upon the foregoing, and subject to the qualifications and limitations
stated herein, we are of the opinion that:
(a) Steamboat Development is a corporation duly organized, validly existing
and in good standing under the laws of the State of Utah;
(b) Steamboat Development has all requisite corporate power and authority
to execute, deliver and perform all of its obligations under the
Guarantee; and
(c) Steamboat Development has duly authorized, executed and delivered the
Guarantee.
In connection with the foregoing, we have assumed that at the time of the
issuance and delivery of the Exchange Notes there will not have occurred any
change in law affecting the validity, legally binding character or
enforceability of the Guarantee and that all of the terms of the Guarantee and
the performance by Steamboat Development of its obligations thereunder will
comply with applicable law and with each requirement or restriction imposed by
any court or
2/7/2005
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governmental body having jurisdiction over Steamboat Development, and will not
result in a default under or a breach of any agreement or instrument then
binding upon Steamboat Development.
In rendering the foregoing opinion, we have relied as to certain matters on
information and representations obtained from public officials, officers of the
Registrants and other sources believed by us to be responsible, and we have
assumed that (i) the Indenture has been duly authorized, executed and delivered
by the Trustee, and (ii) the signatures on all documents examined by us are
genuine, assumptions which we have not independently verified, and that all
individuals who may have executed any of the documents reviewed by us had the
legal capacity to so execute such documents.
We do not represent Steamboat Development for all purposes or with respect
to all matters, and except for Certificates of Existence or such similar
documents issued by the relevant state agency and Steamboat Development's
company resolutions and documents listed above, we have not examined any other
company records or documents, including, without limitation, minutes, or any
other agreements, instruments or indentures under which Steamboat Development
may be a party, nor have we undertaken any inquiry into the general affairs of
Steamboat Development. Consequently, there may exist matters of significance
relating to the opinions herein with respect to which we have not been consulted
and, therefore, have no knowledge. As to the questions of fact material to our
opinions, we have, when relevant facts were not independently established,
relied upon statements, certificates, representations or warranties of managers
or other representatives of Steamboat Development without undertaking any
independent verification.
The foregoing opinion is further subject to the following qualifications:
(a) Our opinion expressed herein is based solely on the laws of Utah in
effect on the date hereof, and is exclusive of the effect, if any, of
federal or state securities laws on the Guarantee to which Steamboat
Development is a party.
(b) We assume no obligation to update or supplement this opinion to reflect
any changes in law that may hereafter occur. Accordingly, this opinion
is, in all respects, subject to, and may be limited by future
legislative and executive actions and future judicial decisions.
(c) We assume no obligation to update or supplement this opinion to reflect
any facts or circumstances that may come to our attention after the
date hereof.
In addition to the foregoing, our opinion is specific to the transaction
set forth in the Indenture, the Registration Rights Agreement and the Guarantee
and is limited to those matters expressly stated herein; accordingly, no opinion
may be implied or inferred beyond the matters expressly stated herein.
We hereby grant permission to Chadbourne & Parke LLP to rely on this
opinion with respect to matters of Utah law in its opinion dated February 4,
2005.
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We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
the Securities" in the Prospectus. In giving such consent, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act.
Sincerely yours,
/s/ Pike & Smith P.A.
Pike & Smith P.A.
2/7/2005
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Schedule A
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Brady Power Partners
OrMammoth Inc.
Ormesa LLC
ORNI 1 LLC
ORNI 2 LLC
ORNI 7 LLC
Steamboat Development Corp.
Steamboat Geothermal LLC
